Document:

Exhibit 4.1

 

[FORM OF ADDITIONAL NOTE]

 

ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 16(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.

 

Amyris,
Inc.

 

CONVERTIBLE
NOTE

 

	Issuance Date:  [________], 2016	Original Principal Amount: $[_________]

 

FOR VALUE RECEIVED,
Amyris, Inc., a Delaware corporation (the “Company”), hereby promises to pay to [____] or registered assigns
(the “Holder”) in cash and/or in shares of Common Stock (as defined below) the amount set out above as the Original
Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion, amortization or otherwise, the “Principal”)
when due, whether upon the Maturity Date (as defined below), on any Installment Date (as defined below) with respect to the Installment
Amount (as defined below) due on such Installment Date, acceleration, redemption or otherwise (in each case in accordance with
the terms hereof). This Convertible Note (including all Convertible Notes issued in exchange, transfer or replacement hereof, this
“Note”) is one of a series of Convertible Notes issued pursuant to the Securities Purchase Agreement (as defined
below) either on the Initial Closing Date (as defined below) or on the Additional Closing Date (as defined below) (collectively,
the “Notes” and such other Senior Convertible Notes, the “Other Notes”). Certain capitalized
terms used herein are defined in Section 29.

 

(1)              
PAYMENTS OF PRINCIPAL; PREPAYMENT. On each Installment Date, the Company shall pay to the Holder an amount equal
to the Installment Amount due on such Installment Date in accordance with Section 8. On the Maturity Date, the Company shall pay
to the Holder an amount in cash representing all outstanding Principal and accrued and unpaid Late Charges (as defined in Section
22(c)) on such Principal to the extent not otherwise converted into Common Stock pursuant hereto. Other than as specifically permitted
by this Note, the Company may not prepay any portion of the outstanding Principal or accrued and unpaid Late Charges on Principal,
if any. Notwithstanding anything herein to the contrary, if the daily Weighted Average Price of the Common Stock is less than the
Absolute Floor for 10 consecutive Trading Days (an “Acceleration Event”), then an amount equal to 118% of all
outstanding Principal and accrued and unpaid Late Charges on such Principal shall be accelerated and shall become due and payable
by the Company to the Holder in cash within thirty (30) days following such Acceleration Event.

 

(2)              
COMPANY OPTIONAL REDEMPTIONS.

 

    

     

    

(a)               
Company Optional Redemption. At any time or times after the date set out above as the Issuance Date (the “Issuance
Date”), the Company shall have the right to redeem, in whole or in part, the Conversion Amount (as defined below) then
remaining under this Note (each, a “Company Optional Redemption Amount”) on a Company Optional Redemption Date
(each as defined below) (each, a “Company Optional Redemption”). The portion of this Note subject to redemption
pursuant to this Section 2(a) shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”)
equal to 118% of the Conversion Amount being redeemed as of the Company Optional Redemption Date. The Company may exercise its
right to require redemption under this Section 2(a) by delivering a written notice thereof by facsimile and overnight courier to
all, but not less than all, of the holders of Notes (each, a “Company Optional Redemption Notice” and the date
all of the holders of Notes received such notice is referred to as the “Company Optional Redemption Notice Date”).
The Company may deliver only one Company Optional Redemption Notice hereunder in any twenty (20) Trading Day period and such Company
Optional Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company
Optional Redemption shall occur (the “Company Optional Redemption Date”), which date shall not be less than
five (5) Trading Days nor more than ninety (90) Trading Days following the Company Optional Redemption Notice Date, and (y) state
the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional Redemption from the Holder and all
of the other holders of the Notes pursuant to this Section 2(a) on the Company Optional Redemption Date. Notwithstanding anything
herein to the contrary, at any time prior to the date the Company Optional Redemption Price is paid, in full, the Company Optional
Redemption Amount may be converted, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 3. All Conversion
Amounts converted by the Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption
Amount of this Note required to be redeemed on the Company Optional Redemption Date. In the event of a partial redemption of this
Note pursuant hereto, the Principal amount redeemed shall be deducted in reverse order starting from the final Installment Amount
to be paid hereunder on the final Installment Date, unless the Holder otherwise indicates and allocates among any Installment Dates
hereunder in writing to the Company. Redemptions made pursuant to this Section 2(a) shall be made in accordance with Section 11.
In the event of the Company’s redemption of any portion of this Note under this Section 2(a), the Holder’s damages
would be uncertain and difficult to estimate because of the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 2(a) 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.

 

(b)              
Triggering Event Redemption. If a Triggering Event occurs prior to the four (4) month anniversary of the Issuance
Date, the Company shall have the right to redeem all, but not less than all, of the Conversion Amount then remaining under this
Note (the “Triggering Event Redemption Amount”) on the Triggering Event Redemption Date (as defined below) (the
“Triggering Event Redemption”). The portion of this Note subject to redemption pursuant to this Section 2(b)
shall be redeemed by the Company in cash at a price (the “Triggering Event Redemption Price”) equal to 112%
of the Conversion Amount being redeemed as of the Triggering Event Redemption Date. The Company may exercise its right to require
redemption under this Section 2(b) by delivering a written notice thereof by facsimile and overnight courier to all, but not less
than all, of the holders of Notes within one (1) Trading Day of the Triggering Event (each, a “Triggering Event Redemption
Notice” and the date all of the holders of Notes received such notice is referred to as the “Triggering Event
Redemption Notice Date”). The Company may deliver only one Triggering Event Redemption Notice hereunder and such Triggering
Event Redemption Notice shall be irrevocable. The Triggering Event Redemption Notice shall (x) state the date on which the Triggering
Event Redemption shall occur (the “Triggering Event Redemption Date”), which date shall not be less than five
(5) Trading Days nor more than ninety (90) Trading Days following the Triggering Event Redemption Notice Date, and (y) state the
aggregate Conversion Amount of the Notes which is being redeemed in such Triggering Event Redemption from the Holder and all of
the other holders of the Notes pursuant to this Section 2(b) on the Triggering Event Redemption Date. Notwithstanding anything
herein to the contrary, (i) at any time prior to the date the Triggering Event Redemption Price is paid, in full, the Triggering
Event Redemption Amount may be converted, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 3
and (ii) if an Acceleration Event shall occur at any time prior to the date the Triggering Event Redemption Price is paid, in full,
the Company shall make the payments required under Section 1 relating to an Acceleration Event, rather than the Triggering Event
Redemption Price. All Conversion Amounts converted by the Holder after the Triggering Event Redemption Notice Date shall reduce
the Triggering Event Redemption Amount of this Note required to be redeemed on the Triggering Event Redemption Date. Redemptions
made pursuant to this Section 2(b) shall be made in accordance with Section 11. In the event of the Company’s redemption
of any portion of this Note under this Section 2(b), the Holder’s damages would be uncertain and difficult to estimate because
of the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption
premium due under this Section 2(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.

 

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(c)               
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant
to Section 2(a) or a Triggering Event Redemption of this Note pursuant to Section 2(b), then it must simultaneously take the same
action with respect to all of the Other Notes.

 

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

 

(a)               
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date,
the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount into 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, costs and expenses (including, without limitation,
fees and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common
Stock upon conversion of any Conversion Amount.

 

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

 

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

 

(ii)              
“Conversion Price” means, as of any Conversion Date or other date of determination, $1.90 per share,
subject to adjustment as provided herein.

 

(c)               
Mechanics of Conversion.

 

(i)                
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion
Date”), the Holder shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior
to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit
I (the “Conversion Notice”) to the Company and (B) if required by Section 3(c)(iii), surrender this Note
to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking
with respect to this Note in the case of its loss, theft or destruction). On or before the first (1st) Business Day following the
date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail a confirmation of receipt of
such Conversion Notice to the Holder and the Transfer Agent. On or before the third (3rd) Trading Day following the date of receipt
of a Conversion Notice (the “Share Delivery Date”), the Company shall (x) provided that the 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 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 to the address
as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion as required by Section
3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and
at its own expense, issue and deliver to the Holder a new Note (in accordance with Section 16(d)) representing the outstanding
Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this
Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date, irrespective
of the date such Conversion Shares are credited to the Holder's account with DTC or the date of delivery of the certificates evidencing
such Conversion Shares, as the case may be. In the event that the Holder elects to convert a portion of the Principal amount of
this Note prior to any applicable Installment Date, the Conversion Amount so converted shall be deducted in reverse order starting
from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder otherwise indicates and
allocates among any Installment Dates hereunder in the applicable Conversion Notice. Notwithstanding anything to the contrary contained
in this Note, the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee)
for delivery via DTC to the transferee in connection with any sale of Conversion Shares with respect to which the Holder has entered
into a contract for sale and for which the Holder has not yet settled.

 

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

 

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

 

(iv)            
Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve
such dispute in accordance with Section 21.

 

(d)              
Limitations on Conversions.

 

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

 

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(ii)              
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon conversion of this Note
or otherwise pursuant to the terms of this Note if the issuance of such shares of Common Stock (taken together with the issuance
of all other shares of Common Stock upon conversion of the Other Notes or otherwise pursuant to the terms of the Notes) would exceed
the aggregate number of shares of Common Stock which the Company may issue upon conversion of the Notes and or otherwise pursuant
to the terms of the Notes without breaching the Company’s obligations under the rules or regulations of the Principal Market
(the number of shares which may be issued without violating such rules and regulations, the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required
by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains
a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory
to the Holder. Until such approval or such written opinion is obtained, no Holder shall be issued in the aggregate, upon conversion
of any Notes or otherwise pursuant to the terms of the Notes, shares of Common Stock in an amount greater than the Exchange Cap.
In the event that the Company is prohibited from issuing any shares of Common Stock pursuant to this Section 3(d)(ii) (the “Exchange
Cap Shares”), the Company shall pay cash in exchange for cancellation of the Conversion Amount that is subject to such
Conversion Notice in an amount equal to the sum of (i) the product of (x) such number of Exchange Cap 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 Exchange Cap Shares to the Company and ending on the Trading Day immediately preceding the
date of such issuance and payment under this Section 3(d)(ii) 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 Exchange Cap Shares, any brokerage commissions
and other reasonable out-of-pocket expenses, if any, of the Holder incurred in connection therewith.

 

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(4)              
RIGHTS UPON EVENT OF DEFAULT.

 

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

 

(i)                
the suspension from trading or failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market
for a period of three (3) consecutive Trading Days or for more than an aggregate of ten (10) Trading Days in any 365-day period;

 

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

 

(iii)            
except to the extent the Company is in compliance with Section 10(b) below, at any time following the tenth (10th)
consecutive Business 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 failure to pay to the Holder any amount of Principal, Late Charges or other amounts when and as due under
this Note (including, without limitation, the Company's failure to pay any redemption, Late Charges or other amounts), 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 to which the Holder is a party, if such failure continues
for a period of at least an aggregate of five (5) Business Days;

 

(v)              
any restrictive legend is placed on any certificate evidencing, or any stop transfer order is maintained against, any shares
of Common Stock issued to the Holder upon conversion of the Notes;

 

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

 

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

 

(viii)        
a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against the Company
or any of its Subsidiaries and which judgments are not; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be included in calculating the $10,000,000 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;

 

(ix)            
the Company and/or any Subsidiary, individually or in the aggregate, fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $10,000,000 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 $10,000,000, which breach
or violation results in the acceleration of amounts due thereunder;

 

(x)              
other than as specifically set forth in another clause of this Section 4(a), the Company or any of its Subsidiaries breaches
any representation or warranty in any material respect (except with respect to any representation or warranty qualified by material
or material adverse effect, in any respect) or breaches any covenant or other term or condition of any Transaction Document, except,
in the case of a breach of a representation, warranty, covenant or other term or condition of any Transaction Document which is
curable, only if such breach continues for a period of at least an aggregate of ten (10) consecutive Business Days after notice
thereof;

 

(xi)            
any breach or failure in any respect to comply with any of Sections 1, 3, 4(b), 5(b), 8, 13(a), 13(b), 13(c) or 13(d) of
this Note;

 

(xii)          
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 or Change of
Control has occurred; or

 

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

 

(xiv)        
any Material Adverse Effect (as defined in the Securities Purchase Agreement) has occurred and is continuing.

 

(b)              
Event of Default Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within one (1) Business Day of obtaining knowledge thereof deliver written notice thereof via facsimile
or electronic mail and overnight courier (an “Event of Default Notice”) to the Holder. At any time after the
earlier of the Holder's receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder
may require the Company to redeem (an “Event of Default Redemption”) all or any portion of this Note by delivering
written notice thereof (the “Event of Default Redemption Notice”) to the Company, which Event of Default Redemption
Notice shall indicate the portion of this Note the Holder is electing to require the Company to redeem. Each portion of this Note
subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company in cash by wire transfer of
immediately available funds at a price equal to the greater of (x) 118% of the Conversion Amount being redeemed and (y) the product
of (A) the Conversion Amount being redeemed and (B) the quotient determined by dividing (I) the greatest Closing Sale Price of
the shares of Common Stock during the period beginning on the date immediately preceding such Event of Default and ending on the
Trading Day immediately preceding the date Company makes the entire payment required to be made under this Section 4(b), by (II)
the lowest Installment Conversion Price in effect during such period (the “Event of Default Redemption Price”).
Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 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 the Note by the
Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
4, but subject to Section 3(d), until the Event of Default Redemption Price (together with any 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 Section 3. In the event of a partial redemption of this Note pursuant
hereto, the Principal amount redeemed shall be deducted in reverse order starting from the final Installment Amount to be paid
hereunder on the final Installment Date, unless the Holder otherwise indicates and allocates among any Installment Dates hereunder
in the applicable Event of Default Redemption Notice. The parties hereto agree that in the event of the Company's redemption of
any portion of the Note under this Section 4(b), the Holder's damages would be uncertain and difficult to estimate because of the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any Event of Default
redemption premium due under this Section 4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of
the Holder's actual loss of its investment opportunity and not as a penalty.

 

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

 

(a)               
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i)  the Successor
Entity assumes in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance
with the provisions of this Section 5(a) pursuant to written agreements in form and substance reasonably satisfactory to the Holder
and approved by the Holder prior to such Fundamental Transaction, including agreements, if so requested by the Holder, to deliver
to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to the Notes, including, without limitation, having a principal amount equal to the principal amounts
of the Notes then outstanding held by such holder, having similar conversion rights and having similar ranking and security to
the Notes, and reasonably satisfactory to the Holder and (ii) except with respect to a Change of Control in which the Company (or
the Successor Entity, as applicable) complies with Section 5(b) in all respects, the Successor Entity (including its Parent Entity)
is a publicly traded corporation whose common capital stock is quoted on or listed for trading on an Eligible Market (a “Public
Company”). Any security issuable or potentially issuable to the Holder pursuant to the terms of this Note on the consummation
of a Fundamental Transaction shall be registered and freely tradable by the Holder without any restriction or limitation or the
requirement to be subject to any holding period pursuant to any applicable law. 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. If the Successor Entity (or its Parent Entity) is a Public Company and the Company (or the Successor Entity), as applicable,
complies with Section 5(b) below in all respects, 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 Common Stock (or other securities, cash, assets or other property (except
such items still issuable under Section 6 which shall continue to be receivable thereafter) issuable upon the conversion or redemption
of the Notes prior to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the
Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations
on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the
Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental
Transaction without the assumption of this Note. In addition to and not in substitution for any other rights hereunder, prior to
the occurrence or consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled
to receive securities, cash, assets or other property with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that, and any applicable Successor Entity or Successor
Entities shall ensure that the Holder will thereafter have the right to receive upon conversion of this Note at any time after
the occurrence or consummation of the Corporate Event, shares of Common Stock or Successor capital stock or, if so elected by the
Holder, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) purchasable upon the conversion
of this Note prior to such Corporate Event (but not in lieu of such items still issuable under Sections 6(a) and 6(b), which shall
continue to be receivable on the Common Stock or on such shares of stock, securities, cash, assets or any other property otherwise
receivable with respect to or in exchange for shares of Common Stock), such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription rights and any shares of Common Stock) which the Holder
would have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record, eligibility or other
determination date for the event resulting in such Corporate Event, had this Note been converted immediately prior to such Corporate
Event or the record, eligibility or other determination date for the event resulting in such Corporate Event (without regard to
any limitations on conversion of this Note) (the “Change of Control Consideration”). Provision made pursuant
to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder. The provisions of this Section
5(a) shall apply similarly and equally to successive Fundamental Transactions.

 

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(b)              
Change of Control Redemption Right. Promptly after the public announcement of such Change of Control, the Company
shall deliver written notice thereof via facsimile or electronic mail and overnight courier to the Holder (a “Change of
Control Notice”). At any time during the period beginning on the earlier to occur of (x) any oral or written agreement
by the Company or any of its Subsidiaries, upon consummation of which the transaction contemplated thereby would reasonably be
expected to result in a Change of Control, (y) the Holder becoming aware of a Change of Control and (z) the Holder's receipt of
a Change of Control Notice and ending twenty-five (25) Trading Days after the date of the consummation of such Change of Control,
the Holder may require the Company to redeem (a “Change of Control Redemption”) all or any portion of this Note
by delivering written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of
Control Redemption Notice shall indicate the Conversion Amount the Holder is electing to require the Company to redeem. The portion
of this Note subject to redemption pursuant to this Section 5(b) shall be redeemed by the Company in cash by wire transfer of immediately
available funds at a price equal to the greatest of (x) 118% of the Conversion Amount being redeemed, (y) the product of (A) the
Conversion Amount being redeemed and (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares
of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (x) the consummation of the
Change of Control and (y) the public announcement of such Change of Control and ending on the date the Holder delivers the Change
of Control Redemption Notice, by (II) the lowest Installment Conversion Price in effect during such period and (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 lowest Installment Conversion Price in effect during such
period (the “Change of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance
with the provisions of Section 11. To the extent redemptions required by this Section 5(b) are deemed or determined by a court
of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments.
Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(d), until the Change of Control Redemption
Price (together with any 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 (or, if after
the date of consummation of such Change of Control, into the applicable Change of Control Consideration) pursuant to Section 3.
In the event of a partial redemption of this Note pursuant hereto, the Principal amount redeemed shall be deducted in reverse order
starting from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder otherwise indicates
and allocates among any Installment Dates hereunder in the applicable Change of Control Redemption Notice. The parties hereto agree
that in the event of the Company's redemption of any portion of the Note under this Section 5(b), the Holder's damages would be
uncertain and difficult to estimate because of the uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any Change of Control redemption premium due under this Section 5(b) is intended by the parties to
be, and shall be deemed, a reasonable estimate of the Holder's actual loss of its investment opportunity and not as a penalty.

 

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

 

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

 

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

 

(7)              
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

 

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

 

(b)              
Voluntary Adjustment by Company. The Company may at any time during the term of this Note, with the prior written
consent of the Holder, reduce the then current Conversion Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company. The Company may at any time during the term of this Note, without the prior written consent
of the Holder, either (i) reduce the Floor Price (as defined below) to any amount and for any period of time deemed appropriate
by the Board of Directors of the Company or (ii) waive the application of the Floor Price to the Installment Conversion (defined
below) and any Acceleration (defined below) by the Holder pursuant to Section 8 with respect to the entire applicable Installment
Period (defined below).

 

(8)              
INSTALLMENT CONVERSION OR REDEMPTION.

 

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(a)               
General. On each applicable Installment Date (as defined below), provided there has been no Equity Conditions Failure
(as defined below), the Company shall pay to the Holder of this Note the Installment Amount due on such date by the conversion
of all or some of such Installment Amount into Common Stock, in accordance with this Section 8 (a “Installment Conversion”);
provided, however, that the Company may, at its option following notice to the Holder as set forth below, pay the
Installment Amount by redeeming such Installment Amount in cash (a “Installment Redemption”) or by any combination
of an Installment Conversion and an Installment Redemption so long as all of the outstanding applicable Installment Amount due
on any Installment Date shall be converted and/or redeemed by the Company on the applicable dates set forth in this Section 8,
subject to the provisions of this Section 8. On or prior to the date which is the fifth (5th) Trading Day prior to each Installment
Date (each, an “Installment Notice Due Date”), the Company shall deliver written notice (each, a “Company
Installment Notice” and the date all of the Holders receive such notice is referred to as the “Company Installment
Notice Date”), to each holder of Notes which Company Installment Notice shall (i) either (A) confirm that the applicable
Installment Amount of the Holder's Note shall be converted to Common Stock in whole or in part pursuant to an Installment Conversion
(such amount to be converted, the “Installment Conversion Amount”) or (B) (1) state that the Company elects
to redeem for cash, or is required to redeem for cash in accordance with the provisions of the Notes, in whole or in part, the
applicable Installment Amount pursuant to an Installment Redemption and (2) specify the portion (including Late Charges, if any,
on such amount) which the Company elects or is required to redeem pursuant to an Installment Redemption (such amount to be redeemed,
the “Installment Redemption Amount”) and the portion (including Late Charges, if any, on such amount) that is
the Installment Conversion Amount, which amounts, when added together, must equal the applicable Installment Amount and (ii) if
the Installment Amount is to be paid, in whole or in part, in Common Stock pursuant to an Installment Conversion, certify that
there has been no Equity Conditions Failure as of the Company Installment Notice Date. Each Company Installment Notice shall be
irrevocable. If the Company does not timely deliver a Company Installment Notice in accordance with this Section 8, then the Company
shall be deemed to have delivered an irrevocable Company Installment Notice confirming an Installment Conversion and shall be deemed
to have certified that there has been no Equity Conditions Failure in connection with any such conversion on the Company Installment
Notice Date and Installment Date. Except as expressly provided in this Section 8(a), the Company shall convert and/or redeem the
applicable Installment Amount of this Note pursuant to this Section 8 and the corresponding Installment Amounts of the Other Notes
pursuant to the corresponding provisions of the Other Notes in the same ratio of the Installment Amount being converted and/or
redeemed hereunder. The Installment Conversion Amount (whether set forth in the Company Installment Notice or by operation of this
Section 8) shall be converted in accordance with Section 8(b) and the Installment Redemption Amount shall be redeemed in accordance
with Section 8(c) and Section 11. Notwithstanding anything herein to the contrary, except in the case of an Acceleration, in the
event of any partial conversion or redemption of this Note, the Principal amount converted or redeemed shall be deducted in reverse
order starting from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder otherwise
indicates and allocates among any Installment Dates hereunder in the applicable Conversion Notice or Redemption Notice, as applicable.

 

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(b)  
Mechanics of Installment Conversion. If the Company delivers a Company Installment Notice and confirms, or is deemed
to have confirmed, in whole or in part, an Installment Conversion in accordance with Section 8(a), then on the applicable Installment
Date, the Company (i) shall confirm in writing to the Investor the applicable Floor Price for the applicable Installment Period
and (ii) shall, or shall direct the Transfer Agent to, credit the Holder's account with DTC (or if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, issue and deliver to the Holder a certificate) for a number of shares of
Common Stock equal to 125% of the quotient of (x) the applicable Installment Conversion Amount as of the applicable Installment
Date divided by (y) the Installment Conversion Price calculated as of the applicable Installment Date (collectively, the “Initial
Installment Shares”); provided, that there has been no Equity Conditions Failure (or such Equity Conditions Failure
is not waived in writing by the Holder) on each day during the period commencing on such Company Installment Notice Date through
and including the applicable Installment Date. During the period commencing on the applicable Installment Date and ending on the
Trading Day immediately prior to the next Installment Date (each, an “Installment Period”), the Holder may elect,
at its option and in its sole discretion, at one or more times during such Installment Period, to convert the applicable Installment
Conversion Amount into a number of shares of Common Stock equal to the quotient of (x) the applicable Installment Conversion Amount
as of the applicable Installment Date divided by (y) the Installment Conversion Price then in effect on such date of conversion
(collectively, the “Installment Shares”), in accordance with the conversion procedures set forth in Section
3 hereunder (except as provided in this Section 8 with respect to delivery of Conversion Shares), mutatis mutandis (with
“Installment Conversion Price” replacing “Conversion Price” for all purposes hereunder with respect to
an Installment Conversion); provided, that there has been no Equity Conditions Failure (or such Equity Conditions Failure
is not waived in writing by the Holder) on each day during the Installment Period. The Installment Shares to be issued to the Holder
pursuant to this Section 8(b) with respect to any Installment Period shall be credited against the Initial Installment Shares issued
to the Holder on the applicable Installment Date. If, as of 4:00 p.m., New York time, on the last Trading Day of the applicable
Installment Period, the number of Installment Shares to be issued to the Holder pursuant to this Section 8(b) with respect to such
Installment Period exceeds the number of Initial Installment Shares previously issued to the Holder on the applicable Installment
Date, then, not later than 4:00 p.m., New York time, on the second (2nd) Trading Day immediately following the last
Trading Day of the applicable Installment Period, the Company shall, or shall direct the Transfer Agent to, credit the Holder's
account with DTC (or if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and
deliver to the Holder a certificate) for a number of shares of Common Stock equal to the amount by which the number of Installment
Shares to be issued to the Holder pursuant to this Section 8(b) with respect to such Installment Period exceeds the number of Initial
Installment Shares previously issued to the Holder on the applicable Installment Date. If, as of 4:00 p.m., New York time, on the
last Trading Day of the applicable Installment Period, the number of Installment Shares to be issued to the Holder pursuant to
this Section 8(b) with respect to such Installment Period is less than the number of Initial Installment Shares previously issued
to the Holder on the applicable Installment Date, then, such excess Initial Installment Shares shall be credited to the number
of Initial Installment Shares the Company shall be required to issue to the Holder on the next applicable Installment Date with
respect to which the Company delivers a Company Installment Notice and confirms, or is 

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deemed to have confirmed, in whole or in
part, an Installment Conversion in accordance with Section 8(a). Notwithstanding anything herein to the contrary, any portion of
an Installment Conversion Amount that is not converted by the Holder pursuant to this Section 8(b) shall not be deducted from the
Principal amount outstanding under this Note, but rather all of such non-converted Installment Conversion Amount shall be added
to the next Installment Amount to be paid hereunder; provided, however, that the par value of any
Initial Installment Shares delivered with respect to such Installment Conversion Amount that is not so converted shall be deducted
from the Principal amount outstanding under this Note and shall be netted against any future Installment Conversions with respect
to such Initial Installment Shares; provided, further, that any Installment Conversion Amount outstanding on the Maturity Date
will be automatically converted into shares of Common Stock at the Installment Conversion Price in effect on the Maturity Date,
provided that such Installment Conversion Price is above the Absolute Floor. All Installment Shares shall be fully paid
and nonassessable shares of Common Stock (rounded to the nearest whole share). If an Event of Default occurs during the period
commencing on the applicable Company Installment Notice Date through the expiration of the applicable Installment Period, the Holder
may elect an Event of Default Redemption in accordance with Section 4(b). If there is an Equity Conditions Failure as of the Company
Installment Notice Date, then unless the Company has elected to redeem such Installment Amount, the Company Installment Notice
shall indicate that unless the Holder waives the Equity Conditions Failure, the Installment Amount shall be redeemed for cash.
If the Company confirmed (or is deemed to have confirmed by operation of Section 8(a)) the conversion of the applicable Installment
Conversion Amount, in whole or in part, and there was no Equity Conditions Failure as of the applicable Company Installment Notice
Date (or is deemed to have certified that there has been no Equity Conditions Failure in connection with any such conversion have
been satisfied by operation of Section 8(a)) but an Equity Conditions Failure occurred at any time during the period commencing
on the applicable Company Installment Notice Date and ending on the expiration of the applicable Installment Period, the Company
shall provide the Holder a subsequent notice to that effect. If there is an Equity Conditions Failure (or such Equity Conditions
Failure is not waived in writing by the Holder) during the period commencing on the applicable Company Installment Notice Date
ending on the expiration of the applicable Installment Period, then at the option of the Holder designated in writing to the Company,
the Holder may require the Company to do either one or both of the following: (i) the Company shall redeem all or any part designated
by the Holder of the Installment Conversion Amount (such designated amount is referred to as the “Equity Conditions Failure
Redemption Amount”) on or prior to the third (3rd) Trading Day after written notice thereof (the “Equity
Conditions Failure Redemption Notice”) is provided to the Company (the “Equity Conditions Failure Redemption
Date”) and the Company shall pay to the Holder on such Equity Conditions Failure Redemption Date, by wire transfer of
immediately available funds, an amount in cash equal to 118% of such Equity Conditions Failure Redemption Amount (the “Equity
Conditions Failure Redemption Price”) and/or (ii) the Installment Conversion shall be null and void with respect to all
or any part designated by the Holder of the unconverted Installment Conversion Amount and the Holder shall be entitled to all the
rights of a holder of this Note with respect to such amount of the Installment Conversion Amount; provided, however,
that the Installment Conversion Price for such unconverted Installment Conversion Amount shall thereafter be adjusted to equal
the lesser of (A) the Installment Conversion Price as in effect on the date on which the Holder voided the Installment Conversion
and (B) the Installment Conversion Price as in effect on the date on which the Holder delivers a Conversion Notice relating thereto.
If the Company fails to redeem any Equity Conditions Failure Redemption Amount on or before the applicable Equity Conditions Failure
Redemption Date by payment of such amount on the applicable Equity Conditions Failure Redemption Date, then the Holder shall have
the rights set forth in Section 11 as if the Company failed to pay the applicable Company Installment Redemption Price (as defined
below) and all other rights under this Note (including, without limitation, such failure constituting an Event of Default described
in Section 4(a)(xi)).

 

    -17- 

     

    

(c)   
Mechanics of Installment Redemption. If the Company elects an Installment Redemption in accordance with Section 8,
then the Installment Redemption Amount which is to be paid to the Holder on the applicable Installment Date shall be redeemed by
the Company and the Company shall pay to the Holder on such Installment Date, by wire transfer of immediately available funds,
an amount in cash (the “Company Installment Redemption Price”) equal to 118% of the Installment Redemption Amount.
If the Company fails to redeem the Installment Redemption Amount on the applicable Installment Date by payment of the Company Installment
Redemption Price on such date, then at the option of the Holder designated in writing to the Company (any such designation shall
be deemed a “Conversion Notice” pursuant to Section 3(c) for purposes of this Note), (i) the Holder shall have the
rights set forth in Section 11 as if the Company failed to pay the applicable Company Installment Redemption Price and all other
rights as a Holder of Notes (including, without limitation, such failure constituting an Event of Default described in Section
4(a)(xi)) and (ii) the Holder may, at its option and in its sole discretion, at one or more times during the Installment Period,
require the Company to convert all or any part of the Installment Redemption Amount into Installment Shares at the Installment
Conversion Price then in effect at the time of such conversion. Conversions required by this Section 8(c) shall be made in accordance
with the provisions of Section 8(b) and, with respect to issuances of Installment Shares, Section 3(c), but subject to Section
3(d). Notwithstanding anything to the contrary in this Section 8(c), but subject to Section 3(d), until the Company Installment
Redemption Price (together with any Late Charges thereon) is paid in full, the Installment Redemption Amount (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
the Holder elects to convert all or any portion of the Installment Redemption Amount prior to the applicable Installment Date as
set forth in the immediately preceding sentence, the Installment Redemption Amount so converted shall be deducted in reverse order
starting from the final Installment Amount to be paid hereunder on the final Installment Date, unless the Holder otherwise indicates
and allocates among any Installment Dates hereunder in the applicable Conversion Notice.

 

(d)  
Deferred Installment Amount. Notwithstanding any provision of this Section 8 to the contrary, the Holder may, at
its option and in its sole discretion, deliver a written notice to the Company no later than the Trading Day immediately prior
to the applicable Installment Date electing to have the payment of all or any portion of an Installment Amount payable on such
Installment Date deferred (such amount(s) deferred, the “Holder Deferral Amount”) until any subsequent Installment
Date selected by the Holder, in its sole discretion, in which case, the Holder Deferral Amount shall be added to, and become part
of, the Installment Amount to be paid on such subsequent Installment Date. Any notice delivered by the Holder pursuant to this
Section 8(d) shall be irrevocable and shall set forth (i) the Holder Deferral Amount and (ii) the date that such Holder Deferral
Amount shall now be payable.

 

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(e)   
Accelerated Installment Amount. Notwithstanding any provision of this Section 8 to the contrary, if the Company delivers
a Company Installment Notice and confirms, or is deemed to have delivered and confirmed, in whole or in part, an Installment Conversion
in accordance with Section 8(a) with respect to an Installment Date, during the applicable Installment Period, the Holder may elect,
at its option and in its sole discretion, at one or more times during such Installment Period (each, an “Acceleration”,
and each such election date, an “Acceleration Date”), to convert all or any portion of any applicable Acceleration
Amount, in addition to any applicable Installment Conversion Amount with respect to which the Holder may elect to convert into
Installment Shares pursuant to Section 8(b), into a number of shares of Common Stock equal to the quotient of (x) the applicable
Acceleration Amount as of the applicable Acceleration Date divided by (y) the Installment Conversion Price then in effect on such
applicable Acceleration Date (the “Acceleration Shares”), in accordance with the conversion procedures set forth
in Section 3 hereunder, mutatis mutandis (with “Installment Conversion Price” replacing “Conversion Price”
for all purposes hereunder with respect to such Acceleration). The Acceleration Shares to be issued to the Holder pursuant to this
Section 8(e) with respect to any Installment Period shall not be credited against the Initial Installment Shares issued to the
Holder on the applicable Installment Date, but rather shall be issued to the Holder in accordance with Section 3(c), but subject
to Section 3(d). All Acceleration Shares shall be fully paid and nonassessable shares of Common Stock (rounded to the nearest whole
share). Notwithstanding anything herein to the contrary, in the event of any partial conversion of this Note by the Holder pursuant
to an Acceleration, the Principal amount converted or redeemed shall not be deducted in reverse order starting from the final Installment
Amount to be paid hereunder on the final Installment Date, but rather a pro rata amount of the Principal amount converted pursuant
to such Acceleration shall be deducted from each of the remaining Installment Amounts to be paid hereunder.

 

(9)              
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate
of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may
be required to protect the rights of the Holder of this Note.

 

(10)          
RESERVATION OF AUTHORIZED SHARES.

 

(a)               
Reservation. The Company shall initially reserve out of its authorized and unissued shares of Common Stock a number
of shares of Common Stock for each of this Note and the Other Notes equal to 150% of the Conversion Rate with respect to the Conversion
Amount of each such Note as of the Issuance Date. So long as any of this Note and the Other Notes are outstanding, the Company
shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose
of effecting the conversion of this Note and the Other Notes, the number of shares of Common Stock specified above in this Section
10(a) as shall from time to time be necessary to effect the conversion of all of the Notes then outstanding; provided, that
at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved pursuant
hereto (in each case, without regard to any limitations on conversions) (the “Required Reserve Amount”). The
initial number of shares of Common Stock reserved for conversions of this Note and the Other Notes and each increase in the number
of shares so reserved shall be allocated pro rata among the Holder and the holders of the Other Notes based on the Principal amount
of this Note and the Other Notes held by each holder at the Closing (as defined in the Securities Purchase Agreement) or increase
in the number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that
a holder shall sell or otherwise transfer this Note or any of such holder's Other Notes, each transferee shall be allocated a pro
rata portion of such holder's Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which
ceases to hold any Notes shall be allocated to the Holder and the remaining holders of Other Notes, pro rata based on the Principal
amount of this Note and the Other Notes then held by such holders.

 

    -19- 

     

    

(b)              
Insufficient Authorized Shares. If at any time while any of the Notes remain outstanding the Company does not have
a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon
conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized
Share Failure”), then the Company shall immediately take all action necessary to increase the Company's authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding.
Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized
Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share Failure, the Company shall
either (x) obtain the written consent of its stockholders for the approval of an increase in the number of authorized shares of
Common Stock and provide each stockholder with an information statement with respect thereto or (y) hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such
increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve
such proposal. 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 “Authorized Failure Shares”), in lieu of delivering such Authorized
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 Authorized
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 Authorized Failure Shares to the Company and ending
on the Trading Day immediately preceding the date of such issuance and payment under this Section 10(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 Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred
in connection therewith. Nothing contained in Section 10(a) or this Section 10(b) shall limit any obligations of the Company under
any provision of the Securities Purchase Agreement.

 

    -20- 

     

    

(11)          
REDEMPTIONS. The Company shall deliver the applicable Company Optional Redemption Price to the Holder in cash on
the applicable Company Optional Redemption Date. The Company shall deliver the applicable Triggering Event Redemption Price to
the Holder in cash on the applicable Triggering Event Redemption Date. The Company shall deliver the applicable Event of Default
Redemption Price to the Holder within three (3) Business Days after the Company's receipt of the Holder's Event of Default Redemption
Notice. If the Holder has submitted a Change of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver
the applicable Change of Control Redemption Price to the Holder (i) concurrently with the consummation of such Change of Control
if such notice is received on or prior to third (3rd) Business Day prior to the consummation of such Change of Control
and (ii) within three (3) Business Days after the Company's receipt of such notice otherwise. The Company shall deliver the applicable
Equity Conditions Failure Redemption Price to the Holder on the applicable Equity Conditions Failure Redemption Date. The Company
shall deliver the applicable Company Installment Redemption Price to the Holder on the applicable Installment Date. The Company
shall pay the applicable Redemption Price to the Holder in cash by wire transfer of immediately available funds pursuant to wire
instruction provided by the holder in writing to the Company on the applicable due date. In the event of a redemption of less than
all of the Conversion Amount of this Note, if requested by the Holder and upon delivery by the Holder to the Company of this Note,
the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 16(d)) representing
the outstanding Principal which has not been redeemed which shall be calculated as if no Redemption Notice has been delivered.
Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to
receive a cash payment under any of the other Transaction Documents and the Company does not timely pay such amounts as required
by such Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption Price
hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document and, upon
payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such other Transaction
Document. 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, and (y) the Company shall immediately return this Note, or issue a new Note (in accordance with
Section 16(d)) to the Holder representing such Conversion Amount to be redeemed. The Holder's delivery of a notice voiding a Redemption
Notice and exercise of its rights following such notice shall not affect the Company's obligations to make any payments of Late
Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.

 

(12)          
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as
expressly provided in this Note.

 

(13)          
COVENANTS.

 

    -21- 

     

    

(a)               
Rank.All payments due under this Note shall rank pari passu with all Other Notes and all other unsecured
indebtedness of the Company.

 

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

 

(c)               
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, except to the extent that the failure to be so qualified or
in good standing would not reasonably be expected to have a Material Adverse Effect (as defined in the Securities Purchase Agreement);
provided, however, that any wholly-owned Subsidiary may merge with or into another wholly-owned Subsidiary or the Company.

 

(d)              
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its material properties which are necessary 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 in all material
respects with the provisions of all material 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.

 

(e)               
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 management determines is appropriate in light of the risks faced by the business.

 

(f)               
Independent Investigation. At the request of the Holder, at no more than one time in any twelve month period, either
(x) at any time when an Event of Default has occurred and is continuing, (y) upon the occurrence of an event that with the passage
of time or giving of notice would constitute an Event of Default or (z) at any time the Holder reasonably believes an Event of
Default may have occurred or be continuing, the Company shall hire an independent, reputable investment bank selected by the Company
and approved by the Holder to investigate as to whether any breach of this Note has occurred (the “Independent Investigator”).
If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator shall notify
the Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection
with such investigation, the Independent Investigator may, during normal business hours and upon signing a confidentiality agreement
in a form reasonably acceptable to the Company, inspect all contracts, books, records, personnel, offices and other facilities
and properties of the Company and its Subsidiaries and, to the extent available to the Company after the Company uses reasonable
efforts to obtain them, the records of its legal advisors and accountants (including the accountants’ work papers) and any
books of account, records, reports and other papers not contractually required of the Company to be confidential or secret, or
subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies and inspections
thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator with such
financial and operating data and other information with respect to the business and properties of the Company as the Independent
Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs, finances and
accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s officers, directors,
key employees and independent public accountants or any of them (and by this provision the Company authorizes said accountants
to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable
times, upon reasonable notice, and as often as may be reasonably requested.

 

    -22- 

     

    

(14)          
AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Holder and the Company shall be required for any
change or amendment to this Note.

 

(15)          
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; provided, however, that any purchaser, assignee or transferee
of this Note shall agree in writing to be bound by the terms of the Securities Purchase Agreement and this Note.

 

(16)          
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 16(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 16(d)) to the Holder representing the outstanding Principal
not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of Section 3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this
Note may be less than the Principal stated on the face of this Note.

 

(b)              
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary 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 16(d)) representing the
outstanding Principal.

 

    -23- 

     

    

(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 16(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 16(a) or Section 16(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 Late Charges, if any, on the Principal
of this Note, from the Issuance Date.

 

(17)          
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 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 seek
an injunction restraining any 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 reasonably requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.

 

(18)          
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 reasonable out-of-pocket 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, reasonable 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.

 

    -24- 

     

    

(19)          
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. 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. Unless expressly indicated otherwise, all section references are to sections
of this Note. Terms used in this Note and not otherwise defined herein but defined in the other Transaction Documents shall have
the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing
by the Holder. In the event that one or more events have occurred that would permit either the Company or the Holder to redeem
or accelerate, or cause the redemption or acceleration of, or would otherwise result in the acceleration of, all or a portion of
this Note, and there is a conflict between the redemption or acceleration prices or amounts relating to such event(s) under this
Note, the greater of such redemption or acceleration prices or amounts shall govern and control.

 

(20)          
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder or the Company 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. Notwithstanding the foregoing,
nothing contained in this Section 20 shall permit any waiver of any provision of Section 3(d).

 

(21)          
DISPUTE RESOLUTION.

 

(a)               
Submission to Dispute Resolution.

 

(i)                
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Installment Conversion
Price, a Weighted Average Price or a fair market value or the arithmetic calculation of a Conversion Rate or the applicable Redemption
Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the
Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company, at
any time after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute
relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Installment Conversion Price, such Weighted
Average Price or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price
(as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or
the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its
sole option, select an independent, reputable investment bank with the consent of the Company, not to be unreasonably withheld,
to resolve such dispute.

 

    -25- 

     

    

(ii)              
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 21 and (B) written documentation supporting its position with respect to
such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the
Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute
Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other
support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on
the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless
otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company
nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection
with such dispute (other than the Required Dispute Documentation).

 

(iii)            
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The
fees and expenses of such investment bank shall be borne by the Company and such investment bank’s resolution of such dispute
shall be final and binding upon all parties absent manifest error.

 

(b)              
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 21 constitutes an agreement to
arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York
Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration
pursuant to CPLR § 7503(a) in order to compel compliance with this Section 21, (ii) the terms of this Note and each other
applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable
dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the
like that such investment bank determines are required to be made by such investment bank in connection with its resolution of
such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms
of this Note and any other applicable Transaction Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall
have the right to submit any dispute described in this Section 21 to any state or federal court sitting in The City of New York,
Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 21 and (iv) nothing in this Section 21 shall
limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect
to any matters described in this Section 21).

 

    -26- 

     

    

(22)          
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 8(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the
reason therefore. Without limiting the generality of the foregoing, the Company shall give written notice to the Holder (i) promptly
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 pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in
each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to
the Holder.

 

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

 

    -27- 

     

    

(23)          
CANCELLATION. After all Principal, 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.

 

(24)          
WAIVER OF NOTICE. To the extent permitted by law and except as expressly set forth herein, 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.

 

(25)          
GOVERNING LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address it set forth on the signature page hereto 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 (i) shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall
limit, or shall be deemed or construed to limit, any provision of Section 21. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE
OF THIS NOTE, THE HOLDER 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.

 

(26)          
Severability. If any provision of this Note is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be
prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Note
so long as this Note as so modified continues to express, without material change, the original intentions of the parties as to
the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would
otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close
as possible to that of the prohibited, invalid or unenforceable provision(s).

 

    -28- 

     

    

(27)          
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after any such receipt or delivery
publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company
believes that a notice contains material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall
indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall
be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the
Company or its Subsidiaries. Nothing contained in this Section 27 shall limit any obligations of the Company, or any rights of
the Holder, under Section 4(i) of the Securities Purchase Agreement.

 

(28)          
MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest
or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid
or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against
amounts owed by the Company to the Holder and thus refunded to the Company.

 

(29)          
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

(a)               
“Acceleration Amount” means, with respect to any Installment Period, an amount equal to 50% of the cumulative
sum of all Excess Trading Volume Amounts for all Trading Days during such Installment Period.

 

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

 

(c)               
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls,
is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

(d)              
“Bloomberg” means Bloomberg Financial Markets.

 

(e)               
“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.

 

    -29- 

     

    

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

 

(g)              
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date,
the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price
or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively,
is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets
Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved pursuant to Section 21. All such determinations to
be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during
the applicable calculation period.

 

(h)              
“Common Stock” means (i) the Company's shares of common stock, par value $0.0001 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.

 

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

 

    -30- 

     

    

(j)                
“Conversion Shares” means shares of Common Stock issuable by the Company pursuant to the terms of any
of the Notes, including any related Late Charges so converted, amortized or redeemed.

 

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

 

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

 

(m)            
“Equity Conditions” means each of the following conditions: (i) on each day during the Equity Conditions
Measuring Period, all Conversion Shares issuable upon conversion of the Notes shall be eligible for sale without restriction under
the Securities Act and any applicable state securities laws; (ii) on each day during the Equity Conditions Measuring Period, the
Common Stock is listed for trading on the Principal Market or any other Eligible Market and shall not have been suspended from
trading on such exchange or market (other than suspensions of not more than two (2) days and occurring prior to the applicable
date of determination due to business announcements by the Company) nor shall the Company have received any final and non-appealable
notice that the listing or quotation of the Common Stock on the Principal Market shall be terminated on a date certain (unless,
prior to such date certain, the Common Stock is listed or quoted on any other Eligible Market); (iii) during the one (1) year period
ending on and including the date immediately preceding the applicable date of determination, the Company shall have delivered the
Conversion Shares upon conversion of the Notes to the Holders on a timely basis as set forth in Section 3(c)(ii) hereof; (iv) the
shares of Common Stock issuable upon conversion of the Installment Conversion Amount and Acceleration Amount (if any) that is subject
to the applicable Installment Conversion requiring the satisfaction of the Equity Conditions may be issued in full without violating
Section 3(d) hereof and the rules or regulations of the Principal Market or any other applicable Eligible Market; (v) during the
Equity Conditions Measuring Period, the Company shall not have failed to timely make any payments within five (5) Business Days
of when such payment is due pursuant to any Transaction Document; (vi) during the Equity Conditions Measuring Period, there shall
not have occurred either (A) the public announcement of a pending, proposed or intended Fundamental Transaction which has not been
abandoned, terminated or consummated or (B) an Event of Default; (vii) the Company shall have no knowledge of any fact that would
cause any Conversion Shares issuable upon conversion of the Notes not to be eligible for sale without restriction pursuant to the
Securities Act and any applicable state securities laws; (viii) during the Equity Conditions Measuring Period, the Company otherwise
shall have been in compliance with and shall not have breached any provision, covenant, representation or warranty of any Transaction
Document; (ix) the Holder shall not be in possession of any material, nonpublic information received from the Company, any Subsidiary
or its respective agent or Affiliates; (x) the shares of Common Stock issuable upon conversion of the Installment Conversion Amount
and Acceleration Amount (if any) that is subject to the applicable Installment Conversion requiring the satisfaction of the Equity
Conditions are duly authorized and listed and eligible for trading without restriction on an Eligible Market; and (xi) the daily
dollar value trading volume of the Common Stock as reported by Bloomberg for each Trading Day during the ten (10) Trading Day period
ending on the Trading Day immediately prior to the applicable date of determination shall be at least $125,000.

 

    -31- 

     

    

(n)              
“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 each
been satisfied (or waived in writing by the Holder).

 

(o)              
“Equity Conditions Measuring Period” means each day during the period beginning twenty (20) Trading Days
prior to the applicable date of determination and ending on and including the applicable date of determination.

 

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

 

(q)              
“Excess Trading Volume Amount” means, with respect to any Trading Day during an Installment Period, the
amount, if any, by which the daily dollar value trading volume of the Common Stock as reported by Bloomberg for such Trading Day
exceeds $200,000.

 

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

 

(s)               
“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 any other Person unless the Company or any of its Subsidiaries
is the surviving corporation, 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) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize
or reclassify the Common Stock (which shall not include a reverse stock split), or (ii) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated
thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

    -32- 

     

    

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

 

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

 

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

 

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

 

(x)              
“Installment Amount” means an amount equal to the sum of (i) the lesser of (A) $[_________][1]
(as such amount may be increased pursuant to Section 8(b) hereof) and (B) the Principal outstanding on such Installment Date, (ii)
any Holder Deferral Amount deferred pursuant to Section 8(d) and included in such Installment Amount, (iii) any Acceleration Amount
that increases (and is included in) such Installment Amount pursuant to Section 8(e) and (iv) accrued and unpaid Late Charges,
if any, with respect to such Principal, as any such Installment Amount for each Holder may be reduced pursuant to the terms hereof,
whether upon conversion, redemption or otherwise. In the event the Holder shall sell or otherwise transfer or assign any portion
of this Note, the transferee shall be allocated a pro rata portion of each unpaid Installment Amount hereunder.

 

____________________________

[1]
Insert 1/18th of the Principal of the Note.

 

    -33- 

     

    

(y)              
“Installment Conversion Price” means as of any date of determination, that price which shall be the lower
of (i) the Conversion Price then in effect and (ii) the Market Price as of such date of determination.

 

(z)               
“Installment Date” means each of [_________], 2016 and every calendar month anniversary thereafter through
and including the Maturity Date, or, if any such date falls on a Holiday, the next day that is not a Holiday.

 

(aa)           
“Market Price” means, as of any applicable date of determination, the higher of (i) 90% of the lesser
of (a) the arithmetic average of the lowest four (4) daily Weighted Average Prices of the Common Stock during the seven (7) consecutive
Trading Day period ending on the Trading Day immediately preceding the applicable date of determination and (b) the daily Weighted
Average Price of the Common Stock on the Trading Day immediately preceding the applicable date of determination and (ii) $1.00
(in each case, as adjusted for any stock split, stock dividend, stock combination, reclassification or other similar transaction)
(the “Floor Price”); provided, however, that in the event that the Weighted Average Price of the
Common Stock on the Trading Day immediately preceding any Installment Date is less than $1.00 (as adjusted for any stock split,
stock dividend, stock combination, reclassification or other similar transaction), then the Floor Price for the applicable Installment
Period shall be the lesser of (A) 80% of such Weighted Average Price and (B) such price deemed appropriate by the Board of Directors
of the Company and set forth in writing to the Investor on such Trading Day (in each case as adjusted for any stock split, stock
dividend, stock combination, reclassification or other similar transaction); provided, further, however, that under
no circumstances shall the Floor Price for any Installment Period be less than $0.25 (which upon any stock split, stock dividend,
stock combination, reclassification or other similar transaction shall be adjusted to the lower of (i) the adjusted price and (ii)
$0.25) (the “Absolute Floor”).

 

(bb)          
“Maturity Date” shall mean [__], 201[_][2]
(as such date may be accelerated pursuant to Section 1); 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 Change of Control Notice is delivered prior to the Maturity Date, and (iii) 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, until such time as such provision shall not limit the conversion of this Note.

 

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

 

____________________________

[2]
Insert 18-month anniversary of Issuance Date.

    -34- 

     

    

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

 

(ee)           
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness
described on Schedule 13 attached hereto and (iii) Indebtedness secured by Permitted Liens described in clauses (iv) and
(v) of the definition of Permitted Liens, in an aggregate amount not to exceed $100,000.

 

(ff)            
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith
by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any
Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in
the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries
to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or
lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely
to the property so acquired and improvements thereon, and the proceeds of such equipment, (v) Liens incurred in connection with
the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clause (iv) above, provided
that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not increase, and (vi) Liens securing the Company’s
obligations under this Note and the Other Notes.

 

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

 

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

 

(ii)              
“Redemption Notices” means, collectively, the Company Optional Redemption Notices, the Triggering Event
Redemption Notice, the Event of Default Redemption Notices, the Change of Control Redemption Notices, the Company Installment Notices
and the Equity Conditions Failure Redemption Notices, each of the foregoing, individually, a “Redemption Notice”.

 

(jj)              
“Redemption Prices” means, collectively, the Company Optional Redemption Price, the Triggering Event
Redemption Price, the Event of Default Redemption Price, the Change of Control Redemption Price, the Company Installment Redemption
Price and the Equity Conditions Failure Redemption Price, each of the foregoing, individually, a “Redemption Price”.

 

    -35- 

     

    

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

 

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

 

(mm)      
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Initial
Closing Date, by and between the Company and [___], pursuant to which the Company issued this Note, as may be amended from time
to time.

 

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

 

(oo)          
“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.

 

(pp)          
“Triggering Event” means any one of the following: (i) the daily Weighted Average Price of the Common
Stock is less than $1.00 for 30 consecutive Trading Days; or (ii) the daily Weighted Average Price of the Common Stock is less
than $0.50 for five consecutive Trading Days.

 

(qq)          
“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).

 

    -36- 

     

    

(rr)             
“Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price
for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York Time (or such other time as the
Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other
time as the Principal Market publicly announces is the official close of trading) as reported by Bloomberg through its “Volume
at Price” functions, or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York
Time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York
Time (or such other time as such market publicly announces is the official close of trading) as reported by Bloomberg, or, if no
dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing
bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or “pink
sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved pursuant to Section 21. All such determinations to
be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during
the applicable calculation period.

 

[Signature Page Follows]

 

 

 

    -37- 

     

    

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

 

 

	 	Amyris, Inc.
	 	 
	 	 
	 	By:	_________________________________
	 	 	Name: Raffi Asadorian
	 	 	Title: Chief Financial Officer

 

 

 

     

     

    

EXHIBIT I

AMYRIS, inc.

 

 

CONVERSION NOTICE

 

Reference is made to the Senior Convertible
Note (the “Note”) issued to the undersigned by Amyris, Inc., a Delaware corporation (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of Common Stock, par value $0.0001 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 Conversion Amount to be converted:	 
	 	 
	Please confirm the following information:
	 
	Conversion Price:	 
	 	 
	Number of shares of Common Stock to be issued:	 
	 	 
	
        [_]If
        this Conversion Notice is being delivered with respect to an Installment Conversion or an Acceleration, check here if Holder is
        electing to use the following Installment Conversion Price:____________ on the following date:_______________.

        

	 
	Please issue the Common Stock into which
        the Note is being converted to Holder, or for its benefit, as follows:
	 
	[_]Check here if requesting delivery as a certificate to the following name and to the following address:
	 
	Issue to:	 
	 	 
	 	 
	 	 
	[_]Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
	 
	DTC Participant:	 
	 	 
	DTC Number:	 
	 	 
	Account Number:	 
	 	 
	Installment Amounts to be reduced (or accelerated) and amount of reduction (or acceleration):

 ___________________________	 
	 	 	 	 	 	 	 	 	 

 

 

     

     

    

 

 

	Date: _______________ __, ____	 
	 	 	 	 
	 	 	 	 
	Name of Registered Holder	 
	 	 	 	 
	 	 	 	 
	By:	 	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	 	 	 	 
	 	Tax ID:	 	 
	 	 	 	 
	 	Facsimile:	 	 

 

 

 

 

 

 

 

     

     

    

[INSERT AMYRIS, INC. LETTERHEAD]

 

 

 

ACKNOWLEDGMENT AND INSTRUCTION LETTER

 

 

 

The Company hereby acknowledges
this Conversion Notice and hereby directs [NAME OF TRANSFER AGENT] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated [__________], 2016 from the Company and acknowledged and agreed to by
[NAME OF TRANSFER AGENT].

 

 

	 	Amyris, Inc.
	 	 
	 	 
	 	By:	_________________________________
	 	 	Name:
	 	 	Title:EX-10.1

 Exhibit 10.1 

EMPLOYMENT AGREEMENT 
 dated as of

 June 8, 2016, between 
 AEP
INDUSTRIES INC., 
 a Delaware corporation (the “Company”), and 

DAVID J. CRON 
 (the
“Executive”). 

 EMPLOYMENT AGREEMENT 

This Employment Agreement, dated June 8, 2016, by and between AEP Industries Inc., a Delaware corporation having its offices at 95 Chestnut
Ridge Road, Montvale, New Jersey 07645 (the “Company”), and David J. Cron (the “Executive”), presently residing at [Address] is entered into and shall be effective as of June 8, 2016 (the “Effective Date”). 

RECITALS 
 The Executive
is an employee of the Company; and 
 The Company desires to continue to employ Executive upon the terms and conditions set forth in this
Agreement, and Executive desires to accept such continuation of employment. 
 Accordingly, in consideration of the mutual promises
contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 

Section 1.    Employment; Term. 

(a)    Employment. Subject to Section 3, commencing as of the Effective Date, the Company hereby agrees to continue
to employ Executive, and Executive hereby agrees to continue to be employed by the Company, in accordance with the terms and provisions of this Agreement. 

(b)    Term. The initial term of this Agreement shall be a period of one (1) year (the “Initial
Term”). Thereafter this Agreement shall be extended for successive periods of one (1) year each from the Effective Date (each an “Extended Term” and together with the Initial Term the “Term”) unless either party gives
written notice to the other at least one hundred (180) days before the expiration of the Initial Term or the then current Extended Term that it does not wish to extend this Agreement beyond the last day of the current Term. 

Section 2.    Terms of Employment. 

(a)    Position. During the term of Executive’s employment, Executive shall serve in the position set
forth on the signature page hereto and shall report to the person or persons set forth on the Executive Data Sheet annexed hereto as Exhibit A. Executive shall have supervision and control over, and responsibility for, such management and
operational functions of the Company currently assigned to such position, and shall have such other powers and duties (including holding officer positions with the Company and one or more subsidiaries of the Company) as may from time to time be
prescribed by the person or persons to whom Executive will report, so long as such powers and duties are reasonable and customary for such position of an enterprise comparable to the Company. The primary person(s) that Executive reports to shall be
such person(s) as set forth under the label “Reports to” on the Executive Data Sheet annexed hereto as Exhibit A. 

  
 Page 2 of
18 

 (b)    Duties. During the term of Executive’s employment,
and excluding any periods of vacation and sick leave to which Executive is entitled, Executive agrees to devote substantially all of his business time to the business and affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently such responsibilities. During the term of Executive’s employment, it shall not be a violation
of this Agreement for Executive to (1) serve on corporate, civic or charitable boards or committees, (2) deliver lectures or fulfill speaking engagements, and (3) manage personal investments, so long as such activities do not interfere with the
performance of Executive’s responsibilities as an employee of the Company in accordance with this Agreement. 

(c)    Compensation. 

(i)    Base Salary. During the term of Executive’s employment, Executive shall receive an annual base
salary (the “Annual Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company, at least equal to the base salary set forth on the Executive Data Sheet annexed hereto as Exhibit A.
Commencing on November 1, 2016 (the “First Date”), and on each subsequent anniversary date of the First Date as long as Executive remains an employee of the Company (the First Date and each subsequent anniversary of the First Date
being herein referred to as an “Adjustment Date”), the Annual Base Salary of Executive in effect on the day preceding the Adjustment Date shall be increased by (A) the percentage equal to the percentage increase, if any, in the
Consumer Price Index for all Urban Consumers for the New York-Northeastern New Jersey Metropolitan Area (or any successor Consumer Price Index) based on data published by the Bureau of Labor Statistics of the United States Department of Labor for
the 12-month period ended on the September 30th immediately preceding the Adjustment Date over such Consumer Price Index for September 30, in the year preceding the Adjustment Date, and (B) such additional amount as the Board of Directors of the
Company (the “Board”) in its discretion may determine to be appropriate. The result of such increase or increases to the then current Annual Base Salary shall constitute Executive’s Annual Base Salary commencing on the
Adjustment Date then at hand and continuing until the next Adjustment Date. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to Executive under this Agreement. After an Adjustment Date the term Annual Base
Salary as used in this Agreement shall refer to Annual Base Salary as so increased. 
 (ii)    Bonuses. In
addition to his Base Salary, Executive shall be paid an annual bonus (the “Bonus”) during the term of his employment pursuant to the Company’s Management Incentive Plan or any successor thereto (the “MIP”). The Bonus
shall be based upon performance criteria and objectives determined by the Compensation Committee of the Board in its reasonable discretion and approved by the Board. All Bonuses shall be paid at the time specified in the MIP. 

(iii)    Benefits. The Company shall provide Executive during the term of his employment hereunder with
coverage under all employee pension and compensation programs, plans and practices (commensurate with his positions in the Company and to the extent permitted under any employee benefit plan) in accordance with the terms thereof, which the Company
makes available to its senior executives. During the term of Executive’s employment, Executive shall be entitled to receive, in addition to the benefits described above, such perquisites and fringe benefits appertaining to his position in
accordance with any practice existing at the Company prior to the Effective Date or as subsequently changed by the Board, which perquisites and fringe benefits will be consistent with past practice. The Executive shall also be entitled to an
additional perquisite allowance each year in an amount from time to time determined by the Company’s Compensation Committee in order to cover expenses not covered by the Company’s business expense reimbursement policy. Any additional
perquisite allowance for a year shall be paid by the Company to Executive no later than March 15 of the following calendar year. 

  
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 (iv)    Expenses. During the term of Executive’s
employment, Executive shall be entitled to receive reimbursement for all reasonable employment expenses incurred by Executive in accordance with the policies, practices and procedures of the Company, including, without limitation, expenses for
travel and similar items related to such duties and responsibilities. The Company will reimburse Executive for all such expenses upon presentation by Executive from time to time of appropriately itemized and approved (consistent with the
Company’s policy) accounts of such expenditures. The reimbursement policies, practices and procedures applicable to Executive shall be the most favorable policies, practices and procedures of the Company relating to reimbursement of
employment expenses incurred by Company, directors, officers or employees in effect at any time during the 12 month period preceding the date Executive incurs the expenses. Any employment expense reimbursement shall be made no later than the
last day of the calendar year following the calendar year in which the Executive incurs the expense, the expense reimbursement for any calendar year shall not affect the expenses eligible for reimbursement in any other calendar year, and
Executive’s right to expense reimbursement cannot be liquidated or exchanged for any other benefit. 

(v)    Vacation. During the term of Executive’s employment, Executive shall be entitled to such number
of days of paid vacation as set forth under the label “Vacation Days” on the Executive Data Sheet annexed hereto as Exhibit A, to be taken in accordance with the existing policies of the Company and past practice. Any paid vacation
shall be taken at such times as are consistent with Executive’s responsibilities hereunder. Unless otherwise approved by the Company, any vacation days not taken in any calendar year shall be forfeited without payment thereof as permitted by
applicable law. No such vacation days shall be forfeited to the extent that such vacation days are not taken at the request of the Company. 

(vi)    Equity Awards, etc. In addition to any benefits Executive may receive hereunder, the Company may,
from time to time, grant Executive equity awards exercisable for shares of common stock of the Company or restricted stock, stock appreciation rights or performance awards under the Company’s then current Equity Plan (the “Executive
Equity Awards”), and such Executive Equity Awards shall be of such kind, in such number and have such terms and provisions as may be determined appropriate by the Board or Compensation Committee thereof. 

(vii)    Withholding. The Company shall be entitled to withhold from payment any amount of withholding
required by law as the Company may reasonably determine. 
 (d)    Director’s and Officer’s Liability
Insurance. The Company shall use all commercially reasonable efforts to obtain and maintain a director’s and officer’s liability insurance policy during the term of Executive’s employment covering Executive on commercially
reasonable terms, and the amount of coverage shall be reasonable in relation to Executive’s position and responsibilities hereunder; provided, however, that such coverage may be reduced or eliminated to the extent that the Company reduces or
eliminates coverage for its directors and executives generally. 

  
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 Section 3.    Termination of Employment. 

(a)    Death or Disability. Executive’s employment shall terminate automatically upon Executive’s
death. If Executive becomes Disabled during the Employment Period (pursuant to the definition of Disability set forth below), the Company may give to Executive written notice in accordance with Section 10(g) of its intention to terminate
Executive’s employment on the date specified in such notice. In such event, Executive’s employment with the Company shall terminate effective on such specified date, which date shall be at least on thirty (30) days after receipt of such
notice by Executive (the “Disability Effective Date”), prior to the Disability Effective Date, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement,
“Disabled” or “Disability” means, with respect to Executive, Executive’s inability to perform the duties and obligations required by Executive’s job by reason of any medically determined physical or mental
impairment, as determined in accordance with the provisions of the long term disability coverage under the AEP Industries Inc. Long Term Disability Plan (the “AEP Disability Plan”), if Executive has elected coverage thereunder,
provided, however, that if Executive has not elected long term disability coverage under the AEP Disability Plan, then “Disability” shall mean, with respect to Executive, any medically determined physical or mental impairment by the
Compensation Committee of the Company or its insurers and acceptable to Executive or Executive’s legal representative that prevents Executive from performing the duties and obligations required by Executive’s job for more than ninety (90)
days during a period of one hundred and eight (180) consecutive days. 
 (b)    Cause. Executive’s
employment may be terminated at any time by the Company for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean an Executive’s (i) commission of a crime of moral turpitude or a felony that involves
financial misconduct or moral turpitude or has resulted, or reasonably could be expected to result, in any adverse publicity regarding Executive or the Company or economic injury to the Company, (ii) dishonesty or willful commission or omission of
any action that has resulted, or reasonably could be expected to result, in any adverse publicity regarding Executive or the Company or has caused, or reasonably could be expected to cause, demonstrable and serious economic injury to the Company, or
(iii) material breach of this Agreement or any other agreement entered into between Executive and the Company or any of its subsidiaries or Affiliates (other than as a result of the Disability of Executive or other factors outside of
Executive’s control) after notice and a reasonable opportunity to cure (if such breach can be cured). For purposes of this Agreement, “without Cause” shall mean a termination by the Company of Executive’s employment during
the Employment Period for any reason other than a termination based upon Cause, death or Disability. For purposes hereof, no act or omission shall be considered willful unless committed in bad faith or without a reasonable belief that the act or
omission was in the best interests of the Company or any of its Affiliates. For purposes of this Agreement, “Affiliate” of the Company means a Person (as defined below) that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Company. As used in this definition, the term “control,” including the correlative terms “controlling,” “controlled by” and
“under common control with” mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership
interest, by contract or otherwise) of a Person. For purposes of this Agreement, “Person” shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. 

  
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 (c)    Good Reason. Executive’s employment may be terminated
at any time by Executive for Good Reason or without Good Reason. For purposes of this Agreement, “Good Reason” means voluntary resignation after any of the following actions are taken by the Company or any of its subsidiaries
without Executive’s consent: (a) any material breach by the Company of any provision of this Agreement; (b) a significant diminution in the responsibilities or authority of Executive which are materially inconsistent with Executive’s
position other than (1) an insubstantial and inadvertent diminution that is remedied by the Company promptly after receipt of written notice thereof sent by Executive, (2) in connection with the termination of Executive’s employment for Cause,
(3) as a result of Executive’s Disability, or (4) by Executive other than for Good Reason; (c) a significant diminution in the Annual Base Salary and Bonus to be paid to Executive (but not including any diminution related to a broader
compensation reduction that is not limited to any particular employee or executive); provided, however, that none of the events described in the foregoing clauses (a), (b) or (c) shall constitute Good Reason unless Executive shall have notified the
Company in writing describing the events which constitute Good Reason and then only if the Company shall have failed to cure such events within (x) in the case of clause (a), fifteen (15) days, or (y) in the case of clauses (b) or (c), thirty (30)
days, after the Company’s receipt of such written notice. 
 (d)    Notice of Termination. Any
termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(g). For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than five (5) days after the giving of such notice). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder. 

(e)    Date of Termination. “Date of Termination” means (i) if Executive’s employment is
terminated by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein pursuant to Section 3(d), as the case may be, and (ii)
if Executive’s employment is terminated by reason of death or Disability, the date of death of Executive or the Disability Effective Date, as the case may be. 

Section 4.    Obligations of the Company upon Termination. 

(a)    With Good Reason; Other Than for Cause, Death or Disability. If, during the period commencing with the
Effective Date and ending with the termination of Executive’s employment (the “Employment Period”), (1) the Company shall terminate Executive’s employment other than for Cause, or (2) Executive shall terminate his
employment for Good Reason or within thirty (30) days subsequent to a Discontinuation Event, and (3) the termination of Executive’s employment in any case is not due to his death or Disability, then the Company will provide Executive with the
following severance payments and/or benefits: 

  
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 (i)    The Company shall pay, subject to Section 8, to Executive as a
severance payment an amount equal to two (2) times the sum of (x) the Annual Base Salary in effect immediately prior to the event giving rise to such termination and (y) the Bonus earned, if any, for the fiscal year immediately preceding the fiscal
year in which the event giving rise to such termination occurs. Except as otherwise provided in this Employment Agreement, the severance payment shall be payable in equal pro rata installments over a period of two (2) years
commencing on the Termination Date (subject to applicable federal and state withholding taxes, social security contributions, any garnishments, or any deductions required by law and any other deductions) in accordance with the ordinary payroll
practices of the Company, but no less frequently than semi-monthly following such termination of employment. In addition, the Company shall pay to Executive (A) any earned but unpaid Bonus of Executive with respect to the fiscal year preceding
the termination payable at the time specified in the MIP, (B) any earned but unpaid Bonus of Executive with respect to the fiscal year in which his termination occurs payable at the time and calculated in the manner specified in the
MIP, and (C) amounts with respect to accrued and unused vacation through the Date of Termination to the extent not theretofore paid (“Accrued Obligations”). 

(ii)    Solely for purposes of this Section 4(a), the following defined terms shall have the following meanings: 

“Discontinuation Event” shall have occurred if the conditions set forth in any one of the following paragraphs shall
have been satisfied: 
 (A)    Any person, corporation or other entity or group, including any “group”
as defined in Section 13(d)(3) of the Exchange Act of 1934, as amended, other than (1) those persons in control of the Company on the Effective Date, (2) any person acting on behalf of the Company in a distribution of stock to the public, or (3) a
trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the beneficial owner of shares of the Company having fifty (50%) percent or more of the total number of votes that may be cast for
the election of directors of the Company; or 
 (B)    As the result of, or in connection with, any tender or exchange
offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing (a “Transaction”), the persons who were directors of the Company before the Transaction shall cease to constitute
a majority of the Board of Directors of the Company or any successor to the Company or its assets; or 
 (C)    If at
any time, (1) the Company shall consolidate with, or merge with, any other Person and the Company shall not be the continuing or surviving corporation, (2) any Person shall consolidate with, or merge with, the Company, and the Company shall be the
continuing or surviving corporation and in connection therewith, all or part of the outstanding Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, (3) the Company shall be a
party to a statutory share exchange with any other Person after which the Company is a Subsidiary of any other Person, or (4) the Company shall sell or otherwise transfer 50% or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons; 
 “Person” shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act of 1934, as amended, and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d); and 

  
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 “Subsidiary” shall mean, a subsidiary of the Company within the meaning
of Section 424(f) of Internal Revenue Code, as amended. 
 (iii)    After the Date of Termination, Executive (and
Executive’s eligible family members) will be entitled to continue their participation in the Company’s medical and dental insurance plans at normal associate contribution rates during the period ending on the earlier of (A) the last day of
the Severance Period and (B) the first date as of which the Company ceases to be obligated to make such plans available to Executive under COBRA (the “COBRA Termination Date”). In the event that the date specified in
clause (A) is the earlier date, Executive (and Executive’s eligible family members) shall be entitled to continue their participation in the Company’s medical and dental insurance plans during the period from such date until the COBRA
Termination Date by paying the full monthly premiums under these plans. 
 Except in the case of a termination by reason of
Executive’s death or Disability, the Company’s obligations to make payments under this Section 4(a) will be conditioned on Executive executing and delivering a customary general release reasonably satisfactory to the parties. 

(b)    Death; Disability; Cause; Other than for Good Reason. If Executive’ s employment shall be
terminated by reason of Executive’s death or Disability, by the Company for Cause or by Executive without Good Reason, Executive shall only be entitled to receive (i) any earned but unpaid Annual Base Salary through the date of the termination
event, payable in accordance with the ordinary payroll practices of the Company, (ii) any earned but unpaid Bonus of Executive with respect to the fiscal year preceding his termination, payable at the time specified in the MIP, (iii) if other
than Cause, any earned but unpaid Bonus of Executive with respect to the fiscal year in which his termination occurs calculated in the manner and payable at the time specified in the MIP, (iv) payment of Accrued Obligations to Executive or
his legal representative in the case of the death or, if applicable, the Disability of Executive, and (v) the continuance of benefits under the Company’s employee benefit plans to the Date of Termination and in the case of death or Disability,
the continuance of death or Disability benefits thereafter in accordance with the terms of such plans and the Company’s perquisite policies as in effect as of such date. 

(c)    Company Obligations after Termination. After the termination of Executive’s employment under
Section 4(b) and payment of all amounts due and provision of all benefits due to Executive pursuant to Section 4(b), the obligations of the Company under this Agreement to make any further payments or provide any benefits specified elsewhere in this
Agreement (other than benefits required to be provided by applicable law or under the terms of any employee benefit of the Company in which the Executive was a participant), shall thereupon cease and terminate. 

(d)    Nature of Payments. Notwithstanding anything contained in this Section 4, all payments under this
Section 4 shall be deemed severance payments for the purpose of Section 8 and may be terminated as therein provided. 

(e)    Executive’s Obligations after Termination. Executive agrees that at any time after the Date of
Termination he will cooperate with the Company in any litigation brought by or against the Company at no additional compensation. Executive shall, however, be entitled to be reimbursed by the Company for his reasonable costs and expenses in
connection with such cooperation. Any such reimbursement shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the costs and expense, the reimbursement for any calendar year
shall not affect the costs and expenses eligible for reimbursement in any other calendar year, and Executive’s right to reimbursement cannot be liquidated or exchanged for any other benefit. 

  
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 Section 5.    Nondisclosure and Nonuse of Confidential Information.

 (a)    Executive shall not disclose or use at any time, either during the Employment Period or thereafter, any
Confidential Information (as hereinafter defined) of which Executive is or becomes aware, whether or not such information is developed by him, except (i) to the extent that such disclosure or use is directly related to, and required by,
Executive’s performance in good faith of duties assigned to Executive by the Company or (ii) when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of the Company,
or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information, provided that Executive shall notify the Company promptly upon learning
that such event may occur, and, if the Company shall so request, Executive shall use his reasonable best efforts (without any additional consideration to be paid to Executive) to assist the Company in seeking a protective order to prevent and/or
limit disclosure of such Confidential Information. Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure; misuse, espionage, loss and theft. Executive shall deliver to
the Company at the termination of the Employment Period, and at any time, either before or after the Termination Date, as the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information or the Work Product (as hereinafter defined) of the business of the Company or any of its Affiliates which Executive may then possess or have under his control. 

(b)    As used in this Agreement, the term “Confidential information” means information that is
not generally known to the public in the context in which used and that is used, developed or obtained by Executive in the course of performing his duties for the Company, including, but not limited to, information, observations and data obtained by
Executive while employed by the Company or any predecessors thereof (including those obtained prior to the date of this Agreement) concerning (i) the business or affairs of the Company and its Affiliates (or such predecessors), including without
limitation, financial data, marketing plans, strategic business plans, product development plans (or other product data), (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and
reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists, (xiii) other copyrightable works, (xiv) all production methods, processes, technology,
know-how and trade secrets, and (xv) all similar and related information in whatever form. Confidential Information will not include any information in the context in which used that has been published in a form generally available to the public
prior to the date Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all
material features comprising such information have been published in combination. 
 (c)    As used in this Agreement,
the term “Work Product” means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable) which relates to the Company’s or any of its Affiliates’ actual or anticipated business, research and development or existing or future products or services and which
are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed (and for the Restricted Period (as defined below) if and to the extent such
Work Product results from any work performed for the Company, any use of the Company’s premises or property or any use of the Company’s Confidential Information) by 

  
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the Company (including those conceived, developed or made prior to the date of this Agreement) together with all patent applications, letters patent, trademark, trade name and service mark
applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. 
 Section
6.    Non-Solicitation; Non-Compete. 
 (a)    During the period commencing on the Effective
Date and ending on the latter of (x) second anniversary of the Termination Date or (y) the first anniversary of the date on which Executive ceases to receive any payments from the Company or any of its Affiliates related to salary, bonus or
severance (the “Restricted Period”), Executive shall not directly or indirectly through another Person (i) induce or attempt to induce anyone who was engaged or employed by the Company or any Affiliate of the Company to leave
the employ or engagement of the Company or such Affiliate, or in any way interfere with the relationship between the Company or any such Affiliate, on the one hand, and any such person thereof, on the other hand, (ii) hire any person who was engaged
or employed by the Company or any Affiliate of the Company at any time until twenty-four (24) months after such individual’s employment relationship or engagement with the Company or such Affiliate has been terminated, or (iii) induce or
attempt to induce any customer, supplier, licensee or other business relation of the Company or any Affiliate of the Company to cease doing business with the Company or such Affiliate, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation, on the one hand, and the Company or any Affiliate, on the other hand. Executive further agrees that, during the period of his employment and thereafter during the restricted period, Executive will
not disparage the Company or any of its Affiliates or any employee of the Company or its Affiliates in any manner whatsoever. 

(b)    Executive acknowledges that in the course of his employment with the Company and/or its Affiliates and their
predecessors, he has become familiar, or will become familiar, with the Company’s and its Affiliates’ and their predecessors’ trade secrets and with other Confidential Information concerning the Company, its subsidiaries or Affiliates
and their respective predecessors and that his services have been and will be of special, unique and extraordinary value to the Company, its subsidiaries and its Affiliates. Therefore, Executive agrees that, during the Restricted Period, Executive
shall not directly or indirectly, engage in the production, sale or distribution of any product produced, sold or distributed by the Company, its subsidiaries or its Affiliates on the Effective Date or during the Restricted Period in the same
geographic areas in which the Company, its subsidiaries or any of its Affiliates is doing business. For purposes of this Agreement, the phrase “directly or indirectly engage in” shall include any direct or indirect ownership or
profit participation interest in such enterprise, whether as an owner, stockholder, partner, principal, manager, agent, consultant, officer, investor, lender, joint venturer of or otherwise in any capacity whatsoever, and shall include any direct or
indirect participation in such enterprise as an employee, consultant, licensor of technology or otherwise. Nothing herein shall prohibit Executive from being a passive owner of not more than two (2%) percent of the outstanding stock or ownership
interest of any class of a corporation or other entity which is publicly traded, so long as Executive has no active participation in the business or management of such corporation or other entity. 

(c)    Executive understands that the foregoing restrictions may limit his ability to earn a livelihood in a business
similar to the business of the Company and any of its subsidiaries and Affiliates, but he nevertheless believes that he has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided
hereunder or as described in the recitals hereto to clearly justify such restrictions which, in any event (that given his education, skills and ability), Executive does not believe would prevent him from otherwise earning a living. Executive has
carefully considered the nature and extent of the restrictions placed upon him by this Agreement, and hereby acknowledges and agrees that the same are reasonable in time and territory and do not confer a benefit upon the Company disproportionate to
the detriment of Executive. 

  
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 Section 7.    Enforcement. 

Because Executive’s services are unique and because Executive has access to Confidential Information and Work Product, and because
Executive acknowledges that any breach of the covenants contained in Section 6 would irreparably injure the Company, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Agreement. Therefore, in the event
of a breach or threatened breach of this Agreement, the Company or its successors or assigns may, in addition to other rights and remedies existing in their favor at law or in equity, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security) or require Executive to account for and pay over to the Company all compensation,
profits, moneys, accruals, increments or other benefits derived from or received as a result of any transactions constituting a breach of the covenants contained herein in this Agreement, if and when final judgment of a court of competent
jurisdiction is so entered against Executive. 
 Section 8.    Severance Payments. 

In addition to the foregoing, and not in any way in limitation thereof, or in limitation of any right or remedy otherwise available to the
Company, if Executive violates any provision of the foregoing Section 5 or 6, any severance payments then or thereafter due from the Company to Executive under Section 4 or otherwise shall be terminated forthwith, and the Company’s obligation
to pay, and Executive’s right to receive, such severance payments shall terminate and be of no further force or effect, if and when determined by a court of competent jurisdiction, in each case without limiting or affecting Executive’s
obligations under such Sections 5 and 6 or the Company’s other rights and remedies available at law or equity. 
 Section
9.    Executive’s Representations, Warranties and Covenants. 
 (a)    Executive hereby
represents and warrants to the Company that: 
 (i)     Executive has all requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive; 

(ii)    the execution, delivery and performance of this Agreement by Executive does not and will not, with or without
notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject; 

(iii)    Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement,
non-solicitation agreement, confidentiality agreement or similar agreement with any other Person; 
 (iv)    upon the
execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms; 

(v)    Executive is a continuing employee of the Company or one of its Affiliates; and 

(vi)    Executive understands that the Company will rely upon the accuracy and truth of the representations and
warranties of Executive set forth herein, and Executive consents to such reliance. 

  
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 Section 10.    General Provisions. 

(a)    Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement
be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable
provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction. 
 (b)    Entire Agreement. Each
party acknowledges and agrees that, except as expressly set forth herein, no representations, warranties, promises or statements of any kind or character have been made to them by each other, or their agents, representatives or attorneys, to induce
the execution of this Agreement. This Agreement, together with the Executive Data Sheet annexed hereto as Exhibit A and such other employee benefits that Executive has on the Effective Date, constitute the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements, commitments, arrangements, negotiations or undertakings, whether oral or written, between the parties with respect to its subject matter. No changes, amendments, waivers
or modifications to this Agreement shall be valid, unless made by a written instrument that expressly refers to the relevant provision of this Agreement and that is executed by all parties in the case of any changes or modifications and by the party
against whom enforcement is sought in the case of any discharge or waiver and then only to the specific purpose, extent and instance so provided. This Agreement shall be deemed to have been jointly drafted and, in construing and interpreting this
Agreement, no provision shall be construed or interpreted for or against any party because such party prepared or requested such provision. 

(c)    Successors and Assigns. 

(i)    This Agreement is personal to Executive and without the prior written consent of the Company shall not be
assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives or estate upon Executive’s death or, if
applicable, Disability. 
 (ii)    This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 

  
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 (d)    Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN
THE STATE OF NEW JERSEY TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW JERSEY WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT
OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. 

(e)    Remedies. Each of the parties to this Agreement and any such person or entity granted rights hereunder
whether or not such person or entity is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for any breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Company may in its sole discretion apply to any court of law or equity
of competent jurisdiction for specific performance and/or other injunctive relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Agreement. Each party shall be responsible for paying its
own attorneys’ fees, costs and other expenses pertaining to any such action for and enforcement, regardless of whether an award or finding or any judgment or verdict thereon is entered against Executive. 

(f)    Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior
written consent of the Company and Executive. The failure of any party to insist upon strict performance of any provision hereof, irrespective of the length of time for which such failure continues, shall not be a waiver of such party’s right
to demand strict compliance in the future, and no consent or waiver, express or implied, to any breach or default in the performance of any obligation hereunder shall constitute a consent or waiver to any other breach or default in the performance
of the same or any other obligation hereunder. 
 (g)    Notices. All notices, requests, demands, claims,
consents and other communications required or permitted to be given in this Agreement must be in writing and must be either personally delivered, transmitted via facsimile, mailed by certified or registered mail (postage prepaid and return receipt
requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written
notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via facsimile, five (5) days after deposit in the U.S. mail and one (1) day after deposit with a
reputable overnight courier service. 
 If to the Company, to: 

AEP Industries Inc. 
 95 Chestnut
Ridge Road 
 Montvale, NJ 07645 

Facsimile: (201) 807-6801 

Attention: Paul M. Feeney 

Executive Vice President, Finance and Chief Financial Officer 

  
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 With a copy (which shall not constitute notice) to: 

Honigman Miller Schwartz and Cohn LLP 

2290 First National Building 
 660
Woodward Avenue 
 Detroit, MI 48226 

Facsimile: 313-465-7317 

Attention: Michael S. Ben, Esq. 

If to Executive, to Executive’s address set forth on Exhibit A hereto. 

(h)    Survival of Representations, Warranties and Agreements. All representations, warranties and agreements
contained herein shall survive the consummation of the transactions contemplated hereby indefinitely. 

(i)    Descriptive Headings; Counterparts. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement. 

(j)    Construction. Where specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties
to express their mutual intent, and no rule of strict construction shall be applied against any party. 

(k)    Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa. 

(l)    Further Assurances. Executive agrees to do such further acts and things, and to execute and deliver
such additional conveyances, assignments, agreements and instruments, as the Company may at any time reasonably request in connection with the administration and enforcement of this Agreement or in order better to assure and confirm unto the Company
its rights and remedies hereunder. 
 (m)    Acknowledgements. Executive has carefully read and considered
all of the terms and conditions of the Agreement, including the restraints and obligations imposed upon Executive under Sections 5 and 6 of this Agreement. Executive agrees that said restraints and obligations are necessary for the reasonable and
proper protection of the Company and its Affiliates, and that each and every one of the restraints and obligations is reasonable in respect to subject matter, length of time and otherwise. 

Executive has had an opportunity to consult with independent counsel with respect to the execution of this Agreement and Executive has made
such investigation of the facts pertaining to this Agreement and of all the matters pertaining hereto as Executive deem necessary or appropriate. 

(n)    Acceptance of Offer; Reservation of Rights to Withdraw Offer. By executing the enclosed counterpart of
this Agreement where indicated and returning it to the Company, Executive hereby accepts the Company’s offer of continued employment and agrees to all terms and conditions of this Agreement. Until such execution, the Company hereby
reserves all rights to withdraw its offer of employment to Executive pursuant to this Agreement. 

  
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 (o)    Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR RELATING TO THIS AGREEMENT. 

Section 11.    Code Section 409A Compliance. 

(a)    The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code
Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance
therewith. In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A. 

(b)    In the event that any provision of this Agreement is determined by the Company or Executive to not comply with Code
Section 409A, the Company shall fully cooperate with Executive to reform this Agreement to correct such noncompliance to the extent permitted under any guidance, procedure, or method promulgated by the Internal Revenue Service now or in the future
that provides for such correction as a means to avoid or mitigate any taxes, interest, or penalties that would otherwise be incurred by Executive on account of such noncompliance. 

(c)    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement
providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision
of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” 

(d)    Notwithstanding any other payment schedule provided herein to the contrary, if Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the following shall apply: 

(i)    With regard to any payment that is considered deferred compensation under Code Section 409A payable on account of
a “separation from service,” such payment shall be made on the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of
Executive’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall be paid to Executive in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified
for them herein; and 
 (ii)    To the extent that any benefits to be provided during the Delay Period are considered
deferred compensation under Code Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Code Section 409A, Executive shall pay the cost of such benefits during the Delay Period, and
the Company shall reimburse Executive (to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to Executive) the Company’s
share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein. 

(e)    To the extent that severance payments or benefits pursuant to this Agreement are conditioned upon execution and
delivery by Executive of a release of claims, Executive shall forfeit all 

  
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rights to such payments and benefits unless such release is signed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following the date of Executive’s
termination of employment. If the foregoing release is executed and delivered and no longer subject to revocation as provided in the preceding sentence, then the following shall apply: 

(i)    To the extent any such cash payment or continuing benefit to be provided is not “deferred compensation”
for purposes of Code Section 409A, then such payment or benefit shall commence upon the first scheduled payment date immediately after the date the release is executed and no longer subject to revocation ( “Release Effective
Date”). The first such cash payment shall include payment of all amounts that otherwise would have been due prior to the Release Effective Date under the terms of this Agreement applied as though such payments commenced immediately
upon Executive’s termination of employment, and any payments made thereafter shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced
immediately following Executive’s termination of employment. 
 (ii)    To the extent any such cash payment or
continuing benefit to be provided is “deferred compensation” for purposes of Code Section 409A, then such payments or benefits shall be made or commence upon the sixtieth (60) day following Executive’s termination of
employment. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon Executive’s termination of
employment, and any payments made thereafter shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following Executive’s
termination of employment. 
 The Company may provide, in its sole discretion, that Executive may continue to participate in any benefits
delayed pursuant to this Section during the period of such delay, provided that Executive shall bear the full cost of such benefits during such delay period. Upon the date such benefits would otherwise commence pursuant to this Section, the
Company may reimburse Executive the Company’s share of the cost of such benefits, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company
at no cost to Executive, in each case had such benefits commenced immediately upon Executive’s termination of employment. Any remaining benefits shall be reimbursed or provided by the Company in accordance with the schedule and procedures
specified herein. 
 (f)    For purposes of Code Section 409A, Executive’s right to receive any installment
payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. 

(g)    Notwithstanding any other provisions of this Agreement to the contrary, in no event shall any payment under this
Agreement that constitutes “deferred compensation” for purposes of Code Section 409A be subject to offset, counterclaim or recoupment by any other amount payable to Executive unless otherwise permitted by Code Section 409A. 

(h)    Unless this Agreement provides a specified and objectively determinable payment schedule to the contrary, to the
extent that any payment of base salary or other compensation is to be paid for a specified continuing period of time beyond the date of Executive’s termination of employment in accordance with the Company’s payroll practices (or other
similar term), the payments of such base salary or other compensation shall be made upon such schedule as in effect upon the date of termination, but no less frequently than monthly or such shorter interval specified herein. 

Signature page follows 

  
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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above. 
  

			
	AEP Industries Inc.
		
	By:	 	/s/ Paul M. Feeney
	Name:	 	Paul M. Feeney
	Title:	 	Executive Vice President, Finance and CFO

 
			
	
	David J. Cron, Executive
		
	Signature	 	/s/ David J. Cron

  
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 Exhibit A 

Executive Data Sheet for Signature Page 
  

			
	 Name:
	  	 David J. Cron

		
	 Address:
	  	 [Address]

		
	 Annual Base Salary (FY 2016):
	  	$343,200.00
		
	 Position:
	  	 Executive Vice President, Manufacturing

		
	 Reports To:
	  	 Chairman and Chief Executive Officer

		
	 Vacation Days:
	  	25

  
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