Document:

Exhibit 10.1

    

     

    

    Taubman Severance Plan for Senior Level Management

    (Effective as of February 9, 2020)

    

    

    1.          Introduction. This Taubman Severance Plan for Senior Level Management (the “Plan”) is effective as of February 9, 2020 (the “Effective Date”). The compensation
      and benefits payable under the Plan are payable in connection with certain termination or change in control events that occur after the effective date of the Plan. The purpose of the Plan is to provide for the payment of severance benefits to
      Eligible Individuals (as defined below) of The Taubman Company LLC (the “Company”) who incur a Separation from Service from the Company as a result of an Involuntary Termination and to provide additional certain other benefits in connection with a
      Change in Control (as defined below).

    

    

    2.          Eligibility for Benefits.

    

    

    (a)          General Rules.

    

    

    (i)          An employee of the Company becomes eligible to participate in the Plan as of the date the employee is specifically designated by the Company in writing as an
      individual covered by the Plan (an “Eligible Individual”). Such designation shall be irrevocable unless otherwise agreed to in writing by the Company and the Eligible Individual.

    

    

    (ii)          Subject to the requirements set forth in this Section 2: (A) the Company will provide the severance benefits described in Section 3 to an Eligible Individual who
      incurs a Separation from Service by reason of an Involuntary Termination that occurs within the one-year period (the “CIC Protection Period”) following a Change in Control, and (B) the Company will provide the severance benefits described in Section
      4 of the Plan to an Eligible Individual who incurs a Separation from Service by reason of an Involuntary Termination that occurs at any time other than during the CIC Protection Period.

    

    

    (iii)          In order to be eligible to receive benefits under Sections 3 or 4 of the Plan (other than payment of the amounts specified in Sections 3(a) and 3(b), and in Sections
      4(a) and 4(b)), the Eligible Individual must, within 60 days following the Termination Date, execute a general waiver and release, which includes certain representations, in a form reasonably acceptable to the Company, and such general waiver and
      release must become effective in accordance with its terms. The Company, in its sole discretion, may modify its form of the required general waiver and release contained to comply with applicable law and will determine the form of the required waiver
      and general release.

    

    

    (b)          Exception to Benefit Entitlement. An Eligible Individual will not receive benefits under the Plan if, as determined by the Company in its sole discretion, the Eligible
      Individual’s employment with the Company terminates, and such termination does not constitute an Involuntary Termination.

    

    

    (c)          Termination of Benefits. All benefits that an Eligible Individual may be or become entitled to under this Plan will terminate immediately if the Eligible Individual, at any time,
      violates any proprietary information or confidentiality obligation to the Company.

    
      
        

    

    
    3.          Change in Control Severance Benefits. In the event that an Eligible Individual incurs a Separation from Service by reason of an Involuntary Termination during the applicable CIC Protection Period,
      the Eligible Individual shall be entitled to, in lieu of any other severance compensation and benefits whatsoever (excluding any compensation or benefits under any employment agreement he or she has with the Company, including any “Change of Control
      Employment Agreement”), the following payments and benefits (subject to the terms and conditions hereof):

    

    

    (a)          payment of any accrued, but unpaid Monthly Base Salary through the Termination Date, paid within 30 days after the Termination Date or sooner if required by applicable law;

    

    

    (b)          payment of any accrued, but unused paid time off or vacation time, paid within 30 days after the Termination Date or sooner if required by applicable law;

    

    

    (c)          a cash lump sum payment equal to sum of:

    

    

    (i)          250% of the sum of (A) the Eligible Individual’s Annual Base Salary, and (B) the Eligible Individual’s Annual Bonus (the “Cash Severance”), and

    

    

    (ii)          18 times the COBRA Premium Payment,

    

    

    with such lump sum paid within 65 days of the Eligible Individual’s Separation from Service; provided, that the Cash Severance shall be reduced by the amount of any Annual Base Salary and Annual Bonus (or their equivalents) payable to the Eligible
      Individual on account of his or her Separation from Service under any employment agreement he or she has with the Company, including any “Change of Control Employment Agreement”;

    

    

    (d)          the full and immediate vesting of the Eligible Individual’s unvested Awards other than Performance Awards, if any, under the Omnibus Plan as of the date of the Eligible Individual’s
      Separation from Service; and

    

    

    (e)          the vesting of the Eligible Individual’s unvested Awards that are Performance Awards, if any, under the Omnibus Plan and the determination of the performance and similar factors used in
      the calculation of such Awards shall continue to be made as otherwise provided for under the terms of the Omnibus Plan and the Awards.

    

    

    Except as otherwise provided in this Section 3, the Eligible Individual’s rights under this Section 3 will not be canceled or otherwise reduced pursuant to any provision regarding same in any employment agreement or “Change of Control Employment
      Agreement” that applies to the Eligible Individual.

    
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    4.          Regular Severance Benefits. In the event that an Eligible Individual incurs a Separation from Service by reason of an Involuntary Termination at any time other than during an applicable CIC
      Protection Period, the Eligible Individual shall be entitled to, in lieu of any other severance compensation and benefits whatsoever (excluding any compensation or benefits under any employment agreement he or she has with the Company), the following
      payments and benefits (subject to the terms and conditions hereof):

    

    

    (a)          payment of any accrued, but unpaid Monthly Base Salary through the Termination Date, paid within 30 days after the Termination Date or sooner if required by applicable law;

    

    

    (b)          payment of any accrued, but unused paid time off or vacation time, paid within 30 days after the Termination Date or sooner if required by applicable law;

    

    

    (c)          a cash lump sum payment equal to sum of:

    

    

    (i)          200% of the sum of (A) the Eligible Individual’s Annual Base Salary, and (B) the Eligible Individual’s Annual Bonus (the “Cash Severance”), and

    

    

    (ii)          18 times the COBRA Premium Payment,

    

    

    with such lump sum paid within 65 days of the Eligible Individual’s Separation from Service; provided, that the Cash Severance shall be reduced by the amount of any Annual Base Salary and Annual Bonus (or their equivalents) payable to the Eligible
      Individual on account of his or her Separation from Service under any employment agreement he or she has with the Company, including any “Change of Control Employment Agreement”; and

    

    

    (d)          the full and immediate vesting of the Eligible Individual’s unvested Awards other than Performance Awards, if any, under the Omnibus Plan as of the date of the Eligible Individual’s
      Separation from Service, to the extent not already provided under the terms of the Awards and the Omnibus Plan;

    

    

    (e)          Immediate vesting of the Eligible Individual’s unvested Awards that are Performance Awards, if any, under the Omnibus Plan as of the date of the Eligible Individual’s Separation from
      Service, and the determination of the performance and similar factors used in the calculation of such Award shall be made as of the date of the Eligible Individual’s Separation from Service.

    

    

    Except as otherwise provided in this Section 4, the Eligible Individual’s rights under this Section 4 will not be canceled or otherwise reduced pursuant to any provision regarding same in any employment agreement that applies to the Eligible
      Individual.

    

    

    5.          Potential Limitation on Payment.

    

    

    (a)          Definitions Relating to This Section. For purposes of this Section 5: (i) “Excise Tax” means any excise tax imposed under Section 4999 of the Code; (ii) “Payment” means any
      payment or distribution in the nature of compensation to or for the benefit of the Eligible Individual, whether paid or payable pursuant to this Plan or otherwise that would be considered payments contingent on a change in the ownership or effective
      control or in the ownership of a substantial portion of the assets of the Company, as described in Section 280G(b)(2)(A)(i) of the Code; and (iii) “Separation Payment” means a Payment paid or payable pursuant to this Plan (disregarding this Section
      5).

    
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    (b)          Accounting Firm. The Company will select, prior to any Change of Control, in its discretion, a nationally recognized accounting firm (“Accounting Firm”) to make the determinations
      contemplated by this Section 5. All determinations made by the Accounting Firm under this Section 5 will be binding on the Company and the Affiliated Companies and the Eligible Individual and will be made within 60 days of the Eligible Individual’s
      Separation from Service, except as set forth in Section 5(e). All determinations by the Accounting Firm under this Section 5 are made solely for calculating amounts payable under this Plan and not for calculating the Eligible Individual’s tax
      liability for amounts paid under this Plan or for advising the Eligible Individual as to such liability.

    

    

    (c)          Better of Net Amount with Reduction or Net Amount with No Reduction. Notwithstanding anything in this Plan to the contrary, in the event that the Accounting Firm determines that
      Payments to the Eligible Individual would be subject (in whole or part) to the Excise Tax, then the Payments shall be reduced, to the extent necessary so that no portion of the Payments is subject to the Excise Tax but only if (1) the net amount of
      such Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such
      reduced Payments) is greater than or equal to (2) the net amount of such Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Payments and the amount of Excise Tax to which the
      Eligible Individual would be subject in respect of such unreduced Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Payments). If a reduction in the Payments is required
      under this Section 5(c), the Payments shall be reduced by the Company in its reasonable discretion in the following order: (i) reduction of any cash payment (excluding any cash payment with respect to the acceleration of equity awards), that is
      otherwise payable to the Eligible Individual that is exempt from Section 409A of the Code; (ii) reduction of any other payments or benefits otherwise payable to the Eligible Individual (other than those described in clause (iii) of this Section 5(c))
      on a pro-rata basis or such other manner that complies with Section 409A of the Code; and (iii) reduction of any payment or benefit with respect to the acceleration of equity awards that is otherwise payable to the Eligible Individual (on a pro-rata
      basis as between equity awards that are covered by Section 409A of the Code and those that are not (or such other manner that complies with Section 409A of the Code)).

    

    

    (d)          Reduction Calculations. If the Accounting Firm determines that the Payments should be reduced, the Company will promptly give the Eligible Individual notice to that effect and a
      copy of the detailed calculation thereof. As applicable, as promptly as practicable following the Company’s reduction of the Payments under Section 5(c), the Company will pay or distribute, or cause one of the Affiliated Companies to pay or
      distribute, to or for the benefit of the Eligible Individual such Separation Payments as are then due to the Eligible Individual under this Plan, and will promptly pay or distribute, or cause to be paid or distributed, to or for the benefit of the
      Eligible Individual in the future such Separation Payments as become due to the Eligible Individual under this Plan, taking into account, in each case, the possible reduction or elimination of Separation Payments pursuant to the provisions of this
      Section 5.

    
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    (e)          Overpayment or Underpayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm
      hereunder, it is possible that amounts will have been paid or distributed to or for the benefit of the Eligible Individual pursuant to this Plan that should not have been so paid or distributed (“Overpayment”) or that additional amounts which will
      have not been paid or distributed to or for the benefit of the Eligible Individual pursuant to this Plan could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Payments and other amounts
      hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or any of the Affiliated Companies or the Eligible Individual that the Accounting Firm believes has a high
      probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed to or for the benefit of the Eligible Individual will be repaid by the Eligible Individual, together with interest at the applicable
      federal rate provided in Section 7872(f)(2) of the Code; provided, however, that no such payment will be made by the Eligible Individual if and to the extent such payment would neither reduce the amount on which the Eligible Individual is subject to
      tax under Section 1 and Section 4999 of the Code nor generate a refund of such taxes. In the event that the Accounting Firm, based on controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment
      will be promptly paid to or for the benefit of the Eligible Individual together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

    

    

    (f)          Fees and Expenses. All fees and expenses of the Accounting Firm in implementing the provisions of this Section 5 will be borne by the Company.

    

    

    (g)          Tax Controversies. In the event of any controversy with the Internal Revenue Service or other taxing authority with regard to the Excise Tax, the Eligible Individual will permit
      the Company to control issues related to the Excise Tax, at its expense, provided that such issues do not materially adversely affect the Eligible Individual. In the event issues are interrelated, the Eligible Individual and the Company shall
      cooperate in good faith so as to avoid jeopardizing resolution of either issue. In the event of any conference with any taxing authority as to the Excise Tax or associated taxes, the Eligible Individual shall permit a representative of the Company to
      accompany the Eligible Individual, and the Eligible Individual and the Eligible Individual’s representative shall cooperate with the Company and its representative.

    

    

    6.          Administration, Interpretation, Amendment and Termination of the Plan.

    

    

    (a)          Exclusive Discretion. The Committee, as the Administrator, has the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan
      and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to
      participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Committee will be binding and conclusive on all persons. The Administrator is the “named fiduciary” of the Plan for
      purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity.

    

    

    (b)          Amendment or Termination; Duration of the Plan.

    

    

    (i)          The Board or the Committee may amend or terminate the Plan at any time and from time to time; provided, however, that no such amendment or termination may impair the
      rights of an Eligible Individual hereunder (other than with respect to equity compensation awards granted after any such amendment or termination) without his or her consent.

    
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    (ii)          Notwithstanding anything herein to the contrary, the Committee may amend the Plan (which amendment(s) shall be effective upon its adoption or at such other time
      designated by the Board or the Committee, as applicable) at any time prior to a Change in Control as may be necessary to avoid the imposition of the additional tax under Section 409A(a)(1)(B) of the Code; provided, however, that any such amendment
      shall be implemented in such a manner as to preserve, to the greatest extent possible, the terms and conditions of the Plan as in existence immediately prior to any such amendment.

    

    

    (iii)          Notwithstanding anything herein to the contrary, the Plan shall remain in effect until its termination by the Board, in accordance with the terms hereof.

    

    

    7.          Section 409A; Six-Month Payment Delay. The Company intends that all payments and benefits provided under this Plan or otherwise are exempt from, or comply with, the requirements of Section 409A of
      the Code and any guidance promulgated thereunder (“Section 409A”) so that none of the payments or benefits will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. No payment or
      benefits to be paid to an Eligible Individual, if any, pursuant to this Plan or otherwise, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the
      “Deferred Payments”) will be paid or otherwise provided until the Eligible Individual has Separation from Service. If, at the time of the Eligible Individual’s termination of employment, the Eligible Individual is a “specified employee” within the
      meaning of Section 409A, then the payment of the Deferred Payments will be delayed to the extent necessary to avoid the imposition of the additional tax imposed under Section 409A, which generally means that the Eligible Individual will receive
      payment on the first payroll date that occurs on or after the date that is six months and one day following the date of the Eligible Individual’s Separation from Service. The Company reserves the right to amend the Plan as it deems necessary or
      advisable, in its sole discretion and without the consent of any Eligible Individual or any other individual, to comply with Section 409A the Code or to otherwise avoid income recognition under Section 409A prior to the actual payment of any benefits
      or imposition of any additional tax. Each payment, installment and benefit payable under this Plan is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). In no event will the Company reimburse an
      Eligible Individual for any taxes that may be imposed on the Eligible Individual as a result of Section 409A.

    

    

    8.          No Implied Employment Contract. This Plan is not an employment contract. Nothing in this Plan or any other instrument executed pursuant to this Plan shall confer upon an Eligible Individual any right
      to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate an Eligible Individual’s employment at any time for any reason. The Company and the Eligible Individual acknowledge that the Eligible Individual’s
      employment with the Company is and shall continue to be at-will, as defined under applicable law, except to the extent otherwise expressly provided in a written agreement between the Eligible Individual and the Company.

    

    

    9.          Successors. The Company shall have the right to assign its rights and obligations under this Plan to an entity that, directly or indirectly, acquires all or substantially all of the assets of the
      Company. The rights and obligations of the Company under this Plan shall inure to the benefit and shall be binding upon the successors and assigns of the Company. The rights and obligations of an Eligible Individual under this Plan are personal to
      the Eligible Individual and are not assignable by the Eligible Individual other than by will or the laws of descent and distribution, and will inure only to the benefit of and be enforceable by the Eligible Individual’s legal representatives.

    
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    10.          Legal Construction. This Plan is intended to be governed by and will be construed in accordance with the laws of the State of Michigan.

    

    

    11.          Miscellaneous.

    

    

    (a)          Notice. Notices and all other communications contemplated by this Plan shall be in writing and shall be deemed to have been duly given when personally delivered, sent by email
      (with confirmation of receipt) or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Eligible Individual, mailed notices shall be addressed to him or her at the home address or email
      address shown on the Company’s corporate records, unless a different address or email address is subsequently communicated to the Company in writing. In the case of the Company, mailed notices or notices sent by email shall be addressed to its
      corporate headquarters, and all notices shall be directed to the attention of the General Counsel, and if by email, to the General Counsel’s Company email address of record.

    

    

    (b)          No Waiver. The failure of a party to insist upon strict adherence to any term of this Plan on any occasion shall not be considered a waiver of such party’s rights or deprive such
      party of the right thereafter to insist upon strict adherence to that term or any other term of this Plan.

    

    

    (c)          Severability. In the event that any one or more of the provisions of this Plan shall be or become invalid, illegal or unenforceable in any respect or to any degree, the validity,
      legality and enforceability of the remaining provisions of this Plan shall not be affected thereby. The parties intend to give the terms of this Plan the fullest force and effect so that if any provision shall be found to be invalid or unenforceable,
      the court reaching such conclusion may modify or interpret such provision in a manner that shall carry out the parties’ intent and shall be valid and enforceable.

    

    

    (d)          Creditor Status of Eligible Individuals. In the event that any Eligible Individual acquires a right to receive payments from the Company under the Plan such right shall be no
      greater than the right of any unsecured general creditor of the Company.

    

    

    (e)          Withholding Taxes. The Company may withhold from any amounts payable under this Plan such federal, state and local taxes as may be required to be withheld pursuant to any
      applicable law or regulation.

    

    

    12.          Definitions. For purposes of the Plan, the following terms are defined as follows:

    

    

    (a)          “Administrator” means the Committee or its delegate.

    

    

    (b)          “Affiliated Company” means any company controlled by, controlling or under common control with the Company.

    

    

    (c)          “Annual Base Salary” means an amount equal to 12 times the highest Monthly Base Salary paid or payable, including any Monthly Base Salary that has been earned but deferred, to the
      Eligible Individual by the Company in respect of the 12-month period immediately preceding the month in which the Eligible Individual’s Termination Date occurs.

    
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    (d)          “Annual Bonus” means the greater of the Eligible Individual’s: (i)target annual bonus for the fiscal year in which the Involuntary Termination occurs; or (ii) highest bonus earned under
      the Company’s (and any Company affiliate’s) annual incentive plans, or any comparable bonus under any predecessor or successor plan of the Company (any Company affiliate), within the last three full fiscal years ended prior to the date of the
      Eligible Individual’s Involuntary Termination, or for such lesser number of full fiscal years ended prior to such date for which the Eligible Individual was eligible to earn such a bonus, and annualized in the case of any bonus earned in a partial
      fiscal year ended within such period.

    

    

    (e)          “Award” has the meaning as defined in the Omnibus Plan.

    

    

    (f)          “Board” means the Board of Directors of Taubman.

    

    

    (g)          “Cause” means:

    

    

    (i)          the willful and continued failure of the Eligible Individual to perform substantially the Eligible Individual’s employment duties (other than any such failure
      resulting from incapacity due to physical or mental illness or following the Eligible Individual’s delivery to the Company of a valid notice of termination for Good Reason), after a written demand for substantial performance is delivered to the
      Eligible Individual by the Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that the Eligible Individual has not substantially
      performed the Eligible Individual’s duties; or

    

    

    (ii)          the willful engaging by the Eligible Individual in illegal conduct, or gross misconduct, that is materially and demonstrably injurious to the Company.

    

    

    For purposes of this Section 12(g), no act, or failure to act, on the part of the Eligible Individual will be considered “willful” unless it is done, or omitted to be done, by the Eligible Individual in bad faith or
      without reasonable belief that the Eligible Individual’s action or omission was in the best interests of the Company. Any act, or failure to act, based on authority given pursuant to a resolution duly adopted by the Board or on the instructions of
      the Chief Executive Officer of Taubman or a senior officer of Taubman or based on the advice of counsel for the Company will be conclusively presumed to be done, or omitted to be done, by the Eligible Individual in good faith and in the best
      interests of the Company. The cessation of employment of the Eligible Individual will not be deemed to be for Cause unless and until there have been delivered to the Eligible Individual a copy of a resolution duly adopted by the affirmative vote of
      not less than three-quarters of the entire membership of the Board (excluding the Eligible Individual, if the Eligible Individual is a member of the Board) at a meeting of the Board called and held for such purpose (after reasonable notice is
      provided to the Eligible Individual and the Eligible Individual is given an opportunity, together with counsel for the Eligible Individual, to be heard before the Board), finding that, in the good faith opinion of the Board, the Eligible Individual
      is guilty of the conduct described in Section 12(g)(i) or 12(g)(ii), and specifying the particulars thereof in detail.

    
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    (h)          “Change in Control” means the first to occur of any of the following events:

    

    

    (i)          The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (“Exchange
      Act”)) other than an Existing Shareholder (“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 33% or more of either (A) the then-outstanding shares of common stock of the Company (“Outstanding
      Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (“Outstanding Company Voting Securities”); provided, however, that, for purposes
      of this Section 12(h), the following acquisitions will not constitute a Change of Control: (A) any acquisition directly from the Company; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust)
      sponsored or maintained by the Company or any Affiliated Company or (D) any acquisition by any corporation pursuant to a transaction that complies with Sections 12(h)(iii)(A), 12(h)(iii)(B) and 12(h)(iii)(C) of this Plan.

    

    

    (ii)          Any time at which individuals who, as of the date hereof, constitute the Board (“Incumbent Board”) cease for any reason to constitute at least a majority of the
      Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising
      the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election
      contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

    

    

    (iii)          Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its
      subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, “Business Combination”), in each case unless,
      following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business
      Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the
      case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or
      through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B)
      no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 33%
      or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such corporation, except to the extent that
      such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the
      execution of the initial agreement or of the action of the Board providing for such Business Combination.

    
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    (iv)          Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

    

    

    (v)          Termination, non-renewal, material amendment or material modification of the Master Services Agreement between Taubman Realty Group Limited Partnership and The Taubman
      Company LLC dated as of November 30, 1992, as amended through the date hereof or the Corporate Services Agreement between the Company and the Taubman Company LLC dated as of November 30, 1992, as amended through the date hereof, other than any such
      termination, non-renewal, amendment or modification which has been previously approved by a majority of the Independent Directors (as defined in the Company’s Restated Articles of Incorporation) serving on the Incumbent Board.

    

    

    In addition, if a Change in Control constitutes a payment event with respect to any amount which constitutes or provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or
      event described in Section 12(h)(i), (ii), (iii), (iv) or (v) with respect to such amount must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.

    

    

    (i)          “COBRA Premium Payment” means the monthly COBRA premium under the Company’s group health plan in effect on the date of the Eligible Individual’s Involuntary Termination that applies to
      the Eligible Individual’s coverage election in effect on such date under the group health plan.

    

    

    (j)          “Code” means the Internal Revenue Code of 1986, as amended.

    

    

    (k)          “Committee” means the Compensation Committee of the Board.

    

    

    (l)          “Disability” means any medically determinable physical or mental impairment that can reasonably be expected to result in death or that has lasted or can reasonably be expected to last
      for a continuous period of not less than 12 months and that renders the Eligible Individual unable to perform effectively his or her duties to the Company or any other substantially similar gainful activity.

    

    

    (m)          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

    
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    (n)          “Existing Shareholder” means any of A. Alfred Taubman’s issue or any of his or their respective descendants, heirs, beneficiaries or donees or any trust, corporation, partnership,
      limited liability company or other entity if substantially all of the economic interests in such entity are held by or for the benefit of such persons.

    

    

    (o)          “Good Reason” means the occurrence of one or more of the following events arising without the express written consent of the Eligible Individual, but only if the Eligible Individual
      notifies the Company in writing of the event within 60 days following the occurrence of the event, the event remains uncured after the expiration of 30 days from the Company’s receipt of such notice, and the Eligible Individual resigns effective no
      later than 30 days following the Company’s failure to cure the event:

    

    

    (i)          a material diminution in the Eligible Individual’s authority, duties or responsibilities, or any other diminution in such position, authority, duties or
      responsibilities (whether or not occurring solely as a result of the Company’s ceasing to be a publicly-traded entity), excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the
      Company promptly after receipt of notice thereof given by the Eligible Individual;

    

    

    (ii)          a material diminution in the Eligible Individual’s then current Monthly Base Salary;

    

    

    (iii)          a material diminution in the sum of the Eligible Individual’s target annual bonus and annual incentive award opportunity under the Omnibus Plan for the current year,
      provided that such diminution is not accompanied by a related increase in the Eligible Individual’s Monthly Base Salary or any other incentive compensation arrangement;

    

    

    (iv)          a material relocation by the Company of the Eligible Individual’s primary place of work; provided, however, that in no event shall a relocation of less than 35 miles
      be deemed material; or

    

    

    (v)          a material breach by the Company of any employment agreement with the Eligible Individual.

    

    

    For purposes of this Section 12(o), any good faith determination of Good Reason made by the Eligible Individual will be conclusive. The Eligible Individual’s mental or physical incapacity following the occurrence of an event described above in
      Sections 12(o)(i) through (v) will not affect the Eligible Individual’s ability to terminate employment for Good Reason.

    

    

    (p)          “Involuntary Termination” means any termination of the Eligible Individual’s employment with the Company (or its successor) (i) by the Company (or its successor) for any reason other
      than Cause or the Eligible Individual’s death or Disability or (ii) by the Eligible Individual with Good Reason.

    

    

    (q)          “Monthly Base Salary” means an Eligible Individual’s monthly base salary, including any amount that has been earned but deferred, as in effect at the time of the Eligible Individual’s
      Termination Date, determined without giving effect to any reduction in base salary that constituted Good Reason for the Eligible Individual’s termination of employment.

    
      11

      
        

    

    (r)          “Omnibus Plan” means The Taubman Company LLC 2008 Omnibus Long-Term Incentive Plan, originally effective May 29, 2008, as amended and restated as of May 21, 2010, and as may thereafter
      be amended from time to time.

    

    

    (s)          “Performance Award” has the meaning as defined in the Omnibus Plan.

    

    

    (t)          “Separation from Service” means a “separation from service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code and Treasury Regulation Section 1.409A-1(h).

    

    

    (u)          “Taubman” means Taubman Centers, Inc.

    

    

    (v)          “Termination Date” means the date on which an Eligible Individual incurs a Separation from Service.

    

    

    13.          ERISA.

    

    

    (a)          Plan Subject to ERISA. This Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA is intended to be and shall be administered and maintained as
      an unfunded “employee welfare benefit plan” as defined in Section 3(1) of ERISA, and this document is both the formal plan document and the required summary plan description for the Plan.

    

    

    (b)          Claims Procedures.

    

    

    (i)          Claims Generally Not Required. Generally, an Eligible Individual is not required to make a formal claim to receive benefits payable under the Plan.

    

    

    (ii)          Disputes. If any person (a “Claimant”) believes that benefits are being denied improperly, that the Plan is not being operated properly, that fiduciaries of
      the Plan have breached their duties, or that the Claimant’s legal rights are being violated with respect to the Plan, the Claimant must file a formal claim with the Administrator. This requirement applies to all claims that any Claimant has with
      respect to the Plan, including claims against fiduciaries and former fiduciaries, except to the extent the Administrator determines in its sole discretion that it does not have the power to grant all relief reasonably being sought by the Claimant.

    

    

    (iii)          Time for Filing Claims. A Claimant must file a formal claim with the Administrator within 90 days after the date the Claimant first knew or should have known
      of the facts on which the claim is based, unless the Administrator in writing consents otherwise.

    

    

    (iv)          Procedures. The Administrator has adopted the procedures attached as Schedule A for considering claims, which it may amend from time to time, as it sees fit.
      These procedures shall comply with all applicable legal requirements. The right to receive benefits under the Plan is contingent on a Claimant using the prescribed claims procedures to resolve any claim. Therefore, if a Claimant (or his or her
      successor or assign) seeks to resolve any claim by any means other than the prescribed claims provisions, he or she must repay all benefits received under this Plan and shall not be entitled to any further Plan benefits.

    
      12

      
        

    

    (c)          Additional Information.

    

    

    	 	
            Plan Name:

          	
            Taubman Severance Plan for Senior Level Management

          
	 	 	 
	 	
            Plan Number:

          	
            520

          
	 	 	 
	 	
            Plan Sponsor:

          	
            The Taubman Company LLC

          
	 	 	 
	 	
            Employer Identification Number:

          	
            38-3081510

          
	 	 	 
	 	
            Plan Year:

          	
            January 1 through December 31

          
	 	 	 
	 	
            Plan Administrator:

          	
            The Taubman Company LLC 

            200 East Long Lake Road 

            Suite 300 

            Bloomfield Hills, MI 48304-2324 

              248-258-6800

          
	 	 	 
	 	
            Agent for Service of Legal Process:

          	
            The Taubman Company LLC 

            200 East Long Lake Road 

            Suite 300 

            Bloomfield Hills, MI 48304-2324 

            248-258-6800

          
	 	 	 
	 	
            Type of Plan:

          	
            Severance plan; employee welfare benefit plan

          
	 	 	 
	 	
            Plan Costs:

          	
            The cost of the Plan is paid by the Company

          

    

    

    (d)          Statement of ERISA Rights. Plan Eligible Individuals have certain rights and protections under ERISA. They are:

    

    

    
      
        	

              	•	
                They may examine (without charge) all Plan documents, including any amendments and copies of all documents filed with the U.S. Department of Labor, such as the Plan’s annual report (Internal Revenue Service Form 5500), if applicable.
                  These documents are available for review in the Company’s Human Resources Department.

              

      

    

    

    

    
      
        	

              	•	
                They may obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. A reasonable charge may be made for such copies.

              

      

    

    

    

    
      
        	

              	•	
                In addition to creating rights for Eligible Individuals, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and
                  in the interests of Eligible Individuals. No one, including the Company or any other person, may fire or otherwise discriminate against an Eligible Individual in any way to prevent them from obtaining a benefit under the Plan or
                  exercising rights under ERISA. If an Eligible Individual’s claim for a severance benefit is denied, in whole or in part, they must receive a written explanation of the reason for the denial. An Eligible Individual has the right to have
                  the denial of their claim reviewed. (The claim review procedure is explained above.)

              

      

    

    
      13

      
        

    

    
      
        	

              	•	
                Under ERISA, there are steps Eligible Individuals can take to enforce the above rights. For instance, if an Eligible Individual requests materials and does not receive them within 30 days, they may file suit in a federal court. In such
                  a case, the court may require the Administrator to provide the materials and to pay the Eligible Individual up to $110 a day until they receive the materials, unless the materials were not sent because of reasons beyond the control of the
                  Plan Administrator. If an Eligible Individual has a claim which is denied or ignored, in whole or in part, he or she may file suit in a state or federal court. If it should happen that an Eligible Individual is discriminated against for
                  asserting their rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a federal court.

              

      

    

    

    

    
      
        	

              	•	
                In any case, the court will decide who will pay court costs and legal fees. If the Eligible Individual is successful, the court may order the person sued to pay these costs and fees. If the Eligible Individual loses, the court may
                  order the Eligible Individual to pay these costs and fees, for example, if it finds that the claim is frivolous.

              

      

    

    

    

    
      
        	

              	•	
                If an Eligible Individual has any questions regarding the Plan, please contact the Plan Administrator. If an Eligible Individual has any questions about this statement or about their rights under ERISA, they may contact the nearest
                  area office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department
                  of Labor, 200 Constitution Avenue, NW Washington, DC 20210. An Eligible Individual may also obtain certain publications about their rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits
                  Security Administration.

              

      

    

    

    

    14.          Guarantee. The Taubman Realty Group Limited Partnership, a Delaware limited partnership (“TRG”), irrevocably, absolutely and unconditionally guarantees the payment of all amounts and benefits (the
      “Benefits”) that the Company is obligated to provide or cause to be provided to each Eligible Individual under this Plan. This is a guarantee of payment not of collection, and is the primary obligation of TRG, and an Eligible Individual may enforce
      this guarantee against TRG without any prior enforcement of the obligation to make a claim for payment of any of the Benefits against the Company.

    

    

    15.          Execution. To record the adoption of the Plan as set forth herein, as originally effective as of February 9, 2020, the Company has caused its duly authorized officer to execute the same.

    
      14

      
        

    

    	 	
            THE TAUBMAN COMPANY LLC

          
	 	 	 
	 	
            By:

          	
            /s/ Holly A. Kinnear

          
	 	
            Name:

          	
            Holly A. Kinnear

          
	 	
            Title:

          	
            SVP and CHRO

          
	 	 	 
	 	
            As guarantor of The Taubman Company LLC:

          
	 	 	 
	 	
            THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP

          
	 	 	 
	 	
            By:

          	
            /s/ Chris Heaphy

          
	 	
            Name:

          	
            Chris Heaphy

          
	 	
            Title:

          	
            Authorized Signatory

          

    
      15

      
        

    

    SCHEDULE A

    

    

    CLAIMS PROCEDURES FOR THE PLAN

    

    

    1.          General. When an Eligible Individual, or, in the event of his or her death, the Eligible Individual’s beneficiary (each a “Claimant”), believe he or she are entitled to receive a benefit under the
      Plan, the Claimant must contact the Administrator to make a claim. The Claimant may also have his or her authorized representative make the claim. In that event, the Administrator will communicate with the authorized representative instead of with
      the Claimant.

    

    

    2.          The Initial Decision on the Claim. The Claimant’s claim for Plan benefits will be subject to a full and fair review by the Administrator. If the claim is denied in whole or in part, the Administrator
      will notify the Claimant in writing or electronically (for example, by e-mail) of the denial. The notification will provide the Claimant with: (a) the specific reason for the denial; (b) the Plan provisions on which the denial is based; (c) an
      explanation of the Plan’s claims decision review procedures and the applicable time limits; (d) a description of any additional materials necessary to perfect the claim, with an explanation of why such material is necessary; and (e) a statement that
      the Claimant has the right to bring a lawsuit if there is still an adverse determination after the review.

    

    

    3.          When the Initial Decision on the Claim Will be Made. Generally, notice of the decision on the claim will be issued within 90 days, or 45 days for a disability-based benefit, after the Claimant filed
      the claim with the Administrator. If special circumstances require an extension of time for processing the claim, the 90-day period may be extended up to an additional 90 days, to a total of 180 days. The extension can be only 30 days for a
      disability-based benefit, and, if necessary, another 30 days, to a total of 105 days. In that event, the claimant will be notified of the need for an extension within the original 90 day or 45 day period, and the date by which the Administrator
      expects to render a final decision.

    

    

    4.          Review of the Denial of the Claim. If the claim for Plan benefits is denied, in whole or in part, and the Claimant wants a review of that denial, the Claimant must make a written request to the
      Administrator for a review of the denial of the claim. The Claimant must make the written request within 60 days, or 180 days for a disability-based benefit, after the Claimant receives notice of the denial of the claim.

    

    

    The Claimant may review pertinent Plan documents and submit issues and comments to the Administrator in writing.

    

    

    The review of the claim will take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim even if such information was not submitted or considered in the initial decision of the claim.

    

    

    5.          When the Decision on the Review of the Claim Will be Made. The Administrator will make its decision on its review of the claim within 60 days, or 45 days for a disability-based benefit, after it
      receives the Claimant’s review request. If special circumstances require an extension of time for processing the review of the claim, a decision will be made not later than 120 days, or 90 days for a disability-based benefit, after the Administrator
      receives the review request. In that event, the Claimant will be furnished with written notice of any such extension of time prior to the commencement of the extension. That notice will also provide a description of the special circumstances that
      require the extension and state the date the determination on review is expected.

    
      16

      
        

    

    6.          Content of the Decision on the Review of the Claim. The Administrator’s decision of the review request will be in writing, or in electronic format; for example, by e-mail. The decision will provide
      the Claimant with: (a) the specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based; and (b) a statement that the Claimant is entitled to copies of documents relevant to the claim and a
      statement describing further voluntary appeal procedures, if any, and the Claimant’s right to take the matter to court.

    

    

    7.          Finality of the Decision on the Review of the Claim. The decision of the Administrator on review of the claim is final.

    

    

    8.          Seeking Review of the Claim in Court. The Claimant must first exhaust the claim and review rights under this Plan before seeking review of the claim in court, and the Claimant must timely follow and
      complete the procedures described above for making claim for Plan benefits and seeking review of an initial decision on the claim. If the Claimant does not follow and complete these procedures, a review of the claim in court will be subject to
      dismissal for the Claimant’s failure to exhaust his or her claim and review rights under the Plan. If the Administrator does not follow these procedures for the initial decision on the claim or the review of the claim, the Claimant will be deemed to
      have exhausted all of the claim and review procedures available under the Plan and the Claimant will be entitled to bring a lawsuit in a state or federal court under Section 502(a) of ERISA to pursue any remedies the Claimant may have regarding the
      claim.

  

  17Exhibit
4.1 

 

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

 

Original
Issue Date: February 5, 2020

 

$______
Principal

$______
Purchase Price

 

original
issue discount

Convertible
PROMISSORY NOTE

 

THIS
ORIGINAL ISSUE DISCOUNT CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued Original Issue Discount
Convertible Promissory Notes issued at a 10% original issue discount by Adhera Therapeutics, Inc., a Delaware corporation (the
“Company”) (this note, the “Note” and, collectively with the other notes of such series, the “Notes”).

 

FOR
VALUE RECEIVED, the Company promises to pay to __________, or its permitted assigns (the “Holder”), the principal
sum of $______ on the date that is the six month anniversary of the Original Issue Date, or August 5, 2020 (the “Maturity
Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest
to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions
hereof. This Note is subject to the following additional provisions:

 

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

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

“Black
Scholes Value” means the value of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Maturity Date, (B) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Maturity Date.

 

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

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of the Notes
or the Warrants issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person, (d) a replacement at one time or
within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority
of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving
as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the date hereof), (e) Nancy Phelan shall both no longer be employed by the
Company on a full-time basis and no longer serve as a member of the Board of Directors of the Company (provided, that if Ms. Phelan’s
employment with the Company is terminated by the Company for “Cause” (as defined that certain Employment Agreement
dated April 4, 2019 by and between the Company and Ms. Phelan (the “Phelan Agreement”)) or if the Board of Directors
of the Company determines not to nominate Ms. Phelan to serve as a member of the Board of Directors at any annual or special meeting
of the stockholders of the Company at which directors will be elected that is held while the Notes are outstanding in the exercise
of their fiduciary duties under Delaware law, including, without limitation, as a result of the occurrence of any event that would
constitute “Cause” under the Phelan Agreement, then the occurrence of the event set forth in this clause (e) shall
not be deemed a Change of Control Transaction), or (f) the execution by the Company of an agreement to which the Company is a
party or by which it is bound, providing for any of the events set forth in clauses (a) through (e) above.

 

    	2

    	 

    

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

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

 

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

 

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

 

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

 

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

 

“Default
Interest Rate” shall have the meaning set forth in Section 2(a).

 

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

 

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

 

“DWAC”
means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.

 

“Event
of Default” shall have the meaning set forth in Section 7(a).

 

“Exchange
Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

 

“Exempt
Exchange” means the issuance of shares of Common Stock or Common Stock Equivalents by the Company to the holders of its
preferred stock and/or debt securities in exchange for such preferred stock and/or debt securities in an exchange offer that is
effected pursuant to one or more Tender Offer Statements on Schedule TO that are filed with the SEC.

 

“Exempt
Issuance” shall have the meaning set forth in the Purchase Agreement.

 

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

 

    	3

    	 

    

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $125,000 due under leases required to
be capitalized in accordance with GAAP.

 

“Liens”
shall have the meaning set forth in the Purchase Agreement.

 

“Mandatory
Default Amount” means the sum of (a) (i) 140% of the aggregate of outstanding principal amount of this Note and the accrued
and unpaid interest thereon, including default interest, and (b) all other amounts, costs, expenses and liquidated damages due
in respect of this Note.

 

“Note
Register” shall have the meaning set forth in Section 3(c).

 

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

 

“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading
Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent
if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B)
the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

 

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

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Notes, (b) capital lease obligations and purchase money indebtedness
incurred in connection with the acquisition of machinery and equipment and (c) the Indebtedness set forth on Schedule 3.1(aa)
to the Purchase Agreement).

 

    	4

    	 

    

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a) and (b) thereunder, and Liens securing the Permitted
Indebtedness under clause (c) thereunder.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of February 5, 2020 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“SEC”
means the Securities and Exchange Commission.

 

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

 

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

 

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

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
the NYSE American, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).

 

“Transaction
Documents” means the Note, the Purchase Agreement and the Warrant which the Company and the Holder are parties.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding
to its functions of reporting prices), (b) if no volume weighted average price of the Common Stock is reported for the Trading
Market, the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority of the
outstanding principal amount of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

    	5

    	 

    

 

Section
2. Interest.

 

(a)
Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this
Note at the rate of 10% per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the Original
Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued
and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During the existence
of an Event of Default, interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted
by law (the lesser of clause (i) or (ii), the “Default Interest Rate”).

 

(b)
Prepayment. The Note may be prepaid: (i) from the Original Issue Date until and through the day that falls on the third
month anniversary of the Original Issue Date (the “3 Month Anniversary Date”) at an amount equal to 115% of the aggregate
of the outstanding principal balance of the Note and accrued and unpaid interest, and (ii) after the 3 Month Anniversary Date
at an amount equal to 125% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest.
In order to prepay the Note, the Company shall provide at least 20 days’ prior written notice to the Holder, during which
time the Holder may convert the Note in whole or in part

 

Section
3. Registration of Transfers and Exchanges.

 

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

 

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

 

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

 

Section
4. Conversion.

 

(a)
Conversion. On or after the 3 Month Anniversary Date until this Note is no longer outstanding, this Note shall be convertible,
in whole or in part, at any time, and from time to time, into Conversion Shares at the option of the Holder. The Holder shall
effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A
(each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date
on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified
in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder.
No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically
surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon,
has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in
an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s)
converted in each conversion, the date of each conversion, and the Conversion Price in effect at the time of each conversion.
The Company may deliver an objection to any Notice of Conversion within two Trading Days of delivery of such Notice of Conversion.
In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may
be less than the amount stated on the face hereof. 

 

    	6

    	 

    

 

(b)
Conversion Price.

 

(i)
Initial Conversion Price. The “Conversion Price” shall be the lower of: (i) $0.50 per share and (ii) 70% of
the VWAP for the prior 10 Trading Days (as adjusted for stock splits, stock combinations and similar events).

 

(ii)
Event of Default Conversion Price. If an Event of Default has occurred, regardless of whether such Event of Default has
been cured or remains ongoing: 

 

(A)
prior to the 3 Month Anniversary Date, but in no event prior to February 29, 2020, this Note shall be convertible at 60% of the
second lowest closing price of the Common Stock as reported on the Trading Market during the 20 consecutive Trading Day period
ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Notice of Conversion
(the “60% Conversion Price”)(as adjusted for stock splits, stock combinations and similar events); and

 

(B)
after the 3 Month Anniversary Date, this Note shall be convertible as provided under subsection 4(b)(iii) below.

 

(iii)
Non-Prepayment Conversion Price. If the Note is not prepaid in accordance with Section 2(b) on or before the 3 Month Anniversary
Date, the Conversion Price shall be the lower of (1) the 60% Conversion Price or (2) $0.05 per share (as adjusted for stock splits,
stock combinations and similar events).

 

All
such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transactions or events that proportionately decreases or increases the Common Stock. Additionally,
the Conversion Price shall be adjusted as provided for herein.

 

(c)
Mechanics of Conversion or Prepayment.

 

(i)
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price in effect at the time of such conversion.

 

    	7

    	 

    

 

(ii)
Delivery of Certificate Upon Conversion. Not later than two Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required to be
delivered by the Company under this Section 4(c) which shall be free of restrictive legends and trading restrictions except as
provided by the Securities Act (other than those which may then be required by the Purchase Agreement) and such shares shall be
delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

 

(iii)
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the
Company shall promptly return to the Holder any original Note delivered to the Company.

 

(iv)
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof, are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares. In the event the Holder of this Note shall
elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for
any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part
of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in accordance
with Section 4.1(e) of the Purchase Agreement. The exercise of any such rights shall not prohibit the Holder from seeking to collect
damages under this Note, the Purchase Agreement or under applicable law.

 

(v)
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall have the remedies provided for
in accordance with Section 4.1 of the Purchase Agreement. Nothing herein or therein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this
Note as required pursuant to the terms hereof.

 

(vi)
Reservation of Conversion Shares. The Company covenants that it will reserve and keep available out of its authorized and
unissued shares of Common Stock for the purpose of issuances upon conversion of this Note (and other purposes further detailed
in the Purchase Agreement), free from preemptive rights or any other actual contingent purchase rights of Persons other than the
Holder (and the other holders of the Notes), not less than the amount of shares designated in Section 4.9 of the Purchase Agreement.
The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.

 

    	8

    	 

    

 

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

 

(viii)
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge
to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificates. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all
fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.

 

(ix)
Attorneys’ Fees etc. The Company shall (A) pay the reasonable fees of the law firm of the Holder’s choice (in
an amount not to exceed $500 per opinion) in connection with the conversion of the Note, (B) cause its attorneys to promptly provide
any reliance opinion to the Transfer Agent, and (C) pay the Holder the sums required under Section 2(c)(iv).

 

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

 

    	9

    	 

    

 

Section
5. Certain Adjustments.

 

(a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of
the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this Section 5(a) shall become effective immediately
after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

(b)
Subsequent Equity Sales. (i) At any time, for so long as the Note or any amounts accrued and payable thereunder remain
outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right
to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),
any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the Conversion Price then in effect (such lower price, the “Base Conversion Price” and each
such issuance or announcement a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal
the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding
the preceding, the Company may close a registered public offering of securities for its own account at a Base Conversion Price
lower than the Conversion Price without triggering a Dilutive Issuance under this Note provided that the Company prepays the then
outstanding principal and interest under this Note.

 

    	10

    	 

    

 

(ii)
If any Common Stock Equivalent is amended or adjusted, and such price as so amended shall be less than the Conversion Price in
effect at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon each such issuance or amendment
as provided in this Section 5(b). In case any Common Stock Equivalent is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to
have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the
Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less
(II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued
or sold for cash, the amount of such consideration received by the Company will be deemed to be the net amount received by the
Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be
the VWAP of such public traded securities on the date of receipt. If any shares of Common Stock or Common Stock Equivalents are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be.

 

(iii)
If the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued after the Original
Issuance Date shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price then in
effect, such issuance shall be deemed to have occurred for less than the Conversion Price on such date and such issuance shall
be deemed to be a Dilutive Issuance.

 

(iv)
If the Company enters into a Variable Rate Transaction despite the prohibition set forth in the Purchase Agreement, the Company
shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised under the terms of such Variable Rate Transaction.

 

(v)
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.

 

    	11

    	 

    

 

(vi)
The provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long
as the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant
to this Section 5(b) shall be downward only. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b)
in respect of an Exempt Issuance.

 

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

 

(d)
Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other
than Common Stock, to 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) (a “Distribution”), at any time after the issuance
of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that
the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, 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 participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation
subject to Section 13(d) of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such
extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded
corporation subject to Section 13(d) of the Exchange Act).

 

    	12

    	 

    

 

(e)
Fundamental Transaction. (1) If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion
of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the conversion of this
Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation on the conversion of this Note). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. The Company shall not effect a Fundamental Transaction unless
it gives the Holder at least 10 Trading Days prior notice together with sufficient details so the Holder can make an informed
decision as to whether it elects to accept the Alternative Consideration. If a public announcement of the Fundamental Transaction
has not been made, the notice to the Holder may not be given until the Company files a Form 8-K or other report disclosing the
Fundamental Transaction. (2) Notwithstanding anything to the contrary, in the event of a Fundamental Transaction the proceeds
of which are not used to repay the principal and interest on the Notes in full and that is (x) an all cash transaction, (y) a
“Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (z) a Fundamental Transaction involving
a person or entity not traded on a national securities exchange or trading market (with such exchange or market including, without
limitation, the Nasdaq Global Select Trading Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the New York Stock
Exchange, Inc., the NYSE American or any market operated by the OTC Markets, Inc.), the Company or any Successor Entity (as defined
below) shall, at the Holder’s option, concurrently with the consummation of the Fundamental Transaction, purchase this Note
from the Holder by paying to the Holder the higher of (i) an amount of cash equal to the Black Scholes Value of the outstanding
principal of this Note on the date of the consummation of such Fundamental Transaction, or (ii) the product of (a) the number
of Conversion Shares issuable upon full conversion of this Note (without regard to any limitation on conversion of this Note)
and (b) the positive difference between the cash per share paid in such Fundamental Transaction minus the then in effect Conversion
Price; (3) If Section 5(e)(1) and (2) are not applicable, the Company shall cause any successor entity in a Fundamental Transaction
in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the
Company under this Note and the other Transaction Documents in accordance with the provisions of this Section 5(e) pursuant to
written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this
Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations
on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the Conversion
Price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of
such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of
any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Notwithstanding anything in this Section 5(e), an Exempt Issuance (as defined in the Purchase
Agreement) shall not be deemed a Fundamental Transaction.

 

    	13

    	 

    

 

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

 

(g)
Notice to the Holder.

 

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

 

(ii)
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on its Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common
Stock, (C) the Company shall authorize the granting to all holders of its Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall
be required in connection with any reclassification of its Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
its Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder
at its last address as it shall appear upon the Note Register, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of its Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of its Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined in
good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. If the Company does not simultaneously file the required Form 8-K, the Holder shall be entitled penalties
in accordance with Section 4.6 of the Purchase Agreement The Holder shall remain entitled to convert this Note during the 20-day
period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

 

    	14

    	 

    

 

Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 50%
(which must include the Lead Investor’s consent) in principal amount of the then outstanding Notes shall have otherwise
given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

(a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

(b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(c)
amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

(d)
other than in connection with an Exempt Issuance or an Exempt Exchange, or in connection with the fulfillment by the Company of
its obligations to repurchase shares of the Series F Convertible Preferred Stock and related warrants to purchase shares of Common
Stock from an affiliate of Robert C. Moscato, Jr., the former Chief Executive Officer of the Company, pursuant to the settlement
agreement between the Company and Mr. Moscato, purchase or otherwise acquire more than a de minimis number of shares of
its Common Stock or Common Stock Equivalents;

 

    	15

    	 

    

 

(e)
repay, or offer to repay, any Indebtedness other than the Note as provided in Section 2(c) or regularly scheduled principal payments
of Permitted Indebtedness set forth under clauses (a) and (b) of the definition thereof and the interest on indebtedness owed
pursuant to clause (c) thereof, as such terms Indebtedness and Permitted Indebtedness are in effect as of the Original Issue Date,
provided that such payments other than on the Notes shall not be permitted if, at such time, or after giving effect to such payment,
any Event of Default exists or occurs or the Company is not be able to satisfy obligations owing to the Noteholders;

 

(f)
pay cash dividends or distributions on any equity securities of the Company;

 

(g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than
a quorum otherwise required for board approval);

 

(h)
issue any equity securities of the Company other than pursuant to the provisions of the Purchase Agreement, an Exempt Issuance,
an Exempt Exchange or an issuance of which the proceeds are used to repay the principal and interest on the Notes in full; or

 

(i)
enter into any agreement with respect to any of the foregoing.

 

Section
7. Events of Default.

 

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

 

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

 

(ii)
the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the
Company of its obligations to deliver Conversion Shares, which breach is addressed in clause (x) below) or any Transaction Document
which failure is not cured, if possible to cure, within the earlier to occur of 10 Trading Days after notice of such failure is
sent by the Holder or by any other Holder to the Company and (B) five Trading Days after the Company has become aware of such
failure;

 

(iii)
except for payment defaults covered under Section 7(a)(i), and defaults as of the Original Issue Date relating to the repayment
of interest on the secured promissory notes of the Company that were issued between June 28, 2019 and August 5, 2019, the Company
shall breach, or a default or Event of Default (subject to any grace or cure period provided in the applicable agreement, document
or instrument) shall occur or be declared, as applicable, under, (A) any of the Transaction Documents or (B) any other material
agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by any other clause
of this Section 7) (and, with respect to individual items under this item (B), relate to the payment by the Company of not less
than $250,000), which default or Event of Default is not cured, if possible to cure, within the earlier to occur of (i) 10 Trading
Days after notice of such default sent by Holder or by any other holder to the Company and (ii) five Trading Days after the Company
has become aware of such default;

 

    	16

    	 

    

 

(iv)
any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made, which failure is not cured, if possible to cure, within
the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company;

 

(v)
the Company or any Subsidiary shall be subject to a Bankruptcy Event;

 

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

 

(vii)
if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part
of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 days;

 

(viii)
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company
or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in
the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within 45 days after the
date thereof;

 

(ix)
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $100,000 and not relating to any claims asserted by current or former officers
arising from employment or settlement agreements with the Company which shall not be more than $150,000 in the aggregate, and
such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 10 days;

 

    	17

    	 

    

 

(x)
any Material Adverse Effect occurs;

 

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

 

(xii)
the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if possible
to cure, within the earlier to occur of five Trading Days after notice of such failure is sent by the Holder;

 

(xiii)
the Company’s Common Stock is subject to a “chill” by the Depository Trust Company or any successor;

 

(xiv)
except for an Exempt Issuance or the sale of all or a material portion of the assets of the Company relating to its prestalia
business, the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess
of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change
of Control Transaction);

 

(xv)
from and after 120 days after the Original Issue Date, the Company fails to have authorized and reserved the amount of shares
designated in Section 4.9 of the Purchase Agreement (without regard to any limitations on conversion hereof, including without
limitation, the Beneficial Ownership Limitation);

 

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

 

(xvii)
the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange Act within the time required
(including any applicable extension period) by the rules and regulations thereunder.

 

(b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election,
immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the Mandatory Default Amount,
the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described
herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind,
and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder
receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.

 

    	18

    	 

    

 

(c)
Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate.

 

(d)
Conversion Price Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall be convertible at the Default Conversion Price.

 

Section
8. Miscellaneous.

 

(a)
No Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 5.

 

(b)
Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted next day delivery, as
follows:

 

	 	If
    to the Company:	Adhera
    Therapeutics, Inc. 
	 	 	4815
    Emperor Boulevard, Suite 100
	 	 	Durham,
    North Carolina 27703
	 	 	Attention:
    Nancy R. Phelan, Chief Executive Officer

 

	 	with
    a copy to:	 
	 	(which
    shall not constitute	Pryor
    Cashman LLP
	 	notice)	7
    Times Square
	 	 	New
    York, NY 10036
	 	 	Attention:
    Lawrence Remmel, Esq.

 

	 	If
    to Holder:	 

 

or
to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from,
as the case may be, the date of delivery.

 

(c)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late
fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a
direct debt obligation of the Company.

 

    	19

    	 

    

 

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

 

(e)
Exclusive Jurisdiction; Governing Law; Prevailing Party Attorneys’ Fees. All questions concerning the construction,
validity, enforcement and interpretation of this Note and venue shall be governed by and construed and enforced in accordance
with Section 5.9 of the Purchase Agreement. If any party shall commence an action or proceeding to enforce or otherwise relating
to this Note, then, in addition to the other obligations of the Company elsewhere in this Note, the prevailing party in such action
or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 

    	20

    	 

    

 

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

 

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

 

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

 

(Signature
Pages Follow)

 

    	21

    	 

    

 

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

 

	 	ADHERA THERAPEUTICS, INC.
	 	 	 
	 	By:	
	 	Name:	 Nancy R. Phelan
	 	Title:	 Chief Executive Officer

 

    	22

    	 

    

 

ANNEX
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Original Issue Discount Convertible Note due August 5, 2020 of ADHERA
THERAPEUTICS, INC., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below.

 

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

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

	Conversion
    calculations:	 
	 	 
	 	Date
    to Effect Conversion:
	 	 
	 	Principal
    Amount of Note to be Converted:
	 	 
	 	Number
    of shares of Common Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	DWAC
    Instructions:
	 	 
	 	Broker
    No:___________________
	 	Account
    No:_________________

 

    	23

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