Document:

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE
AGREEMENT (the "Agreement"), dated as of January 3, 2014, is by and among Fuse Science, Inc., a Nevada corporation
with offices located at 6135 NW 167th Street, #E21, Miami Lakes, Florida 33015 (the "Company"), and each of the
investors listed on the Schedule of Buyers attached hereto (individually, a "Buyer" and collectively, the "Buyers").

 

RECITALS

 

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

 

B.           The
Company has authorized the issuance of senior secured convertible notes, in the form attached hereto as Exhibit A (the "Notes"),
which Notes shall be convertible into shares of the Company's common stock, $0.001 par value per share (the "Common Stock")
(any shares of Common stock issued pursuant to the terms of the Notes, collectively, the "Conversion Shares"),
in accordance with the terms of the Notes.

 

C.           Certain
of the Buyers (the "New Buyers") wish to purchase, and the Company wishes to sell, upon the terms and conditions
stated in this Agreement, (i) that aggregate principal amount of Notes set forth opposite such New Buyer's name in column (3) on
the Schedule of Buyers attached hereto (which aggregate original principal amount of Notes for all Buyers shall be $550,000) (the
"Initial Notes") (any shares of Common stock issued pursuant to the terms of the Initial Notes, collectively,
the "Initial Conversion Shares") and (ii) warrants, in substantially the form attached hereto as Exhibit B
(the "Initial Warrants"), representing the right to acquire up to that number of shares of Common Stock set forth
opposite such New Buyer's name in column (4) on the Schedule of Buyers (as exercised, collectively, the "Initial Warrant
Shares").

 

E.           Subject
to the terms and conditions set forth in this Agreement, the New Buyers shall have the right, but not the obligation, to participate
in one or more Additional Closings (as defined below) in order to purchase and require the Company to sell, (i) collectively in
the Additional Closings up to an additional $450,000 in aggregate original principal amount of Notes, in substantially the form
attached hereto as Exhibit A (the "Additional Notes,") in an original principal amount equal to the applicable
Additional Note Purchase Amount (as defined below) in each Additional Closing (any shares of Common stock issued pursuant to the
terms of the Additional Notes, collectively, the "Additional Conversion Shares") and (ii) warrants, in substantially
the form attached hereto as Exhibit B, representing the right to acquire up to that number of shares of Common Stock equal
to the number of Additional Conversion Shares underlying the Additional Notes purchased in such Additional Closing, based on the
initial Fixed Conversion Price (as defined in the Notes) (the "Additional Warrants," and together with the Initial
Warrants, the "Warrants") (as exercised, collectively, the "Additional Warrant Shares," and together
with the Initial Warrant Shares, the "Warrant Shares").

  

    	 

    	 

    

  

F.           Certain
of the Buyers (the "Exchanging Buyers") are holders of the Company's 10% Senior Secured Convertible Promissory
Notes due January 4, 2014 (the "Existing Notes") in the principal amount set forth opposite such Exchanging Buyer's
name in column (5) of the Schedule of Buyers. Each of the Exchanging Buyers and the Company wish to exchange the Existing Notes
held by such Exchanging Buyer for Notes in the principal amount set forth opposite such Exchanging Buyer's name in column (6) of
the Schedule of Buyers (the "Exchange Notes") (any shares of Common stock issued pursuant to the terms of the
Exchange Notes, collectively, the "Exchange Conversion Shares").

 

G.           For
the avoidance of doubt, the Initial Notes, the Additional Notes and the Exchange Notes are collectively referred to herein as the
"Notes" and the Initial Conversion Shares, the Additional Conversion Shares and the Exchange Conversion Shares
are collectively referred to herein as the "Conversion Shares". The Notes, the Conversion Shares, the Warrants
and the Warrant Shares are collectively referred to herein as the "Securities."

 

H.           The
Notes shall rank senior to all outstanding and future indebtedness of the Company and its Subsidiaries (as defined below) and will
be secured by a perfected first priority security interest in certain assets of the Company and the stock and assets of each of
the Company's Subsidiaries, as evidenced by a Pledge and Security Agreement, in substantially the form attached hereto as Exhibit
C (as amended or modified from time to time in accordance with its terms, the "Security Agreement") and will
be guaranteed by all direct and indirect Subsidiaries of the Company, currently formed or formed in the future, as evidenced by
a guaranty agreement, in the form attached hereto as Exhibit D (the "Guaranty Agreement", and together
with the Security Agreement and any ancillary documents related thereto, collectively, the "Security Documents").

 

AGREEMENT

 

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

 

1.          Purchase
and Sale of Notes and Warrants and Exchange of Existing Notes for Exchange Notes.

 

(a)          Initial
Notes and Initial Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(a) and 7(a) below,
the Company shall issue and sell to each New Buyer, and each New Buyer severally, but not jointly, shall purchase from the Company
on the Initial Closing Date (as defined below), as applicable, (i) an Initial Note in the original principal amount as is set forth
opposite such New Buyer's name in column (3) on the Schedule of Buyers, along with (ii) Initial Warrants to acquire up to that
aggregate number of Initial Warrant Shares as is set forth opposite such New Buyer's name in column (4) on the Schedule of Buyers
(the "Initial Closing").

  

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(b)          Additional
Notes and Additional Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(b) and 7(b)
below, the Company agrees to issue and sell to each New Buyer, and each New Buyer shall have the right, for the first time on the
30th calendar day after the Initial Closing Date (as defined below) or, if any such date falls on a day that is not
a Business Day (as defined below), the next day that is a Business Day and on each 30th calendar day thereafter or,
if any such date falls on a day that is not a Business Day, the next day that is a Business Day, (each, an "Additional
Closing Deadline"), but not later than 5:00 pm New York City time on the 155th calendar day after the Initial
Closing Date (so that there may be up to five (5) Additional Closings (as defined below) (the fifth (5th) Additional
Closing, the "Final Additional Closing"), to purchase (i) (x) in each of the first four (4) Additional Closings,
an Additional Note in an original principal amount of up to $100,000 and (y) in the Final Additional Closing, an Additional Note
in an original principal amount of up to $50,000, in each case along with (ii) Additional Warrants to acquire up to that number
of shares of Common Stock equal to the number of Additional Conversion Shares underlying the Additional Notes to be purchased by
such New Buyer in such Additional Closing, based on the initial Fixed Conversion Price. In order to require the Company to issue
and sell to a New Buyer Additional Notes and Additional Warrants in an Additional Closing, a New Buyer must notify the Company
in writing (an "Additional Closing Exercise Notice") at least two (2) Business Days prior to such Additional Closing
Deadline that it is electing to exercise its right to require the Company to issue and sell Additional Notes and Additional Warrants
(each, an "Additional Closing"), which Additional Closing Exercise Notice shall state the aggregate principal
amount of Additional Notes (and the corresponding number of Additional Warrants) the New Buyer is electing to purchase in such
Additional Closing (the "Additional Note Purchase Amount").

 

(c)          Exchange
of Existing Notes for Exchange Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(a)
and 7(a) below, at the Initial Closing, each Exchanging Buyer shall surrender to the Company such Exchanging Buyer's Existing Notes
and the Company shall issue and deliver to each Exchanging Buyer the Exchange Notes in the principal amount set forth opposite
such Exchanging Buyer's name in column (6) of the Schedule of Buyers. All accrued but unpaid interest on the Existing Notes as
of the Initial Closing shall be forfeited by the Exchanging Buyers for no additional consideration.

 

(d)          Closing.
The Initial Closing and each Additional Closing are each referred to in this Agreement as a "Closing" and the
Initial Closing Date and each Additional Closing Date (each as defined below) are each referred to in this Agreement as a "Closing
Date". Each Closing shall occur on the applicable Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third
Avenue, New York, New York 10022. The date and time of the Initial Closing (the "Initial Closing Date")
shall be 10:00 a.m., New York City time, on the date hereof (or such later date as is mutually agreed to by the Company and each
Buyer) after notification of satisfaction (or waiver) of the closing conditions set forth in Sections 6(a) and 7(a) below. The
date and time of each Additional Closing (each, an "Additional Closing Date") shall be 10:00 a.m., New York City
time, on each Additional Closing Deadline for which an Additional Closing Exercise Notice has been delivered by a New Buyer (or
such later date as is mutually agreed to by the Company and the applicable New Buyers) after notification of satisfaction (or waiver)
of the conditions to the applicable Additional Closing set forth in Section 6(b) and 7(b) below. As used herein "Business
Day" means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.

  

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(e)          Purchase
Price.

 

(i)          The
aggregate purchase price for the Initial Notes and the Initial Warrants to be purchased by each New Buyer (the "Initial
Purchase Price") shall be the amount set forth opposite such New Buyer's name in column (7) on the Schedule of Buyers.
The aggregate purchase price for any Additional Notes and Additional Warrants to be purchased by a New Buyer in an Additional Closing
(the "Additional Purchase Price," and together with the Initial Purchase Price, the "Purchase Price")
shall be the applicable Additional Note Purchase Amount. Each New Buyer and the Company agree that the Notes and the Warrants constitute
an "investment unit" for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986, as amended (the "Code").
The New Buyers and the Company mutually agree that the allocation of the issue price of such investment unit between the Notes
and the Warrants in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) shall be an aggregate
amount of $5,000 allocated to the Warrants and the balance of the Purchase Price allocated to the Notes, and neither the Buyers
nor the Company shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative
proceeding in respect of taxes.

 

(ii)         The
Exchange Notes in the principal amount set forth in column (6) of the Schedule of Buyers shall be issued to each Exchanging Buyer
in exchange for such Exchanging Buyer's Existing Notes and without the payment of any additional consideration.

 

(f)          Form
of Payment.

 

(i)          Initial
Notes and Additional Notes. On the Initial Closing Date, (i) each Buyer shall pay its respective Initial Purchase Price (less,
in the case of Hudson Bay Master Fund Ltd. ("Hudson Bay"), the amounts withheld by such Buyer pursuant to Section
4(g)) to the Company for the Initial Notes and the Initial Warrants to be issued and sold to such New Buyer at the Initial Closing,
by wire transfer of immediately available funds in accordance with the Company's written wire instructions and (ii) the Company
shall deliver to each New Buyer (A) an Initial Note in the aggregate original principal amount as is set forth opposite such Buyer's
name in column (3) of the Schedule of Buyers and (B) an Initial Warrant pursuant to which such New Buyer shall have the right to
acquire up to such number of Initial Warrant Shares as is set forth opposite such New Buyer's name in column (4) of the Schedule
of Buyers, in all cases, duly executed on behalf of the Company and registered in the name of such New Buyer or its designee. On
each Additional Closing Date, (i) each applicable New Buyer shall pay its respective Additional Purchase Price (less, in the case
of Hudson Bay, the amounts withheld by such Buyer pursuant to Section 4(g)) to the Company for the Additional Notes and the Additional
Warrants to be issued and sold to such New Buyer at the Additional Closing, by wire transfer of immediately available funds in
accordance with the Company's written wire instructions and (ii) the Company shall deliver to each New Buyer (A) an Additional
Note in an aggregate original principal amount equal to the applicable Additional Note Purchase Amount and (B) an Additional Warrant
pursuant to which such Buyer shall have the right to acquire up to that number of shares of Common Stock equal to the number of
Additional Conversion Shares underlying the Additional Notes to be purchased by such Buyer in such Additional Closing, based on
the initial Fixed Conversion Price, in all cases, duly executed on behalf of the Company and registered in the name of such Buyer
or its designee.

 

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(ii)         Exchange
Notes. On the Initial Closing Date, (i) each Exchanging Buyer shall surrender to the Company for cancellation its Existing
Notes and (ii) the Company shall deliver to each Exchanging Buyer Exchange Notes in the principal amount set forth opposite such
Exchanging Buyer's name in column (6) of the Schedule of Buyers, duly executed on behalf of the Company and registered in the name
of such Exchanging Buyer or its designee.

 

2.          BUYER'S
REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the applicable
Closing Date:

 

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

 

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

 

(c)          Accredited
Investor Status. Such Buyer is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D. Such
Buyer has completed an Investor Questionnaire in the form attached hereto as Exhibit E hereto (the "Questionnaire").

 

(d)          Reliance
on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and such Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.

  

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

 

(f)          No
Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(g)          Transfer
or Resale. Such Buyer understands that except as provided in Section 4(h) hereof: (i) the Securities have not been and are
not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company (if requested by the Company)
an opinion of counsel to such Buyer, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold,
assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, "Rule 144"); (ii) any sale
of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule
144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person (as defined below) through
whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company
nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder.

 

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

  

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(i)          No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such
Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of such Buyer to perform its obligations hereunder.

 

(j)          Residency.
Such Buyer is a resident of the jurisdiction specified below its address on the Schedule of Buyers.

 

(k)          Waiver
of Participation Rights. Such Buyer hereby completely and unconditionally waives any right of participation, preemptive right
or similar right it has under any other agreement or arrangement entered into prior to the date hereof with respect to securities
of the Company. In addition, notwithstanding anything to the contrary contained herein, including pursuant to Section 4(o) hereof,
each Exchanging Buyer hereby completely and unconditionally waives any right of participation, preemptive or similar right to purchase
any Initial Notes, Additional Notes, Initial Warrants and/or Additional Warrants.

 

(l)          Exchanging
Buyers. Each Exchanging Buyer hereby represents and warrants that (i) it has good, legal and marketable title to its Existing
Notes, free and clear of any and all liens other than those under securities laws; (ii) as of the Initial Closing Date, the Exchanging
Buyer shall not have assigned, conveyed or transferred any interest whatsoever (contingent or otherwise) in its Existing Notes
to any third party and the Existing Notes shall be delivered to the Company free and clear of any and all liens other than those
of the Company and under securities laws and (iii) the aggregate principal amount of Exchange Notes set forth opposite such Exchanging
Buyer's name in column (5) of the Schedule of Buyers represents all of the debt securities of the Company owned by the Exchanging
Buyer.

 

		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of each Closing Date:

 

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

  

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(b)          Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and from and after
the Authorized Share Increase Date (as defined below) the reservation for issuance and issuance of the Conversion Shares issuable
upon conversion of the Notes, the issuance of the Warrants and from and after the Authorized Share Increase Date the reservation
for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants and the granting of a security interest
in the Collateral (as defined in the Security Documents)) have been duly authorized by the Company's board of directors or other
governing body and (other than the filing with the SEC of a Form D and any other filings as may be required by any state securities
agencies) no further filing, consent or authorization is required by the Company, its board of directors or its stockholders or
other governing body. This Agreement and the other Transaction Documents to which it is a party have been duly executed and delivered
by the Company and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities
law. "Transaction Documents" means, collectively, this Agreement, the Notes, the Warrants, the Security Documents,
the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or
delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from
time to time. The Transaction Documents to be executed at any Additional Closing will be duly executed and delivered by the Company,
and when so executed and delivered, will constitute the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors' rights and remedies.

 

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(c)          Issuance
of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the terms
of the Transaction Documents shall be validly issued, and free from all preemptive or similar rights, taxes, liens, charges and
other encumbrances with respect to the issuance thereof. From and after the earlier of (i) the Stockholder Approval Date and (ii)
the Stockholder Approval Deadline, the Company shall have reserved from its duly authorized capital stock not less than the sum
of (i) 130% of the maximum number of Conversion Shares initially issuable upon conversion of the Notes (assuming for purposes hereof
that the Notes are convertible at the initial Conversion Price (as defined in the Notes) and without taking into account any limitations
on the conversion of the Notes set forth in the Notes) and (ii) the maximum number of Warrant Shares initially issuable upon exercise
of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein). Upon issuance
or conversion in accordance with the Notes or exercise in accordance with the Warrants (as the case may be), the Conversion Shares
and the Warrant Shares, respectively, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyers
in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.

 

(d)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the
consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes, the Warrants, the Conversion Shares and Warrant Shares and the reservation for issuance of the Conversion
Shares and the Warrant Shares after the Authorized Share Increase Date) will not (i) result in a violation of the Certificate of
Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein) or other organizational
documents of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as
defined below) of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and
regulations and the rules and regulations of the OTCQB Market (the "Principal Market") and including all applicable
federal laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such
violations that could not reasonably be expected to have a Material Adverse Effect.

 

(e)          Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of a Form D and any other filings as may be required by any state securities
agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in
each case, in accordance with the terms hereof or thereof, except for the filing of appropriate UCC financing statements with the
appropriate states and other authorities pursuant to the Security Documents. All consents, authorizations, orders, filings and
registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be
obtained or effected on or prior to the applicable Closing Date, and neither the Company nor any of its Subsidiaries are aware
of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the
registration, application or filings contemplated by the Transaction Documents. The Company is not in violation of the requirements
of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension
of the Common Stock in the foreseeable future. "Governmental Entity" means any nation, state, county, city, town,
village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government,
governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality
of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization
or any of the foregoing.

 

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(f)          Acknowledgment
Regarding Buyer's Purchase of Securities. The Company acknowledges and agrees that to the Company's knowledge, each Buyer is
acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that, except for Brian Tuffin, the Company's Chief Executive Officer, who is one of the Exchanging Buyers,
no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an "affiliate" (as defined in
Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a "beneficial owner" of more than 10%
of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "1934
Act")). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or
any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer's purchase of the Securities.
The Company further represents to each Buyer that the Company's decision to enter into the Transaction Documents to which it is
a party has been based solely on the independent evaluation by the Company and its representatives.

 

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

 

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

 

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

 

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

 

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(k)          SEC
Documents; Financial Statements. Except as set forth on Schedule 3(k), during the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein
and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred
to as the "SEC Documents"). The Company has delivered or has made available to the Buyers or their respective
representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective
dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations
of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with
the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as
of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which will not be material, either individually or in the aggregate). No other information provided
by or on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation,
information referred to in Section 2(e) of this Agreement) contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they
are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including without
limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents
(the "Financial Statements"), nor is the Company currently aware of facts or circumstances which would require
the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to
be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants
that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company
to amend or restate any of the Financial Statements.

 

(l)          Absence
of Certain Changes. Since the date of the Company's most recent audited financial statements contained in a Form 10-K, there
has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations
(including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, except
as set forth in or contemplated by the SEC Documents filed subsequent thereto. Since the date of the Company's most recent audited
financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends,
(ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures,
individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has
taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership,
liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective
creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead
a creditor to do so. The Company and its Subsidiaries, on a consolidated basis, after giving effect to the transactions contemplated
hereby to occur at the Closings, will not be Insolvent (as defined below). For purposes of this Section 3(l), "Insolvent"
means, (I) with respect to the Company and its Subsidiaries, on a consolidated basis, (i) the present fair saleable value of the
Company's and its Subsidiaries' assets is less than the amount required to pay the Company's and its Subsidiaries' total Indebtedness
(as defined below), (ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur
or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (II) with respect to
the Company and each Subsidiary, individually, (i) the present fair saleable value of the Company's or such Subsidiary's (as the
case may be) assets is less than the amount required to pay its respective total Indebtedness, (ii) the Company or such Subsidiary
(as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of
its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company's or such Subsidiary's remaining assets constitute unreasonably small capital.

 

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(m)          No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise) (other
than the Closings of the Offering contemplated hereby), that (i) would be required to be disclosed by the Company as of the date
hereof or the applicable Closing Date under applicable securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could reasonably
be expected to have a material adverse effect on any Buyer's investment hereunder or (iii) could reasonably be expected to have
a Material Adverse Effect.

 

(n)          Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation or
certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. Since April 1, 2011, (i) the Common Stock has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the
Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting
of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse
Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

 

    	13

    	 

    

 

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

 

(p)          Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 and
all applicable rules and regulations promulgated by the SEC thereunder.

 

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

 

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(r)          Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 400,000,000 shares of Common
Stock of which, 374,915,143 are issued and outstanding and 108,554,958 shares are reserved for issuance pursuant to securities
(other than the Notes and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock, subject to
the increase in authorized shares of Common Stock contemplated in this Agreement and (ii) 10,000,000 shares of preferred stock,
$0.001 par value, of which none are issued and outstanding. No shares of Common Stock are held in treasury. All of such outstanding
shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and non-assessable. 11,857,000
shares of the Company's issued and outstanding Common Stock on the date hereof are owned by Persons who are "affiliates"
(as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at
least 10% of the Company's issued and outstanding Common Stock are "affiliates" without conceding that any such Persons
are "affiliates" for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company's
knowledge, no Person owns 10% or more of the Company's issued and outstanding shares of Common Stock (calculated based on the assumption
that all Convertible Securities (as defined below), whether or not presently exercisable or convertible, have been fully exercised
or converted (as the case may be) taking account of any limitations on exercise or conversion (including "blockers")
contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).
(i) None of the Company's or any Subsidiary's capital stock is subject to preemptive rights or any other similar rights or any
liens or encumbrances suffered or permitted by the Company or any Subsidiary; (ii) except as set forth in the SEC Documents or
on Schedule 3(r)(ii), there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) except as set forth
in the SEC Documents or on Schedule 3(r)(iii), there are no outstanding debt securities, notes, credit agreements, credit facilities
or other agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the
Company or any of its Subsidiaries is or may become bound; (iv) except as set forth on Schedule 3(r)(iv), there are no financing
statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (v) except as set
forth on Schedule 3(r)(v), there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated
to register the sale of any of their securities under the 1933 Act; (vi) except as set forth on Schedule 3(r)(vi), there are no
outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may
become bound to redeem a security of the Company or any of its Subsidiaries; (vii) except as set forth on Schedule 3(r)(vii), there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
(viii) except as set forth on Schedule 3(r)(viii), there are no securities that have been issued in a Variable Rate Transaction
(as defined below) on or prior to the Subscription Date, (ix) except as disclosed in the SEC Documents, neither the Company nor
any Subsidiary has any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement;
and (x) neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC
Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company's or
its Subsidiaries' respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse
Effect. The Company has furnished or has made available to the Buyers true, correct and complete copies of the Company's Certificate
of Incorporation, as amended and as in effect on the date hereof (the "Certificate of Incorporation"), and the
Company's bylaws, as amended and as in effect on the date hereof (the "Bylaws"), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights of the holders thereof in
respect thereto.

 

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(s)          Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as set forth on Schedule 3(s), has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse
Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness,
except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or
(iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment
of the Company's officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) "Indebtedness"
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, "capital leases" in accordance
with generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, claim, lien, tax, right of first refusal,
pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights)
owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment
of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred
to in clauses (A) through (G) above; (y) "Contingent Obligation" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto;
and (z) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency thereof.

 

(t)          Absence
of Litigation. Except as set forth on Schedule 3(t), there is no action, suit, proceeding, inquiry or investigation before
or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any
of the Company's or its Subsidiaries' officers or directors which is outside of the ordinary course of business or individually
or in the aggregate material to the Company or any of its Subsidiaries. No director, officer or employee of the Company or any
of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the
Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the 1933 Act or the 1934 Act.

 

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

 

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

 

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

 

(x)          Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations
therefor ("Intellectual Property Rights") necessary to conduct their respective businesses as now conducted and
as presently proposed to be conducted. Except as set forth on Schedule 3(x), none of the Company's or its Subsidiaries'
Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned,
within three years from the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its
Subsidiaries of Intellectual Property Rights of others. Except as set forth on Schedule 3(x), there is no claim, action
or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the
Company or any of its Subsidiaries regarding their Intellectual Property Rights. The Company is not aware of any facts or circumstances
which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and each of its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property
Rights.

 

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

 

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

 

(aa)         Tax
Status. Since January 1, 2010, the Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and
state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has
timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due
on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner
as to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as
amended.

 

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

 

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

 

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

 

(ee)         Acknowledgement
Regarding Buyers' Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or "derivative" securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in "derivative" transactions to which
any such Buyer is a party, directly or indirectly, presently may have a "short" position in the Common Stock which was
established prior to such Buyer's knowledge of the transactions contemplated by the Transaction Documents; and (iii) each Buyer
shall not be deemed to have any affiliation with or control over any arm's length counterparty in any "derivative" transaction.
The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by the Transaction
Documents pursuant to the Initial 8-K Filings (as defined below) one or more Buyers may engage in hedging and/or trading activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value and/or number of the Warrant Shares or Conversion Shares, as applicable, deliverable with respect to the Securities are
being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing stockholders' equity
interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Notes, the Warrants
or any other Transaction Document or any of the documents executed in connection herewith or therewith.

 

    	19

    	 

    

 

(ff)         Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries 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 (other than the Placement
Agents), or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company or any of its Subsidiaries.

 

(gg)         U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify upon any Buyer's request.

 

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

 

(ii)         Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as
amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve"). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any equity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.

 

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

 

    	20

    	 

    

 

(kk)         Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, "Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism" (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained
in 31 CFR, Subtitle B, Chapter V.

 

(ll)         Management.
Except as set forth in Schedule 3(ll) hereto or as disclosed in the SEC Documents, during the past five (5) year period,
no current officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the
Company or any of its Subsidiaries has been the subject of:

 

(i)          a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii)         conviction
in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate to
driving while intoxicated or driving under the influence);

 

(iii)        any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1)         Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

(2)         Engaging
in any type of business practice; or

 

(3)         Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

    	21

    	 

    

 

(iv)         any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than 60 days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be
associated with persons engaged in any such activity;

 

(v)          a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi)         a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

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

 

(nn)         Public
Utility Holding Act. None of the Company nor any of its Subsidiaries is a "holding company," or an "affiliate"
of a "holding company," as such terms are defined in the Public Utility Holding Act of 2005.

 

(oo)         Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a "public utility" under the
Federal Power Act, as amended.

 

(pp)         Ranking
of Notes. Except as set forth on Schedule 3(pp), no Indebtedness of the Company, at the applicable Closing, will be
senior to, or pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest,
damages, upon liquidation or dissolution or otherwise.

 

(qq)         Disclosure.
Except as disclosed in the Initial 8-K Filing, the Company confirms that neither it nor any other Person acting on its behalf has
provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to
constitute material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the
transactions contemplated by this Agreement and the other Transaction Documents. The Company understands and confirms that each
of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure
provided to the Buyers regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including
the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does
not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company
or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance
has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties,
liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not
been so publicly disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

  

    	22

    	 

    

  

(rr)         No
Disqualification Events.  With respect to Securities to be offered and sold hereunder in reliance on Rule 506 under the
1933 Act ("Regulation D Securities"), none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20%
or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an "Issuer
Covered Person" and, together, "Issuer Covered Persons") is subject to any of the "Bad Actor"
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a "Disqualification Event"), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether
any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its
disclosure obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.

 

(ss)         Other
Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person that has been or will be paid
(directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation
D Securities.

 

(tt)         Notice
of Disqualification Events. The Company will notify the Buyers in writing, prior to each Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

(uu)         Exchange
Notes Tacking. For the purposes of Rule 144, the Company acknowledges that the holding period of the Exchange Notes (including
the corresponding Exchange Conversion Shares) may be tacked onto the holding period of the Existing Notes, and the Company agrees
not to take any position contrary to this Section 3(uu).

 

		4.	COVENANTS.

 

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

  

    	23

    	 

    

  

(b)          Form
D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before each Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities being sold
at such Closing for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or "Blue Sky"
laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any
such action so taken to the Buyers on or prior to such Closing Date. Without limiting any other obligation of the Company under
this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required
under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
"Blue Sky" laws), and the Company shall comply with all applicable federal, foreign, state and local laws, statutes,
rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.

 

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

 

(d)          Use
of Proceeds. The Company will use the proceeds from the sale of the Securities as set forth on Schedule 4(d) attached
hereto and for general corporate purposes and except as set forth on Schedule 4(d) attached hereto, and not for (i) the
repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries, (ii) redemption or repurchase of any securities
of the Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.

 

(e)          Financial
Information. The Company agrees to send the following to each Buyer during the Reporting Period (i) unless the following are
filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any Current Reports
on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless
the following are either filed with the SEC through EDGAR or are otherwise widely disseminated via a recognized new release service
(such as PR Newswire), on the same day as the release thereof, facsimile copies of all press releases issued by the Company or
any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices and other information
made available or given to the stockholders of the Company generally, contemporaneously with the making available or giving thereof
to the stockholders.

 

(f)          Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Conversion Shares
and Warrant Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is
then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing
or designation for quotation (as the case may be) of all of the Conversion Shares and Warrant Shares from time to time issuable
under the terms of the Transaction Documents on such national securities exchange or automated quotation system. The Company shall
use reasonable best efforts to maintain the Common Stock's listing or authorization for quotation (as the case may be) on the Principal
Market, The New York Stock Exchange, the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global
Market (each, an "Eligible Market"). Neither the Company nor any of its Subsidiaries shall take any action which
could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall
pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).

  

    	24

    	 

    

  

(g)          Fees.
The Company shall reimburse Hudson Bay for all reasonable costs and expenses incurred by it or its affiliates in connection with
the transactions contemplated by the Transaction Documents (including, without limitation, all reasonable legal fees and disbursements
of Schulte Roth & Zabel LLP, counsel to Hudson Bay, in connection therewith, documentation and implementation of the transactions
contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith) (the "Expense
Amount"), which amount shall be withheld by Hudson Bay (at the request of Schulte Roth & Zabel LLP) from its Purchase
Price at the applicable Closing or paid by the Company upon termination of this Agreement on demand by Schulte Roth & Zabel
LLP so long as such termination did not occur as a result of a material breach by Hudson Bay of any of its obligations hereunder
(as the case may be). Subject to the limitation set forth in the immediately preceding sentence, if the amount so withheld at a
Closing by Hudson Bay was less than the Expense Amount actually incurred by Hudson Bay and/or Schulte Roth & Zabel LLP, as
applicable, in connection with the transactions contemplated by the Transaction Documents, the Company shall promptly reimburse
Hudson Bay and/or Schulte Roth & Zabel LLP, as applicable, on demand for such Expense Amount not so reimbursed by the Company
on the date hereof or through such withholding at such Closing. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker's commissions (other than for
Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys' fees and out-of-pocket
expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents,
each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to each Buyer.

 

(h)          Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.

 

    	25

    	 

    

 

(i)          Disclosure
of Transactions and Other Material Information. The Company shall, on or before 8:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, issue a press release and file a Current Report on Form 8-K (each, reasonably acceptable
to the Buyers) describing all the material terms of the transactions contemplated by the Transaction Documents in the form required
by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement, the form of
Notes, the form of the Warrants and the form of the Security Documents) (including all attachments, the "Initial 8-K Filing").
In addition, effective upon the filing of the Initial 8-K Filing, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and any Buyer or any of its affiliates, on the
other hand, shall terminate. On or before 8:30 a.m., New York City Time, on the first (1st) Business Day following each
Additional Closing Date, the Company shall file a Current Report on Form 8-K with the SEC describing the transaction consummated
on such date (each, an "Additional 8-K Filing," and together with the Initial 8-K Filing, the "8-K Filings").
From and after the filing of the applicable 8-K Filing, the Company shall have disclosed all material, non-public information (if
any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. The Company shall not, and the Company
shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide
any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after the issuance
of the applicable 8-K Filing without the express prior written consent of such Buyer. In the event of a breach of any of the foregoing
covenants, including, without limitation, Section 4(o) of this Agreement, or any of the covenants or agreements contained in any
other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees
and agents (as determined in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein
or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such breach or such material, non-public information, as applicable, without the prior approval
by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall
have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees, stockholders
or agents, for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any
press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company
shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with an 8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any
such press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer,
the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing,
announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication
that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer has had, and no Buyer shall
have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement executed
by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)),
any duty of confidentiality with respect to, or a duty not to trade on the basis of, any information regarding the Company or any
of its Subsidiaries.

 

    	26

    	 

    

 

(j)          Additional
Registration Statements. Until the date that all Securities may be resold pursuant to Rule 144 without any restrictions or
limitations, the Company shall not file a registration statement under the 1933 Act relating to securities that are not the Securities.

 

(k)          Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written
consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Notes or the Warrants.

 

(l)          Reservation
of Shares. So long as any Notes or Warrants remain outstanding, from and after the earlier of (i) the Authorized Share Increase
Date and (ii) the Authorized Share Increase Deadline, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than (i) 130% of the maximum number of shares of Common Stock issuable upon conversion
of all the Notes then outstanding (assuming for purposes hereof, that the Notes are convertible at the Conversion Price (as defined
in the Notes) and without regard to any limitations on the conversion of the Notes set forth therein), and (ii) the maximum number
of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations on the exercise
of the Warrants set forth therein).

 

(m)          Conduct
of Business. While any of the Notes or Warrants remain outstanding, the business of the Company and its Subsidiaries shall
not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would
not result, either individually or in the aggregate, in a Material Adverse Effect.

 

(n)          Variable
Securities. Until all of the Securities have been sold by the Buyers, the Company and each Subsidiary shall be prohibited from
effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction. "Variable
Rate Transaction" means a transaction in which the Company or any Subsidiary (i) issues or sells any Convertible Securities
either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of
or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities, or (B) with
a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such
Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock, other than pursuant to customary anti-dilution provisions or (ii) enters into
any agreement (including, without limitation, an equity line of credit) whereby the Company or any Subsidiary may sell securities
at a future determined price (other than customary "preemptive" or "participation" rights). Each Buyer shall
be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall
be in addition to any right to collect damages.

 

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(o)          Participation
Right. From the date hereof through the five (5) year anniversary of the Initial Closing Date, neither the Company nor any
of its Subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied
with this Section 4(o). As used herein, "Subsequent Placement" means any direct or indirect, issuance, offer,
sale, grant, option or right to purchase, or other disposition of (or announcement of any issuance, offer, sale, grant, option
or right to purchase or other disposition of) any equity or any equity-linked or related securities (including, without limitation,
any "equity security" (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities
(as defined below), any debt, any preferred stock or any purchase rights. The Company acknowledges and agrees that the right set
forth in this Section 4(o) is a right granted by the Company, separately, to each Buyer.

 

(i)          At
least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a
written notice of its proposal or intention to effect a Subsequent Placement (each such notice, a "Pre-Notice"),
which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than:
(i) a statement that the Company desires to provide such Buyer with material, non-public information, or, if permissible hereunder,
a statement that the Company proposes or intends to effect a Subsequent Placement, (ii) a statement that the statement in clause
(i) above does not constitute material, non-public information and (iii) a statement informing such Buyer that it is entitled to
receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written
request of a Buyer within three (3) Trading Days after the Company's delivery to such Buyer of such Pre-Notice, and only upon a
written request by such Buyer, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver to
such Buyer an irrevocable written notice (the "Offer Notice") of any proposed or intended issuance or sale or
exchange (the "Offer") of the securities being offered (the "Offered Securities") in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged,
(y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged
and (z) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer's pro rata
portion of 100% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(o) shall be (a) based on such Buyer's pro rata portion of the aggregate original principal
amount of the Notes purchased hereunder by all Buyers (the "Basic Amount"), and (b) with respect to each Buyer
that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of
other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic
Amounts (the "Undersubscription Amount").

 

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(ii)         To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day after such Buyer's receipt of the Offer Notice (the "Offer Period"), setting forth the portion of
such Buyer's Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the "Notice of Acceptance").
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), such Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer in any
material respect prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the
Offer Period shall expire on the third (3rd) Business Day after such Buyer's receipt of such new Offer Notice.

 

(iii)        The
Company shall have five (5) Business Days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the "Refused Securities")
pursuant to a definitive agreement(s) (the "Subsequent Placement Agreement"), but only to the offerees described
in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set
forth in the Offer Notice in any material respect and (ii) to publicly announce (a) the execution of such Subsequent Placement
Agreement, and (b) either (x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the
termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such
Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto.

 

(iv)         In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(o)(iii) above), then such Buyer may, at its sole option and in its sole discretion, reduce the number
or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or
amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or
exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o) prior to such reduction) and
(ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to
reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange
more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the
Buyers in accordance with Section 4(o)(i) above.

 

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(v)          Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and
substance to such Buyer and its counsel.

 

(vi)         Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.

 

(vii)        The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto (collectively, the "Subsequent Placement Documents")
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under
or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.

 

(viii)      Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice
regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned
and such Buyer shall not be deemed to be in possession of any material, non-public information with respect to the Company or any
of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall
provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section
4(o). The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period,
except as expressly contemplated by the last sentence of Section 4(o)(ii).

 

(ix)         The
restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities. The Company
shall not circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer that are not provided to
all.

 

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(x)          Notwithstanding
the foregoing, this Section 4(o) shall not apply in respect of the issuance of (A) shares of Common Stock, options to purchase
Common Stock or other equity incentive awards to directors, officers or consultants, endorsers or employees of the Company in their
capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account
the shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (A) do not, in
the aggregate, exceed more than 15% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the
exercise price of any such options is not lowered after issuance by subsequent amendment thereof, none of such options are amended
subsequent to issuance to increase the number of shares issuable thereunder and none of the terms or conditions of any such options
are subsequent to issuance otherwise materially changed in any manner that adversely affects any of the Buyers; (B) shares of Common
Stock issued upon the conversion or exercise of Convertible Securities (other than options to purchase Common Stock or other equity
incentive awards issued pursuant to an Approved Stock Plan that are covered by clause (A) above) issued prior to the date hereof,
provided that the conversion price of any such Convertible Securities (other than options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (A) above) is not lowered by subsequent amendment, none of such Convertible
Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A)
above) are subsequently amended to increase the number of shares issuable thereunder and none of the terms or conditions of any
such Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (A) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (C) the Conversion
Shares and (D) the Warrant Shares (each of the foregoing in clauses (A) through (D), collectively the "Excluded Securities").
"Approved Stock Plan" means any benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other
equity incentive awards may be issued to any employee, officer, director, consultant or endorser for services provided to the Company
in their capacity as such. "Convertible Securities" means any capital stock or other security of the Company or
any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company
(including, without limitation, Common Stock) or any of its Subsidiaries.

 

(p)          Dilutive
Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required
to issue upon conversion of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares
of Common Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company's
obligations under the rules or regulations of the Principal Market.

 

(q)          Passive
Foreign Investment Company. The Company shall conduct its business in such a manner as will ensure that the Company will not
be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code
of 1986, as amended.

 

(r)          Restriction
on Redemption and Cash Dividends. Except as set forth on Schedule 4(r), so long as any Notes are outstanding, the Company shall
not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without
the prior express written consent of the Required Holders.

  

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

 

(t)          10b-5
Plans. So long as any Notes remain outstanding, the Company shall not, directly or indirectly, (and shall not permit any of
its officers, directors or employees, directly or indirectly) to establish any 10b-5 plan (or permit any similar transaction) at
any time after the date hereof, unless (x) any such plan is established after the end of the Restricted Period and (y) the trigger
on sales under any such plan is no less than $0.15 per share of Common Stock for a sixty (60) day period after the expiration of
the Restricted Period (as adjusted for stock splits, stock dividends, recapitalizations and similar events).

 

(u)          Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Notes set forth the totality of the procedures required of the Buyers in order to exercise the Warrants or convert
the Notes. Except as provided in Section 5(d), no additional legal opinion, other information or instructions shall be required
of the Buyers to exercise their Warrants or convert their Notes. The Company shall honor exercises of the Warrants and conversions
of the Notes and shall deliver the Conversion Shares and Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Notes and Warrants.

 

(v)          Collateral
Agent.

 

(i)          Each
Buyer hereby (a) appoints Hudson Bay as the collateral agent hereunder and under the Security Documents (in such capacity, the
"Collateral Agent"), and (b) authorizes the Collateral Agent (and its officers, directors, employees and agents)
to take such action on such Buyer's behalf in accordance with the terms hereof and thereof. The Collateral Agent shall not have,
by reason hereof or pursuant to any Security Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral
Agent nor any of its officers, directors, employees and agents shall have any liability to any Buyer for any action taken or omitted
to be taken in connection hereof or the Security Documents except to the extent caused by its own gross negligence or willful misconduct,
and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors,
employees and agents (collectively, the "Collateral Agent Indemnitees") from and against any losses, damages,
liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising
from or in connection with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent
pursuant hereto or any of the Security Documents.

 

(ii)         The
Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder
or thereunder, upon advice of counsel selected by it.

  

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(iii)        The
Collateral Agent may resign from the performance of all its functions and duties hereunder and under the Notes and the Security
Documents at any time by giving at least ten (10) Business Days prior written notice to the Company and each holder of the Notes.
Such resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment as provided below. Upon any
such notice of resignation, the holders of a majority of the outstanding principal amount of Notes shall appoint a successor Collateral
Agent. Upon the acceptance of the appointment as Collateral Agent, such successor Collateral Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall
be discharged from its duties and obligations under this Agreement, the Notes and the Security Agreement. After any Collateral
Agent's resignation hereunder, the provisions of this Section 4(v) shall inure to its benefit. If a successor Collateral Agent
shall not have been so appointed within said ten (10) Business Day period, the retiring Collateral Agent shall then appoint a successor
Collateral Agent who shall serve until such time, if any, as the holders of a majority of the outstanding principal amount of Notes
appoints a successor Collateral Agent as provided above.

 

(iv)         The
Company hereby covenants and agrees to take all actions as promptly as practicable reasonably requested by either the holders of
a majority of the outstanding principal amount of Notes or the Collateral Agent (or its successor), from time to time pursuant
to the terms of this Section 4(v), to secure a successor Collateral Agent satisfactory to such requesting part(y)(ies), in their
sole discretion, including, without limitation, by paying all fees of such successor Collateral Agent, by having the Company agree
to indemnify any successor Collateral Agent and by each of the Company executing a collateral agency agreement or similar agreement
and/or any amendment to the Security Documents reasonably requested or required by the successor Collateral Agent.

 

(w)          Stockholder
Approval. The Company shall provide each stockholder entitled to vote at a special or annual meeting of stockholders of the
Company (the "Stockholder Meeting"), which shall be called as promptly as practicable after the date hereof, but
in no event later than 74 days after the Initial Closing (the "Stockholder Meeting Deadline"), a proxy statement
(the "Proxy Statement"), in a form reasonably acceptable to the Buyers after review by Schulte Roth & Zabel
LLP at the expense of the Company, soliciting each such stockholder's affirmative vote at the Stockholder Meeting for approval
of resolutions (the "Resolutions") providing for (i) the increase in authorized number of shares of Common Stock
of the Company to 800,000,000 and (ii) a reverse stock split of the Common Stock at a ratio of 200 to 1 (such affirmative approval
being referred to herein as the "Authorized Share Stockholder Approval" and the date such approval is obtained,
the "Authorized Share Stockholder Approval Date"), and the Company shall use its reasonable best efforts to solicit
its stockholders' approval of such Resolutions and to cause the Board of Directors of the Company to recommend to the stockholders
that they approve the Resolutions. The Company shall file the preliminary Proxy Statement with the SEC as soon as practicable after
the date hereof, but in no event later than twenty (20) days after the Initial Closing. The Company shall be obligated to seek
to obtain the Authorized Share Stockholder Approval by the Stockholder Meeting Deadline. If, despite the Company's reasonable best
efforts, the Authorized Share Stockholder Approval is not obtained at the Stockholder Meeting, the Company shall cause an additional
Stockholder Meeting to be held every thirty (30) days thereafter until the Authorized Share Stockholder Approval is obtained. No
later than one (1) Trading Day following the Authorized Share Stockholder Approval, the Company shall file with the Secretary of
State of Nevada a certificate of amendment to the Company's Articles of Incorporation to effect the Authorized Share Stockholder
Approval, which certificate of amendment shall provide that it shall become immediately effective upon filing (such filing, the
"Amendment Filing", and the occurrence of both the Authorized Share Stockholder Approval and the Amendment
Filing, the "Increased Shares Amendment"). The date on which the Increased Shares Amendment becomes effective
is referred to herein as the "Authorized Share Increase Date". As used herein, "Authorized Share Increase
Deadline" means the date seventy-five (75) days following the Initial Closing.

 

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(x)          Public
Information. At any time during the period commencing from the six (6) month anniversary of the commencement of the earliest
Rule 144 holding period of the Securities and ending at such time that all of the Securities, if a registration statement is not
available for the resale of all of the Securities, may be sold without restriction or limitation pursuant to Rule 144 and without
the requirement to be in compliance with Rule 144(c)(1), if the Company shall (i) fail for any reason to satisfy the requirements
of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirement under Rule
144(c) or (ii) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and
the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a "Current Public Information Failure")
then, as partial relief for the damages to any holder of Securities by reason of any such delay in or reduction of its ability
to sell the Securities (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall
pay to each such holder an amount in cash equal to one percent (1.0%) of the aggregate Purchase Price of such holder's Securities
on the day of a Public Information Failure and on every thirtieth day (pro-rated for periods totaling less than thirty days) thereafter
until the earlier of (i) the date such Public Information Failure is cured and (ii) such time that such Public Information Failure
no longer prevents a holder of Securities from selling such Securities pursuant to Rule 144 without any restrictions or limitations.
The payments to which a holder shall be entitled pursuant to this Section 4(y) are referred to herein as "Public Information
Failure Payments." Public Information Failure Payments shall be paid on the earlier of (I) the last day of the
calendar month during which such Public Information Failure Payments are incurred and (II) the third Business Day after
the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to
make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid in full.

 

(y)          Tax
and Judgment Liens. On or prior to fifteen (15) calendar days after the Initial Closing Date, the Company shall cause all judgment
liens and tax liens against the Company to be released, including, without limitation, those referenced in Schedule 4(y) attached
hereto, and to provide reasonable proof of each such release to each of the Buyers.

 

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(z)          Closing
Documents. On or prior to fourteen (14) calendar days after the Initial Closing Date, the Company agrees to deliver, or cause
to be delivered, to each Buyer and Schulte Roth & Zabel LLP executed copies of the Transaction Documents, Securities and other
document required to be delivered to any party pursuant to Section 7 hereof.

 

		5.	REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

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

 

(b)          Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent,
in the form of Exhibit F attached hereto (the "Irrevocable Transfer Agent Instructions"), to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust Company ("DTC"), registered in the
name of each Buyer or its respective nominee(s), for the Conversion Shares and the Warrant Shares in such amounts as specified
from time to time by each Buyer to the Company upon conversion of the Notes or the exercise of the Warrants (as the case may be).
The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this
Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of
the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a
sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC
in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that
such sale, assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective
registration statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee
(as the case may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy
at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all other available
remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity
of showing economic loss and without any bond or other security being required. Any fees (with respect to the transfer agent, counsel
to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on any of the Securities
shall be borne by the Company.

 

    	35

    	 

    

 

(c)          Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares and the Warrant
Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and
except as set forth below, the Securities shall bear any legend as required by the "blue sky" laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock
certificates):

 

[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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE 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.

 

(d)          Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act,
(ii) following any sale of such Securities pursuant to Rule 144 (assuming neither the transferor nor the transferee is an affiliate
of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer
provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144
which shall not include an opinion of Buyer's counsel), (iv) in connection with a sale, assignment or other transfer (other than
under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable
form, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable
requirements of the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without
limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to
the foregoing, the Company shall no later than two (2) Trading Days following the delivery by a Buyer to the Company or the transfer
agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock powers attached,
signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with
any other deliveries from such Buyer as may be required above in this Section 5(d), as directed by such Buyer, either: (A) provided
that the Company's transfer agent is participating in the DTC Fast Automated Securities Transfer Program and such Securities are
Conversion Shares or Warrant Shares, credit the aggregate number of shares of Common Stock to which such Buyer shall be entitled
to such Buyer's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company's
transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and other legends, registered
in the name of such Buyer or its designee (the date by which such credit is so required to be made to the balance account of such
Buyer's or such Buyer's nominee with DTC or such certificate is required to be delivered to such Buyer pursuant to the foregoing
is referred to herein as the "Required Delivery Date"). The Company shall be responsible for any transfer agent
fees or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance
herewith.

 

    	36

    	 

    

 

(e)          Failure
to Timely Deliver; Buy-In. If the Company fails to (i) issue and deliver (or cause to be delivered) to a Buyer by the Required
Delivery Date a certificate representing the Securities so delivered to the Company by such Buyer that is free from all restrictive
and other legends or (ii) credit the balance account of such Buyer's or such Buyer's nominee with DTC for such number of Conversion
Shares or Warrant Shares so delivered to the Company, and if on or after the Required Delivery Date such Buyer (or any other Person
in respect, or on behalf, of such Buyer) purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by such Buyer of all or any portion of the number of shares of Common Stock, or a sale of a number of
shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Buyer so anticipated receiving
from the Company without any restrictive legend, then, in addition to all other remedies available to such Buyer, the Company shall,
within three (3) Trading Days after such Buyer's request and in such Buyer's sole discretion, either (i) pay cash to such Buyer
in an amount equal to such Buyer's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any)
for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the "Buy-In
Price"), at which point the Company's obligation to so deliver such certificate or credit such Buyer's balance account
shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate
or certificates or credit such Buyer's DTC account representing such number of shares of Common Stock that would have been so delivered
if the Company timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Conversion Shares or Warrant Shares (as the case may be) that
the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price
(as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing on the date of the delivery by
such Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as the case may be) and ending on the date of
such delivery and payment under this clause (ii).

 

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

 

(a)          Initial
Closing Date. The obligation of the Company hereunder to issue and sell the Initial Notes and the related Warrants to each
New Buyer and to exchange the Existing Notes for Exchange Notes with each Exchanging Buyer at the Initial Closing is subject to
the satisfaction, at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are
for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with
prior written notice thereof:

  

    	37

    	 

    

  

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

 

(ii)         Such
New Buyer and each other New Buyer shall have delivered to the Company the Initial Purchase Price (less, in the case of Hudson
Bay, the amounts withheld by such Buyer pursuant to Section 4(g)) for the Initial Notes and the related Initial Warrants being
purchased by such Buyer at the Initial Closing by wire transfer of immediately available funds pursuant to the wire instructions
provided by the Company.

 

(iii)        Such
Exchanging Buyer shall have delivered to the Company such Exchanging Buyer's Existing Notes for cancellation.

 

(iv)        The
representations and warranties of such Buyer shall be true and correct in all material respects (other than representations and
warranties that are already qualified by materiality or material adverse effect which shall be true and correct in all respects)
as of the date when made and as of the Initial Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Initial Closing Date.

 

(b)          Additional
Closing Date. The obligation of the Company hereunder to issue and sell the Additional Notes and the related Additional
Warrants to each New Buyer at the Additional Closing is subject to the satisfaction, at or before each Additional Closing Date,
of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each New Buyer with prior written notice thereof:

 

(i)          Such
New Buyer and each other New Buyer shall have delivered to the Company the Additional Purchase Price (less, in the case of Hudson
Bay, the amounts withheld by such New Buyer pursuant to Section 4(g)) for the Additional Notes and related Additional Warrants
being purchased by such New Buyer at the Additional Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.

 

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

 

    	38

    	 

    

  

		7.	CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

 

(a)          Initial
Closing Date. The obligation of each New Buyer hereunder to purchase its Initial Notes and its related Initial Warrants
at the Initial Closing and each Exchanging Buyer to exchange its Existing Notes for Exchange Notes is subject to the satisfaction,
at or before the Initial Closing Date, of each of the following conditions, provided that these conditions are for each Buyer's
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice
thereof:

 

(i)          The
Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer (A) each of the Transaction
Documents to which it is a party. (B) with respect to the New Buyers, (x) the Initial Notes (in such principal amounts as such
New Buyer shall request) being purchased by such New Buyer at the Initial Closing pursuant to this Agreement, and (y) the Initial
Warrants (in such amounts as such New Buyer shall request) being purchased by such New Buyer at the Initial Closing pursuant to
this Agreement and (C) with respect to the Exchanging Buyers, the Exchange Notes (in such principal amounts as such Buyer shall
request).

 

(ii)         Such
Buyer shall have received the opinion of Roetzel & Andress, LPA, the Company's counsel, dated as of the Initial Closing Date,
in substantially the form of Exhibit H attached hereto.

 

(iii)        The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company's transfer agent.

 

(iv)        The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Nevada Secretary
of State within ten (10) days of the Initial Closing Date.

 

(v)         The
Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Initial Closing Date, as to (I) the resolutions consistent with Section 3(b) as adopted by the Company's
board of directors in a form reasonably acceptable to such Buyer, (II) the Certificate of Incorporation of the Company and (III)
the Bylaws of the Company, each as in effect at the Initial Closing.

 

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

 

    	39

    	 

    

 

(vii)        The
Company shall have delivered to such Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock outstanding on the Initial Closing Date immediately prior to the Initial Closing.

 

(viii)      The
Common Stock (I) shall be designated for quotation or listed (as applicable) on the Principal Market and (II) shall not have been
suspended, as of the Initial Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Initial Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum maintenance requirements of the Principal Market.

 

(ix)         The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market and shall have obtained a complete and
unconditional waiver from any Person with a right of participation, preemptive right or similar right with respect to any securities
of the Company for the transactions contemplated hereby and for all future securities issuances by the Company or any of its Subsidiaries.

 

(x)          No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority or other Governmental Entity of competent jurisdiction that prohibits the consummation of
any of the transactions contemplated by the Transaction Documents.

 

(xi)         Since
the date of execution of this Agreement, no event or series of events shall have occurred that has or reasonably could be expected
to have a Material Adverse Effect.

 

(xii)        The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Initial
Conversion Shares, the Exchange Conversion Shares and the Initial Warrant Shares.

 

(xiii)      Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire transfer instructions of the Company.

 

(xiv)        The
transactions contemplated by each of the exchange agreements by and between each New Buyer and the Company dated as of the date
hereof shall have been consummated concurrently with the Initial Closing.

 

(xv)         In
accordance with the terms of the Security Documents, the Company shall have delivered to the Collateral Agent appropriate financing
statements on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by each Security Document.

 

    	40

    	 

    

 

(xvi)        Within
two (2) Business Days prior to the Initial Closing, the Company shall have delivered or caused to be delivered to each Buyer (A)
certified copies of UCC search results, listing all effective financing statements which name as debtor the Company or any of its
Subsidiaries filed in the prior five years to perfect an interest in any assets thereof, together with copies of such financing
statements, none of which, except as otherwise agreed in writing by the Buyers, shall cover any of the Collateral (as defined in
the Security Documents) and the results of searches for any tax lien and judgment lien filed against such Person or its property,
which results, except as otherwise agreed to in writing by the Buyers shall not show any such Liens (as defined in the Security
Documents); and (B) a perfection certificate, duly completed and executed by the Company and each of its Subsidiaries, in form
and substance satisfactory to the Buyers.

 

(xvii)      The
Collateral Agent and such Buyer shall be satisfied that the Collateral Agent has been granted, and holds, for the benefit of the
Collateral Agent and such Buyer, a perfected, first priority Lien on, and security interest in, all of the Collateral, subject
only to Permitted Liens.

 

(xviii)     Such
New Buyer shall have received evidence of the cancellation or payment in full of all Indebtedness under the Existing Notes, together
with (A) a termination and release agreement with respect to the Existing Notes and all related documents, duly executed by the
Company, its Subsidiaries and each of the Exchanging Buyers, in form and substance reasonably acceptable to such New Buyer, and
(B) UCC-3 termination statements for all UCC-1 financing statements filed by one or more Exchanging Buyers and covering any portion
of the Collateral.

 

(b)          Additional
Closing Date. The obligation of each New Buyer hereunder to purchase the Additional Notes and the related Additional Warrants
at an Additional Closing is subject to the satisfaction, at or before each Additional Closing Date, of each of the following conditions,
provided that these conditions are for each New Buyer's sole benefit and may be waived by such New Buyer at any time in its sole
discretion by providing the Company with prior written notice thereof:

 

(i)          The
Company shall have executed and delivered to such New Buyer the Additional Notes (in such principal amounts as such New Buyer shall
request) and the Additional Warrants (in such amounts as such New Buyer shall request) which are being purchased by such
New Buyer at the Additional Closing pursuant to this Agreement.

 

(ii)         Such
New Buyer shall have received the opinion of Roetzel & Andress, LPA, the Company's outside counsel, dated as of the Additional
Closing Date, in substantially the form of Exhibit H attached hereto.

 

    	41

    	 

    

 

(iii)        The
Irrevocable Transfer Agent Instructions shall remain in effect as of the Additional Closing Date and the Company shall cause its
transfer agent to deliver a letter to such New Buyer to that effect.

 

(iv)        The
Company shall have delivered to such New Buyer a certified copy of the Certificate of Incorporation as certified by the Nevada
Secretary of State within ten (10) days of the Additional Closing Date.

 

(v)          The
Company shall have delivered to such New Buyer a certificate, in the form acceptable to such New Buyer, executed by the Secretary
of the Company and dated as of the Additional Closing Date, as to (I) the resolutions consistent with Section 3(b) as adopted by
the Company's board of directors in a form reasonably acceptable to such New Buyer, (II) the Certificate of Incorporation of the
Company and (III) the Bylaws of the Company, each as in effect at the Additional Closing.

 

(vi)         Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties that are already qualified by materiality or Material Adverse Effect which shall be true and correct in all respects)
as of the date when made and as of the Additional Closing Date as though originally made at that time (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Additional Closing Date. Such New Buyer shall have received a certificate,
duly executed by the Chief Executive Officer of the Company, dated as of the Additional Closing Date, to the foregoing effect and
as to such other matters as may be reasonably requested by such New Buyer in the form acceptable to such New Buyer.

 

(vii)        The
Company shall have delivered to such New Buyer a letter from the Company's transfer agent certifying the number of shares of Common
Stock outstanding on the Additional Closing Date immediately prior to the Additional Closing.

 

(viii)      The
Common Stock (I) shall be designated for quotation or listed (as applicable) on the Principal Market and (II) shall not have been
suspended, as of the Additional Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of the Additional Closing Date, either (A) in writing by
the SEC or the Principal Market or (B) by falling below the minimum maintenance requirements of the Principal Market.

 

(ix)         The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market.

 

(x)          No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority or other Governmental Entity of competent jurisdiction that prohibits the consummation of
any of the transactions contemplated by the Transaction Documents.

 

    	42

    	 

    

  

(xi)         Since
the date of execution of this Agreement, no event or series of events shall have occurred that has or reasonably could be expected
to have a Material Adverse Effect.

 

(xii)        The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the applicable
Additional Conversion Shares and Additional Warrant Shares.

 

(xiii)      No
Event of Default (as defined in the Notes) shall have occurred and be continuing.

 

		8.	TERMINATION.

 

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

 

		9.	MISCELLANEOUS.

 

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

  

    	43

    	 

    

  

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

 

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

 

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

  

    	44

    	 

    

  

(e)          Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein
and therein, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered
herein and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be
deemed to) (i) have any effect on any agreements any Buyer has entered into with, or any instruments any Buyer has received from,
the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by such Buyer in the
Company or (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries, or any
rights of or benefits to any Buyer or any other Person, in any agreement entered into prior to the date hereof between or among
the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from the Company and/or any of
its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force and effect. Except
as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision of
this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined
below), and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Securities, as applicable, provided that no such amendment shall be effective to the extent
that it (1) applies to less than all of the holders of the Securities then outstanding or (2) imposes any obligation or liability
on any Buyer without such Buyer's prior written consent (which may be granted or withheld in such Buyer's sole discretion). No
waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided that
the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity
with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that
no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding
(unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer's
prior written consent (which may be granted or withheld in such Buyer's sole discretion). No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless
the same consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders
of the Warrants (as the case may be). The Company has not, directly or indirectly, made any agreements with any Buyers relating
to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As
a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (i) no due
diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect
such Buyer's right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company's representations
and warranties contained in this Agreement or any other Transaction Document and (ii) unless a provision of this Agreement or any
other Transaction Document is expressly preceded by the phrase "except as disclosed in the SEC Documents," nothing contained
in any of the SEC Documents shall affect such Buyer's right to rely on, or shall modify or qualify in any manner or be an exception
to any of, the Company's representations and warranties contained in this Agreement or any other Transaction Document. "Required
Holders" means (i) prior to the Initial Closing Date, each Buyer entitled to purchase or receive Notes at the Initial
Closing and (ii) on or after the Initial Closing Date, holders of a majority of the Securities as of such time (excluding any Securities
held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder or pursuant to the Notes and/or the
Warrants (or the Buyers, with respect to any waiver or amendment of Section 4(o)); provided, that such majority must include Hudson
Bay Master Fund Ltd (to the extent Hudson Bay Master Fund Ltd holds any Notes, Warrants or other Securities as of such time or
has the right to purchase any Notes or Warrants as of such time).

  

    	45

    	 

    

  

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

 

	If to the Company:	Fuse Science, Inc.
	 	6135 NW 167th Street
	 	#E21
	 	Miami Lakes, Florida 33015
	 	Phone No.: (305) 503-3873
	 	Facsimile: (305) 819-0900
	 	Attention: Chief Executive Officer

 

    	46

    	 

    

 

	With a copy (for informational	 
	purposes only) to:	Roetzel & Andress, LPA
	 	350 E. Las Olas Boulevard
	 	Suite #1150
	 	Fort Lauderdale, Florida 33301
	 	Phone No.: (954) 759-2721
	 	Facsimile: (954) 462-4260
	 	Attention: Dale A. Bergman, Esq.
	and	 
	 	Gutierrez Yelin & Boulris, PLLC
	 	100 Almeria Avenue
	 	Suite #340
	 	Coral Gables, Florida  33134
	 	Phone No.: (305) 358-5100
	 	Facsimile: (888) 281-1829
	 	Attention: Jorge Gutierrez, Esq.
	 	 
	If to the Transfer Agent:	Securities Transfer Corporation
	 	Issuances/Lost Securities
	 	2591 Dallas Parkway
	 	Suite #102
	 	Frisco, Texas 75034
	 	Phone No.: (469) 633-0101 x109
	 	Facsimile: (469) 633-0088
	 	Attention: Christina Shelton
	 	 
	If to a Buyer, to its address, facsimile number or e-mail address set forth on the Schedule of Buyers, with copies to such Buyer's representatives as set forth on the Schedule of Buyers,
	 
	With a copy (for informational	 
	purposes only) to:	Schulte Roth & Zabel LLP
	 	919 Third Avenue
	 	New York, New York  10022
	 	Telephone:   (212) 756-2000
	 	Facsimile:    (212) 593-5955
	 	E-mail:         eleazer.klein@srz.com
	 	Attention:     Eleazer N. Klein, Esq.

  

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

  

    	47

    	 

    

 

(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any assignee of any of the Securities (but only with respect to an assignee of such Securities to the extent
a Buyer has executed a written assignment of rights hereunder with respect thereto). The Company shall not assign this Agreement
or its rights and obligations hereunder without the prior written consent of the Required Holders, including, without limitation,
by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the
Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may
assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of the
Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.

 

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

 

(i)          Survival.
The representations, warranties, agreements and covenants shall survive the Initial Closing. Each Buyer shall be responsible only
for its own representations, warranties, agreements and covenants hereunder.

 

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

 

(k)          Indemnification.

 

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

 

    	48

    	 

    

 

(ii)         Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have the right
to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by the indemnifying
party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee and the indemnifying
party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other party represented
by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall be selected by the Investors
holding at least a majority of the Purchased Shares. The Indemnitee shall cooperate fully with the indemnifying party in connection
with any negotiation or defense of any such action or Indemnified Liabilities by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnitee that relates to such action or Indemnified Liabilities.
The indemnifying party shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay
or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnitee, which consent shall
not be unreasonably withheld conditioned or delayed, consent to entry of any judgment or enter into any settlement or other compromise
which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release
from all liability in respect to such Indemnified Liabilities or litigation. Following indemnification as provided for hereunder,
the indemnifying party shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the
Indemnitee under this Section 9(k), except to the extent that the indemnifying party is prejudiced in its ability to defend such
action.

 

    	49

    	 

    

 

(iii)        The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.

 

(iv)         The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.

 

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

 

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

 

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

 

    	50

    	 

    

  

(o)          Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of
the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars ("U.S. Dollars"), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. "Exchange
Rate" means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S.
Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

(p)          Judgment
Currency.

 

(i)          If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the "Judgment Currency") an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

 

(1)         the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(2)         the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the "Judgment Conversion
Date").

 

(ii)         If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

  

    	51

    	 

    

  

(iii)        Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement.

 

(q)          Independent
Nature of Buyers' Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer
independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with
such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring
such Buyer's investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer confirms
that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction contemplated
hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single
agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company, not
the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this
Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the
Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.

 

[signature pages follow]

  

    	52

    	 

    

  

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

 

	 	COMPANY:
	 	 
	 	FUSE SCIENCE, INC.
	 	 
	 	By:  	 
	 	Name: 	Brian Tuffin
	 	Title:	Chief Executive Officer

  

    	53

    	 

    

 

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

 

	 	BUYERS:
	 	 
	 	HUDSON BAY MASTER FUND LTD.
	 	By: Hudson Bay Capital Management LP, as

its Investment Manager
	 	 
	 	By:  	 
	 	Name: 	George Antonopoulos
	 	Title: 	Authorized Signatory

  

    	54

    	 

    

  

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

 

	 	BUYERS:
	 	 
	 	By:  	 
	 	Name: 	Barry Honig

  

    	55

    	 

    

  

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

 

	 	BUYERS:
	 	 
	 	[BUYER]
	 	 
	 	By:  	 
	 	Name: 	 
	 	Title:	 

  

    	56

    	 

    

  

SCHEDULE OF BUYERS

  

 

	(1)	 	(2)	 	(3)	 	 	(4)	 	 	(5)	 	 	(6)	 	 	(7)	 	 	(8)
	Buyer	 	Address and Facsimile Number	 	Original
 Principal
 Amount
 of Initial

    Notes	 	 	Aggregate 
Number of 
Initial
 Warrant

    Shares	 	 	Principal
 Amount
 of
 Existing

    Notes	 	 	Original
 Principal
 Amount
 of

    Exchange
 Notes	 	 	Initial
 Purchase
 Price	 	 	Legal Representative's
 Address and Facsimile

    Number
	 	 	 	 			 	 			 	 			 	 			 	 			 	 	 
	Hudson Bay
 Master Fund
 Ltd	 	777 Third Avenue, 30th Floor
 New York, NY 10017
 Attention:
    Yoav Roth
 Facsimile: (212) 571-1279
 E-mail:
 investments@hudsonbaycapital.com
 Residence: Cayman Islands	 	$	275,000	 	 	 	20,625,000	 	 	 	N/A	 	 	 	N/A	 	 	$	275,000	 	 	Schulte Roth & Zabel LLP
 919 Third Avenue
 New York,
    New York  10022
 Attention:  Eleazer Klein, Esq.
 Facsimile: (212) 593-5955
 Telephone:  (212)
    756-2376
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GRQ Consultants, Inc. 401(k)	 	555 S. Federal Highway 
Suite #450 
Boca Raton, FL 33432
    
Telephone: 561-235-5379 
Facsimile: 561-302-2287 
E-mail: brhonig@aol.com	 	$	275,000	 	 	 	20,625,000	 	 	$	105,000	 	 	$	105,000	 	 	$	275,000	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MusclePharm Corporation	 	4721 Ironton Street, Building A 
Denver, Colorado 80239 
Telephone:
    
Facsimile" 
E-mail: 
Residence:	 	 	N/A	 	 	 	N/A	 	 	$	275,000	 	 	$	275,000	 	 	 	N/A	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Brauser	 	4400 Biscayne Boulevard 
Suite #850 
Miami, Florida 33137
    
Telephone: 
Facsimile" 
E-mail:	 	 	N/A	 	 	 	N/A	 	 	$	105,000	 	 	$	105,000	 	 	 	N/A	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Frost Gamma Investments Trust	 	4400 Biscayne Boulevard 
Miami, Florida 33137 
Telephone:
    
Facsimile" 
E-mail: 
Residence:	 	 	N/A	 	 	 	N/A	 	 	$	105,000	 	 	$	105,000	 	 	 	N/A	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Melechdavid, Inc.	 	100 S. Pointe Drive 
Suite #1405 
Miami Beach, Florida
    33139 
Telephone: 
Facsimile" 
E-mail: 
Residence:	 	 	N/A	 	 	 	N/A	 	 	$	105,000	 	 	$	105,000	 	 	 	N/A	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Jonathan Manela	 	350 Seventh Avenue 
Suite #900 
New York, New York 10001
    
Telephone: 
Facsimile" 
E-mail: 
Residence:	 	 	N/A	 	 	 	N/A	 	 	$	65,000	 	 	$	65,000	 	 	 	N/A	 	 	N/A
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Brian Tuffin	 	Fuse Science, Inc. 
6135 NW 167th Street, #E21 
Miami Lakes,
    Florida 33015 
Telephone: 
Facsimile" 
E-mail: 
Residence:	 	 	N/A	 	 	 	N/A	 	 	$	15,000	 	 	$	15,000	 	 	 	N/A	 	 	N/A

   

    	57Exhibit 10.2

 

FORM OF [SERIES A] [SERIES B] SENIOR
SECURED CONVERTIBLE NOTE

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE
TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 19(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY,
THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)
OF THIS NOTE.

 

FUSE SCIENCE, INC.

 

[SERIES A] [SERIES B] SENIOR SECURED
CONVERTIBLE NOTE

 

	Issuance Date: [●] 20141	Original Principal Amount: U.S. $[●]

 

FOR VALUE RECEIVED,
Fuse Science, Inc., a Nevada corporation (the "Company"), hereby promises to pay to the order of [BUYER] or its
registered assigns ("Holder") the amount set out above as the Original Principal Amount (as reduced pursuant to
the terms hereof pursuant to redemption, conversion or otherwise, the "Principal") when due, whether upon the
Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and
to pay interest ("Interest") on any outstanding Principal (as defined below) at the applicable Interest Rate (as
defined below) from the date set out above as the Issuance Date (the "Issuance Date") until the same becomes due
and payable, whether upon the Maturity Date, or acceleration, conversion, redemption or otherwise (in each case in accordance with
the terms hereof). This [Series A] [Series B] Senior Secured Convertible Note (including all [Series A] [Series B] Senior Secured
Convertible Notes issued in exchange, transfer or replacement hereof, this "Note" or "Note")
is one of an issue of [Series A] [Series B] Senior Secured Convertible Notes issued pursuant to the Securities Purchase Agreement
(as defined below) on [the Initial]2 [an Additional]3 Closing Date (as defined below) (collectively, the
"Other Notes") and such other Senior Secured Convertible Notes, if any, that have been issued pursuant to the
Securities Purchase Agreement on [the Initial Closing Date and on]4 one or more Additional Closing Dates that is not
the Issuance Date (collectively, the "Additional Notes", and together with the Other Notes, the "Notes").
Certain capitalized terms used herein are defined in Section ‎31.

 

 

1 Insert the
applicable Closing Date.

2 Insert in
the Initial Notes.

3 Insert in
all Additional Notes.

4
Insert in all Additional Notes.

 

    	 

    	 

    

 

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

 

2.          INTEREST;
INTEREST RATE. (a) Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of
a 360-day year and twelve 30-day months, shall be payable in arrears on each Conversion Date, if any, on each Event of Default
Redemption Date (as defined in Section 11), if any, on each Change of Control Redemption Date (as defined in Section 11), if any,
on each Holder Optional Redemption Date (as defined in Section 10), if any, and on the Maturity Date (each, an "Interest
Date"). Interest shall be payable on each Interest Date, to the record holder of this Note on the applicable Interest
Date, in shares of Common Stock ("Interest Shares") so long as there has been no Equity Conditions Failure; provided
however, that the Company may, at its option following written notice to the Holder, pay Interest on any Interest Date in cash
("Cash Interest") or in a combination of Cash Interest and Interest Shares. The Company shall deliver a written
notice (each, an "Interest Election Notice") to each holder of the Notes on or prior to the Interest Notice Due
Date (the date such notice is delivered to all of the holder, the "Interest Notice Date") which notice (i) either
(A) confirms that Interest to be paid on such Interest Date shall be paid entirely in Interest Shares or (B) elects to pay Interest
as Cash Interest or a combination of Cash Interest and Interest Shares and specifies the amount of Interest that shall be paid
as Cash Interest and the amount of Interest, if any, that shall be paid in Interest Shares and (ii) if the Company is paying all
or any portion of Interest in Interest Shares, certifies that there has been no Equity Conditions Failure. If an Equity Conditions
Failure has occurred as of the Interest Notice Date, then unless the Company has elected to pay such Interest as Cash Interest,
the Interest Election Notice shall indicate that unless the Holder waives the Equity Conditions Failure, the Interest shall be
paid as Cash Interest. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred as of the
Interest Notice Date but an Equity Conditions Failure occurs at any time prior to the Interest Date, (A) the Company shall provide
the Holder a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Interest shall
be paid as Cash Interest. Interest to be paid on an Interest Date in Interest Shares shall be paid in a number of fully paid and
nonassessable shares (rounded to the nearest whole share in accordance with Section 3(a)) of Common Stock equal to the quotient
of (1) the amount of Interest payable on such Interest Date less any related Cash Interest paid on such Interest Date and (2) the
Company Conversion Price in effect on the applicable Interest Date.

 

    	2

    	 

    

 

(b)          When
any Interest Shares are to be paid on an Interest Date, the Company shall (A) provided that the Company's transfer agent (the "Transfer
Agent") is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program,
credit such aggregate number of Interest Shares to which the Holder shall be entitled to the Holder's or its designee's balance
account with DTC through its Deposit/Withdrawal at Custodian system, or (B) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver on the applicable Interest Date, to the address set forth in the
register maintained by the Company for such purpose pursuant to the Securities Purchase Agreement or to such address as specified
by the Holder in writing to the Company at least two (2) Business Days prior to the applicable Interest Date, a certificate, registered
in the name of the Holder or its designee, for the number of Interest Shares to which the Holder shall be entitled. When any Cash
Interest is to be paid on an Interest Date, the Company shall pay to the Holder, in cash by wire transfer of immediately available
funds, the amount of any Cash Interest.

 

(c)          Prior
to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of
inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption
in accordance with Section 11. From and after the occurrence and during the continuance of any Event of Default, the Interest Rate
shall automatically be increased to fifteen percent (15.0%). In the event that such Event of Default is subsequently cured, the
adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date
of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of
Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including
the date of such cure of such Event of Default. The Company shall pay any and all taxes that may be payable with respect to the
issuance and delivery of Interest Shares.

 

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

 

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

 

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

 

    	3

    	 

    

 

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

 

(ii)         "Conversion
Price" means, as of any Conversion Date or other date of determination (x) prior to [●]5, $0.02 per share
(subject to adjustment as provided herein) (the price set forth in this clause (x), the "Fixed Conversion Price")
and (y) on or after [●]6, the lower of (I) the Fixed Conversion Price and (II) sixty percent (60%) of (I) the
lowest Weighted Average Price of the Common Stock on any Trading Day during the sixty (60) consecutive Trading Days ending on the
Trading Day immediately preceding the Conversion Date or other date of determination, in each case, subject to adjustment as provided
herein. For the avoidance of doubt, all such foregoing determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination, reclassification or similar transaction during the applicable calculation period.

 

(c)          Mechanics
of Conversion.

 

(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a "Conversion Date"),
the Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the "Conversion Notice")
to the Company. If required by Section 3(c)(iii), within three (3) Trading Days following a conversion of this Note as aforesaid
(the "Share Delivery Date"), the Holder shall surrender this Note to a nationally recognized overnight delivery
service for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft
or destruction as contemplated by Section 19(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit II,
of receipt of such Conversion Notice to the Holder and the Transfer Agent. On or before the second (2nd) Trading Day following
the date of receipt of a Conversion Notice, the Company shall (1)(x) provided that the Transfer Agent is participating in the DTC
Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system or (y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable
overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder shall be entitled and (2) deliver to the Holder the
Make-Whole Amount in cash, in Common Stock or in a combination of cash and Common Stock in accordance with Section 12. If this
Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater
than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event
later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee)
a new Note (in accordance with Section 19(d)) representing the outstanding Principal not converted. The Person or Persons entitled
to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on the Conversion Date.

 

 

5 Insert date
that is three (3) months after the Initial Closing Date.

6 Insert date
that is three (3) months after the Initial Closing Date.

 

    	4

    	 

    

 

(ii)         Company's
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, to issue to the Holder on or prior to the Share Delivery Date, a certificate
for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company's
share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, on or prior to
the Share Delivery Date, to credit the Holder's or its designee's balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder's conversion of any Conversion Amount (as the case may be) (a "Conversion
Failure") and if on or after such Share Delivery Deadline the Holder (or any other Person in respect, or on behalf, of
the Holder) purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock, issuable upon such conversion that the Holder so anticipated receiving
from the Company, then, in addition to all other remedies available to the Holder, the Company shall, within three (3) Business
Days after receipt of the Holder's written request and in the Holder's discretion, either: (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the
"Buy-In Price"), at which point the Company's obligation to so issue and deliver such certificate or credit the
Holder's balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder's conversion
hereunder (as the case may be) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit the Holder's balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon the Holder's conversion hereunder (as the case may be) and pay cash to the
Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock
multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (ii).

 

    	5

    	 

    

 

(iii)        Registration;
Book-Entry. The Company shall maintain a register (the "Register") for the recordation of the names and addresses
of the holders of each Note and the principal amount of the Notes held by such holders (the "Registered Notes").
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders
of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary.
A Registered Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the
Register. Upon its receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof,
the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same
aggregate principal amount as the principal amount of the surrendered Registered Note to the designated assignee or transferee
pursuant to Section 19, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of
all or part of any Registered Note within two (2) Business Days of its receipt of such a request, then the Register shall be automatically
updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in
this Section 3, following conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required
to physically surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted
(in which event this Note shall be delivered to the Company following conversion thereof as contemplated by Section 3(c)(i)) or
(B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting
reissuance of this Note upon physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal,
Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions and/or payments (as the
case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon conversion.

 

(iv)         Pro
Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion,
the Company, subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro
rata amount of such holder's portion of its Notes submitted for conversion based on the principal amount of Notes submitted for
conversion on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such
date. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion
of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute
in accordance with Section 24.

 

    	6

    	 

    

 

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

 

4.          RIGHTS
UPON EVENT OF DEFAULT.

 

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

 

    	7

    	 

    

 

(i)          the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a
period of five (5) consecutive days or for more than an aggregate of ten (10) days in any 365 day period;

 

(ii)         the
Company's (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the required
number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case
may be) or (B) notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by way of public
announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion
of any Notes into shares of Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant
to Section 3(d), or a request for exercise of any Warrants for Warrant Shares in accordance with the provisions of the Warrants;

 

(iii)        at
any time following the tenth (10th) consecutive day that the Holder's Authorized Share Allocation is less than the number of shares
of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise);

 

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

 

(v)          the
Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities acquired by the Holder under the Securities Purchase Agreement (including this
Note) as and when required by such Securities or the Securities Purchase Agreement, unless otherwise then prohibited by applicable
state or federal securities laws, and any such failure remains uncured for at least five (5) days;

 

(vi)         the
occurrence of any default under, redemption of or acceleration prior to maturity of any Indebtedness (as defined in the Securities
Purchase Agreement) in excess of $150,000 of the Company or any of its Subsidiaries, other than with respect to any Other Notes
or Additional Notes;

 

    	8

    	 

    

 

(vii)        bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or
against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;

 

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

 

(ix)         the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other
similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or
insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;

 

    	9

    	 

    

 

(x)          a
final judgment or judgments for the payment of money aggregating in excess of $150,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment
which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $150,000 amount
set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written
statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity
and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty
(30) days of the issuance of such judgment;

 

(xi)         the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $150,000 due to any third party (other than, with respect to
unsecured Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper
proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or
is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $150,000, which breach
or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer
to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default
or event of default under any agreement binding the Company or any Subsidiary, which default or event of default would or is likely
to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition
(including financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;

 

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

 

(xiii)       any
strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the
Company or any Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect (as
defined in the Securities Purchase Agreement);

 

(xiv)       a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred;

 

(xv)        any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 15 of this Note;

 

    	10

    	 

    

 

(xvi)       any
Material Adverse Effect occurs;

 

(xvii)      any
material provision of any Security Document (as defined in the Securities Purchase Agreement) (as determined by the Collateral
Agent (as defined in the Securities Purchase Agreement)) shall at any time for any reason (other than pursuant to the express terms
thereof) cease to be valid and binding on or enforceable against the Company or any Subsidiary intended to be a party thereto,
or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company
or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability
thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created
under any Security Document;

 

(xviii)     any
Security Document or any other security document, after delivery thereof pursuant hereto, shall for any reason fail or cease to
create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien in favor of
the Collateral Agent for the benefit of the holders of the Notes on any Collateral (as defined in the Security Documents) purported
to be covered thereby;

 

(xix)        the
Company's failure, on or prior to the Authorized Share Increase Deadline, to increase the number of authorized shares of Common
Stock, to 800,000,000 shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction after the Subscription Date);

 

(xx)         the
Company's failure, on or prior to the Authorized Share Increase Deadline, to effect a reverse stock split at a ratio of 200:1;

 

(xxi)        the
Company's failure to publicly file any quarterly report on Form 10-Q or annual report on Form 10-K, in each case, when such filings
are due pursuant to, and otherwise in accordance with, the requirements of the 1934 Act as then in effect (but regardless of whether
or not the Company is required pursuant to the 1934 Act to make any such filings) if any such failure continues for an aggregate
of at least five (5) Business Days while this Note is outstanding;

 

(xxii)      any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes; or

 

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

 

    	11

    	 

    

 

(b)          Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note, any Other Note
or any Additional Note, the Company shall within one (1) Business Day deliver written notice thereof via facsimile and overnight
courier (with next day delivery specified) (an "Event of Default Notice") to the Holder. At any time after the
earlier of the Holder's receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder
may require the Company to redeem (regardless of whether such Event of Default has been cured) all or any portion of this Note
by delivering written notice thereof (the "Event of Default Redemption Notice") to the Company, which Event of
Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject
to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the sum of (I)
the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the
product of (X) the Conversion Rate with respect to the Conversion Amount in effect at such time as the Holder delivers an Event
of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Event of
Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) (the price set
forth in this clause (I), the "Basic Event of Default Redemption Price") and (II) the Make-Whole Amount (the "Event
of Default Redemption Price"). On the Event of Default Redemption Date (as defined in Section 11) the Company shall deliver
or shall cause to be delivered to the Holder the Basic Event of Default Redemption Price in cash by wire transfer of immediately
available funds pursuant to wire instructions provided by the Holder in writing to the Company. The Make-Whole Amount shall be
paid in cash, in Common Stock or in a combination of cash and Common Stock in accordance with Section 12. Redemptions required
by this Section 4(b) shall be made in accordance with the provisions of Section 11. To the extent redemptions required by this
Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such
redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 4, but subject
to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion
Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be converted, in whole or
in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of the Company's redemption of any portion
of this Note under this Section 4(b), the Holder's damages would be uncertain and difficult to estimate because of the parties'
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and shall be
deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty.

 

    	12

    	 

    

 

5.          RIGHTS
UPON FUNDAMENTAL TRANSACTION.

 

(a)          Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this
Section 5(a), including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having
a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by
such holder, having similar conversion rights as the Notes and having similar ranking to the Notes, and satisfactory to the Holder
and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or
listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the
other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental
Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion or redemption
of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of the Company's Common
Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 6 and 16, which shall
continue to be receivable thereafter) issuable upon the conversion or redemption of the Notes prior to such Fundamental Transaction,
such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted
immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted
in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option or the
Required Holders may elect on behalf of the Holders of all the Notes by delivery of written notice to the Company to waive this
Section 5(a) to permit the Fundamental Transaction without the assumption of this Note. The provisions of this Section 5 shall
apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the
conversion of this Note.

 

    	13

    	 

    

 

(b)          Notice
of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior
to the consummation of a Change of Control (the "Change of Control Date"), but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via facsimile and overnight courier to the Holder (a
"Change of Control Notice"). At any time during the period beginning after the Holder's receipt of a Change of
Control Notice or the Holder becoming aware of a Change of Control of a Change of Control Notice is not delivered to the Holder
in accordance with the immediately preceding sentence (as applicable) and ending on the later of twenty (20) Trading Days after
(A) consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice, the Holder may require
the Company to redeem all or any portion of this Note by delivering written notice thereof ("Change of Control Redemption
Notice") to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount the Holder is
electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by the Company
at a price equal to the sum of (X) the greater of (i) the product of (x) the Change of Control Redemption Premium multiplied by
(y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied by (y) the
product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing
Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of
(1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on
the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion Price then in effect at the time of
delivery by the Holder of the Change of Control Redemption Notice and (iii) the product of (y) the Change of Control Redemption
Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the aggregate
cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders
of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded
securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior
to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following
the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately
prior to the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the price
set forth in this clause (X), the "Basic Change of Control Redemption Price") and (Y) the Make-Whole Amount (the
"Change of Control Redemption Price"). On the Change of Control Redemption Date (as defined in Section 11) the
Company shall deliver or shall cause to be delivered to the Holder the Basic Change of Control Redemption Price in cash by wire
transfer of immediately available funds pursuant to wire instructions provided by the Holder in writing to the Company. The Make-Whole
Amount shall be paid in cash, in Common Stock or in a combination of cash and Common Stock in accordance with Section 12. Redemptions
required by this Section 5 shall be made in accordance with the provisions of Section 11 and shall have priority to payments to
stockholders in connection with such Change of Control. To the extent redemptions required by this Section 5(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control
Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under
this Section 5(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to Section 3. In the event of the Company's redemption of any portion of this Note under this Section 5(b), the Holder's
damages would be uncertain and difficult to estimate because of the parties' inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium
due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder's actual
loss of its investment opportunity and not as a penalty.

 

    	14

    	 

    

 

6.          RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations
or restrictions on the convertibility of this Note) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder's right to
participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, 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 Maximum Percentage).

 

(b)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of this Note (i) in addition to the shares
of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with
respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate
Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares
of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of
Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled
to receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares
of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance satisfactory to the Required Holders. The provisions of this Section 6
shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the
conversion or redemption of this Note.

 

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7.          RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.

 

(a)          Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues
or sells, or in accordance with this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance
or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued
or sold or deemed to have been issued or sold) for a consideration per share (the "New Issuance Price") less than
a price equal to the Fixed Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such
Fixed Conversion Price then in effect is referred to herein as the "Applicable Price") (the foregoing a "Dilutive
Issuance"), then, immediately after such Dilutive Issuance, the Fixed Conversion Price then in effect shall be reduced
to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the
adjusted Fixed Conversion Price and consideration per share under this Section 7(a)), the following shall be applicable:

 

(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 7(a)(i), the "lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option" shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus
(2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made upon
the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

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(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 7(a)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof"
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Fixed Conversion Price shall be made upon the actual
issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue
or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Fixed Conversion Price
has been or is to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment
of the Fixed Conversion Price shall be made by reason of such issue or sale.

 

(iii)        Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed Conversion Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued
or sold. For purposes of this Section 7(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 7(a) shall be made if such
adjustment would result in an increase of the Fixed Conversion Price then in effect.

 

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(iv)         Calculation
of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued or deemed issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company, together comprising one integrated
transaction, (x) such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be deemed to have
been issued for consideration equal to the Black Scholes Consideration Value thereof and (y) the other securities issued or sold
or deemed to have been issued or sold in such integrated transaction shall be deemed to have been issued for consideration equal
to the difference of (I) the aggregate consideration received or receivable by the Company minus (II) the Black Scholes Consideration
Value of each such Option or Convertible Security (as applicable) or Adjustment Right (as applicable). If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock,
Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received
by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities,
in which case the amount of consideration received by the Company for such securities will be the average VWAP of such security
for the five (5) Trading Day period immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may
be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company
and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation
(the "Valuation Event"), the fair value of such consideration will be determined within five (5) Trading Days
after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company
and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees
and expenses of such appraiser shall be borne by the Company.

 

(v)          Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

(b)          Adjustment
of Fixed Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 5 or Section
7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number
of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without
limiting any provision of Section 5 or Section 7(a), if the Company at any time on or after the Subscription Date combines (by
any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the Fixed Conversion Price in effect immediately prior to such combination
will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b) occurs during the period
that a Fixed Conversion Price is calculated hereunder, then the calculation of such Fixed Conversion Price shall be adjusted appropriately
to reflect such event.

 

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(c)          Holder's
Right of Alternative Fixed Conversion Price. Subject to Section 4(n) of the Securities Purchase Agreement, in addition to and
not in limitation of the other provisions of this Section 7, if the Company in any manner issues or sells or enters into any agreement
to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, "Variable Price Securities")
after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for
shares of Common Stock pursuant to such Options or Convertible Securities, as applicable, at a price which varies or may vary with
the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such
formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar
transactions) (each of the formulations for such variable price being herein referred to as, the "Variable Price"),
the Company shall provide written notice thereof via facsimile and overnight courier to the Holder on the date of such agreement
and/or the issuance of such Convertible Securities or Options, as applicable. Subject to Section 4(n) of the Securities Purchase
Agreement, from and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder
shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Fixed Conversion
Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely
for purposes of such conversion the Holder is relying on the Variable Price rather than the Fixed Conversion Price then in effect.
The Holder's election to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder to rely
on a Variable Price for any future conversion of this Note.

 

(d)          Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting
of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's board of directors
shall in good faith determine and implement an appropriate adjustment in the Fixed Conversion Price so as to protect the rights
of the Holder, provided that no such adjustment pursuant to this Section 7(d) will increase the Fixed Conversion Price as otherwise
determined pursuant to this Section 7, provided further that if the Holder does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then the Company's board of directors and the Holder shall agree, in good faith,
upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination
shall be final and binding and whose fees and expenses shall be borne by the Company.

 

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(e)          Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

(f)          Adjusted
Conversion Price. If immediately following the close of business on the ten (10) consecutive Trading Days immediately following
the date that is the six (6) month anniversary of the Issuance Date or such later date thereafter when the Company shall have satisfied
its current public information requirement under Rule 144(c)(1) (the "Adjustment Date"), the Fixed Conversion
Price then in effect exceeds the Adjusted Market Price as of such Adjustment Date (the "Adjusted Conversion Price"),
the Fixed Conversion Price hereunder shall be reset to the Adjusted Conversion Price as of such Adjustment Date (each, a "Conversion
Price Adjustment"). Notwithstanding the foregoing, to the extent the Holder delivers one or more Conversion Notices to
the Company during the Adjusted Market Price Measuring Period (as defined in Section 31(b)) with respect to a Conversion Price
Adjustment, in addition to the shares of Common Stock issued or issuable to the Holder with respect to each such Conversion Notice,
on the later of (A) the applicable Share Delivery Date with respect to such Conversion Notice and (B) the applicable Adjustment
Date, the Holder shall receive an additional number of shares of Common Stock equal to the difference of (x) the quotient of (I)
the Conversion Amount with respect to such Conversion Notice, divided by (II) the Adjusted Conversion Price, less (y) the number
of shares of Common Stock issued or otherwise issuable to the Holder with respect to such Conversion Notice. Except as otherwise
provided in this Section 7(f), the Adjusted Conversion Price, if any, shall not apply to any Conversion Amount converted into Common
Stock prior to such Adjustment Date.

 

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

 

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9.          RESERVATION
OF AUTHORIZED SHARES.

 

(a)          Reservation.
From and after the earlier of the Authorized Share Increase Date and the Authorized Share Increase Deadline, the Company shall
reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each of the Notes equal to 130%
of the entire Conversion Rate with respect to the entire Conversion Amount of each such Note as of the most recent Closing Date
as of the applicable date of determination. After the earlier of the Authorized Share Increase Date and the Authorized Share Increase
Deadline and for so long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and keep available
out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of the Notes, 130% of the number
of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes then outstanding,
provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be
reserved by the previous sentence (without regard to any limitations on conversions) (the "Required Reserve Amount").
The initial number of shares of Common Stock reserved for conversions of the Notes and each increase in the number of shares so
reserved shall be allocated pro rata among the holders of the Notes based on the original principal amount of the Notes held by
each holder on the most recent Closing Date as of the applicable date of determination or increase in the number of reserved shares
(as the case may be) (the "Authorized Share Allocation"). In the event that a holder shall sell or otherwise transfer
any of such holder's Notes, each transferee shall be allocated a pro rata portion of such holder's Authorized Share Allocation.
Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the remaining
holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.

 

(b)          Insufficient
Authorized Shares. If, notwithstanding Section 9(a), and not in limitation thereof, at any time after the earlier of the Authorized
Share Increase Date and the Authorized Share Increase Deadline while any of the Notes remain outstanding the Company does not have
a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon
conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an "Authorized
Share Failure"), then the Company shall immediately take all action necessary to increase the Company's authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than thirty (30) days after the occurrence of such Authorized Share Failure, the Company shall
hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders' approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend
to the stockholders that they approve such proposal. In the event that the Company is prohibited from issuing shares of Common
Stock upon any conversion due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized
but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the "Authorization Failure Shares"),
in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption
of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the
product of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorization
Failure Shares to the Company and ending on the date of such issuance and payment under this Section 9(b) and (ii) to the extent
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
the Holder of Authorization Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred
in connection therewith. Nothing contained in Section 9(a) or this Section 9(b) shall limit any obligations of the Company under
any provision of the Securities Purchase Agreement.

 

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10.         OPTIONAL
REDEMPTION AT THE HOLDER'S ELECTION. At any time after [●]7,
the Holder shall have the right, in its sole discretion, at any time or times thereafter, to require that the Company redeem (a
"Holder Optional Redemption") all or any portion of the Conversion Amount of this Note then outstanding by delivering
written notice thereof (a "Holder Optional Redemption Notice" and the date the Holder delivers such notice, the
"Holder Optional Redemption Notice Date") to the Company which notice shall state (i) the portion of this Note
that is being redeemed (the "Holder Optional Redemption Amount") and (ii) the date on which the Holder Optional
Redemption shall occur which date shall be not less than five (5) Business Days from the Holder Optional Redemption Notice Date
(the "Holder Optional Redemption Date"). The portion of this Note subject to redemption pursuant to this Section
10 shall be redeemed by the Company at a price (the "Holder Optional Redemption Price") equal to the sum of (x)
100% of the Conversion Amount being redeemed together with and any accrued and unpaid Interest and Late Charges, if any, on such
Conversion Amount and Interest through the Holder Optional Redemption Date (the price set forth in this clause (x), the "Basic
Holder Optional Redemption Price") and (y) the Make-Whole Amount. On the Holder Optional Redemption Date the Company shall
deliver or shall cause to be delivered to the Holder the Basic Holder Optional Redemption Price in cash by wire transfer of immediately
available funds pursuant to wire instructions provided by the Holder in writing to the Company. The Make-Whole Amount shall be
paid in cash, in Common Stock or in a combination of cash and Common Stock in accordance with Section 12. Holder Optional Redemptions
made pursuant to this Section 10 shall be made in accordance with Section 11. To the extent redemptions required by this Section
10 are deemed or determined by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions
shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 10, but subject to Section
3(d), until the Holder Optional Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount
submitted for redemption under this Section 10 (together with any Late Charges thereon) may be converted, in whole or in part,
by the Holder into Common Stock pursuant to the terms of this Note. In the event of the Company's redemption of any portion of
this Note under this Section 10, the Holder's damages would be uncertain and difficult to estimate because of the parties' inability
to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the
Holder. Accordingly, any redemption premium due under this Section 10 is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty.

 

 

7 Insert the
date that is the one (1) year anniversary of the Initial Closing Date.

 

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11.         REDEMPTIONS.

 

(a)          Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder within two (2) Business Days after the
Company's receipt of the Holder's Event of Default Redemption Notice (an "Event of Default Redemption Date").
If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the
applicable Change of Control Redemption Price to the Holder concurrently with the consummation of such Change of Control if such
notice is received prior to the consummation of such Change of Control and within two (2) Business Days after the Company's receipt
of such notice otherwise (a "Change of Control Redemption Date"). The Company shall deliver the applicable Holder
Optional Redemption Price to the Holder on the applicable Holder Optional Redemption Date. In the event of a redemption of less
than all of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new
Note (in accordance with Section 19(d)) representing the outstanding Principal which has not been redeemed. In the event that the
Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and
until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require
the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that was submitted
for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the
Company's receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount,
(y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 19(d)), to the Holder, and
in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the
difference between (1) the applicable Redemption Price minus (2) the Principal portion of the Conversion Amount submitted for redemption
and (z) the Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted with respect to
each conversion effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date on which the
applicable Redemption Notice is voided and (B) 75% of the lowest Closing Bid Price of the Common Stock during the period beginning
on and including the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the
date on which the applicable Redemption Notice is voided. The Holder's delivery of a notice voiding a Redemption Notice and exercise
of its rights following such notice shall not affect the Company's obligations to make any payments of Late Charges which have
accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

 

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(b)          Redemption
by Other Holders. Upon the Company's receipt of notice from any of the holders of the Other Notes or the Additional Notes for
redemption or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section
4(b), Section 5(b), Section 10 or pursuant to equivalent provisions set forth in the Other Notes and the Additional Notes (each,
an "Other Redemption Notice"), the Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by facsimile a copy of such notice. If the Company receives a Redemption Notice and one or more
Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is three (3) Business
Days prior to the Company's receipt of the Holder's applicable Redemption Notice and ending on and including the date which is
three (3) Business Days after the Company's receipt of the Holder's applicable Redemption Notice and the Company is unable to redeem
all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during
such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the
Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption
Notices received by the Company during such seven (7) Business Day period.

 

12.         MAKE-WHOLE
AMOUNT.

 

(a)          In
addition to any shares of Common stock and/or cash due to the Holder on any Make-Whole Date, on each Make-Whole Date, any applicable
Make-Whole Amount (the "Additional Obligations") on such Conversion Amount being converted or redeemed, as applicable,
shall be payable to the record holder of this Note, in shares of Common Stock ("Additional Shares") so long as
there has been no Equity Conditions Failure; provided however, that the Company may, at its option following written notice to
the Holder, pay such Additional Obligations on any Make-Whole Date in cash ("Cash Additional Payment") or in a
combination of Cash Additional Payment and Additional Shares. The Company shall deliver a written notice (each, an "Additional
Election Notice") to each holder of the Notes on or prior to the second (2nd) Trading Day immediately following
the applicable Make-Whole Trigger Date (an "Additional Notice Due Date" and the date such notice is delivered
to all of the holder, the "Additional Notice Date") which notice (i) either (A) confirms that the Additional Obligations
to be paid on such Make-Whole Date shall be paid entirely in Additional Shares or (B) elects to pay the Additional Obligations
as a Cash Additional Payment or a combination of a Cash Additional Payment and Additional Shares and specifies the amount of Additional
Obligations that shall be paid as a Cash Additional Payment and the amount of Additional Obligations, if any, that shall be paid
in Additional Shares and (ii) if the Company is paying all or any portion of the Additional Obligations in Additional Shares, certifies
that there has been no Equity Conditions Failure. If an Equity Conditions Failure has occurred as of the Additional Notice Date,
then unless the Company has elected to pay such Additional Obligations as a Cash Additional Payment, the Additional Election Notice
shall indicate that unless the Holder waives the Equity Conditions Failure, the Additional Obligations shall be paid as a Cash
Additional Payment. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred as of the Additional
Notice Date but an Equity Conditions Failure occurs at any time prior to the Make-Whole Date, (A) the Company shall provide the
Holder a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Additional Obligations
shall be paid as a Cash Additional Payment. Additional Obligations to be paid on a Make-Whole Date in Additional Shares shall be
paid in a number of fully paid and nonassessable shares (rounded to the nearest whole share in accordance with Section 3(a)) of
Common Stock equal to the quotient of (1) the amount of Additional Obligations payable on such Make-Whole Date less any related
Cash Additional Payment paid on such Make-Whole Date and (2) the Company Conversion Price in effect on the Make-Whole Date.

 

    	24

    	 

    

 

(b)          When
any Additional Shares are to be paid on a Make-Whole Date, the Company shall (A) provided that the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of Additional Shares to which the Holder shall
be entitled to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal at Custodian system, or (B)
if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver on the applicable
Make-Whole Date, to the address set forth in the register maintained by the Company for such purpose pursuant to the Securities
Purchase Agreement or to such address as specified by the Holder in writing to the Company at least two (2) Business Days prior
to the applicable Make-Whole Date, a certificate, registered in the name of the Holder or its designee, for the number of Additional
Shares to which the Holder shall be entitled. The Company shall pay any and all taxes that may be payable with respect to the issuance
and delivery of Additional Shares. When any Cash Additional Payment is to be paid on a Make-Whole Date, the Company shall pay to
the Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Additional Payment.

 

13.         VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation,
Title 7 of the Nevada Revised Statutes) and as expressly provided in this Note.

 

14.         SECURITY.
This Note and the Other Notes are secured to the extent and in the manner set forth in the Security Documents.

 

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

 

(a)          Rank.
All payments due under this Note (i) shall rank pari passu with all Other Notes and Additional Notes and (ii) except for
Permitted Indebtedness secured by Permitted Liens, shall be senior to all other Indebtedness of the Company and its Subsidiaries.

 

    	25

    	 

    

 

(b)          Incurrence
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note, the Other
Notes and the Additional Notes and (ii) Permitted Indebtedness).

 

(c)          Existence
of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, allow
or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, "Liens")
other than Permitted Liens.

 

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

 

(e)          Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.

 

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

 

(g)          Maturity
of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of the Subsidiaries to mature or accelerate prior to the Maturity Date.

 

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

 

    	26

    	 

    

 

(i)          Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified
and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary. Notwithstanding the foregoing, the Company may dissolve or merge any Subsidiary
which is no longer active or which it deems in its sole and absolute discretion no longer to be materially necessary to its business.

 

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

 

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

 

16.         PARTICIPATION.
In addition to any adjustments pursuant to Section 7, the Holder, as the holder of this Note, shall be entitled to receive such
dividends paid and distributions made to the holders of Common Stock to the same extent as if the Holder had converted this Note
into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock
on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with
the dividend or distribution to the holders of Common Stock (provided, however, to the extent that the Holder's right to participate
in any such dividend or distribution would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such dividend or distribution to such extent (or the beneficial ownership of any such shares of Common
Stock as a result of such dividend or distribution to such extent) and such dividend or distribution to such extent shall be held
in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Maximum Percentage).

 

17.         AMENDING
THE TERMS OF THIS NOTE. The prior written consent of the Required Holders shall be required for any change or amendment to
this Note. No consideration shall be offered or paid to the Holder to amend or consent to a waiver or modification of any provision
of this Note unless the same consideration is also offered to all of the holders of the Notes. The Holder shall be entitled, at
its option, to the benefit of any amendment to any of the Notes.

 

    	27

    	 

    

 

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

 

19.         REISSUANCE
OF THIS NOTE.

 

(a)          Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 19(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 19(d)) to the Holder representing the outstanding Principal not being transferred. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following
conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal
stated on the face of this Note.

 

(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note (in accordance with Section 19(d)) representing the outstanding Principal.

 

(c)          Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 19(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.

 

(d)          Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 19(a) or Section 19(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note,
from the Issuance Date.

 

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20.         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 (including, without
limitation, compliance with Section 7).

 

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

 

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

 

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

 

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24.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Conversion Price, the Company Conversion Price, any Redemption
Price, the Closing Bid Price, the Closing Sale Price or fair market value (as the case may be) or the arithmetic calculation of
the Conversion Rate or the applicable Redemption Price (as the case may be), the Company or the Holder (as the case may be) shall
submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile (i) within two (2) Business Days
after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if
no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute (including,
without limitation, as to whether any issuance or sale or deemed issuance or sale was an issuance or sale or deemed issuance or
sale of Excluded Securities). If the Holder and the Company are unable to agree upon such determination or calculation within two
(2) Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Company
or the Holder (as the case may be), then the Company shall, within two (2) Business Days, submit via facsimile (a) the disputed
determination of the Conversion Price, the Company Conversion Price, any Redemption Price, the Closing Bid Price, the Closing Sale
Price or fair market value (as the case may be) to an independent, reputable investment bank selected by the Company and approved
by the Holder or (b) the disputed arithmetic calculation of the Conversion Rate or any Redemption Price (as the case may be) to
an independent, outside accountant selected by the Holder that is reasonably acceptable to the Company. The Company shall cause
at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as the
case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives
such disputed determinations or calculations (as the case may be). Such investment bank's or accountant's determination or calculation
(as the case may be) shall be binding upon all parties absent demonstrable error.

 

25.         NOTICES;
CURRENCY; PAYMENTS.

 

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

 

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

 

(c)          Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth
herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of
the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available
funds by providing the Company with prior written notice setting out such request and the Holder's wire transfer instructions.
Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall
instead be due on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction
Documents which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal
to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid
in full ("Late Charge").

 

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

 

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

 

28.         GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. In the event that any provision of this Note is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision of this Note. Nothing contained herein shall be
deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction
to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING
OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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29.         JUDGMENT
CURRENCY.

 

(a)          If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to
convert into any other currency (such other currency being hereinafter in this Section 29 referred to as the "Judgment
Currency") an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing
on the Trading Day immediately preceding:

 

(i)          the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

(ii)         the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 29(a)(ii) being hereinafter referred to as the "Judgment Conversion
Date").

 

(b)          If
in the case of any proceeding in the court of any jurisdiction referred to in Section 29(a)(ii) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(c)          Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.

 

30.         MAXIMUM
PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event
that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

 

    	32

    	 

    

 

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

 

(a)          "Additional
Closing Date" shall have the meaning set forth in the Securities Purchase Agreement.

 

(b)          "Adjusted
Market Price" means, for any given date, the lesser of (i) the initial Fixed Conversion Price and (ii) 80% of the quotient
of (A) the sum of the VWAP of the Common Stock for each of the Trading Days during the ten (10) consecutive Trading Day period
ending on and including the Trading Day immediately prior to such given date divided by (B) ten (10) (such period, the "Adjusted
Market Price Measuring Period"). All such determinations to be appropriately adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions during such Adjusted Market Price Measuring Period.

 

(c)          "Adjustment
Right" means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than rights of the type described
in Sections 6 or 16 hereof) that could result in a decrease in the net consideration received by the Company in connection with,
or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).

 

(d)          "Approved
Stock Plan" means any benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock, options to purchase Common Stock and other equity incentive awards
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.

 

(e)          "Authorized
Share Increase Date" means the date the Company increased the number of authorized shares of Common Stock to 800,000,000
shares of Common Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction
after the Subscription Date).

 

(f)          "Authorized
Share Increase Deadline" means [●]8.

 

 

8 Insert the
date that is seventy-five (75) days immediately following the Initial Closing Date.

 

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(g)         "Black
Scholes Consideration Value" means the value of the applicable Option, Convertible Security or Adjustment Right (as the
case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the "OV"
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such
Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may
be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost
of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance
of such Option, Convertible Security or Adjustment Right (as the case may be).

 

(h)         "Bloomberg"
means Bloomberg, L.P.

 

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

 

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

 

(k)         "Change
of Control Redemption Premium" means 125%.

 

(l)          "Closing
Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal
Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security,
the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid
price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security
by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported
in the "pink sheets" by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing Sale
Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing
Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 24. All such determinations shall be appropriately adjusted for
any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.

 

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(m)          "Closing
Date" shall mean, collectively, the Initial Closing Date and all Additional Closing Dates, if any.

 

(n)          "Common
Stock" means (i) the Company's shares of 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.

 

(o)          "Company
Conversion Price" means, with respect to any Interest Date or Make-Whole Date, as the case may be, that price which shall
be the lower of (i) the applicable Conversion Price and (ii) the price computed as 80% of the quotient of (I) the sum of the VWAP
of the Common Stock for each of the Trading Days during the ten (10) consecutive Trading Day period ending and including the Trading
Day immediately prior to such Interest Date o Make-Whole Date, as applicable, divided by (II) ten (10) (such period, the "Measuring
Period"). All such determinations to 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.

 

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

 

(q)          "Current
Public Information Failure" means the Company's failure to file with the SEC any required reports under Section 13 or
15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable.

 

(r)           "Current
Subsidiary" means any Person in which the Company on the Subscription Date, directly or indirectly, (i) owns a majority
of the outstanding capital stock or holds a majority of any equity or similar interest of such Person or (ii) controls or operates
all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, "Current
Subsidiaries."

 

(s)           "Eligible
Market" means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Capital Market, the
Nasdaq Global Market or the Principal Market.

 

    	35

    	 

    

 

(t)          "Equity
Conditions" means: (i) on each day during the period beginning three months prior to the applicable date of determination
and ending on and including the applicable date of determination either (x) one or more registration statements, if any, shall
be effective and the prospectus contained therein shall be available for the resale by the Holder of all of the shares of Common
Stock issuable upon conversion of this Note or otherwise pursuant to the terms of this Note and upon exercise of the Warrants (collectively,
the "Underlying Shares") and there shall not have been during such period any period during which such registration
statement shall not have been available for use or (y) all Underlying Securities shall be eligible for sale pursuant to Rule 144
without the need for registration under any applicable federal or state securities laws (in each case, disregarding any limitation
on conversion of the Notes, other issuance of securities with respect to the Notes and exercise of the Warrants) and no Current
Information Failure exists or is continuing; (ii) on each day during the period beginning three months prior to the applicable
date of determination and ending on and including the applicable date of determination (the "Equity Conditions Measuring
Period"), the Common Stock (including all Underlying Securities) is listed or designated for quotation (as applicable)
on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more
than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor
shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring) or
pending either (A) in writing by such Eligible Market or (B) by falling below the minimum listing maintenance requirements of the
Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) on each day during
the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of
this Note on a timely basis as set forth in Section 3 hereof and all other shares of capital stock required to be delivered by
the Company on a timely basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in
connection with the event requiring determination may be issued in full without violating Section 3(d) hereof; (v) any shares of
Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the rules
or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi)
on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental
Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge
of any fact that would reasonably be expected to cause (1) the registration statement, if any, registering the Underlying Shares
for resale to not be effective or the prospectus contained therein to not be available for the resale of all of the Underlying
Securities or (2) any Underlying Securities to not be eligible for sale pursuant to Rule 144 without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other
issuance of securities with respect to the Notes and exercise of the Warrants) and no Current Information Failure exists or is
continuing; (viii) the Holder shall not be in (and no other Buyer shall be in) possession of any material, non-public information
provided to any of them by the Company, any of its affiliates or any of their respective employees, officers, representatives,
agents or the like; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance
with each, and shall not have breached any provision, covenant, representation or warranty of any Transaction Document; (x) on
each day during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure or Price Failure; and
(xi) on each day during the Equity Conditions Measuring Period, there shall not have occurred an Event of Default or an event that
with the passage of time or giving of notice would constitute an Event of Default.

 

    	36

    	 

    

 

(u)          "Equity
Conditions Failure" means that on any day during the period commencing ten (10) Trading Days prior to the applicable date
of determination through the applicable date of determination, the Equity Conditions have not been satisfied (or waived in writing
by the Holder).

 

(v)          "Excluded
Securities" means any (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers
or employees of the Company in their capacity as such pursuant to an Approved Stock Plan after the Authorized Share Increase Date,
provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after
the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding
immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered after issuance by subsequent
amendment thereof, none of such options are amended subsequent to issuance to increase the number of shares issuable thereunder
and none of the terms or conditions of any such options are subsequent to issuance otherwise materially changed in any manner that
adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities
or contractual agreements (other than options to purchase Common Stock or other equity incentive awards issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion price of any such
Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) is not lowered by subsequent amendment, none of such Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are subsequently amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other
than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers; and (iii) the shares of Common Stock issuable upon conversion
of the Notes or otherwise pursuant to the terms of the Notes.

 

    	37

    	 

    

 

(w)          "Fundamental
Transaction" means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any "person" or "group" (as these terms are used for purposes
of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Voting Stock of the Company.

 

(x)          "GAAP"
means United States generally accepted accounting principles, consistently applied.

 

(y)          "Initial
Closing Date" shall have the meaning set forth in the Securities Purchase Agreement.

 

(z)          "Interest
Notice Due Date" means the second (2nd) Trading Day immediately prior to the applicable Interest Date.

 

(aa)         "Interest
Rate" means twelve percent (12.00%) per annum, as may be adjusted from time to time in accordance with Section 2.

 

(bb)         "Make-Whole
Amount" means the amount equal to the difference obtained by subtracting (1) the amount of interest (calculated at the
Treasury Rate) that the Holder would earn on an investment equal to the applicable Make-Whole Remaining Interest for the period
from the date of the applicable related event resulting in the reduction of the Principal amount outstanding under this Note until
the Maturity Date from (2) the applicable Make-Whole Remaining Interest.

 

(cc)         "Make-Whole
Date" means the applicable payment date of any required Make-Whole Amount.

 

(dd)         "Make-Whole
Remaining Interest" means the amount equal to any Interest, if any, that, but for the applicable related event resulting
in the reduction of the Principal amount outstanding under this Note, would have accrued with respect to the applicable Conversion
Amount being converted or redeemed at the Interest Rate (assuming the Interest Rate then in effect as of the applicable related
event resulting in the reduction of the Principal amount outstanding under this Note is the Interest Rate through the Maturity
Date) for the period from the applicable related event resulting in the reduction of the Principal amount outstanding under this
Note through the Maturity Date.

 

(ee)         "Make-Whole
Trigger Date" means the applicable date triggering the requirement to pay the Make-Whole Amount.

 

    	38

    	 

    

 

(ff)         "Maturity
Date" shall mean [●]9; provided, however, the Maturity Date may be extended at the option of the Holder
(i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall have occurred
and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through the
date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or a Fundamental Transaction Notice is delivered prior to the Maturity Date, provided further that if a Holder
elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to
Section 3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the
conversion of this Note.

 

(gg)         "New
Subsidiary" means, as of any date of determination, any Person in which the Company after the Subscription Date, directly
or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, "New Subsidiaries."

 

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

 

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

 

(jj)         "Permitted
Indebtedness" means (i) Indebtedness evidenced by this Note, the Other Notes and the Additional Notes, (ii) Indebtedness
incurred by the Company that (1) is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note and
(2) is subject to an intercreditor agreement, in each case, as reflected in a written agreement acceptable to the Required Holders
and the Collateral Agent and approved by the Collateral Agent in writing, and which Indebtedness does not provide at any time for
(a) the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal, interest or premium,
if any, thereon prior to the date ninety-one (91) days after [●]10and (b) total interest and fees at a rate in
excess of 12.00% per annum and (iii) Indebtedness secured by Permitted Liens described in clause (iv) of the definition of Permitted
Liens.

 

 

9
Insert the fifth (5th) year anniversary of the Initial Closing Date.

10 Insert
the date that is the one (1) year anniversary of the Initial Closing Date.

 

    	39

    	 

    

 

(kk)         "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 or inventory acquired or held by the Company or any of its Subsidiaries to secure the purchase
price of such equipment or inventory or indebtedness incurred solely for the purpose of financing the acquisition or lease of such
equipment or inventory, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely
to the property so acquired and improvements thereon, and the proceeds of such equipment, in either case, with respect to indebtedness
in an aggregate amount not to exceed $4 million and, if applicable, 50% or less warrant coverage, (v) leases or subleases and licenses
and sublicenses granted to others in the ordinary course of the Company's business, not interfering in any material respect with
the business of the Company and its Subsidiaries taken as a whole, (vi) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of custom duties in connection with the importation of goods, (vii) Liens arising from judgments,
decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(x), (viii) Liens existing as of
the Subscription Date, as disclosed in the Securities Purchase Agreement and (ix) Liens securing Permitted Indebtedness set forth
in clause (ii) of the definition of "Permitted Indebtedness" in Section 31(jj).

 

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

 

(mm)       "Price
Failure" means, with respect to a particular date of determination, that the quotient of (I) the sum of the VWAP of the
Common Stock for each Trading Day in the thirty (30) consecutive Trading Day period ending and including the Trading Day immediately
preceding such date of determination, divided by (II) thirty (30) (such period, the "Price Failure Measuring Period")
is less than $0.10 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions).
All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such Price Failure Measuring Period.

 

(nn)         "Principal
Market" means the OTCQB Market.

 

(oo)         "Redemption
Notices" means, collectively, the Event of Default Redemption Notices, the Holder Optional Redemption Notices and the
Change of Control Redemption Notices, and each of the foregoing, individually, a "Redemption Notice."

 

(pp)         "Redemption
Premium" means (i) in the case of the Events of Default described in Section ‎4(a) (other than Sections 4(a)(vii)
through 4(a)(ix)), 125% or (ii) in the case of the Events of Default described in Sections 4(a)(vii) through 4(a)(ix), 100%.

 

(qq)         "Redemption
Prices" means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices and the Holder
Optional Redemption Prices, and each of the foregoing, individually, a "Redemption Price."

 

    	40

    	 

    

 

(rr)         "Required
Holders" means, at any given time, the holders of a majority of the aggregate principal amount of the Notes, outstanding
as of such time (excluding any Notes held by the Company or any of its Subsidiaries); provided, that such majority must include
Hudson Bay Master Fund Ltd (to the extent Hudson Bay Master Fund Ltd holds any Notes outstanding as of such time).

 

(ss)        "SEC"
means the United States Securities and Exchange Commission or the successor thereto.

 

(tt)         "Securities
Purchase Agreement" means that certain securities purchase agreement, dated as of the Subscription Date, by and among
the Company and the initial holders of the Notes pursuant to which the Company issued the Notes and Warrants, as may be amended
from time to time.

 

(uu)       "Subscription
Date" means December [__], 2013.

 

(vv)       "Subsidiaries"
means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries, and each of the foregoing,
individually, a "Subsidiary."

 

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

 

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

 

(yy)       "Treasury
Rate" means a rate per annum (computed on the basis of actual days elapsed over a year of 360 days) equal to the rate
listed in The Wall Street Journal for United States Treasury securities having a term of not greater than sixty (60) months.

 

(zz)         "Volume
Failure" means, with respect to a particular date of determination, that the aggregate daily dollar trading volume (as
reported on Bloomberg) of the Common Stock on the Eligible Market on which the Common Stock is listed or designated for quotation
on any Trading Day over the thirty (30) consecutive Trading Day period ending on the Trading Day immediately preceding such date
of determination (such period, the "Volume Failure Measuring Period") is less than $150,000 (as adjusted for any
stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions). All such determinations to
be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
during such Volume Failure Measuring Period.

 

    	41

    	 

    

 

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

 

(bbb)        "VWAP"
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or,
if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities
market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00
p.m., New York time, as reported by Bloomberg through its "Volume at Price" function or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours,
the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as
reported in the "pink sheets" by OTC Markets Group Inc. (formerly Pink Sheets LLC). If 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. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section 24. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction
during such period.

 

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

 

32.         DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose
such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that
a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate
to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, non-public information relating to the Company
or its Subsidiaries. Nothing contained in this Section 32 shall limit any obligations of the Company, or any rights of the Holder,
under Section 4(i) of the Securities Purchase Agreement.

 

[signature page follows]

 

    	42

    	 

    

 

 

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

 

	 	FUSE SCIENCE, INC.
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

    	43

    	 

    

 

EXHIBIT I

 

FUSE SCIENCE, INC.

CONVERSION NOTICE

 

Reference is made to
the [Series A] [Series B] Senior Secured Convertible Note (the "Note") issued to the undersigned by Fuse Science,
Inc., a Nevada corporation (the "Company"). In accordance with and pursuant to the Note, the undersigned hereby elects
to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par value
per share (the "Common Stock"), of the Company, as of the date specified below. Capitalized terms not defined
herein shall have the meaning as set forth in the Note.

 

	Date of Conversion:	 	 
	 	 	 
	 	 	 
	Aggregate Principal to be converted:	 	 
	 	 	 
	 	 	 
	Aggregate accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate Interest to be converted:	 	 
	 	 	 
	 	 	 
	AGGREGATE CONVERSION AMOUNT TO BE CONVERTED:	 	 
	 	 	 
	 	 	 
	Please confirm the following information:	 	 
	 	 	 
	 	 	 
	Conversion Price:	 	 
	 	 	 
	 	 	 
	The Holder elects to use the Variable Rate Price instead of the Fixed Conversion Price pursuant to Section 7(c):	 	 
	 	 	 
	 	 	 
	The Holder elects to use the Adjusted Conversion Price of the Fixed Conversion Price pursuant to Section 7(f):	 	 
	 	 	 
	 	 	 
	Number of shares of Common Stock to be issued:	 	 
	 	 	 

 

    	44

    	 

    

 

	Please issue the Common Stock into which the Note is being converted in the following name and to the following address:	 	 
	 	 	 
	 	 	 
	Issue to:	 	 
	 	 	 
	 	 	 
	Facsimile Number:	 	 
	 	 	 
	 	 	 
	Holder:	 	 
	 	 	 
	 	 	 
	By:	 	 
	 	 	 
	 	 	 
	Title: 	 	 
	 	 	 
	 	 	 
	Dated:	 	 
	 	 	 
	 	 	 
	Account Number:	 	 
	 	 	 
	 	 	 
	(if electronic book entry transfer)	 	 
	 	 	 
	 	 	 
	Transaction Code Number:	 	 
	 	 	 
	 	 	 
	(if electronic book entry transfer)	 	 
	 	 	 

 

    	45

    	 

    

 

EXHIBIT II

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Conversion Notice and hereby directs Securities Transfer Corporation to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated December __, 2013 from the Company and acknowledged and
agreed to by Securities Transfer Corporation.

 

	 	FUSE SCIENCE, INC.
	 	 
	 	By:	 
	 	Name:
	 	Title:

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