Document:

Exhibit

GIBRALTAR INDUSTRIES, INC.
2018 EQUITY INCENTIVE PLAN
_________________________________
Award of Performance Units
_________________________________

THIS AWARD is made to Patrick M. Burns (the “Recipient”) as of this 2nd day of March, 2020.
Recitals:

Effective as of May 4, 2018, Gibraltar Industries, Inc. (the “Company”) adopted an equity based incentive plan known as the Gibraltar Industries, Inc. 2018 Equity Incentive Plan (the “Plan”).

An Award to the Recipient of Nine Thousand (9,000) Performance Units has been approved by the Committee as provided for by the Plan.  These Performance Units will, except as otherwise provided by this Award upon the occurrence of a Change in Control, be converted to Shares and issued to the Recipient provided that the Company achieves certain Performance Goals established by the Committee.  The actual number of Shares which the Recipient shall be entitled to receive may be increased, depending on the degree to which the Company achieves a level of performance which exceeds the minimum level of performance established by the Committee to be entitled to receive an award of Shares; provided that the number of Shares which may be issued to the Recipient shall not under any circumstances exceed Eighteen Thousand (18,000) Shares.  In addition, if the Company fails to achieve the minimum level of performance established by the Committee to be entitled to receive an award of Shares, the Recipient shall not be entitled to the issuance of any Shares whatsoever with respect to this Award.

The Plan provides that the terms and conditions of each Award are to be specified in a written instrument.

The Award of Performance Units to the Recipient on the terms and conditions contained in this instrument has been approved according to the terms of the Plan. 

Grant of Award:

NOW, THEREFORE, the Company hereby grants an Award of Performance Units to the Recipient on the following terms and conditions:

1.     Award of Performance Units.  Subject to the terms and conditions of this Award instrument (“Instrument”), the Recipient is hereby granted an Award of Nine Thousand (9,000) Performance Units (hereinafter the “Targeted Performance Unit Award”).  The number of Shares which the Recipient shall be entitled to receive may be increased depending on the degree to which the Company achieves a level of performance which exceeds the minimum level of performance established by the Committee to be entitled to receive an award of Shares (such minimum level of performance being hereinafter the “Threshold Performance Level”).  In addition, if the Company fails to achieve the Threshold Performance Level, the Recipient shall not be entitled to the issuance of any Shares whatsoever with respect to this Award.  Provided that the Recipient satisfies the terms and conditions set forth in this Instrument, the Performance Units awarded to the Recipient will be converted to Shares and issued to the Recipient as provided for in this Instrument.  Any reference in this Instrument to Performance Units shall be deemed to refer only to the Performance Units granted pursuant to the Award reflected in this Instrument together with any Dividend Equivalent Units attributable to such Performance Units and any additional Performance Units credited to the Recipient with respect to the Performance Units referred to above pursuant to the anti-dilution provisions of the Plan.

2.    Restriction on Transfer.  The Performance Units issued pursuant to this Award shall be subject to the Restrictions on transfer set forth in Section 8.01 of the Plan.

3.    Performance Period and Performance Goals.  
Except as otherwise provided by Section 4(b) and Section 8 below, the Performance Period for the Performance Units contained in this Award shall be the period beginning March 2, 2020 and ending March 1, 2023.  The Performance Goal which shall be in effect for the Performance Period shall be the achievement by the Company of a total shareholder return for the Performance Period (hereinafter the “Company’s TSR”), which Company’s TSR, when compared to the total shareholder return for the Performance Period of each of the companies which, as of the last day of the Performance Period, is included within the S & P Small Cap 600 Industrial Sector Index (all such companies being hereinafter the “S & P Small Cap Industrial Sector Companies”), will rank the Company’s TSR at the fifty fifth (55th) percentile within the range of the total shareholder returns of each of the companies contained in the S & P Small Cap Industrial Sector Companies (the range of the total shareholder returns of each of the companies contained in the S & P Small Cap Industrial Sector Companies being hereinafter the “Index Companies’ TSR”).  The Company’s TSR shall be equal to a fraction, the numerator of which is equal to: (a) the sum of: (i) an amount equal to the closing price of one share of the Company’s Common Stock on the last Business Day (as defined below) of the Performance Period, as reported by the NASDAQ Stock Market; and (ii) the amount of the dividends, if any, paid on one (1) share of the Company’s Common Stock during the Performance Period; minus (b) an amount equal to the closing price of one share of the Company’s Common Stock on the Business Day ending immediately prior to the first day of the Performance Period as reported by the NASDAQ Stock Market, adjusted, if applicable, to reflect any stock splits or stock dividends made by the Company during the Performance Period, and the denominator of which is an amount equal to the closing price of one share of the Company’s Common Stock on the Business Day ending immediately prior to the first day of the Performance Period as reported by the NASDAQ Stock Market, adjusted, if applicable, to reflect any stock splits or stock dividends made by the Company during the Performance Period. The ranking of the Company’s TSR as a percentile of the Index Companies’ TSR shall be established by the Committee in consultation with the Committee’s compensation consultants as soon as practicable following the end of the Performance Period or such earlier period as may be required by this Award.  For purposes of this Instrument, the term “Business Day” means each day on which stock exchanges in the United States are open for trading. 

(b)     Issuance of Shares to Recipient.  If, prior to March 1, 2023 (hereinafter the “Vesting Date”), there has not been a Change in Control and the Recipient is still in the employment of the Company on the Vesting Date, the Company shall, on March 24, 2023, issue Shares to the Recipient equal in number to the number as determined pursuant to Section 7(a) hereof.

4.    Issuances of Shares Upon Certain Terminations of Employment. 
(a)  Notwithstanding any provisions of Section 6.10 of the Plan to the contrary and subject, in all cases, to the provisions of the Omnibus Code Section 409A Compliance Policy adopted by the Company effective January 1, 2009:
(i) if: (A) prior to the Vesting Date, there has not been a Change in Control which has resulted in the issuance of Shares of Common Stock to the Recipient pursuant to Section 8 hereof; and (B) the Recipient’s employment with the Company has been terminated prior to the later of end of the Performance Period and the first anniversary of the date the Award is made to the Recipient: (I) by the Company “without cause” (as defined in Section 4(b) below); or (II) by the Recipient for a “Good Reason” (as defined in Section 4(c) below); then (C) provided that the Recipient executes and delivers to the Company a waiver and release as required by 

Section 4(d) below and does not revoke such waiver and release as permitted by the terms of such waiver and release, on the first day that employees who are employed at the Company’s corporate headquarters are paid a regular installment of their base pay (such date being a “Pay Date”) which occurs on the later of: (I) the end of the six (6) month period following the effective date of the termination of the Recipient’s employment; and (II) the last day of the Performance Period, the Company shall issue to the Recipient, Shares of Common Stock, equal in number to  the number of Performance Units (and related Dividend Equivalent Units) which are deemed to have been earned by the Recipient (as determined pursuant to Section 6 based on the Company’s TSR as compared to the Index Companies’ TSR, determined as of the date on which the termination of the Recipient’s employment becomes effective; and
(ii)if, prior to the Vesting Date, the Recipient’s employment with the Company is terminated as a result of his death or his suffering of a Disability, the Performance Period shall end on the date that the Recipient’s employment with the Company is terminated and the Company shall, no later than thirty (30) days following the earlier of: (i) the end of the six (6) month period which begins on the first day following the date the Recipient’s employment is terminated; and (ii) the date of the Recipient’s death, issue Shares to the Recipient (or, in the case of the Recipient’s death, to the personal representative of the Recipient’s estate), which Shares shall be equal in number to the number as determined pursuant to Section 6(b) hereof.
(b)For purposes of this Award, the Recipient’s employment shall be deemed to be terminated “without cause” if the Company terminates the Recipient’s employment for any reason other than a determination by the Board that the Recipient has engaged in egregious acts or omissions which have resulted in material injury to the Company and its business; provided that, the Recipient shall not, under any circumstances, be deemed to have engaged in egregious acts or omissions if: (i) the acts or omissions have been committed or omitted by the Recipient in connection with the implementation of policies or procedures or strategic initiatives which have been disclosed to or directed by the Board; and (ii) in the case of policies or procedures or strategic initiatives which have been disclosed to the Board, the Board has not objected to the Recipient’s implementation of any such policies, procedures or strategic initiatives.  For the avoidance of doubt, upon a determination by the Board that the Recipient has engaged in egregious acts or omissions which have resulted in material injury to the Company and its business, the Company may terminate the Recipient’s employment without providing thirty (30) days advance written notice to the Recipient, and, for the further avoidance of doubt, a termination of the Recipient’s employment which is based upon a violation by the Recipient of the Company’s policy against sexual harassment shall not be deemed to be a termination “without cause”.
(c)For purposes of this Award, the Company shall be deemed to be for a “Good Reason” if:  (i) (A) the Recipient’s base salary and/or annual or long term cash or equity based bonus opportunity as a percentage of his base salary is reduced or any other material compensation or benefit arrangement for the Recipient is reduced (and such reduction in the Recipient’s base salary, annual or long term cash or equity based bonus opportunity or other material compensation or benefit arrangement is not made in accordance with a reduction in the base salaries, bonus opportunity or other material compensation payable to a majority of the other executive officers of the Company); or

(B)the Recipient’s duties or responsibilities are changed in a manner with the result that the Recipient’s new duties and responsibilities are: (I) materially greater than the Recipient’s duties and responsibilities immediately prior to such change and such change in the Recipient’s duties and responsibilities is not accompanied by a mutually agreeable increase in compensation, including base salary and annual and long term cash and equity incentive compensation opportunities; or (II) decreased or otherwise limited so as to be 

inconsistent with the Recipient’s position (including status, offices, title and reporting requirements) immediately prior to the change in the Recipient’s duties; or

(C)the Recipient’s authority is: (I) materially increased, without the Recipient’s consent and without a mutually agreeable increase in compensation, including base salary and annual and long-term cash and equity incentive compensation opportunities, of the Recipient; or (II) reduced or otherwise limited, in each case so as to be inconsistent with the authority which accompanied the Recipient’s position immediately prior to the change in the Recipient’s authority; and

(ii)     (A) the Recipient, no later than thirty (30) days following the occurrence of any of the events described above in Section 4(c)(i) provides written notice to the Company that the Recipient intends to terminate his employment with the Company for a “Good Reason” if the Company does not, within thirty (30) days following the delivery of such written notice to the Company, eliminate the condition (described in Section 4(c)(i)) which would otherwise permit the Recipient to terminate his employment with the Company for a Good Reason; and (B) the Company does not, within thirty (30) days following the receipt by the Company of the written notice described in this Section 4(c)(ii), eliminate the condition (described in Section 4(c)(i)(A), (B) or (C)) which would otherwise permit the Recipient to terminate his employment with the Company for a Good Reason.

(d)     For purposes of Section 4(a)(i) above, the Recipient shall, as a condition to being entitled to receive an issuance of Shares in the event that the Recipient’s employment is terminated by the Company “without cause” as defined in Section 4(b) or by the Recipient for a “Good Reason” as defined in Section 4(c), the Recipient shall be required to execute and deliver to the Company, a waiver and release, in the standard form used by the Company, within forty-five (45) days following the date the Company delivers such waiver and release to the Recipient. 

5.    Forfeiture of Performance Units Upon Certain Termination of Employment.  
If: (a) prior to the Vesting Date, there has not been a Change in Control; and (b) prior to the end of the Performance Period, the Recipient’s employment with the Company has been terminated other than: (i) by the Company, without “Cause” as “Cause” is defined in the Severance Agreement; (ii) by the Recipient for a “Good Reason” as “Good Reason” is defined in Section 4(c) above; or (iii) due to the Recipient’s death or his suffering of a Disability; then (c) the Recipient shall forfeit his right to receive any Shares with respect to any Performance Units awarded pursuant to the terms of this Instrument and the Company shall have no obligation to issue any Shares to the Recipient with respect to such Performance Units.  

6.    Shares Earned.  
(a)  The Committee shall determine the number of Shares to be issued to the Recipient with respect to the Performance Units awarded pursuant to this Instrument as soon as practicable following the end of the Performance Period.  To determine the number of Shares which shall be issued to the Recipient, the Committee, in consultation with its compensation consultants, shall determine the ranking of the Company’s TSR for the Performance Period as compared to the Index Companies’ TSR.  Notwithstanding anything to the contrary contained in this Section 6(a) or Section 6(b) below, in no event shall any Shares be awarded to the Recipient, if the Company’s TSR for the Performance Period is a negative percentage.  If the Company’s TSR for the Performance Period ranks at a level which is less than the fortieth (40th) percentile of the Index Companies’ TSR, the number of Shares to be issued to the Recipient shall be zero (0) Shares.  If the Company’s TSR for the Performance Period ranks at a level which is equal to the fortieth (40th) percentile of the Index Companies’ TSR, the number of Shares to be issued to the Recipient 

shall be Four Thousand Five Hundred (4,500) Shares.  In addition, for each one (1) percentile increase in the ranking of the Company’s TSR for the Performance Period over the fortieth (40th) percentile of the Index Companies’ TSR up to the fifty-fifth (55th) percentile of the Index Companies’ TSR (hereinafter the “Targeted TSR”), the Recipient shall be issued an additional Three Hundred (300) Shares.  If the Company’s TSR for the Performance Period ranks at a level which is equal to the Targeted TSR, the number of Shares to be issued to the Recipient shall be Nine Thousand (9,000) Shares.  In addition, for each one (1) percentile increase in the ranking of the Company’s TSR for the Performance Period over the Targeted TSR up to the seventy-fifth (75th) percentile of the Index Companies’ TSR, the Recipient shall be issued an additional Four Hundred Fifty (450) Shares; provided that, in no event shall the total number of Shares which are to be issued to the Recipient pursuant to this Award exceed Eighteen Thousand (18,000) Shares (except that such number of Shares may be increased to reflect the anti-dilution adjustments contemplated by Section 3.01 of the Plan).  For the avoidance of doubt, to the extent that the amount by which the ranking of the Company’s TSR for the Performance Period is not a whole integer percentage of the Index Companies’ TSR, the number of Shares to be issued to the Recipient with respect to any such fractional percentage shall be pro-rated based on the Recipient’s right to receive Three Hundred (300) Shares for each one (1) percentile increase in the ranking of the Company’s TSR between the fortieth (40th) percentile and the Targeted TSR and, to the extent the Company’s TSR exceeds the Targeted TSR, the number of shares to be issued to the Recipient with respect to any fractional percentage shall be based on the Recipient’s right to receive Four Hundred Fifty (450) Shares for each one (1) percentile in the ranking of the Company’s TSR in excess of the Targeted TSR.  Notwithstanding anything to the contrary contained in the foregoing provisions of this Section 6(a), any fractional Shares which might result from any calculation made pursuant to this Section 6(a) shall disappear and be absorbed into the next lowest number of whole Shares and the Company shall not be liable for any payment for such fractional share interest to the Recipient.

(d) In the event that the Recipient’s employment with the Company is terminated before the Vesting Date as a result of his death or his Disability, the number of Shares which shall be issued to the Recipient shall be equal to: (i) the number of Shares which would be issued to the Recipient as determined pursuant to Section 6(a) above based on the ranking of the Company’s TSR determined as of the date on which the Recipient’s employment with the Company is terminated compared to the Index Companies’ TSR for the same Performance Period ending as of the date the Recipient’s employment with the Company is terminated; multiplied by a fraction, the numerator of which is equal to the total number of full and partial calendar months which have elapsed from the beginning of the Performance Period to the date on which the Recipient’s employment with the Company is terminated and the denominator of which is thirty six (36).  

7.    Settlement of Award Upon a Change in Control.  If a Change in Control occurs and, in connection with the Change in Control, the Acquiror (as defined in the Plan) does not either: (a) expressly assume, in writing, the obligations of the Company under the terms of this Award; or (b) issue to the Recipient a substitute award which is based on the Acquiror’s stock and is substantially equivalent to the terms of this Award, both from an economic perspective as well as from the perspective of the Recipient’s rights to issuance of Shares of Common Stock (or stock of the Acquiror) upon terminations of employment due to death or Disability; then (c)(i) notwithstanding the foregoing provisions of this Award, the Performance Period shall be deemed to expire on the date the Change in Control occurs; and (ii) on the date the Change in Control occurs the Recipient shall be paid, in one lump sum payment in cash or immediately available funds, less applicable withholding taxes, an amount equal to: (A) Nine Thousand (9,000); multiplied by (B) the Fair Market Value of one Share of Common Stock, determined as of the date the Change in Control occurs.  Notwithstanding the foregoing, if any Shares of Common Stock have been issued to the Recipient under the terms of Section 4 above and following the date of any such issuance, a Change in 

Control occurs, the Recipient shall not be entitled to any additional payment with respect to the Performance Units awarded to the Recipient pursuant to the terms of this Award as a result of the occurrence of the Change in Control.

8.    Applicability of the Plan.  Except as otherwise provided by this Instrument, the terms of the Plan shall apply to the Award described in this Instrument and the rights of the Recipient with respect to such Award.  This Instrument, together with the Plan, contains all the terms and conditions of the Award described herein and the rights of the Recipient with respect to such Award.

9.    Notices.  Any notices or other communications given in connection with this Agreement shall be mailed, and shall be sent by registered or certified mail, return receipt requested, to the indicated address as follows:

If to the Company:

Gibraltar Industries, Inc.
3556 Lake Shore Road
P.O. Box 2028
Buffalo, New York 14219
Attn: Corporate Secretary

If to the Recipient:

Patrick M. Burns 
___________________
___________________ 

or to such changed address as to which either party has given notice to the other party in accordance with this Section 9.  All notices shall be deemed given when so mailed, except that a notice of a change of address shall be deemed given when received. 

10.    Defined Terms.  Capitalized terms used but not otherwise defined herein shall have the meaning provided to such terms by the Plan.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first set forth above.
GIBRALTAR INDUSTRIES, INC.

By:_/s/ Cherri L. Syvrud______________Exhibit 4.1

 

NEITHER THESE SECURITIES NOR THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES ARE
RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT PURSUANT TO REGISTRATION
REQUIREMENTS THEREOF OR EXEMPTION THEREFROM.

 

 

VERIFYME, INC.

 

SENIOR SECURED CONVERTIBLE DEBENTURE
DUE__________, 2021

 

	Issuance Date:  ________, 2020	Principal Amount:  $

 

FOR VALUE RECEIVED,
VERIFYME, INC., a corporation organized and existing under the laws of the State of Nevada (the “Company”),
hereby promises to pay to __________, having its address at______________, or its assigns (the “Holder”),
the initial principal sum of ____________ and 00/100 Dollars ($________.00) (subject to adjustment as provided herein, the “Principal
Amount”) together with interest accruing on the Principal Amount in the cumulative annual amount of ten percent (10%)
(the “Interest Amount”) on ____________ (the “Maturity Date”). The Company has the option
to redeem this Debenture prior to the Maturity Date pursuant to Section 2(c). All unpaid principal and accrued interest shall be
due and payable on the Maturity Date. The Holder has the option to cause any outstanding principal and accrued interest on this
Debenture to be converted into Common Stock of the Company, par value $0.001 per share (“Common Stock”) at any
time pursuant to the terms set forth herein.

 

This Debenture is one
of the Debentures referred to in that certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
dated effective as of February __, 2020, between the Company, the Holder and certain other Buyers who are signatories thereto.
Capitalized terms used but not defined herein shall have the meanings set forth in the Securities Purchase Agreement.

 

This Debenture shall
be a senior secured obligation of the Company, with priority over all existing and future Indebtedness (as defined below) of the
Company as provided for herein. The obligations of the Company under this Debenture are secured pursuant to the terms of the security
agreement of even date (the “Security Agreement”) by and among the Company and the Buyers (including the Holder),
and such security interest includes but is not limited to all of the assets of the Company and its subsidiaries. So long as the
Company shall have any obligation under this Debenture, and in addition to the rights in the Security Agreement, the Company shall
not (directly or indirectly through any Subsidiary or Affiliate) incur or suffer to exist or guarantee any Indebtedness that is
senior to or pari passu with (in priority of payment and performance) the Company’s obligations hereunder, except as permitted
in the Security Agreement, and other than Indebtedness described in clause (c) of the definition of Indebtedness. As used herein,
the term “Indebtedness” means (a) all indebtedness of the Company for borrowed money or for the deferred purchase
price of property or services, including any type of letters of credit, but not including deferred purchase price obligations in
place as of the Issuance Date and as disclosed in the SEC Documents or obligations to trade creditors incurred in the ordinary
course of business, (b) all obligations of the Company evidenced by notes, bonds, debentures or other similar instruments, (c)
purchase money indebtedness hereafter incurred by the Company to finance the purchase of fixed or capital assets, including all
capital lease obligations of the Company which do not exceed the purchase price of the assets funded, (d) all guarantee obligations
of the Company in respect of obligations of the kind referred to in clauses (a) through (c) above that the Company would not be
permitted to incur or enter into, and (e) all obligations of the kind referred to in clauses (a) through (d) above that the Company
is not permitted to incur or enter into that are secured and/or unsecured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured and/or unsecured by) any lien or encumbrance on property (including accounts
and contract rights) owned by the Company, whether or not the Company has assumed or become liable for the payment of such obligation.

 

    	 	 1	 

    	 	 

    

  

This Debenture is also
subject to the provisions of the Securities Purchase Agreement and further is subject to the following additional provisions:

 

1.       This
Debenture has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged
only in compliance with the Securities Act and other applicable state and foreign securities laws. The Holder may transfer or assign
this Debenture (or any part thereof) without the prior consent of the Company, and the Company shall cooperate with any such transfer
as permitted by the Securities Act and other applicable state laws. In the event of any proposed transfer of this Debenture, the
Company may require, prior to issuance of a new Debenture in the name of such other Person, that it receive reasonable transfer
documentation including legal opinions that the issuance of the Debenture in such other name does not and will not cause a violation
of the Securities Act or any applicable state or foreign securities laws or is exempt from the registration requirements of the
Securities Act. Prior to due presentment for transfer of this Debenture to which the Company has consented, the Company and any
agent of the Company may treat the Person in whose name this Debenture is duly registered on the Company's books and records of
outstanding debt securities and obligations (the “Debenture Register”) as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not this Debenture be overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.

 

2.       Conversion
at Holder’s Option; Mandatory Conversion; Redemption at Company’s Option.

 

a.       The
Holder is entitled to, at any time or from time to time, convert the Conversion Amount (as defined below) into Conversion Shares,
at a conversion price for each share of Common Stock equal to $0.08, subject to adjustment as set forth herein (the “Conversion
Price”). For purposes of this Debenture, the “Conversion Amount” shall mean the sum of (A) all or
any portion of the outstanding Principal Amount of this Debenture, as designated by the Holder upon exercise of its right of conversion
plus (B) all or any portion of the outstanding Interest Amount of this Debenture, as designated by the Holder upon exercise of
its right of conversion.

 

Conversion shall be effectuated
by delivering by facsimile, email or other delivery method to the Company of the completed form of conversion notice attached hereto
as Annex A (the “Notice of Conversion”), executed by the Holder of the Debenture evidencing
such Holder's intention to convert this Debenture or a specified portion hereof. No fractional shares of Common Stock or scrip
representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest
whole share. If so requested by the Holder, the Company shall within one (1) business day respond with its endorsement so as to
confirm the outstanding principal amount of the Debenture submitted for conversion or shall reconcile any difference with Buyer
promptly after receiving such Notice of Conversion. The date on which notice of conversion is given (the “Conversion Date”)
shall be deemed to be the date on which the Company receives by fax, email or other means of delivery used by the Holder the Notice
of Conversion (such receipt being evidenced by electronic confirmation of delivery by facsimile or email or confirmation of delivery
by such other delivery method used by the Holder). Delivery of a Notice of Conversion to the Company shall be given by the Holder
pursuant to the notice provisions set forth in the Securities Purchase Agreement. The Conversion Shares must be delivered to the
Holder within two (2) business days from the date of delivery of the Notice of Conversion to the Company. Conversion Shares shall
be delivered by DWAC so long as the Company is then DWAC Operational, unless the Holder expressly requests delivery in certificated
form or the Conversion Shares are in the form of Restricted Stock and are required to bear a restrictive legend. Conversion Shares
shall be deemed delivered (i) if delivered by DWAC, upon deposit into the Holder’s brokerage account, or (ii) if delivered
in certificated form, upon the Holder’s actual receipt of the Conversion Shares within five business days from the date of
delivery of the Notice of Conversion in certificated form at the address specified by the Holder in the Notice of Conversion, as
confirmed by written receipt. The Holder will not be responsible for any fees imposed by the Company’s transfer agent in
connection with the conversion of the Debenture and delivery of the Conversion Shares to the Holder.

 

If at any time
the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the
sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount
for such conversion may be increased to include Additional Principal, where “Additional Principal” means such
additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable
upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been
adjusted by the Holder to the par value price.

 

    	 	 2	 

    	 	 

    

 

Notwithstanding the foregoing,
unless the Holder delivers to the Company written notice at least sixty-one (61) days prior to the effective date of such notice
that the provisions of this paragraph (the “Limitation on Ownership”) shall be adjusted to 9.99% with respect to the
Holder, in no event shall a holder of this Debenture have the right to convert this Debenture into, nor shall the Company issue
to such Holder, shares of Common Stock to the extent that such conversion would result in the Holder and its Affiliates together
beneficially owning more than 4.99% of the then issued and outstanding shares of Common Stock. For purposes hereof, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13D-G under the Exchange Act.

  

b.       The
Debentures shall be automatically converted into Common Stock upon the earlier to occur of: (i) the commencement of trading of
the Common Stock on the NASDAQ, New York Stock Exchange or NYSE American (an “Uplist”) at the Uplist Conversion
Price; or (ii) the minimum bid price of the Common Stock exceeds $0.50 per share for twenty (20) consecutive trading days and the
average trading volume during the ten (10) trading day period preceding the mandatory Conversion Date is at least 100,000 shares
and the Conversion Shares are registered under an effective registration statement or are salable under Rule 144 at the Conversion
Price. The “Uplist Conversion Price” shall mean the lesser of the Conversion Price or a 30% discount of the
public offering price that a share of Common Stock is offered to the public resulting in the Uplist.

 

c.       So long as no Event
of Default (as defined in Section 10) shall have occurred and be continuing (whether such Event of Default has been declared by
the Holder) (unless the Holder consents to such redemption notwithstanding such Event of Default, as described in clause (v), below),
the Company may at its option call for redemption all or part of the Debenture, with the exception of any portion thereof which
is the subject of a previously-delivered Notice of Conversion, prior to the Maturity Date, as follows:

 

(i)       The
Debenture called for redemption shall be redeemable by the Company, upon not less than ten (10) calendar days written notice, for
an amount (the “Redemption Price”) equal to: (i) if the Redemption Date (as defined below) is ninety (90) calendar
days or less from the date of issuance of this Debenture, One Hundred Ten percent (110%) of the sum of the Principal Amount plus
accrued but unpaid interest; (ii) if the Redemption Date is greater than or equal to ninety-one (91) calendar days from the date
of issuance of this Debenture and less than or equal to one hundred fifty (180) calendar days from the date of issuance of this
Debenture, One Hundred Twenty percent (120%) of the sum of the Principal Amount plus accrued but unpaid interest; (iii) if the
Redemption Date is greater than or equal to one hundred fifty eighty one (181) calendar days from the date of issuance of this
Debenture, One Hundred Thirty percent (130%) of the sum of the Principal Amount plus accrued but unpaid interest. The date upon
which the Debenture is redeemed and paid shall be referred to as the “Redemption Date” (and, in the case of
multiple redemptions of less than the entire outstanding Principal Amount, each such date shall be a Redemption Date with respect
to the corresponding redemption).

 

(ii)        On the Redemption
Date, the Company shall cause the Holder whose Debentures have been presented for redemption to be issued payment of the Redemption
Price. In the case of a partial redemption, the Company shall also issue a new Debenture to the Holder for the Principal Amount
and accrued but unpaid interest remaining outstanding after the Redemption Date promptly after the Holder’s presentation
of the Debenture called for redemption.

 

(iii)       To
effect a redemption the Company shall provide a written notice to the Holder(s) not less than ten (10) business days prior to the
Redemption Date (the “Redemption Notice”), setting forth the following:

 

		1.	the Redemption Date;

 

		2.	the Redemption Price;

 

		3.	the aggregate Principal Amount of the Debenture being called for redemption;

 

		4.	a statement advising the Holder that the Debenture (or, in the case of a partial redemption, that portion of the Principal
Amount and accrued but unpaid interest being called for redemption) as of the Redemption Date will cease to be convertible into
Common Stock as of the Redemption Date; and

 

    	 	 3	 

    	 	 

    

 

		5.	in the case of a partial redemption, a statement advising the Holder that after the Redemption Date a substitute Debenture
will be issued by the Company after deduction of the portion thereof called for redemption, at no cost to the Holder, if the Holder
so requests.

 

Upon issuance of the Redemption Notice,
the Debenture cannot be converted at the Holder’s option pursuant to Section 2(a) hereof. Notwithstanding the foregoing,
in the event the Company issues a Redemption Notice but fails to fund the redemption on the Redemption Date, then such Redemption
Notice shall be null and void, and (i) the Holder(s) shall be entitled to convert the Debenture previously the subject of the Redemption
Notice, and (ii) the Company may not redeem such Debenture for at least thirty (30) days following the intended Redemption Date
that was voided, and the Company shall be required to pay to the Holder(s) the Redemption Price simultaneously with the issuance
of a Redemption Notice in connection with any subsequent redemption pursued by the Company.

 

3.       If
the Company, at any time while this Debenture or any amounts due hereunder are outstanding, issues, 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 other securities convertible into, exercisable for, or otherwise
entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of any
convertible securities outstanding following the Issuance Date) (excluding Exempt Issuances, as defined below, this Debenture,
and any securities issuable pursuant to the Securities Purchase Agreement), in each or any case at an effective price per share
that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. If the Company enters into
a Variable Rate Transaction (as defined in this Debenture), despite the prohibition set forth in this Debenture, the Company shall
be deemed to have issued Common Stock at the lowest possible price per share at which such securities could be issued in connection
with such Variable Rate Transaction. Such adjustment shall be made at the option of the Holder whenever such Common Stock or other
securities are issued. For purposes of this Section 3, “Exempt Issuance” means the issuance of (i) shares of
Common Stock, options or other equity awards to officers, consultants, employees or directors of the Company pursuant to any stock
or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such purpose, (ii) securities issuable upon the exercise or
exchange of or conversion of securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the Issuance Date; provided that such securities have not been amended since the Issuance Date to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than
in connection with stock splits or combinations) or to extend the term of such securities, (iii) securities issued pursuant to
acquisitions approved by a majority of the disinterested directors of the Company, and (iv) shares of Common Stock issued pursuant
to any real property leasing arrangement or financing from a national bank approved by the Board of Directors of the Company.

 

4.       No
provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional to convert
this Debenture into Common Stock, at the time, place, and rate herein prescribed. This Debenture is a direct obligation of the
Company.

 

5.       If,
at any time after the Issuance Date, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization,
or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different
number of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Company, then the Holder of this Debenture shall thereafter have the
right to receive upon conversion of this Debenture, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder
would have been entitled to receive in such transaction had this Debenture been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holder of this Debenture to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Debenture) shall
thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the
conversion hereof. The Company shall not effectuate any transaction described in this Section 5 unless (a) it first gives, to the
extent practicable, at least thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice)
of the record date of the special meeting of stockholders to approve, or if there is no such record date, the consummation of,
such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during
which time the Holder shall be entitled to convert this Debenture) and (b) the resulting successor or acquiring entity (if not
the Company) assumes by written instrument all of the obligations of this Debenture. The above provisions shall similarly apply
to successive consolidations, mergers, sales, transfers or share exchanges.

 

    	 	 4	 

    	 	 

    

 

6.       If,
at any time while any portion of this Debenture remains outstanding, the Company effectuates a forward stock split or reverse stock
split of its Common Stock or issues a dividend on its Common Stock consisting of shares of Common Stock or otherwise recapitalizes
its Common Stock, the Conversion Price shall be equitably adjusted to reflect such action.

 

7.       All
payments contemplated hereby to be made “in cash” shall be made by wire transfer of immediately available funds in
such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private
debts. All payments of cash and each delivery of shares of Common Stock issuable to the Holder as contemplated hereby shall be
made to the Holder to an account designated by the Holder to the Company and if the Holder has not designated any such accounts
at the address last appearing on the Debenture Register of the Company as designated in writing by the Holder from time to time;
except that the Holder may designate, by notice to the Company, a different delivery address for any one or more specific payments
or deliveries.

 

8.       The
Holder of the Debenture, by acceptance hereof, agrees that this Debenture is being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Debenture or the Shares of Common Stock issuable upon conversion thereof except
in compliance with the terms of the Securities Purchase Agreement and under circumstances which will not result in a violation
of the Securities Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.

 

9.       This
Debenture shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties consents
to the exclusive jurisdiction and venue of the federal courts located in Monroe County,
New York in connection with any dispute arising under this Agreement, and each waives any objection based on forum non conveniens.
This provision is intended to be a “mandatory” forum selection clause and governed by and interpreted consistent with
New York law. Each of the parties hereby consents to the exclusive jurisdiction and venue of
any state or federal court having its situs in Monroe County, New York, and each waives any objection based on forum non conveniens.
To the extent determined by such court, the Company shall reimburse the Holder for any reasonable legal fees and disbursements
incurred by the Holder in enforcement of or protection of any of its rights under this Debenture or the Securities Purchase Agreement.

 

10.       The
following shall constitute an “Event of Default”:

 

a.       The
Company fails in the payment of principal or interest on this Debenture as required to be paid in cash hereunder, and payment shall
not have been made for a period of five (5) business days following the payment due date (as to which no further cure period shall
apply); or

 

b.       Any
of the representations or warranties made by the Company herein, in the Securities Purchase Agreement or in any certificate or
financial or other written statements heretofore or hereafter furnished by the Company to the Holder in connection with the issuance
of this Debenture, shall be false or misleading (including without limitation by way of the misstatement of a material fact or
the omission of a material fact) in any material respect at the time made (as to which no cure period shall apply); or

 

    	 	 5	 

    	 	 

    

 

c.       The
Company fails to remain listed on the OTC Pink, OTCQB, OTCQX, Nasdaq Capital Markets, NYSE, or other applicable principal trading
market for the Common Stock (the “Principal Market”) any time from the date hereof to the Maturity Date for a period
in excess of five (5) Trading Days (as to which no further cure period shall apply); or

 

d.       The
Company (i) fails to timely file required SEC reports when due (including extensions), becomes, is deemed to be or asserts that
it is a “shell company” at any time for purposes of the 1933 Act, and Rule 144 promulgated thereunder or otherwise
takes any action, or refrains from taking any action, the result of which makes Rule 144 under the 1933 unavailable to the Holder
for the sale of their Securities, (ii) fails to issue shares of Common Stock to the Holder or to cause its Transfer Agent to issue
shares of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this
Debenture, (iii) fails to transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued
to the Holder upon conversion of this Debenture as and when required by this Debenture and such transfer is otherwise lawful, (iv)
fails to remove any restrictive legend when such legend removal is lawful, or (v) the Company fails to perform or observe any of
its obligations under the Section 5 of the Agreement (no cure period shall apply in the case of clauses (i) through (v) above,
inclusive); or

 

e.       The
Company fails to perform or observe, in any material respect (i) any other covenant, term, provision, condition, agreement or obligation
set forth in the Debenture, (subject to a cure period of three (3) business days other than in the case of a failure under Section
5 hereof, as to which no cure period shall apply, and a cure period of fifteen (15) days in the case of a failure under any other
Section hereof), or (ii) any other covenant, term, provision, condition, agreement or obligation of the Company set forth in the
Securities Purchase Agreement and such failure shall continue uncured for a period of either (1) three (3) business days after
the occurrence of the Company’s failure under Section 4(d), (e) (except as described in Section 10(c) hereof, as to which
Section 10(c) hereof shall control), (f), (g) or (h) of the Securities Purchase Agreement, or (2) fifteen (15) days after the occurrence
of the Company’s failure under any other provision of the Securities Purchase Agreement not otherwise specifically addressed
in the Events of Default set forth in this Section 10; or

 

f.       The
Company shall (i) admit in writing its inability to pay its debts generally as they mature; (ii) make an assignment for the benefit
of creditors or commence proceedings for its dissolution; or (iii) apply for or consent to the appointment of a trustee, liquidator
or receiver for its or for a substantial part of its property or business (as to which no cure period shall apply); or

 

g.       A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment (as to which no cure period shall apply);
or

 

h.       Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60)
days thereafter (as to which no cure period shall apply); or

 

i.       Any
money judgment, writ or warrant of attachment, or similar process (including an arbitral determination), in excess of one hundred
thousand dollars ($100,000) in the aggregate shall be entered or filed against the Company or any of its properties or other assets
(as to which no cure period shall apply), and such judgment, attachment or process is not satisfied, set aside, discharged, bonded
against, or stayed within 30 days after the same is levied; or

 

j.       The
occurrence of a breach or an event of default under the terms of any indebtedness or financial instrument of the Company or any
subsidiary (including but not limited to any Subsidiary) of the Company in an aggregate amount in excess of one hundred thousand
dollars ($100,000) or more which is not waived by the creditors under such indebtedness (as to which no cure period shall apply);
or

 

k.       Bankruptcy,
reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed
within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce
in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding (as
to which no further cure period shall apply); or

 

    	 	 6	 

    	 	 

    

 

l.       The
issuance of a final, non-appealable order, ruling, finding or similar adverse determination the SEC, the Secretary of State of
the State of Nevada or other applicable state of incorporation of the Company, FINRA or any other securities regulatory body (whether
in the United States, Canada or elsewhere) having proper jurisdiction that the Company and/or any of its past or present directors
or officers have committed a material violation of applicable securities laws or regulations (as to which no cure period shall
apply); or

 

m.       The
Company shall have its Common Stock halted, suspended, or delisted from the Principal Market for a period in excess of ten (10)
Trading Days (as to which no further cure period shall apply); or

 

n.       Reserved;
or

 

o.       Notice
of a Material Adverse Effect is provided by the Company or the determination in good faith by a majority of the outstanding principal
amount of the Debentures that a Material Adverse Effect has occurred; or

 

p.       Reserved;
or

 

q.       Reserved;
or

 

r.       At
any time while this Debenture is outstanding, the lowest traded price on the Principal Market is equal to or less than $0.001;
or

 

s.       The
failure by Company to maintain any material intellectual property rights, personal, real property or other assets which are necessary
to conduct its business (whether now or in the future); or

 

t.       If,
at any time on or after the date which is six (6) months after the Issuance Date, assuming the Holder is not deemed to be an “affiliate”
of the Company for purposes of Rule 144, due solely to the Company’s action or inaction, the Holder is unable to receive
unrestricted shares of the Company’s Common Stock upon conversion of this Debenture.

 

Then, or at any time
thereafter, the Company shall immediately give written notice of the occurrence of such Event of Default to the Holder, and in
each and every such case, unless such Event of Default shall have been waived in writing by the Holder of the Debenture (which
waiver shall not be deemed to be a waiver of any subsequent default), then at the option of the Holder and in the discretion of
the Holder, take any or all of the following actions: (i) pursue remedies against the Company in accordance with any of the Holder’s
rights, (ii) increase the interest rate applicable to the Debenture to the lesser of eighteen percent (18%) per annum and the maximum
interest rate allowable under applicable law, (iii) in the case of an Event of Default under Section 10(d)(ii) through (v) arising
from an untimely delivery to the Holder of Conversion Shares or shares of Common Stock in de-legended form, if the closing bid
price of the Common Stock on the Trading Day immediately prior to the actual date of delivery of Conversion Shares or de-legended
shares, as the case may be, is less than the closing bid price on the Trading Day immediately prior to the date when Conversion
Shares or de-legended shares were required to be delivered, increase the Principal Amount of the relevant Holder’s Debenture
by an amount per share equal to such difference, and (iv) accelerate the then outstanding Principal Amount under this Debenture
(the “Acceleration Amount”), together with accrued and unpaid interest thereon, whereupon the Acceleration Amount shall
be immediately due and payable, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly
waived, anything contained herein, in the Securities Purchase Agreement or in any other note or instruments to the contrary notwithstanding.
In the case of an Event of Default under Section 10(d)(ii), the Holder may either (i) declare the Acceleration Amount to exclude
the Conversion Amount that is the subject of the Event of Default, in which case the Acceleration Amount shall be based on the
remaining Principal Amount and accrued interest (if any), in which case the Company shall continue to be obligated to issue the
Conversion Shares, or (ii) declare the Acceleration Amount to include the Conversion Amount that is the subject of the Event of
Default, in which case the Acceleration Amount shall be based on the full Principal Amount, including the Conversion Amount, and
accrued interest (if any), whereupon the Notice of Conversion shall be deemed withdrawn. At its option, the Holder may elect to
convert the Debenture pursuant to Section 2 notwithstanding the prior declaration of a default and acceleration, in the sole discretion
of such Holder. The Holder may immediately enforce any and all of the Holder's rights and remedies provided herein or any other
rights or remedies afforded by applicable law. Notwithstanding the foregoing, in the case of a default under Section 10(d)(ii)
through (iv), the Holder of the Debenture sought to be converted, transferred or de-legended, as the case may be, acting singly,
shall have the sole and absolute discretion to increase the applicable interest rate on the Debenture held by such Holder and/or
to accelerate the Debenture(s) held by such Holder. The Company expressly acknowledges and agrees that the Holder’s exercise
of any or all of the remedies provided herein or under applicable law, including without limitation the increase(s) in the Principal
Amount and the Acceleration Amount as may be declared in the case of a default, is reasonable and appropriate due to the inability
to define the financial hardship that the Company’s default would impose on the Holder. To the extent that the Holder’s
exercise of any of its remedies in the case of an Event of Default shall be construed to exceed the maximum interest rate allowable
under applicable law, then such remedies shall be reduced to equal the maximum interest rate allowable under applicable law.

 

    	 	 7	 

    	 	 

    

 

11.       Nothing
contained in this Debenture shall be construed as conferring upon the Holder the right to vote or to receive dividends or to consent
or receive notice as a stockholder in respect of any meeting of stockholders or any rights whatsoever as a stockholder of the Company,
unless and to the extent converted in accordance with the terms hereof. Notwithstanding the foregoing, the Holder shall have the
right to participate in any dividends or distributions with respect to Common Stock on an as-converted basis (except for dividends
or distributions that result in an adjustment of the Conversion Price as provided herein.)

 

12.       Reserved.

 

13.       This
Debenture may be amended only by the written consent of the parties hereto. Notwithstanding the foregoing, the Principal Amount
of this Debenture shall automatically be reduced by any and all Conversion Amounts (to the extent that the same relate to principal
hereof). In the absence of manifest error, the outstanding Principal Amount of the Debenture on the Holder’s book and records
shall be the correct amount.

 

14.       In
the event of any inconsistency between the provisions of this Debenture and the provisions of any other Transaction Document, the
provisions of this Debenture shall prevail.

 

15.       The
Company specifically acknowledges and agrees that in the event of a breach or threatened breach by the Company of any provision
hereof or of any other Transaction Document, the Holder will be irreparably damaged, and that damages at law would be an inadequate
remedy if this Debenture or such other Transaction Document were not specifically enforced. Therefore, in the event of a breach
or threatened breach by the Company, the Holder shall be entitled, in addition to all other rights and remedies, to an injunction
restraining such breach, without being required to show any actual damage or to post any bond or other security, and/or to a decree
for a specific performance of the provisions of this Debenture and the other Transaction Documents.

 

16.       No
waivers or consents in regard to any provision of this Debenture may be given other than by an instrument in writing signed by
the Holder.

 

17.       Each
time, while this Debenture is outstanding, the Company enters into a Section 3(a)(9) transaction (including but not limited to
the issuance of new promissory notes or debentures, or of a replacement promissory note or debenture), or Section 3(a)(10) Transaction,
in which any third party has the right to convert monies owed to that third party (or receive shares pursuant to a settlement or
otherwise) at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments
in this Debenture), then the Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all
applicable adjustments in this Debenture) until this Debenture is no longer outstanding. Each time, while this Debenture is outstanding,
the Company enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or debentures,
or of a replacement promissory note or debenture), or Section 3(a)(10) Transaction, in which any third party has a look back period
greater than the look back period in effect under this Debenture at that time, then the Holder’s look back period shall automatically
be adjusted to such greater number of days until this Debenture is no longer outstanding. The Company shall give written notice
to the Holder, with the adjusted Conversion Price and/or adjusted look back period (each adjustment that is applicable due to the
triggering event), within one (1) business day of an event that requires any adjustment described in this section. So long as this
Debenture is outstanding, the Company shall not enter into any transaction or arrangement structured in accordance with, based
upon, or related or pursuant to, in whole or in part, Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).
In the event that the Company does enter into, or makes any issuance of Common Stock related to a 3(a)(l0) Transaction while this
Debenture is outstanding, a liquidated damages charge of 20% of the outstanding principal balance of this Debenture, will be assessed
and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance
of this Debenture.

 

    	 	 8	 

    	 	 

    

 

18.       Reserved.

 

19.        From
the Issuance Date until the Debenture is extinguished in its entirety, for so long as forty percent (40%) or more of the Debentures
initially issued under the Securities Purchase Agreement are outstanding, the Company shall be prohibited from entering into an
agreement involving a Variable Rate Transaction (as defined herein) without the consent of Buyers holding at least a majority in
principle amount of the Debentures. “Variable Rate Transaction” means a transaction in which the Company (i)
issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right
to receive, shares of Common Stock either at a conversion price, exercise price or exchange rate or other price that is based upon,
and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of
such debt or equity securities or (ii) creates or authorizes the creation of or issuance of any other security convertible or exercisable
for any equity security of the Company, having rights, preferences or privileges senior to or on parity with this Debenture or
(iii) amend, alter, or repeal any provision of the Company’s Certificate of Incorporation or Bylaws that would adversely
impact the Holders. The Holder shall be entitled to obtain injunctive relief against the Company to preclude any such issuance,
which remedy shall be in addition to any right to collect damages.

 

20.       Notwithstanding
any provision in this Debenture or the related transaction documents to the contrary, the total liability for payments of interest
and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at
any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Debenture
or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including,
without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason
whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed
by the usury laws of the jurisdiction governing this Debenture, all sums in excess of those lawfully collectible as interest for
the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction
of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force
and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal
balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided,
however, that the Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce,
or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment
of the principal balance then outstanding. It is the intention of the parties that the Company does not intend or expect to pay,
nor does the Holder intend or expect to charge or collect any interest under this Debenture greater than the highest non-usurious
rate of interest which may be charged under applicable law.

 

 

 

 

[Signature Page Follows]

 

    	 	 9	 

    	 	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Debenture to be duly executed by an officer thereunto duly authorized as of the date of issuance set
forth above.

 

	COMPANY: 	 
	 	 
	VERIFYME, INC. 	 
	 	 
	 	 
	By: 	 	 
	Name: 	Patrick White	 
	Title: 	Chief Executive Officer	 
	 	 	 

 

 

[Signature Page to Senior Secured Convertible
Debenture]

 

    	 		 

    	 	 

    

 

ANNEX A

 

VERIFYME, INC.

 

NOTICE OF CONVERSION

 

(To Be Executed by the Registered Holder
in Order to Convert the Debenture)

 

The undersigned hereby irrevocably elects
to convert $ ________________ of the Principal Amount of the above Debenture into Shares of Common Stock of VerifyMe, Inc., a Nevada
corporation (the “Company”), according to the conditions hereof, as of the date written below. After giving effect
to the conversion requested hereby, the outstanding Principal Amount of such debenture is $____________________, absent manifest
error.

 

Pursuant to the Debenture, certificates
representing Common Stock upon conversion must be delivered (including delivery by DWAC or DRS) to the undersigned within two (2)
business days from the date of delivery of the Notice of Conversion to the Transfer Agent.

 

	 
	Conversion Date
	 
	 
	Applicable Conversion Price
	 
	 
	Signature
	 
	 
	Print Name
	 
	 
	Address
	 
	 
	 
	 

 

The Shares shall be delivered to the following
DWAC Account Number:

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