Document:

EX-4.2

 Exhibit 4.2 
  

 
 ON SEMICONDUCTOR CORPORATION 

and 
 THE GUARANTORS NAMED HEREIN

  
  

2.625% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2026, SERIES B 
  

 
 THIRD SUPPLEMENTAL INDENTURE 

AND AMENDMENT – GUARANTEE 

DATED AS OF November 21, 2016 
  

 
 DEUTSCHE BANK TRUST COMPANIES
AMERICAS, 
 Trustee 
  

 
  

 
  

 

 This THIRD SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of November 21, 2016, is
among ON Semiconductor Corporation, a Delaware corporation (the “Company”), each of the parties identified under the caption “Guarantors” on the signature page hereto (the “Guarantors”) and Deutsche Bank Trust Company
Americas, a New York banking corporation, as Trustee. 
 RECITALS 

WHEREAS, the Company, the initial Guarantors and the Trustee entered into an Indenture, dated as of December 15, 2011 (the
“Indenture”), pursuant to which the Company has issued $198,552,000 in principal amount of 2.265% Convertible Senior Subordinated Notes due 2026, Series B (the “Notes”); and 

WHEREAS, Section 11.01(e) of the Indenture provides that the Company and the Trustee may amend or supplement the Indenture in order to add
additional Note Guarantees with respect to the Notes, without the consent of the Noteholders; and 
 WHEREAS, all acts and things prescribed
by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, of the Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally
binding on the Company, the Guarantors and the Trustee, in accordance with its terms, have been duly done and performed; 
 NOW, THEREFORE,
to comply with the provisions of the Indenture and in consideration of the above premises, the Company, the Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Noteholders as follows: 

ARTICLE 1 
 Section 1.01 This
Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes. 

Section 1.02 This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee. 
 ARTICLE 2 

From this date, by executing this Supplemental Indenture, the Guarantors whose signatures appear below shall be Guarantors with respect to the
Notes on terms contemplated by and subject to the provisions of Article 17 of the Indenture. 
 ARTICLE 3 

Section 3.01 Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis)
and shall remain in full force and effect in accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture. 

Section 3.02 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to
be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those
terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. 

 Section 3.03 THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. 
 Section 3.04 The parties may sign any number of copies of this Supplemental Indenture. Each signed
copy shall be an original, but all of such executed copies together shall represent the same agreement. 
 Section 3.05. The recitals
contained herein shall be taken as the statements of each of the Company and the undersigned Guarantors, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this
Supplemental Indenture. 
 [NEXT PAGE IS SIGNATURE PAGE] 
  

 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the
date first written above. 
  

			
	ON SEMICONDUCTOR CORPORATION
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Executive Vice President, Chief Financial Officer and Treasurer
	
	ON SEMICONDUCTOR (CHINA) HOLDING, LLC
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	FAIRCHILD SEMICONDUCTOR CORPORATION
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	FAIRCHILD SEMICONDUCTOR CORPORATION OF CALIFORNIA
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer

  
 Signature page to
Third Supplemental Indenture to 2.625% Notes Indenture 

 
			
	FAIRCHILD SEMICONDUCTOR WEST CORPORATION
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	GIANT HOLDINGS, INC.
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	KOTA MICROCIRCUITS, INC.
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	SILICON PATENT HOLDINGS
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	GIANT SEMICONDUCTOR CORPORATION
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer

  
 Signature page to
Third Supplemental Indenture to 2.625% Notes Indenture 

 
			
	MICRO-OHM CORPORATION:
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	FAIRCHILD ENERGY, LLC:
		
	By	 	 /s/ Bernard Gutmann

	Name:	 	Bernard Gutmann
	Title:	 	Chief Financial Officer, Senior Vice-President and Treasurer
	
	DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE:
		
	By	 	 /s/ Irina Golovashchuk

	Name:	 	Irina Golovashchuk
	Title:	 	Vice President
		
	By	 	 /s/ Kathryn Fischer

	Name:	 	Kathryn Fischer
	Title:	 	Assistant Vice President

  
 Signature page to
Third Supplemental Indenture to 2.625% Notes IndentureExhibit 10.1 

 

NEITHER
THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount: $__________	Issue
    Date: November _, 2016 
	Purchase
    Price: $_________	 
	Original
    Issue Discount: $__________	 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, ADVANCED MEDICAL ISOTOPE CORP., a Delaware corporation (hereinafter called the
“Borrower”), hereby promises to pay to the order of______________, a _________________, or registered
assigns (the “Holder”) the principal sum of up to $_________ (the “Principal Amount”), together with
interest at the rate of ten percent (10%) per annum (with the initial 6 months of interest being guaranteed upon the Issue
Date), at maturity or upon acceleration or otherwise, as set forth herein (the “Note”). The consideration to the
Borrower for this Note is $________ (the “Consideration”). The maturity date shall be six (6) months from the
Issue Date (the “Maturity Date”), and is the date upon which the principal sum, as well as any accrued and unpaid
interest and other fees, shall be due and payable. The Maturity Date shall be extended to seven (7) months from the Issue
Date in the event that the Borrower pays a penalty equal to 5% of the total outstanding principal and accrued interest under
the Note (as calculated on the date that Borrower pays such penalty) (the “First Extension Payment”) to Holder,
provided that such payment shall be made prior to the six month anniversary of the Issue Date. The Maturity Date shall be
extended to eight (8) months from the Issue Date in the event that the Borrower pays the First Extension Payment within the
allocated timeframe and an additional penalty equal to 5% of the total outstanding principal and accrued interest under the
Note (as calculated on the date that Borrower pays such penalty) to Holder, provided that such payment shall be made prior to
the seven month anniversary of the Issue Date. This Note may not be prepaid in whole or in part except as otherwise
explicitly set forth herein. Any amount of principal or interest on this Note, which is not paid by the Maturity Date, shall
bear interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid
(“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be
computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent
not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms
hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the
Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not
the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for
purposes of determining the amount of interest due on such date. As used in this Note, the term “business day”
shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are
authorized or required by law or executive order to remain closed. Notwithstanding anything herein to the contrary, in the
event the Company has not filed a registration statement on Form S-1 for the primary sale of the Company’s common stock
by the four (4) month anniversary of the closing of the Note, the Company shall not have the ability to extend the maturity
date of the Note as provided herein and the Note will automatically be deemed in default on the six (6) month anniversary of
the closing of the Note.

 

    	 	 	 

     

    

 

This
Note carries a prorated original issue discount of $________ (the “OID”), to cover Holder’s accounting fees,
due diligence fees, monitoring, and/or other non-legal transactional costs incurred in connection with the purchase and sale of
the Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $________, computed
as follows: the Principal Amount less the OID.

 

This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The
following additional terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1
Conversion Right. The Holder shall have the right at any time to convert all or any part of the outstanding and unpaid
principal amount and accrued and unpaid interest of this Note into fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common
Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of
this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security
of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number
of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of
this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations
on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the
Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as
determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon
each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice
of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice)
to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term
“Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this
Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest,
if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option,
any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

    	 	2	 

     

    

 

1.2
Conversion Price.

 

(a)
Calculation of Conversion Price.The Conversion Price shall equal$ 0.20 per share, provided, however, that immediately
upon the occurrence of an Event of Default under the Note, the Conversion Price shall automatically equal the Variable Conversion
Price (as defined herein) (subject, in each case, to equitable adjustments for stock splits, stock dividends or rights offerings
by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events)(also subject to adjustment as further described
herein). The “Variable Conversion Price” shall mean the lesser of (i) $0.20 or (ii) 60% multiplied by the Market Price
(as defined herein). “Market Price” means the lowest one (1) Trading Prices (as defined below) for the Common Stock
during the thirty (30) Trading Day period ending on the last complete Trading Day prior to the Conversion Date. “Trading
Prices” means, for any security as of any date, the lowest VWAP of the Common Stock on the Over-the-Counter Pink Marketplace,
or applicable trading market (the “OTC PINK”) as reported by a reliable reporting service (“Reporting Service”)
designated by the Holder (i.e. Bloomberg) or, if the OTC PINK is not the principal trading market for such security, on the principal
securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading price of such
security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such security that
are quoted on the OTC Markets. If the Trading Prices cannot be calculated for such security on such date in the manner provided
above, the Trading Prices shall be the fair market value as mutually determined by the Borrower and the holders of a majority
in interest of the Notes being converted for which the calculation of the Trading Prices are required in order to determine the
Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period
on the OTC PINK, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
Upon the first occurrence of an Event of Default under this Note, the 60% multipliers contained in the Variable Conversion Price
calculation shall be automatically adjusted to 45% (resulting in a discount of 55%).

 

Each
time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd party
has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise) at a discount
to market greater than the Variable Conversion Price in effect at that time (prior to all other applicable adjustments in the
Note), then the Variable Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable
adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, the Borrower enters
into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory
note), or Section 3(a)(10) transaction, in which any 3rd party has a look back period greater than the look back period in effect
under the Note at that time (currently a thirty (30) Trading Day look back period as described in this Section 1.2(a) applies),
then the Holder’s look back period shall automatically be adjusted to such greater number of days until this Note is no
longer outstanding. The Borrower shall give written notice to the Holder, with the adjusted Variable Conversion Price and/or adjusted
look back period (each adjustment that is applicable due to the triggering event), within one (1) business day of an event that
requires any adjustment described in the two immediately preceding sentences.

 

    	 	3	 

     

    

 

1.3
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note. The Borrower is required at all times to have authorized and reserved five
times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes
in effect from time to time)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance
with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital
structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current
Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number
of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower
(i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon
conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents
who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common
Stock in accordance with the terms and conditions of this Note.

 

If,
at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of
the Note.

 

1.4
Method of Conversion.

 

(a)
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other
reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless
the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute
or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this
Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and
deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable
transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following
conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be
less than the amount stated on the face hereof.

 

    	 	4	 

     

    

 

(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other
than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such
shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount
of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2) business days after such receipt (the “Deadline”)
(and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with
the terms hereof.

 

(e)
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall
be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the
amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith
terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such
conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue
and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by
the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower
to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by
the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation
of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall
be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time,
on such date.

 

    	 	5	 

     

    

 

(f)
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained
in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with
DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

 

(g)
Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon
conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $1,000 per day in cash, for each
day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower
by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall
be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a
valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right
are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1.4(g) are justified.

 

1.5
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred
unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer
agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act
(or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in
Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who
is an Accredited Investor. Except as otherwise provided (and subject to the removal provisions set forth below), until such time
as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately
sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective
registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

    	 	6	 

     

    

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be accepted by the Borrower so that the sale or transfer is effected or
(ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does
not accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section
3.2 of the Note.

 

1.6
Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market
on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant
to this Note more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal
United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall
be 4.99% of the total shares currently outstanding, subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof.
Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the
rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction
over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum
Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3
of the Note.

 

    	 	7	 

     

    

 

1.7
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a
Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect
to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance
with Section 1.3) for the Borrower’s failure to convert this Note.

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent

(a) pay,
declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares
of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b)
directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except
for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested
directors.

 

2.2
Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property
or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such shares.

 

    	 	8	 

     

    

 

ARTICLE
III. EVENTS OF DEFAULT

 

If
any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise, and such breach continues for a period of five (5) days.

 

3.2
Conversion and the Shares. The Borrower fails to reserve a sufficient amount of shares of common stock as required under
the terms of this Note (including Section 1.3 of this Note)(and such breach continues for a period of five (5) days), fails to
issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so)
upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer
or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower
directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not
to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat
that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or
any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business
days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its
obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered
or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances
any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower
to the Holder within five (5) business days of a demand from the Holder, either in cash or as an addition to the balance of the
Note, and such choice of payment method is at the discretion of the Borrower.

 

3.3
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this
Note and any collateral documents and such breach continues for a period of ten (10) days after written notice thereof to the
Borrower from the Holder.

 

    	 	9	 

     

    

 

3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith, shall be false or misleading in any material
respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights
of the Holder with respect to this Note.

 

3.5
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business,
or such a receiver or trustee shall otherwise be appointed.

 

3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed
for a period of thirty (30) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower.

 

3.8
Delisting of Common Stock. The Borrower shall fail to maintain the listing or quotation of the Common Stock on the OTC
PINK or an equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock Exchange,
or the NYSE MKT.

 

3.9
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange
Act, and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.11
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to
pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as
a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

    	 	10	 

     

    

 

3.12
Financial Statement Restatement. The Borrower replaces its auditor, or any restatement of any financial statements filed
by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is
no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted
a material adverse effect on the rights of the Holder with respect to this Note.

 

3.13
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.

 

3.14
Replacement of Transfer Agent. In the event that the Borrower replaces its transfer agent, and the Borrower fails to provide
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions (including but not limited
to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent
to Borrower and the Borrower.

 

3.15
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the other equity or debt securities
of the Borrower, including but not limited to all convertible promissory notes, currently issued, or hereafter issued, by the
Borrower, to the Holder or any other 3rd party (the “Other Agreements”), after the passage of all applicable notice
and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note, in which event the Holder
shall be entitled to apply all rights and remedies of the Holder under the terms of this Note by reason of a default under said
Other Agreement or hereunder.

 

3.16
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose,
or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material
non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by
Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date.

 

3.17
No bid. At any time while this Note is outstanding, the lowest Trading Prices on the OTC PINK or other applicable principal
trading market for the Common Stock is equal to or less than $0.0001.

 

3.18
Failure to prepay upon Qualified Financing. If the Borrower fails to immediately prepay this Note in its entirety within
three (3) business days of the Borrower’s closing of any financing of $1,500,000 or more.

 

    	 	11	 

     

    

 

3.19
Failure to timely file an S-1 registration statement for the primary sale of Company common stock. If the Borrower fails
to file a S-1 registration statement for the primary sale of the Company’s common stock by the four (4) month anniversary
of the closing of the Note.

 

Upon
the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to
pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum
(as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE
SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation
of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due on this Note or upon acceleration), 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3,10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17,
and/or 3.18 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”),
and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the
principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
150% multiplied by the then outstanding entire balance of the Note (including principal and accrued and unpaid interest)
plus Default Interest, if any, plus any amounts owed to the Holder pursuant to Sections 1.4(g) hereof (collectively,
in the aggregate of all of the above, the “Default Sum”), and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all
costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all
other rights and remedies available at law or in equity.

 

If
the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable,
then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that
there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then
in effect, subject to issuance in tranches due to the beneficial ownership limitations contained in this Note.

 

    	 	12	 

     

    

 

ARTICLE
IV. MISCELLANEOUS

 

4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, facsimile, or electronic mail addressed as set forth below or to such other address
as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery, upon electronic mail delivery, or delivery by facsimile,
with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

 

If
to the Borrower, to:

ADVANCED
MEDICAL ISOTOPE CORP.

1021
N. Kellogg Street Kennewick, WA 99336

e-mail:
AMICinvestor@isotopeworld.com

 

If
to the Holder:

INSERT
NAME

 

4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and
the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

    	 	13	 

     

    

 

4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined
in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.

 

4.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

4.6
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state and/or federal courts of New York, NY. The parties to this Note hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing
party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any
provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably
waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document 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.

 

4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding
principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest
on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty
and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the
sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant
to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate
to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares
of Common Stock.

 

    	 	14	 

     

    

 

4.8
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that
the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

4.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay any amount outstanding
under this Note, on or before the Maturity Date of this Note, by making a payment to the Holder of an amount in cash equal to
125% multiplied the amount that the Borrower is prepaying. Notwithstanding anything to the contrary contained in this Note, the
Borrower may prepay any amount outstanding under this Note, after the Maturity Date of this Note, by making a payment to the Holder
of an amount in cash equal to 140% multiplied the amount that the Borrower is prepaying. In order to prepay this Note, the Borrower
shall provide notice to the Holder five (5) business days prior to such respective prepayment date, and the Holder must receive
such prepayment on or before the 10th business day after the Holder’s receipt of the respective prepayment notice (the “Prepayment
Period”). The Holder may convert the Note in whole or in part at any time during the Prepayment Period. If the Borrower
fails to pay the applicable prepayment amount within any applicable Prepayment Period, then it shall automatically be deemed an
Event of Default under Sections 3.3 and 3.4 of this Note.

 

4.10
Section 3(a)(10) Transactions. If at any time while this Note is outstanding, the Borrower enters into a transaction structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a “3(a)(10)
Transaction”), then a liquidated damages charge of 25% of the outstanding principal balance of this Note at that time, will
be assessed and will become immediately due and payable to the Holder, either in the form of cash payment or as an addition to
the balance of the Note, as determined by mutual agreement of the Borrower and Holder.

 

4.11
Intentionally Omitted.

 

    	 	15	 

     

    

 

4.12
Right of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or
financing from any 3rd party, that the Borrower intends to act upon, then the Borrower must first offer such opportunity to the
Holder to provide such capital or financing to the Borrower on the same terms as each respective 3rd party’s terms. Should
the Holder be unwilling or unable to provide such capital or financing to the Borrower within 10 trading days from Holder’s
receipt of written notice of the offer (the “Offer Notice”) from the Borrower, then the Borrower may obtain such capital
or financing from that respective 3rd party upon the exact same terms and conditions offered by the Borrower to the Holder, which
transaction must be completed within 30 days after the date of the Offer Notice. If the Borrower does not receive the capital
or financing from the respective 3rd party within 30 days after the date of the respective Offer Notice, then the Borrower must
again offer the capital or financing opportunity to the Holder as described above, and the process detailed above shall be repeated.
The Offer Notice must be sent via electronic email to:

 

4.13
Trading Limitation. Unless an Event of Default occurs under the Note, from the Issue Date and until the one year anniversary
after the Issue Date, the Holder shall only be permitted to sell, per Trading Day, up to the greater of (i) $1,000 or (ii) 6%
multiplied by the Aggregate Amount (as defined below) of the Common Stock. The Aggregate Amount shall mean the total number shares
of common stock of the Borrower traded during the respective Trading Day multiplied by the highest traded price for the Common
Stock during the respective Trading Day.

 

4.14
Purchase Price Consideration upon Public Offering or Private Placement. The Holder may, in its sole discretion, elect to
apply all, or any portion, of the outstanding principal and accrued interest due under this Note, as purchase consideration in
any future public offering or private placement of equity securities of the Borrower (each a “Future Transaction”).
The dollar amount of purchasing power in such private placement or public offering shall be equal to the portion of the outstanding
principal and accrued interest that Holder elects to apply multiplied by 1.25. The Borrower shall give written notice to Holder
as soon as practicable, but in no event less than fifteen (15) days before the anticipated closing date of such Future Transaction.

 

[Signature
page to follow]

 

    	 	16	 

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this November __, 2016.

 

ADVANCED
MEDICAL ISOTOPE CORP.

 

	By:	 	 
	Name:	James
    C. Katzaroff	 
	Title:	 Chief
    Executive Officer	 

 

    	 	17	 

     

    

 

EXHIBIT
A — NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common
Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of ADVANCED MEDICAL
ISOTOPE CORP., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of the
Borrower dated as of November 2, 2016 (the “Note”), as of the date written below. No fee will be charged to the Holder
for any conversion, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	[
    ] 	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the
    undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name
    of DTC Prime Broker: Account Number:
	 	 	 
	 	[
    ] 	The
    undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
    set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately
    below or, if additional space is necessary, on an attachment hereto
	 	 	 
	 	 	INSERT
    INVESTOR NAME

 

	 	Date
    of Conversion:	 	 
	 	Applicable
    Conversion Price:	$	 
	 	Number
    of Shares of Common Stock to be Issued	 	 
	 	Pursuant
    to Conversion of the Notes:	 	 
	 	Amount
    of Principal Balance Due remaining	 	 
	 	Under
    the Note after this conversion:	 	 

 

	By:	 	 
	Name:	 	 
	Title:	 	 
	Date:
    	 	 

  

    	 	18

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