Document:

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. 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:

Exchange
Date:

Initial
Conversion Price (subject to adjustment herein): $0.12

 

$_______

 

7.5%
ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE

DUE
May _____, 2018

 

THIS
7.5% ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE DEBENTURE of ADVANCED MEDICAL ISOTOPE CORPORATION, a Delaware corporation,
(the “Company”), having its principal place of business at 719 Jadwin Avenue, Richland, WA 99352, designated
as its 7.5% Original Issue Discount Senior Secured Convertible Debenture due May ___, 2018 (the “Debenture”).
This Debenture is being issued in connection with that certain Exchange Agreement pursuant to which the Company exchanged certain
then outstanding indebtedness that was issued by the Company on November 2, 2016 for this Debenture.

 

FOR
VALUE RECEIVED, the Company promises to pay to _________, or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $_________ on May __, 2018 (the “Maturity Date”)
or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder. This Debenture is subject
to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, capitalized
terms that are not otherwise defined herein have the meanings given to such terms in the Exchange Agreement and the following
terms shall have the following meanings:

 

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“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Agent”
shall have the meaning ascribed to such term in the Security Agreement.

 

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

 

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

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant 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 Significant 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 Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company
or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the
Company or any Significant 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(d).

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

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

 

    	2

    	 	 	 

    

 

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

 

“Commission”
shall mean the Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company (or any direct or indirect subsidiaries the Company may obtain
or form in the future) 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 Debenture in accordance with
the terms hereof.

 

“Debenture
Register” shall have the meaning set forth in Section 2(d).

 

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“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).

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

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

 

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

 

“Exchange
Agreement” means the Exchange Agreement, dated as of May __, 2017 among the Company and the original Holders, as amended,
modified or supplemented from time to time in accordance with its terms.

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock, Restricted Stock Units (RSUs) or options to eligible grantees
under 2015 Omnibus Incentive and Securities Plan, provided that issuances under this clause (a) shall not exceed an aggregate
of twenty percent (20%) of the total outstanding shares of Common Stock on an as converted primary basis as of the date hereof
in any 12 month period, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or
other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Exchange
Date, provided that such securities have not been amended since the Exchange 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, (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person
(or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities, and (d) shares of Common Stock issued in
lieu of cash payment for services provided by service providers.

 

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

 

“Holding
Fee” shall have the meaning set forth in Section 9(b).

 

“Holder
Demand” shall have the meaning set forth in Section 9(d).

 

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“Holder
Redemption” shall have the meaning set forth in Section 6(b).

 

“Holder
Redemption Amount” means 105% of the then outstanding principal amount of the Debenture if on or prior to December 15,
2017 and 110% of the then outstanding principal amount of the Debenture thereafter up to fifty percent (50%) of the gross proceeds
of the financing. By way of example, if the Company raises $100,000 in a financing after August 1, 2017, but prior to December
15, 2017, and the Holder requires the Company to redeem its full Holder Redemption Amount, the Company shall pay to the Holder
$50,000 and the principal amount of the Debenture shall be reduced by $47,620.

 

“Holder
Redemption Date” shall have the meaning set forth in Section 6(b).

 

“Holder
Redemption Notice” shall have the meaning set forth in Section 6(b).

 

“Holder
Redemption Notice Date” shall have the meaning set forth in Section 6(b).

 

“Holder
Redemption Period” shall have the meaning set forth in Section 6(b).

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (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 $50,000 due under leases required to
be capitalized in accordance with United States generally accepted accounting principles.

 

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

 

“Interest
Conversion Rate” means the Conversion Price in effect on the Interest Payment Date.

 

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

 

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

 

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

 

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

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

    	5

    	 	 	 

    

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all
accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded
(if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion
Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in
full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of this Debenture, plus 100% of accrued and
unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

 

“New
York Courts” shall have the meaning set forth in Section 10(d).

 

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

 

“Optional
Redemption” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Amount” means the sum of (a) 105% of the then outstanding principal amount of the Debenture if on or prior
to December 15, 2017 and 110% of the then outstanding principal amount of the Debenture thereafter, (b) accrued but unpaid interest
(including 12-month make-whole interest payment) and (c) all liquidated damages and other amounts due in respect of the Debenture.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).

 

“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).

 

“Original
Issue Date” means the date of the first issuance of the securities for which this Debenture was exchanged pursuant to
the Exchange Agreement, regardless of any transfers of those securities or any Debenture and regardless of the number of instruments
which may be issued to evidence those securities or such Debenture.

 

“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.

 

“Required
Minimum” means, the product of 400% of the maximum aggregate number of shares of Common Stock then issued or potentially
issuable upon conversion in full of all Debentures (including Conversion Shares issuable as payment of interest on the Debentures),
ignoring any conversion or exercise limits set forth therein.

 

    	6

    	 	 	 

    

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

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

 

“Security
Agreement” means the Security Agreement, dated the date hereof, among the Company and the Holder.

 

“Security
Documents” shall mean the Security Agreement, and any other documents and filing required thereunder in order to grant
the Holder a first priority security interest in the assets of the Company as provided in the Security Agreement, including all
UCC-1 filing receipts.

 

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

 

“Successive
Release Amount” shall have the meaning set forth in Section 9(b).

 

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

 

“Termination
Fee” shall have the meaning set forth in Section 9(d).

 

“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 NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“Transaction
Documents” means the Debentures, the Security Agreement, all exhibits and schedules thereto and hereto and any other
documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means American Registrar & Transfer Co., 1234 W South Jordan Pkwy Ste B3, South Jordan, UT 84095, and any
successor transfer agent of the Company.

 

“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, additional shares of Common Stock either (A)
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 (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

 

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“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)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) 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
Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

Section
2. Interest; Prepayment.

 

a)
Payment of Interest in Cash or Kind; Notice; Interest Calculations and Late Fee.

 

i.
The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture
at the rate of 7.5% per annum, payable on each Conversion Date (as to interest accrued and payable, including pursuant to Section
2(b) below, on the principal amount subject to such conversion) and on the Maturity Date (each such date, an “Interest
Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the
next succeeding Business Day), in cash or, at the Company’s option, in duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock at the Interest Conversion Rate (the dollar amount to be paid in shares, the “Interest Share Amount”)
or a combination thereof; provided, however, that payment in shares of Common Stock may only occur if (i) there
is no existing Event of Default and no existing event which, with the passage of time or the giving of notice, would constitute
an Event of Default during the 5 Trading Days immediately prior to the Interest Payment Date (the “Interest Notice Period”),
(ii) the Company shall have given the Holder notice in accordance with the notice requirements set forth below and (iii) as to
such Interest Payment Date, the Company shall have delivered to the Holder’s account with The Depository Trust Company a
number of shares of Common Stock to be applied against such Interest Share Amount equal to the quotient of (x) the applicable
Interest Share Amount divided by (y) the lesser of the (i) then Conversion Price and (ii) the Interest Conversion Rate assuming
for such purposes that the Interest Payment Date is the Trading Day immediately prior to the commencement of the Interest Notice
Period (the “Interest Conversion Shares”).

 

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ii.
Company’s Election to Pay Interest in Cash or Kind. Subject to the terms and conditions herein, the decision whether
to pay interest hereunder in cash, shares of Common Stock or a combination thereof shall be at the sole discretion of the Company.
Prior to the commencement of any Interest Notice Period, the Company shall deliver to the Holder a written notice of its election
to pay interest hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof
and the Interest Share Amount as to the applicable Interest Payment Date, provided that the Company may indicate in such notice
that the election contained in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice.
During any Interest Notice Period, the Company’s election (whether specific to an Interest Payment Date or continuous) shall
be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written
notice to the Holder shall be deemed an election by the Company to pay the interest on such Interest Payment Date in cash. At
any time the Company delivers a notice to the Holder of its election to pay the interest in shares of Common Stock, the Company
shall timely file a prospectus supplement pursuant to Rule 424 disclosing such election. The aggregate number of shares of Common
Stock otherwise issuable to the Holder on an Interest Payment Date shall be reduced by the number of Interest Conversion Shares
previously issued to the Holder in connection with such Interest Payment Date.

 

iii.
Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily
commencing on the Exchange Date until payment in full of the outstanding principal, together with all accrued and unpaid interest,
liquidated damages and other amounts which may become due hereunder, has been made. Payment of interest in shares of Common Stock
(other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur pursuant to Section
4(c)(ii) herein and, solely for purposes of the payment of interest in shares, the Interest Payment Date shall be deemed the Conversion
Date. Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding
registration and transfers of this Debenture (the “Debenture Register”).

 

iv.
All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of
18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily from
the date such interest is due hereunder through and including the date of actual payment in full. Notwithstanding anything to
the contrary contained herein, if, on any Interest Payment Date the Company has elected to pay accrued interest in the form of
Common Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails to satisfy the conditions
for payment in Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Company, in lieu of delivering
either shares of Common Stock pursuant to this Section 2 or paying the regularly scheduled interest payment in cash, shall deliver,
within three (3) Trading Days of each applicable Interest Payment Date, an amount in cash equal to the product of (x) the number
of shares of Common Stock otherwise deliverable to the Holder in connection with the payment of interest due on such Interest
Payment Date multiplied by (y) the highest VWAP during the period commencing on the Interest Payment Date and ending on the Trading
Day prior to the date such payment is actually made. If any Interest Conversion Shares are issued to the Holder in connection
with an Interest Payment Date and are not applied against an Interest Share Amount, then the Holder shall promptly return such
excess shares to the Company.

 

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b)
Interest Make Whole. In the event that this Debenture is converted or redeemed (including via An Event of Default) prior
to the Maturity Date, the Company shall pay to the Holder, in addition to any other amounts then owed, in cash upon such conversion
or redemption, an amount in interest equal to the amount of interest that would otherwise have been payable if this Debenture
had been held until the Maturity Date.

 

c)
Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount
of this Debenture without the prior written consent of the Holder.

 

Section
3. Registration of Transfers and Exchanges.

 

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

 

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

 

c)
Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and
any agent of the Company may treat the Person in whose name this Debenture is duly registered on 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
is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

 

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Section
4.  Conversion.

 

a)
Voluntary Conversion. At any time until this Debenture is no longer outstanding, this Debenture shall be convertible, in
whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion
limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion,
the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein
the principal amount of this Debenture to be converted, accrued but unpaid interest thereon (whether paid in cash or Interest
Conversion Shares) 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 Debenture to the Company unless the entire principal amount of this Debenture, 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 Debenture in an amount equal to the applicable conversion. The Holder and the Company shall maintain
records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to
any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. The Holder, and any assignee
by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated
on the face hereof.

 

b)
Conversion Price; Alternate Conversion Price.

 

i.
Conversion Price. The conversion price in effect on any Conversion Date before December 15, 2017 shall be equal to $0.12,
subject to adjustment herein (the “Initial Conversion Price”). The conversion price in effect on any Conversion
Date after December 15, 2017 shall be equal to the lesser of (A) $0.20, subject to adjustment herein and (B) 60% of the lowest
trading price of the Common Stock on the Trading Market in the ten (10) Trading Days prior to the date of conversion (the “Alternate
Conversion Price”).

 

ii.
Alternate Conversion Price Upon an Event of Default. At any time after the occurrence of an Event of Default which has
not been cured within 10 Trading Days, the Holder may, at the Holder’s option, convert the outstanding Principal Amount
plus any liquidated damages into shares of Common Stock at price per share equal to 55% of the lowest trading price for the thirty
(30) Trading Days immediately prior to date of conversion (the “Event of Default Conversion Price”, and together
with the Initial Conversion Price and the Alternate Conversion Price, the “Conversion Price”).

 

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c)
Mechanics of Conversion.

 

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 Debenture to be
converted by (y) the Conversion Price.

 

ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) three (3) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after
the six month anniversary of the Original Issue Date, shall be free of restrictive legends and trading restrictions representing
the number of Conversion Shares being acquired upon the conversion of this Debenture (including, if the Company has given continuous
notice pursuant to Section 2(b) for payment of interest in shares of Common Stock at least 20 Trading Days prior to the date on
which the Notice of Conversion is delivered to the Company, shares of Common Stock representing the payment of accrued interest
otherwise determined pursuant to Section 2(a) but assuming that the Interest Notice Period is the 20 Trading Days period immediately
prior to the date on which the Notice of Conversion is delivered to the Company and excluding for such issuance the condition
that the Company deliver Interest Conversion Shares as to such interest payment prior to the commencement of the Interest Notice
Period) and (B) a bank check in the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued
interest in cash). On or after the six month anniversary of the Original Issue Date the Company shall deliver any Conversion Shares
required to be delivered by the Company under this Section 4(c) electronically through the Depository Trust Company or another
established clearing corporation performing similar functions. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with
respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.

 

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 Debenture delivered to the Company and the Holder shall promptly return
to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.

 

    	12

    	 	 	 

    

 

iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In
the event the Holder of this Debenture 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 Debenture shall have been sought and obtained, and the Company posts a surety
bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture, which is subject
to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute
and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction,
the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for
any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount
being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated
damages begin to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds
such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant
to Section 8 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder
shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

 

    	13

    	 	 	 

    

 

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

 

vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock at least a number of shares equal to the Required Minimum. 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.

 

    	14

    	 	 	 

    

 

vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Debenture. 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 Debenture 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
Conversion Shares, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of
this Debenture so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion 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.

 

    	15

    	 	 	 

    

 

d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall
not have the right to convert any portion of this Debenture, 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 Debenture
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 Debenture 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 Debentures 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 Debenture is convertible (in relation to other securities owned by the Holder
together with any Affiliates) and of which principal amount of this Debenture 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
Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal
amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with
this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such
Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to
verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4(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 Commission, as the case may be, (ii) a more recent public announcement by the Company,
or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Debenture, 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 Debenture
held by the Holder. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture
held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any increase
in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the
Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Debenture.

 

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Section
5. Certain Adjustments.

 

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

 

b)
Subsequent Equity Sales. If, at any time while this Debenture is outstanding, the Company or any Subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces
any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock at an effective price per share that is lower than the then Initial Conversion Price (such lower
price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Initial Conversion Price, such issuance shall be deemed to have occurred for less than the Initial
Conversion Price on such date of the Dilutive Issuance), then the Initial Conversion Price shall be reduced to equal the Base
Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding
the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If the Company enters into
a Variable Rate Transaction, 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. 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.

 

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

 

d)
Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) 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 Debenture, 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 Debenture (without regard to any limitations
on conversion 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, 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).

 

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e)
Fundamental Transaction. If, at any time while this Debenture 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, or (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 Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable
upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 4(d) on the conversion of this Debenture), 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 Debenture
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion
of this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of
Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following
such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is
not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under
this Debenture 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 of this Debenture, deliver to the Holder in exchange
for this Debenture a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Debenture 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 Debenture (without regard
to any limitations on the conversion of this Debenture) 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 Debenture 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 Debenture 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 Debenture and the other Transaction Documents with
the same effect as if such Successor Entity had been named as the Company herein.

 

    	19

    	 	 	 

    

 

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

 

g)
Notice to the Holder.

 

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

 

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

 

    	20

    	 	 	 

    

 

Section
6. Redemption.

 

a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the Exchange
Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice
is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem
some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional Redemption
Amount on the 5th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption
Date”, such 5 Trading Day period, the “Optional Redemption Period” and such redemption, the “Optional
Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Company may only
effect an Optional Redemption if there is no existing Event of Default and no existing event which, with the passage of time or
the giving of notice, would constitute an Event of Default, during the Optional Redemption period. If such condition shall cease
to be satisfied at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption
Notice by notice to the Company within 3 Trading Days after the first day on which any such condition has not been met in which
case the Optional Redemption Notice shall be null and void, ab initio. The Company covenants and agrees that it will honor
all Notices of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts owing
thereon are due and paid in full.

 

b)
Optional Redemption at Election of Holder. From the date hereof until such time as this Debenture is no longer outstanding,
if the Company raises cash proceeds from an equity or debt financing, the Company shall immediately provide notice of such financing
to the Holder, including the gross proceeds of such financing. Thereafter, the Holder may deliver a notice to the Company (a “Holder
Redemption Notice” and the date such notice is deemed delivered hereunder, the “Holder Redemption Notice Date”)
of its irrevocable election to require the Company to redeem some or all of the then outstanding principal amount of this Debenture
for cash in an amount up to the Holder Redemption Amount on the 5th Trading Day following the Holder Redemption Notice
Date (such date, the “Holder Redemption Date”, such 5 Trading Day period, the “Holder Redemption Period”
and such redemption, the “Holder Redemption”). The Holder Redemption Amount is payable in full on the Holder
Redemption Date. Notwithstanding the foregoing, the Company shall be permitted to raise an aggregate of $500,000 in one or more
equity or debt financings before the Holder shall be permitted to require the Company to redeem its Debenture in accordance with
this Section 6(b).

 

c)
Redemption Procedure. The payment of cash pursuant to an Optional Redemption or Holder Redemption shall be payable on the
Optional Redemption Date or Holder Redemption Date, as applicable. If any portion of the payment pursuant to an Optional Redemption
or Holder Redemption shall not be paid by the Company by the applicable due date, interest shall accrue thereon at an interest
rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law until such amount is paid in full. Notwithstanding
anything herein contained to the contrary, if any portion of the Optional Redemption Amount or Holder Redemption Amount remains
unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such
Optional Redemption or Holder Redemption, ab initio, and, with respect to the Company’s failure to honor the Optional
Redemption, the Company shall have no further right to exercise such Optional Redemption. The Holder may elect to convert the
outstanding principal amount of the Debenture pursuant to Section 4 prior to actual payment in cash for any redemption under this
Section 6 by the delivery of a Notice of Conversion to the Company.

 

    	21

    	 	 	 

    

 

Section
7. Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the Agent shall have otherwise
given prior written consent, in the event the Agent , the Company shall not, and shall not permit any of the Subsidiaries to,
directly or indirectly:

 

a)
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)
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 certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de  minimis number of shares
of its Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required
under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors
of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during
the term of this Debenture;

 

e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Debenture, other than regularly
scheduled principal and interest payments as such terms are in effect as of the Exchange Date (which shall include the debentures
issued to the Holder pursuant to a securities purchase agreement of even date herewith), provided that such payments shall not
be permitted if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

 

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

 

g)
issue any Common Stock or Common Stock Equivalents pursuant to Section 3(a)(9) (except such transaction exclusively with the original
purchasers of the securities being exchanged) or Section 3(a)(10) of the Securities Act;

 

h)
transfer any assets of the Company or any domestic Subsidiary to a third party (other than in the ordinary course of business);

 

i)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the Commission, 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);

 

j)
authorize, create, modify or amend any now-existing or future-created class of equity, including series of common stock other
than the Common Stock or preferred stock of the Company; or

 

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

 

    	22

    	 	 	 

    

 

Section
8. Events of Default.

 

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

 

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

 

ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Debenture, including, but not limited
to, any failure to conduct a Holder Redemption in accordance with Section 6 and any failure to remain current with respect to
Transfer Agent and legal fees relating to legal transfer and legend removal of the Securities (other than a breach by the Company
of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below),
which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure
sent by the Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such failure;

 

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

 

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

 

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

 

vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

    	23

    	 	 	 

    

 

vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days;

 

viii.
the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose
of all or in excess of 33% of its assets in one transaction or a series of related transactions (whether or not such sale would
constitute a Change of Control Transaction);

 

ix.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the 5th Trading Day after a
Conversion Date pursuant to Section 4(c);

 

x.
any Person shall breach any agreement delivered to the initial Holder pursuant to the Transaction Documents;

 

xi.
the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill” (i.e., the Depository Trust Company announces that it
will not accept the deposit of shares of Common Stock into its participants’ street name accounts);

 

xii.
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 such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days; or

 

xiii.
The Company shall fail to maintain sufficient reserves shares equal to or above the Required Minimum.

 

    	24

    	 	 	 

    

 

b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus
accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days
after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on
this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable
law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture 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 Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such
rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section
9. [RESERVED]

 

Section
10. Miscellaneous.

 

a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or sent
by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other
facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in
accordance with this Section 10(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile number or email address or address of the Holder appearing on the books
of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal
place of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto
prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

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

 

    	25

    	 	 	 

    

 

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

 

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

 

    	26

    	 	 	 

    

 

e)
Waiver; Amendment. Any waiver by the Company or the Holder of a breach of any provision of this Debenture 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 Debenture.
The failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture 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 Debenture on any other occasion. Any waiver by the Company or the Holder must be in writing. Any provision
of this Debenture may be waived by the Holder, which waiver shall be binding on all successors and assigns. Any provision of this
Debenture may be amended by a written instrument executed by the Company and the Holder, which amendment shall be binding on all
successors and assigns.

 

f)
Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture 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 this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this Debenture, 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.

 

    	27

    	 	 	 

    

 

g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture
shall be cumulative and in addition to all other remedies available under this Debenture 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 Debenture. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than
as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and
the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition
to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required. The Company shall provide all information and
documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with
the terms and conditions of this Debenture.

 

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

 

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

 

j)
Secured Obligation. The obligations of the Company under this Debenture are secured by all assets of the Company and each
Subsidiary pursuant to the Security Agreement, dated as of May 9, 2017 between the Company, the Subsidiaries of the Company and
the Secured Parties (as defined therein).

 

Section
11. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly
disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate
to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries.

 

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

 

(Signature
Pages Follow)

 

    	28

    	 	 	 

    

 

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

 

 

	 	Advanced
    medical Isotope Corporation 
	 	 
	 	By:	    
	 	Name:	Michael
    Korenko
	 	Title:	CEO

 

    	29

    	 	 	 

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Original Issue Discount Senior Secured Convertible Debenture due May
__, 2018 of Advanced Medical Isotope Corporation, 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.
If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Debenture, 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.

 

Date
of Conversion:

 

Conversion
Price:

 

Principal
Amount of Debenture to be Converted:

 

Number
of shares of Common Stock to be issued:

 

Remaining
Principal Balance Due After This Conversion:

 

Signature:

 

Name:

 

DWAC
Instructions:

 

Broker
No:

Account
No:

 

    	30SECURITIES
EXCHANGE AGREEMENT

 

This
Securities Exchange Agreement (this “Agreement”) is dated as of May ___, 2017, between Advanced Medical Isotope
Corporation, a Delaware corporation (the “Company”), and ________________ (“Holder”).

 

WHEREAS,
the Holder currently holds various convertible promissory notes of the Company (the “Notes”), issued on November
2, 2016 to various investors and assigned to the Holder pursuant to an assignment agreement, in the aggregate amount (including
principal and interest) of $__________ (the “Aggregate Outstanding Amount”);

 

WHEREAS,
the Notes are currently due and payable by the Company to the Holder; and

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933,
as amended (the “Securities Act”), the Company desires, in lieu of payment of the Notes, to issue a Debenture
(as defined below) and shares of Preferred Stock (as defined below) to the Holder in exchange for the Notes and the Holder desires,
in lieu of payment of the Notes, to receive the Debenture and shares of Preferred Stock in exchange for its Notes, as more fully
described in this Agreement (the “Exchange”);

 

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

 

ARTICLE
I.

DEFINITIONS

 

1.1       Definitions.
In addition to the terms defined elsewhere in this Agreement (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Purchase Agreement (as defined herein), and (b) the following terms have the meanings
set forth in this Section 1.1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors”means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Closing”
means the closing of the Exchange pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which this Agreement has been executed and delivered by the applicable parties thereto,
and all conditions precedent to the Holder’s and Company’s obligations to proceed with the Closing and Exchange, in
each case, have been satisfied or waived.

 

    	 	 	 

    	 

    

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Company
Counsel” means Disclosure Law Group, a Professional Corporation, with offices located at 600 West Broadway, Suite 700,
San Diego, California 92101.

 

“Debenture”
means the 7.5% Original Issue Discount Senior Secured Convertible Debenture due, subject to the terms therein, twelve (12) months
from its date of issuance, issued by the Company to the Holder hereunder pursuant to the Exchange in the principal amount of $_____________
(or 125% of the Aggregate Outstanding Amount).

 

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

 

“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“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.

 

“Preferred
Stock” shall mean the Series A Convertible Preferred Stock issuable pursuant to that certain Certificate of Designation.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of May __, 2017 among the Company and the Holders, as amended,
modified or supplemented from time to time in accordance with its terms, pursuant to which the Holder purchased a debenture and
shares of Series A convertible preferred stock.

 

    	 	2	 

    	 

    

 

“Required
Minimum” means, the product of 400% of (i) the maximum aggregate number of shares of Common Stock then issued or potentially
issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon conversion in full
of all Debentures and all shares of Preferred Stock (including Underlying Shares issuable as payment of interest on the Debentures),
ignoring any conversion or exercise limits set forth therein.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities”
means the Debentures, the shares of Preferred Stock and the Underlying Shares.

 

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

 

“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 NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Debentures, the Security Agreement, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Debenture and Preferred
Stock, including without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the
Debentures in accordance with the terms of the Debentures, in each case without respect to any limitation or restriction on the
conversion of the Debentures or the shares of Preferred Stock.

 

ARTICLE
II.

EXCHANGE

 

2.1       Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company shall issue to the Holder, in exchange for the Note, the Debenture and _________
shares of Preferred Stock. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Company Counsel or such other location as the parties shall mutually agree.

 

    	 	3	 

    	 

    

 

		2.2	Deliveries.

 

(a)       On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Holder the following:

 

		(i)	this
                                         Agreement duly executed by the Company;

 

(ii)       the
Debenture, registered in the name of the Holder;

 

(iii)       ________
shares of Preferred Stock convertible into _________ shares of Common Stock; and

 

(iv)       the
Security Agreement, duly executed by the Company, along with all of the Security Documents.

 

(b)       On
or prior to the Closing Date, the Holder shall deliver or cause to be delivered to the Company the following:

 

		(i)	this
                                         Agreement duly executed by the Holder; and

 

		(ii)	the
                                         Note.

 

		2.3	Closing
                                         Conditions.

 

(a)       The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)       the
accuracy in all material respects on the Closing Date of the representations and warranties of the Holder contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)       all
obligations, covenants and agreements of the Holder required to be performed at or prior to the Closing Date shall have been performed;
and

 

(iii)       the
delivery by the Holder of the items set forth in Section 2.2(b) of this Agreement.

 

(b)       The
respective obligations of the Holder hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)       the
accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);

 

(ii)       all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;

 

    	 	4	 

    	 

    

 

(iii)       the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)       the
Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date,
certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement
and the other Transaction Documents and the Exchange, certifying the current versions of the Certificate of Incorporation and
Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company; and

 

(v)       the
Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in this Section 2.3(b).

 

ARTICLE
III.

REPRESENTATIONS
AND WARRANTIES

 

3.1       Representations
and Warranties of the Company. Each of the representations and warranties (together with any related disclosure schedules
thereto) made by the Company to the Holder in the Purchase Agreement are hereby incorporated herein by reference (as though fully
restated herein) and are, as of the date of this Agreement, hereby made to, and in favor of, the Holder. In addition to the foregoing,
the Company represents and warrants to the Holder that:

 

(a)       Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection therewith. This Agreement has been duly executed by the Company and, when delivered
in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

    	 	5	 

    	 

    

 

(b)       Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in this Agreement. The Company has reserved from its duly authorized capital stock
a number of shares of Common Stock for issuance equal to at least the Required Minimum.

 

(c)       Holding
Period for Securities. Pursuant to Rule 144, the holding period of the Debenture and shares of Preferred Stock shall tack
back to November 2, 2016, the original issue date of the Notes. The Company agrees not to take a position contrary to this Section
3.1(c). Accordingly, upon conversion of the Debenture or the Preferred Stock, the Company agrees to take all actions, including,
without limitation, the issuance by its legal counsel of any necessary legal opinions, necessary to issue the Underlying Shares
without restriction and not containing any restrictive legend without the need for any action by the Holder.

 

(d)       General
Solicitation. The Company has not undertaken any advertisement, article, notice or other communication regarding the exchange
of Notes into the Debenture and shares of Preferred Stock or otherwise published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

3.2       Representations
and Warranties of the Holder. The Holder hereby represents and warrants as of the date hereof and as of the Closing Date to
the Company as follows:

 

(a)       Organization;
Authority. The execution and delivery of this Agreement and performance by the Holder of the transactions contemplated this
Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable,
on the part of the Holder. This Agreement has been duly executed by the Holder, and when delivered by the Holder in accordance
with the terms hereof, will constitute the valid and legally binding obligation of the Holder, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

(e)       General
Solicitation. Such Holder is not exchanging the Note as a result of any advertisement, article, notice or other communication
regarding the Debenture and shares of Preferred Stock published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

    	 	6	 

    	 

    

 

ARTICLE
IV.

OTHER
AGREEMENTS OF THE PARTIES

 

4.1       Transfer
Restrictions.

 

(a)       Provided
that the Company is then in compliance with the current public information requirements under Rule 144, the certificates evidencing
the Underlying Shares shall not contain any legend. Accordingly, upon execution of this Agreement, the Company shall issue irrevocable
instructions to the Transfer Agent and any subsequent transfer agent in a form acceptable to the Holder along with an opinion
of counsel on behalf of the Company and acceptable to the Transfer Agent (the “Irrevocable Transfer Agent Instructions”)
to issue certificates or credit shares to the applicable balance accounts at DTC, registered in the name of the Holder or its
respective nominee(s), for the Underlying Shares in such amounts as specified from time to time by the Holder to the Company upon
conversion of the Debentures or Preferred Stock (as the case may be). The Company represents, warrants and covenants that no instruction
other than the Irrevocable Transfer Agent Instructions referred to in this Section 4.1(a), and stop transfer instructions to give
effect to Section 4.1 hereof, will be given by the Company to its Transfer Agent with respect to the Underlying Shares, and that
the Underlying Shares shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent
provided in this Agreement and the other Transaction Documents. If, after the Effective Date, the Holder effects a sale, assignment
or transfer of the Securities, the Company shall permit the transfer and shall promptly instruct its Transfer Agent to issue one
or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified
by the Holder to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves the Underlying
Shares, the Transfer Agent shall issue such shares to such Holder, assignee or transferee (as the case may be) without any restrictive
legend in accordance with this Section 4.1(a). The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 4.1 will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 4.1, that the Holder shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without
any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable
Transfer Agent Instructions to the Transfer Agent immediately following execution of this Agreement. Any fees (with respect to
the Transfer Agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends
on any of the Securities shall be borne by the Company. In the event that, after the date hereof and through November 2, 2017
(but only until November 2, 2017, the “Public Information Period”), the Company is not in compliance with the
public information requirements of Rule 144 (“Public Information Failure”), the Holder shall return any Underlying
Shares then held by the Holder and a new certificate representing such Underlying Shares shall be issued to the Holder with the
following legend:

 

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“THIS
SECURITY HAS NOT 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 MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED
IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”

 

(b)       Upon
written notice from the Company during the Public Information Period that the public information requirements of Rule 144 are
no longer met, the Holder will cease sales of the Underlying Shares and promptly return the Underlying Shares to the Company to
be re-issued pursuant to the legending requirements above. Upon the Company becoming again meeting the public information requirements
under Rule 144, the Company agrees that it will, no later than two Trading Days following the delivery by the Holder to the Company
or the Company’s transfer agent of a certificate representing Underlying Shares re-issued pursuant to clause (a) above and
issued with a restrictive legend transmit or cause to be transmitted to the Holder the Underlying Shares, free from all restrictive
and other legends, by crediting the DTC account of the Holder’s prime broker as directed by the Holder. Notwithstanding
anything herein to the contrary, the Holder shall have the right to provide a legal opinion of counsel reasonably acceptable to
the Company of its own to the effect that the legends may be removed and/or the Underlying Shares may be resold pursuant to an
exemption from registration under the Securities Act.

 

(c)       During
any periods that the Underlying Shares are legended and may not be resold by the Holder because of a Public Information Failure
or the Company has not timely complied with the requirements to remove legends hereunder, in addition to any other available remedies
to the Holder, the Company shall pay to the Holder in cash as liquidated damages and not as a penalty, for each $1,000 of Underlying
Shares (based on the VWAP of the Common Stock on the date such Underlying Shares are submitted to the Transfer Agent) delivered
for removal of the restrictive legend, $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such
damages have begun to accrue) for each Trading Day until such certificate is delivered without a legend, which shall be payable
on the first day of each month until the Public Information Failure no longer exists.

 

4.2       Holder
Trading Limitation. Unless otherwise agreed by the Company and the Holder, the Holder agrees that for the period ending on
November 2, 2017 it shall not sell shares of Common Stock on any Trading Day equal to, or in excess of, the greater of (i) $2,063
(based on the VWAP of the Common Stock on the prior Trading Day) and (ii) 10.3125% of the trading volume of the Common Stock on
that same Trading Day. Notwithstanding the foregoing, this limitation shall not be in effect at any time during which there is
an “Event of Default” (as such term is defined in the Debenture) pursuant to the terms of the Debenture.

 

    	 	8	 

    	 

    

 

4.3       Indemnification
of Holder. Subject to the provisions of this Section 4.3, the Company will indemnify and hold the Holder and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of
a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Holder (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Holder Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any the
Holder Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
any Holder Party in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of the Holder Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such
action is based upon a breach of the Holder Party’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings the Holder Party may have with any such stockholder or any violations by such Holder Party
of state or federal securities laws or any conduct by the Holder Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Holder Party in respect of which indemnity may be sought pursuant
to this Agreement, the Holder Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Holder Party. Any Holder Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Holder Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of the Holder Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Holder Party
under this Agreement (y) for any settlement by the Holder Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Holder Party’s breach of any of the representations, warranties, covenants or agreements made by
the Holder Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.3 shall
be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received
or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any
Holder Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

 

    	 	9	 

    	 

    

 

4.4       Conversion
Procedures. The form of Notice of Conversion included in the Debenture and Preferred Stock set forth the totality of the procedures
required of the Holder in order to convert the Debentures or Preferred Stock. Without limiting the preceding sentences, no ink-original
Notice of Exercise or 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 in order to convert the Debenture or Preferred Stock. No additional
legal opinion, other information or instructions shall be required of the Holder to convert its Debenture or Preferred Stock.
The Company shall honor conversions of the Debenture and Preferred Stock and shall deliver Underlying Shares in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.

 

4.5       Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day immediately following
the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the
Exchange Act. From and after the filing of such press release, the Company represents to the Holder that it shall have publicly
disclosed all material, non-public information delivered to the Holder by the Company, or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon
the filing of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company or any of its respective officers, directors, agents, employees
or Affiliates on the one hand, and the Holder or any of its Affiliates on the other hand, shall terminate. The Company and Holder
shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Holder shall issue any such press release nor otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of the Holder, or without the prior consent of the Holder, with respect to any
press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Holder, or include the name
of the Holder in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent
of the Holder, except: (a) as required by federal securities law in connection with the filing of final Transaction Documents
with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Holders with prior notice of such disclosure permitted under this clause (b).

 

4.6       Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
the Holder is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted
by the Company, or that the Holder could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Holder.

 

    	 	10	 

    	 

    

 

4.7       Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.5, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide the Holder or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto the Holder shall have consented to the receipt of
such information and agreed with the Company to keep such information confidential. The Company understands and confirms that
the Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that
the Company delivers any material, non-public information to the Holder without the Holder’s consent, the Company hereby
covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its future subsidiaries,
or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, and of its future subsidiaries
or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Holder shall remain subject to applicable law. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any of its future
subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
The Company understands and confirms that the Holder shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.

 

4.8       Reservation
and Listing of Securities.

 

(a)       The
Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.

 

(b)       If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.

 

(c)       The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Holders evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.

 

    	 	11	 

    	 

    

 

4.9       Subsequent
Equity Sales.

 

(a)       From
the date hereof until 9 months following the Closing Date, the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company (or any direct or indirect subsidiaries the Company may obtain or form in the
future) of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.
“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, additional shares of Common
Stock either (A) 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 (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.
Any 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.

 

(b)       Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock, Restricted Stock
Units (RSUs) or options to eligible grantees under 2015 Omnibus Incentive and Securities Plan, provided that issuances under this
clause (a) shall not exceed an aggregate of twenty percent (20%) of the total outstanding shares of Common Stock on an as converted
primary basis as of the date hereof in any 12 month period, (b) securities upon the exercise or exchange of or conversion of any
securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this
Agreement 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, (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which
the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities, and (d) shares of Common Stock issued in lieu of cash payment for services provided by service providers.

 

    	 	12	 

    	 

    

 

4.10       Most
Favored Nation Provision.

 

(a)       From
the date hereof until the date when the Holder no longer holds Debentures originally purchased by the Holder hereunder, if the
Company effects a Subsequent Financing, each Holder may elect, in its sole discretion, to exchange all or some of the Debentures
then held by the Holder for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis based on the outstanding
principal amount of such Debentures, along with any accrued but unpaid interest (including guaranteed interest in the first year),
liquidated damages and other amounts owing thereon, and the effective price at which such securities were sold in such Subsequent
Financing; provided, however, that this Section 4.10 shall not apply with respect to an Exempt Issuance. The Company
shall provide each Holder with notice of any such Subsequent Financing in the manner set forth below. “Subsequent Financing”
shall mean any issuance by the Company (or any direct or indirect subsidiaries the Company may obtain or form in the future) of
Common Stock or Common Stock Equivalents or indebtedness (or a combination of units thereof).

 

(b)       At
least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to the Holder a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Holder
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of the Holder, and only upon a request by the Holder, for a Subsequent Financing Notice, the Company shall promptly,
but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to the Holder. The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended
to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and
shall include a term sheet or similar document relating thereto as an attachment. If the Holder wishes to exchange any part of
the Debenture pursuant to this Section 4.10, the Holder must provide written notice to the Company by not later than 5:30 p.m.
(New York City time) on the fifth (5th) Trading Day after the Holder has received the Pre-Notice that the Holder desires to exchange
it Debenture and the amount of the Debenture that the Holder desires to exchange. If the Company receives no such notice from
the Holder as of such fifth (5th) Trading Day, the Holder shall be deemed to have notified the Company that it does not elect
to exchange its Debenture. Notwithstanding anything to the contrary in this Section 4.10 and unless otherwise agreed to by the
Holder, the Company shall either confirm in writing to the Holder that the transaction with respect to the Subsequent Financing
has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case
in such a manner such that the Holder will not be in possession of any material, non-public information, by the tenth (10th)
Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public
disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment
of such transaction has been received by the Holder, such transaction shall be deemed to have been abandoned and the Holder shall
not be deemed to be in possession of any material, non-public information with respect to the Company (or any direct or indirect
subsidiaries the Company may obtain or form in the future).

 

4.12       Capital
Changes. Until the date that the Debentures are no longer outstanding, other than in connection with a listing of the Common
Stock on a national securities exchange, the Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without the prior written consent of the Holder or as otherwise provided in the Transaction Documents.

 

    	 	13	 

    	 

    

 

4.13       Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against the Holder and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.

 

4.14       Furnishing
of Information. Until the earliest of the time that no Holder owns Securities, the Company covenants to maintain the registration
of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

4.15       Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval
prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

ARTICLE
V.

MISCELLANEOUS

 

5.1       Termination.
This Agreement may be terminated by any Holder, as to the Holder’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Holder, by written notice to the other parties, if the Closing has not been
consummated on or before May __, 2017; provided, however, that such termination will not affect the right of any
party to sue for any breach by the other party (or parties).

 

5.2       Fees
and Expenses. The Company shall be responsible for all reasonable fees and expenses of the Purchaser, including, but not limited
to, legal and due diligence fees and expenses. Except as expressly set forth in the Transaction Documents to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion or exercise notice delivered by the Purchaser), stamp taxes and other taxes
and duties levied in connection with the delivery of any Securities to the Purchaser.

 

    	 	14	 

    	 

    

 

5.3       Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, and understandings, oral
or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4       Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on
a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company or any direct or indirect subsidiaries the Company
may obtain or form in the future, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K.

 

5.5       Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchaser. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with accordance
with this Section 5.5 shall be binding upon the Purchaser and holder of Securities and the Company.

 

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

 

5.7       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchaser.”

 

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5.8       Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action
or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party hereto shall
commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.3, 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.

 

5.10       Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11       Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

5.12       Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

    	 	16	 

    	 

    

 

5.13       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the
case of a rescission of a conversion of a Debenture or Preferred Stock, the Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded conversion or exercise notice concurrently with the return to the Purchaser of the
aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such
shares pursuant to such Purchaser’s Preferred Stock (including, issuance of a replacement certificate evidencing such restored
right).

 

5.14       Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.

 

5.15       Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents
and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy
at law would be adequate

 

5.16       Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any Action or Proceeding that may be brought by the Purchaser in order to enforce
any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at the Purchaser’s election.

 

    	 	17	 

    	 

    

 

5.18       Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.

 

5.19       Saturdays,
Sundays, Holidays, etc.If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

5.20       Construction.
The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise this Agreement
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments hereto. In addition, each and every reference
to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date
of this Agreement.

 

5.21       WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 

 

(Signature
Pages Follow)

 

    	 	18	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Securities Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	advanced
    medical isotope corporation	Address
    for Notice:
	 	 	 
	By:	 	
	Name:
    	Michael
    Korenko	719
    Jadwin Avenue, Richland, WA 99352
	Title:	CEO	MKorenko@IsotopeWorld.com
	 	 	Bjolliff@IsotopeWorld.com
	With
    a copy to (which shall not constitute notice):	509-736-4000
    office

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR HOLDER FOLLOWS]

 

    	 	19	 

    	 

    

 

[HOLDER
SIGNATURE PAGES TO ADMD SECURITIES EXCHANGE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned have caused this Securities Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

Name
of Holder: __________________

 

Signature
of Authorized Signatory of Holder: __________________________

 

Name
of Authorized Signatory: ____________________________________

 

Title
of Authorized Signatory: _____________________________________

 

Email
Address of Authorized Signatory: ___________________________________________

 

Facsimile
Number of Authorized Signatory: _________________________________________

 

Address
for Notice of Holder:

 

[SIGNATURE
PAGES CONTINUE]

 

    	 	20

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