Form 8-K
8-K — FARADAY FUTURE INTELLIGENT ELECTRIC INC.
Accession: 0001213900-26-092678
Filed: 2026-08-21
Period: 2026-08-20
CIK: 0001805521
SIC: 3711 (MOTOR VEHICLES & PASSENGER CAR BODIES)
Item: Entry into a Material Definitive Agreement
Item: Financial Statements and Exhibits
Documents
8-K — ea0302221-8k_faraday.htm (Primary)
EX-4.1 — FORM OF AMENDED AND RESTATED UNSECURED NOTE (ea030222101ex4-1.htm)
EX-10.1 — FORM OF AMENDMENT AGREEMENT (ea030222101ex10-1.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K — CURRENT REPORT
8-K (Primary)
Filename: ea0302221-8k_faraday.htm · Sequence: 1
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2026-08-20
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): August 20, 2026
Faraday
Future Intelligent Electric Inc.
(Exact
name of registrant as specified in its charter)
Delaware
001-39395
84-4720320
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
1990
E. Grand Avenue
El
Segundo, CA
90245
(Address of principal executive
offices)
(Zip Code)
(424)
276-7616
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Class A common stock, par
value $0.0001 per share
FFAI
The Nasdaq Stock Market
LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
As
previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 24, 2025 (the “Original
Report”), on March 21, 2025, Faraday Future Intelligent Electric Inc., a corporation incorporated under the laws of the State of
Delaware (the “Company”) entered into a Securities Purchase Agreement (the “March SPA”) with certain investors
party thereto (collectively, the “Investors”), pursuant to which the Company agreed to sell, and the Investors agreed to
purchase, in four closings, for an aggregate purchase price of $41 million, of which approximately $39.5 million would be paid in cash
and approximately $1.5 million would be converted from a previous loan to the Company, (i) certain senior unsecured convertible
notes (the “Unsecured Notes”), (ii) common stock purchase warrants (the “Common Warrants”) to purchase shares
of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), (iii) shares of Series B Preferred
Stock, par value $0.0001 per share (the “Series B Preferred Stock”); and (iv) incremental note purchase warrants (the “Incremental
Warrants”), exercisable for (A) Unsecured Notes, (B) Common Warrants and (C) shares of Series B Preferred Stock. The Original Report
is incorporated herein by reference. Capitalized terms not defined herein shall have the meaning set forth in the Original Report. The
First Closing occurred on April 4, 2025, the Second Closing occurred on May 28, 2025, the Third Closing occurred on July 11, 2025 (each,
a “Completed Closing” and, collectively, the “Completed Closings”) and the Fourth Closing has yet to occur.
On August 20, 2026 (the “Signing Date”), the Company and
the Investors entered an Amendment Agreement (the “Amendment Agreement”) to amend (i) the March SPA to split the Fourth Closing
into two separate closings, with the form of Unsecured Notes to be issued therein amended; (ii) the March SPA to eliminate the Company’s
obligation to issue, and the Investors’ right to receive, Common Warrants and Incremental Warrants at the remaining closings; (iii)
the preamble of the outstanding Incremental Warrants issued by the Company to the Investors at each Completed Closing, to eliminate the
Company’s obligation to issue, and such Investors’ right to receive, Common Warrants upon exercise of such Incremental Warrants;
and (iv) the Commitment Annex to reallocate a portion of the remaining Note Commitment Amount for one Investor to another.
The
terms of the amended and restated Unsecured Notes (the “A&R Notes”) remain substantially similar to the form of Unsecured
Notes filed as Exhibit 4.3 to the Original Report, except that the conversion price will only be adjusted upon (i) the final closing,
to 100% of the Closing Bid Price (as defined in the A&R Notes) on the trading day immediately prior to the final closing; (ii) the
receipt of Stockholder Approval (as defined in the A&R Purchase Agreement), to 100% of the Closing Bid Price on the trading day immediately
prior to the receipt of Stockholder Approval; and (iii) the effectiveness date of the Registration Statement (as defined in the A&R
Notes), to 100% of the Closing Bid Price on the trading day immediately prior to the effectiveness date of the Registration Statement.
The
foregoing summary of the Amendment Agreement and A&R Notes do not purport to be complete and is subject to, and are qualified in
its entirety by, the full text of the Amendment Agreement, which is filed as Exhibit 10.1 and Exhibit 4.1 to this Current Report on Form
8-K and are incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits
(d)
Exhibits.
Exhibit
No.
Description
4.1
Form of Amended and Restated Unsecured Note
10.1
Form of Amendment
Agreement.
104
Cover Page Interactive
Data File (embedded within the Inline XBRL document)
1
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
FARADAY FUTURE INTELLIGENT ELECTRIC
INC.
Date: August 21, 2026
By:
/s/
Koti Meka
Name:
Koti Meka
Title:
Chief Financial Officer
2
EX-4.1 — FORM OF AMENDED AND RESTATED UNSECURED NOTE
EX-4.1
Filename: ea030222101ex4-1.htm · Sequence: 2
Exhibit 4.1
FORM
OF SENIOR UNSECURED CONVERTIBLE NOTE
NEITHER
THE ISSUANCE AND SALE OF THE SECURITY REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THIS SECURITY 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 TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE 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. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE,
INCLUDING SECTIONS 3(c)(iii) AND 19(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.
Faraday
Future Intelligent Electric, Inc.
Senior
Unsecured Convertible Note
Issuance Date: [●]
Original Principal Amount: U.S. $[●]
FOR
VALUE RECEIVED, Faraday Future Intelligent Electric, Inc., a Delaware corporation (the “Company”), hereby promises
to pay to the order of [PURCHASER] or its registered assigns (“Holder”) the amount set forth above as the Original
Principal Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from
the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).
This Unsecured Convertible Note (including all Unsecured Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”,
together with the Other Notes (as defined below), collectively, the “Notes”) was issued pursuant to the Securities
Purchase Agreement, dated as of March 21, 2025, as amended from time to time, (the “Subscription Date”), by and among the Company and the purchasers
(the “Buyers”) referred to therein (as amended from time to time, the “Securities Purchase Agreement”).
As used herein, the term “Other Notes” shall mean the Unsecured Convertible Notes other than this Note issued to a
Purchaser pursuant to the Securities Purchase Agreement. Certain capitalized terms used herein are defined in Section 32.
1. PAYMENTS
OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal,
accrued and unpaid Interest on such Principal and Interest and accrued and unpaid Late Charges (as defined in Section 25(c)). Other than
as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal and accrued, unpaid Interest
or accrued and unpaid Late Charges on Principal and Interest, if any.
2. INTEREST;
INTEREST RATE.
(a) Interest
on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months
and shall be payable on a Conversion Date with respect to the Conversion Amount being converted on such Conversion Date, with any remaining
accrued and unpaid Interest payable on the Maturity Date (each, an “Interest Date”). Interest shall be payable on
each Interest Date, to the record holder of this Note on the applicable Interest Date, in shares of Common Stock (“Interest
Shares”) so long as there has been no Equity Conditions Failure; provided however, that the Company may, at its option following
notice to the Holder, pay Interest on any Interest Date in cash (“Cash Interest”) or in a combination of Cash Interest
and Interest Shares. The Company shall deliver a written notice (each, an “Interest Election Notice”) to each holder
of the Notes on or prior to the Trading Day immediately prior to such applicable Interest Date (the date such notice is delivered to
all of the holder, the “Interest Election Notice Date”) which notice (i) either (A) confirms that Interest to be paid
on such Interest Date shall be paid entirely in Interest Shares or (B) elects to pay Interest as Cash Interest or a combination of Cash
Interest and Interest Shares and specifies the amount of Interest that shall be paid as Cash Interest and the amount of Interest, if
any, that shall be paid in Interest Shares and (ii) certifies that there has been no Equity Conditions Failure. If an Equity Conditions
Failure has occurred as of the Interest Election Notice Date, then unless the Company has elected to pay such Interest as Cash Interest,
the Interest Election Notice shall indicate that unless the Holder waives the Equity Conditions Failure, the Interest shall be paid as
Cash Interest. Notwithstanding anything herein to the contrary, if no Equity Conditions Failure has occurred as of the Interest Election
Notice Date but an Equity Conditions Failure occurs at any time prior to the Interest Date, (A) the Company shall provide the Holder
a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Interest shall be paid in cash.
Interest to be paid on an Interest Date in Interest Shares shall be paid in a number of fully paid and nonassessable shares (rounded
to the nearest whole share in accordance with Section 3(a)) of Common Stock equal to the quotient of (1) the amount of Interest payable
on such Interest Date less any Cash Interest paid and (2) the Alternate Conversion Price in effect on the applicable Interest Date.
(b) When
any Interest Shares are to be paid on an Interest Date, the Company shall (i) (A) provided that the Company’s transfer agent (the
“Transfer Agent”) is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program, credit such aggregate number of Interest Shares to which the Holder shall be entitled to the Holder’s or its
designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (B) if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, issue and deliver on the applicable Interest Date, to the address set forth in
the register maintained by the Company for such purpose pursuant to the Securities Purchase Agreement or to such address as specified
by the Holder in writing to the Company at least two (2) Business Days prior to the applicable Interest Date, a certificate, registered
in the name of the Holder or its designee, for the number of Interest Shares to which the Holder shall be entitled and (ii) with respect
to each Interest Date, pay to the Holder, in cash by wire transfer of immediately available funds, the amount of any Cash Interest.
2
(c) Prior
to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion
of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption in accordance
with Section 12 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the continuance
of any Event of Default, the Interest Rate shall automatically be increased to eighteen percent (18.0%) per annum (the “Default
Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including,
without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default.
3. CONVERSION
OF NOTES. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and non-assessable
shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.
(a) Conversion
Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall
be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid
and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company
shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses
of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock upon conversion
of any Conversion Amount.
(b) Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall be determined
by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).
(i) “Conversion
Amount” means 108.00% of the portion of the (i) Principal, (ii) Interest, (iii) accrued and unpaid Late Charges with respect
to such Principal of this Note and Interest and (iv) other amounts outstanding under this Note to be converted, redeemed or otherwise
with respect to which this determination is being made.
3
(ii) “Conversion
Price” shall mean, subject to adjustment as provided herein, the lower of:
(1)
Initially, as of any Conversion Date or other date of determination, $1.29;
(2) Following
the Final Closing, 100% of the Closing Bid Price on the Trading Day immediately prior to the Final Closing;
(3) Following
the effective date of the Registration Statement, 100% of the Closing Bid Price on the Trading Day immediately prior to the effective
date of the Registration Statement; and
(4) Following
the receipt of the Stockholder Approval, 100% of the Closing Bid Price on the Trading Day immediately prior to the receipt of Stockholder
Approval.
(c) Mechanics
of Conversion.
(i) Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the
Holder shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion in the form attached hereto as Exhibit I (each, a “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within two (2) Trading Days following a conversion of this Note as aforesaid,
the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification
undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 19(b)). On or before
the first (1st) Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required
pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion
Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”),
the Company shall (1) provided that the Transfer Agent is participating in DTC Fast Automated Securities Transfer Program (“FAST”),
credit such aggregate number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion to the Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not
participating in FAST, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified
in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock
to which the Holder shall be entitled pursuant to such conversion. If this Note is physically surrendered for conversion pursuant to
Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being converted,
then the Company shall as soon as practicable and in no event later than one (1) Business Day after receipt of this Note and at its own
expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 19(d)) representing the outstanding
Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.
4
(ii) Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Deadline, if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate for
the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of this
Note (as the case may be) (a “Conversion Failure”), then, in addition to all other remedies available to the Holder,
(1) the Company shall pay in cash to the Holder on each day after such Share Delivery Deadline that the issuance of such shares of Common
Stock is not timely effected an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to
the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled, multiplied by (B) any trading price of the
Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Conversion Date
and ending on the applicable Share Delivery Deadline and (2) the Holder, upon written notice to the Company, may void its Conversion
Notice with respect to, and retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant
to such Conversion Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make
any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to
the foregoing, if on or prior to the Share Delivery Deadline if the Transfer Agent is not participating in FAST, the Company shall fail
to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share
register or, if the Transfer Agent is participating in FAST, the Transfer Agent shall fail to credit the balance account of the Holder
or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
conversion hereunder or pursuant to the Company’s obligation pursuant to clause (II) below, and if on or after such Share Delivery
Deadline the Holder acquires (in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or
any portion of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company
and has not received from the Company in connection with such Conversion Failure (a “Buy-In”), then, in addition to
all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of the Holder’s request
and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired
(including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or
credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of
Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number
of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the “Buy-In
Payment Amount”). Nothing shall limit the 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 certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the conversion of this Note as required pursuant to the terms hereof.
5
(iii) Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and addresses
of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered Notes”). The
entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders of the Notes
shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including, without limitation,
the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered Note may be assigned,
transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its receipt of a written
request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall record the information
contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount as the principal
amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 19, provided that if
the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two
(2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer or
sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any
portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company
unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the
Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note.
The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges converted and/or paid (as the case
may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory
to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the
Register to record such Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions,
and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically deemed
updated to reflect such occurrence.
(iv) Pro
Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for the
same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount
of such holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion
on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event
of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company
shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 24.
(v) In
the event that the Conversion Price is lower than the Floor Price then in effect on the date of any conversion, the Conversion Price
shall be equal to the Floor Price then in effect. In addition, the Company shall also either (i) deliver to the Holder the applicable
Alternate Conversion Floor Amount in cash in immediately available funds or (ii) increase the then outstanding Principal amount by the
applicable Alternate Conversion Floor Amount. Notwithstanding anything to the contrary in Section (3)(c)(i), but subject to Section (3)(d)(i),
until the Company delivers shares of Common Stock representing the applicable Conversion Amount to the Holder, such Conversion Amount
may be converted by the Holder into shares of Common Stock pursuant to Section (3)(c)(i) without regard to this Section (3)(c)(v).
6
(d) Limitations
on Conversions.
(i) Beneficial
Ownership. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the right to convert
any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void and treated
as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution Parties collectively
would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately
after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination
of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining,
nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes
or convertible preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on
conversion or exercise analogous to the limitation contained in this Section 3(d)(i). For purposes of this Section 3(d)(i),
beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of
outstanding shares of Common Stock the Holder may acquire upon the conversion of this Note without exceeding the Maximum Percentage,
the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report
on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y)
a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting
forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives
a Conversion Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported
Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and,
to the extent that such Conversion Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this
Section 3(d)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of shares of Common Stock
to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder and any other Attribution Party since the date as of which
the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion
of this Note results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the
Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum
Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall
not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time
to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase
in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company
and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of
Notes that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms
of this Note in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including
for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph
shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility.
The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of
this Section 3(d)(i) to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective
or inconsistent with the intended beneficial ownership limitation contained in this Section 3(d)(i) or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall
apply to a successor holder of this Note.
7
(ii) Principal
Market Regulation The Company shall not issue any shares of Common Stock upon conversion of this Note or otherwise pursuant to the
terms of this Note if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the
Company may issue upon conversion of the Notes or otherwise pursuant to the terms of this Note (as the case may be) without breaching
the Company’s obligations under the rules or regulations of the Principal Market (the number of shares which may be issued without
violating such rules and regulations, including rules related to the aggregate of offerings under NASDAQ Listing Rule 5635(d), the “Exchange
Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders
as required by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains
a written opinion from counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the
Holder. Until such approval or such written opinion is obtained, no Buyer shall be issued in the aggregate, upon conversion or exercise
(as the case may be) of any Notes or otherwise pursuant to the terms of the Notes, shares of Common Stock in an amount greater than the
product of (i) the Exchange Cap as of the Signing Date multiplied by (ii) the quotient of (1) the original principal amount of Notes
issued to such Buyer pursuant to the Securities Purchase Agreement on each Closing Date (as defined in the Securities Purchase Agreement)
divided by (2) the aggregate original principal amount of all Notes issued to the Buyers pursuant to the Securities Purchase Agreement
on each Closing Date (with respect to each Buyer, the “Exchange Cap Allocation”). In the event that any Buyer shall
sell or otherwise transfer any of such Buyer’s Notes, the transferee shall be allocated a pro rata portion of such Buyer’s
Exchange Cap Allocation with respect to such portion of such Notes so transferred, and the restrictions of the prior sentence shall apply
to such transferee with respect to the portion of the Exchange Cap Allocation so allocated to such transferee. Upon conversion in full
of a holder’s Notes, the difference (if any) between such holder’s Exchange Cap Allocation and the number of shares of Common
Stock actually issued to such holder upon such holder’s conversion in full of such Notes shall be allocated, to the respective
Exchange Cap Allocations of the remaining holders of Notes on a pro rata basis in proportion to the shares of Common Stock underlying
the Notes then held by each such holder of Notes.
(iii) Insufficient
Shares. The Company is not obligated to effect the conversion of any portion of this Note, and the Holder shall not have the right
to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and void
and treated as if never made, if the Company does not have sufficient authorized but unissued and unreserved shares available for such
conversion.
(e) Right
of Alternate Conversion.
(i) General.
(1) Alternate
Optional Conversion. Subject to Section 3(d), at any time, at the option of the Holder, the Holder may convert (each, an “Alternate
Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional Conversion Date”)
all, or any part, of this Note into shares of Common Stock (such portion of the Conversion Amount subject to such Alternate Optional
Conversion, the “Alternate Optional Conversion Amount”) at the Alternate Conversion Price.
8
(2) Alternate
Conversion Upon an Event of Default. Subject to Section 3(d), at any time after the occurrence of an Event of Default (regardless
of whether such Event of Default has been cured, or if the Company has delivered an Event of Default Notice to the Holder or if the Holder
has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of Default has occurred),
the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion” and together
with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate Event of
Default Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each Alternate Optional
Conversion Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion of
the Conversion Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount” and
together with each Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”) into shares of Common
Stock at the Alternate Conversion Price.
(ii) Mechanics
of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion Amount pursuant
to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes
hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of shares of Common Stock
issuable upon conversion of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the
Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect
to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note
that the Holder is electing to use the Alternate Conversion Price for such conversion. Notwithstanding anything to the contrary in this
Section 3(e), but subject to Section 3(d), until the Company delivers shares of Common Stock representing the
applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into shares of
Common Stock pursuant to Section 3(c) without regard to this Section 3(e). In the event of an Alternate Conversion
pursuant to this Section 3(e) of all, or any portion, of this Note, the Holder’s damages would be uncertain and difficult
to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable
substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 3(e), together
the Alternate Conversion Price used in such Alternate Conversion, as applicable, is intended by the parties to be, and shall be deemed,
a reasonable estimate of, the Holder’s actual loss of its investment opportunity and not as a penalty.
4. RIGHTS
UPON EVENT OF DEFAULT.
(a) Event
of Default. Each of the following events shall constitute an “Event of Default” and each of the events in clauses
(vii), (viii) and (ix) shall constitute a “Bankruptcy Event of Default”:
(i) the
suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period
of ten (10) consecutive Trading Days;
(ii) the
Company’s (A) failure to cure a Conversion Failure with respect to an aggregate value in excess of $2,000,000 (value being calculated
based on the greater of (x) the Conversion Amount converted and (y) the then market price of the Common Stock) by delivery of the required
number of shares of Common Stock within ten (10) Trading Days after the applicable Conversion Date or exercise date (as the case may
be) or (B) notice, written or oral, to any holder of the Notes, including, without limitation, by way of public announcement or through
any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into shares of
Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d);
9
(iii) except
to the extent the Company is in compliance with Section 10(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 10(a) below) is less than the sum of the number of
shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise);
(iv) the
Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts
when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any redemption
payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement) or any other agreement,
document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the
case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of
at least two (2) Trading Days;
(v) the
Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
of this Note with an aggregate value in excess of $2,000,000 (value being calculated based on the greater of (x) the Conversion Amount
converted and (y) the then market price of the Common Stock) as and when required hereunder or pursuant to any other Transaction Document
(as defined in the Securities Purchase Agreement), unless otherwise then prohibited by applicable federal securities laws, and any such
failure remains uncured for at least two (2) days;
(vi) the
occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $1,500,000 of Indebtedness
of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(vii) bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against
the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed within
thirty (30) days of their initiation;
10
(viii) the
commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;
(ix) the
entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;
(x) a
final judgment or judgments for the payment of money aggregating in excess of $1,500,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,500,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
11
(xi) the
Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace period,
any payment with respect to any Indebtedness in excess of $1,500,000 due to any third party (other than, with respect to unsecured Indebtedness
only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect
to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach or violation
of any agreement for monies owed or owing in an amount in excess of $1,500,000, which breach or violation permits the other party thereto
to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event that would,
with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding the
Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business, assets,
operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects of the Company
or any of its Subsidiaries, individually or in the aggregate;
(xii) other
than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation
or warranty, in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document or any Financing Document
(as defined in the Securities Purchase Agreement), except, in the case of a breach of a covenant or other term or condition that is curable,
only if such breach remains uncured for a period of two (2) consecutive Trading Days;
(xiii) a
false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity Conditions
are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;
(xiv) any
breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 14 of this Note;
(xv) (i)
institution of any steps by any Person to terminate a Pension Plan (as defined in the Existing Senior Secured Notes) if as a result of
such termination the Company or any Subsidiary or any member of the Controlled Group (as defined in the Existing Senior Secured Notes)
could reasonably be expected to be required to make a contribution to such Pension Plan, or could reasonably be expected to incur a liability
or obligation to such Pension Plan, in either case in excess of $1,500,000, (ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under ERISA (as defined in the Existing Senior Secured Notes) or the code (as defined in the Existing
Senior Secured Notes), or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Plan (as defined in the Existing
Senior Secured Notes) and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of such withdrawal
(including any outstanding withdrawal liability that the Company or any member of the Controlled Group have incurred on the date of such
withdrawal) exceeds $1,500,000;
(xvi) any
provision of any Transaction Document or any Financing Documents shall at any time for any reason (other than pursuant to the express
terms thereof) cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof
shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority
having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary
shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document or any Financing
Documents; or
12
(xvii) any
material provision of any Financing Document shall at any time for any reason cease to be valid and binding on or enforceable against
the Company or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by
the Company or any governmental authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability
thereof;
(xviii) any
Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b) Notice
of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other Note,
the Company shall within one (1) Business Day deliver written notice thereof via electronic mail and overnight courier (with next day
delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default (such earlier date, the “Event of
Default Right Commencement Date”) and ending (such ending date, the “Event of Default Right Expiration Date”,
and each such period, an “Event of Default Redemption Right Period”) on the twentieth (20th) Trading Day
after the later of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default Notice that
includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company,
such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to
cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date
of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to redeem
(regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion
of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company, which
Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note
subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater
of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the
Conversion Rate with respect to the Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice
multiplied by (Y) the product of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on
any Trading Day during the period commencing on the date immediately preceding such Event of Default and ending on the date the Company
makes the entire payment required to be made under this Section 4(b) (the “Event of Default Redemption Price”).
Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 11. To the extent redemptions
required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the
Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 4(b),
but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid in full, the
Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be converted, in
whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of the Company’s redemption
of any portion of this Note under this Section 4(b), the Holder’s damages would be uncertain and difficult to estimate because
of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and
shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption
upon an Event of Default shall not constitute an election of remedies by the Holder, and all other rights and remedies of the Holder
shall be preserved.
13
(c) Mandatory
Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any conversion
that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity Date,
the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, accrued and unpaid Interest
and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption Premium, in addition to any and
all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder or any other person or
entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of Default,
in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights in respect
of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption Price or any
other Redemption Price, as applicable.
5. RIGHTS
UPON FUNDAMENTAL TRANSACTION.
(a) Assumption.
The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section
5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental
Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount
and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar
conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory to the Holder and (ii) the
Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading
on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if
such Successor Entity had been named as the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall
deliver to the Holder confirmation that there shall be issued upon conversion or redemption of this Note at any time after the consummation
of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such
items still issuable under Sections 6 and 16, which shall continue to be receivable thereafter)) issuable upon the conversion
or redemption of the Notes prior to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent)
of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction (without regard to any limitations
on the conversion of this Note), as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental
Transaction without the assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations on the conversion of this Note.
14
(b) Notice
of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the
consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement of such
Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holder (a “Change
of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change of Control Notice
or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in accordance with the
immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the date of consummation
of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement of such Change
of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice thereof (“Change
of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate the Conversion Amount
the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5 shall be redeemed by
the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption Premium multiplied by
(y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied by (y) the product
of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price
of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of (1) the consummation
of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the date the Holder delivers
the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control
Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (I) the
aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders
of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded
securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the
consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public
announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to
the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change
of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance with the provisions
of Section 11 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent redemptions
required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the
Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5,
but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon) is paid in full,
the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon) may be converted,
in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of the Company’s redemption of any portion
of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for
the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed,
a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.
15
6. RIGHTS
UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 7 or 16 below, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any
limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate
Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for the grant, issuance or
sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be
entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the
extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration
date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) for
the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right
has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance,
if applicable)) to the same extent as if there had been no such limitation).
(b) Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or
in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure
that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option (i) in addition
to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled
with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate
Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the shares
of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common
Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had
this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a
conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall
be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.
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7. RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.
(a) Adjustment
of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company grants, issues or
sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 7(a) is deemed to have granted,
issued or sold, any shares of Common Stock (including the granting, issuance or sale of shares of Common Stock owned or held by or for
the account of the Company, but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold)
for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect
immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred
to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after
such Dilutive Issuance, the Conversion Price then in effect shall be adjusted (downward only) to an amount equal to the New Issuance
Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance
Price under this Section 7(a)), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options
and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the
terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting, issuance or sale of such Option for such price per share. For purposes of this Section
7(a)(i), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts
of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance
or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon
exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which
one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such
Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) with
respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus
the value of any other consideration (including, without limitation, consideration consisting of cash, debt forgiveness, assets or any
other property) received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated
below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such
Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
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(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible
Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or
exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution
of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this
Section 7(a)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon the
conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the
sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon
the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set
forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market
conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts
paid or payable to the holder of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the
issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration
received or receivable (including, without limitation, any consideration consisting of cash, debt forgiveness, assets or other property)
by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further
adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or
exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other
provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion Price shall be made
by reason of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 7(b) below),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes
of this Section 7(a)(i), if the terms of any Option or Convertible Security (including, without limitation, any Option
or Convertible Security that was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section
7(a) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.
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(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”), together comprising
one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the
Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to each other and/or
(C) are consummated under the same plan of financing), the aggregate consideration per share of Common Stock with respect to such Primary
Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued
(or was deemed to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated transaction solely
with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration
Value of each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration
Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible
Security, if any, in each case, as determined on a per share basis in accordance with this Section 7(a)(iv). If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received
therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the
purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by
the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common
Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the
fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of
consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for each of the
five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount
of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible
Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined
jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an
event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
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(b) Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6, Section
16 or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.
Without limiting any provision of Section 6, Section 16 or Section 7(a), if the Company at any time on or after
the Subscription Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective
immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b)
occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted
appropriately to reflect such event.
(c) Holder’s
Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section 7, if the Company
in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any
such securities, “Variable Price Securities”), after the Subscription Date that are issuable pursuant to such agreement
or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price
of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting
customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the
formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide
written notice thereof via electronic mail and overnight courier to the Holder on the date of such agreement and the issuance of such
Common Stock, Convertible Securities or Options. From and after the date the Company enters into such agreement or issues any such Variable
Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for
the Conversion Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of this Note
that solely for purposes of such conversion the Holder is relying on the Variable Price rather than the Conversion Price then in effect.
The Holder’s election to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder to rely
on a Variable Price for any future conversion of this Note.
(d) Other
Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly applicable,
or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions
of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall in good faith determine
and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided that no such adjustment
pursuant to this Section 7(d) will increase the Conversion Price as otherwise determined pursuant to this Section 7, provided
further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution,
then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally
recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose
fees and expenses shall be borne by the Company.
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(e) Calculations.
All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(f) Voluntary
Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term
of this Note, with the prior written consent of the holders of a majority of the Notes then outstanding (the “Required Holders”),
reduce the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board
of directors of the Company.
8. REDEMPTIONS
AT THE COMPANY’S ELECTION.
(a) Company
Optional Redemption. At any time no Equity Conditions Failure exists, the Company shall have the right to redeem all, but not less
than all, of the Conversion Amount then remaining under this Note (the “Company Optional Redemption Amount”) on the
Company Optional Redemption Date (each as defined below) (a “Company Optional Redemption”). The portion of this Note
subject to redemption pursuant to this Section 8(a) shall be redeemed by the Company in cash at a price (the “Company Optional
Redemption Price”) equal to the greater of (i) 110% of the Conversion Amount being redeemed as of the Company Optional Redemption
Date and (ii) the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed as of the Company Optional
Redemption Date multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date immediately preceding such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the
date the Company makes the entire payment required to be made under this Section 8(a). The Company may exercise its right to require
redemption under this Section 8(a) by delivering a written notice thereof by electronic mail and overnight courier to all, but not
less than all, of the holders of Notes (the “Company Optional Redemption Notice” and the date all of the holders of
Notes received such notice is referred to as the “Company Optional Redemption Notice Date”). The Company may deliver
only one Company Optional Redemption Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional
Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the “Company Optional Redemption
Date”) which date shall not be less than fifteen (15) Trading Days nor more than thirty(30) Trading Days following the Company
Optional Redemption Notice Date, (y) certify that there has been no Equity Conditions Failure and (z) state the aggregate Conversion
Amount of the Notes which is being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes
pursuant to this Section 8(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date. Notwithstanding
anything herein to the contrary, (i) if no Equity Conditions Failure has occurred as of the Company Optional Redemption Notice Date but
an Equity Conditions Failure occurs at any time prior to the Company Optional Redemption Date, (A) the Company shall provide the Holder
a subsequent notice to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Company Optional Redemption shall
be cancelled and the applicable Company Optional Redemption Notice shall be null and void and (ii) at any time prior to the date the
Company Optional Redemption Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part, by
the Holder into shares of Common Stock pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional
Redemption Notice Date shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional
Redemption Date. Redemptions made pursuant to this Section 8(a) shall be made in accordance with Section 11. In the event of
the Company’s redemption of any portion of this Note under this Section 8(a), the Holder’s damages would be uncertain
and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability
of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section 8(a)
is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity
and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event
of Default has occurred and continuing, but any Event of Default shall have no effect upon the Holder’s right to convert this Note
in its discretion.
21
(b) Pro
Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section 8(a),
then it must simultaneously take the same action with respect to all of the Other Notes.
9. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times
in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder
of this Note. Without limiting the generality of the foregoing or any other provision of this Note or the other Transaction Documents,
the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of this Note above the
Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of this Note. Notwithstanding anything
herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to convert
this Note in full for any reason (other than pursuant to restrictions set forth in Section 3(d) hereof), the Company shall use its
best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit
such conversion into shares of Common Stock.
10. RESERVATION
OF AUTHORIZED SHARES.
(a) Reservation.
So long as any Notes remain outstanding, the Company shall at all times reserve at least 125% of the number of shares of Common Stock
as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions, of all of the
Notes then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding until the Maturity
Date) at the Alternate Conversion Price then in effect (the “Required Reserve Amount”). The Required Reserve Amount
(including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the
Notes based on the original principal amount of the Notes held by each holder on the Closing Date or increase in the number of reserved
shares, as the case may be (the “Authorized Share Allocation”). In the event that a holder shall sell or otherwise
transfer any of such holder’s Notes, each transferee shall be allocated a pro rata portion of such holder’s Authorized Share
Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Notes shall be allocated to the
remaining holders of Notes, pro rata based on the principal amount of the Notes then held by such holders.
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(b) Insufficient
Authorized Shares. If, notwithstanding Section 10(a), and not in limitation thereof, at any time while any of the Notes
remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required Reserve Amount
(an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then
outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company
shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal. In the event that the Company is prohibited from issuing shares of Common Stock pursuant to the terms of
this Note due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares
of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering
such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion
Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized
Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and ending on the
date of such issuance and payment under this Section 10(a); and (ii) to the extent the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions
and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 10(a) or
this Section 10(b) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
11. [Reserved].
12. REDEMPTIONS.
(a) Mechanics.
The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business Days after
the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change of Control
Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price to
the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation
of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall
deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. Notwithstanding
anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive a cash payment
under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption
Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document and, upon
payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such other Transaction
Document. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly cause to be
issued and delivered to the Holder a new Note (in accordance with Section 19(d)) representing the outstanding Principal which has
not been redeemed. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period required,
at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of
redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount
that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not been
paid. Upon the Company’s receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such
Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 19(d)), to
the Holder, and in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount
equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 12,
if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this
Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the
Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided and (B)
greater of (x) the Floor Price and (y) the lowest VWAP of the Common Stock during the five (5) consecutive Trading Day period ending
and including the applicable Conversion Date (it being understood and agreed that all such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period). The Holder’s delivery
of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company’s obligations
to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Conversion Amount subject
to such notice.
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(b) Redemption
by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption or repayment
as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section 5(b)
(each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day of its
receipt thereof, forward to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives a Redemption Notice
and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is two (2)
Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending on and including the
date which is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption Notice and the Company
is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices
received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including
the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption
Notices received by the Company during such seven (7) Business Day period.
13. VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation,
the Delaware General Corporation Law) and as expressly provided in this Note.
14. COVENANTS.
Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:
(a) Rank.
All payments due under this Note shall rank (i) pari passu with all Other Notes, (ii) senior to all other unsecured Indebtedness
of the Company and its Subsidiaries, other than (A) those certain unsecured convertible notes issued on December 31, 2024, January 17,
2025 and January 22, 2025, pursuant to that certain securities purchase agreement, dated December 21, 2024, by and among the Company
and the purchasers identified therein; (B) those certain unsecured convertible notes issued on August 29, 2024, pursuant to that certain
exchange agreement, dated August 29, 2024, by and among the Company and the purchasers identified therein; and (C) those certain loan
agreements, dated November 24, 2024, January 2, 2025 and February 14, 2025, that are convertible into unsecured convertible notes.
(b) [Reserved].
(c) [Reserved].
(d) Restriction
on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock; provided that the foregoing
shall not restrict or prohibit any Subsidiary from making dividends or distributions, directly or indirectly, to any Wholly-Owned Subsidiary
(as defined in the Securities Purchase Agreement), except (i) cashless repurchases of equity interests deemed to occur upon the exercise
of stock options or warrants shall be permitted, and de minimis cash distributions sufficient to pay employment and other taxes associated
with such repurchase shall be permitted, if such equity interests represent a portion of the exercise price of such options or warrants,
(ii) dividends or distributions payable only in Capital Stock (other than Disqualified Stock) of the Company and (iii) the Company may
pay cash in lieu of fractional shares in connection with any exercise of warrants, options, or other securities convertible into or exchangeable
for Capital Stock.
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(e) [Reversed].
(f) Change
in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental
thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose.
(g) Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.
(h) Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of
its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear
and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(i) Maintenance
of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to
maintain all of the Intellectual Property Rights of the Company and/or any of its Subsidiaries that are necessary or material to the
conduct of its business in full force and effect.
(j) Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption
insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance
with sound business practice by companies in similar businesses similarly situated.
(k) Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of
property or assets of any kind or the rendering of services of any kind) with any affiliate involving aggregate consideration in excess
of $1,500,000 with respect to all transactions collectively, except (i) transactions in the ordinary course of business in a manner and
to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration
and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with
a Person that is not an affiliate thereof, (ii) employment, severance, benefit, equity award, equity option, and other similar compensation
or benefit plans or arrangements between Holdings (as defined in the Securities Purchase Agreement) and its Subsidiaries, on the one
hand, and their respective officers, employees, directors and consultants, on the other hand, in the ordinary course of business, (iii)
payment of reasonable and customary fees and reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of officers,
directors, employees or consultants of the Company or any of its Subsidiaries, (iv) the issuance of Capital Stock, or dividends or redemptions
with respect thereto, of the Company (other than Disqualified Stock), (v) the issuance of Capital Stock, or dividends or redemptions
with respect thereto, of the Company (other than Disqualified Stock), (vi) all related party transactions described in filings with the
Securities and Exchange Commission made prior to the date hereof, (v) licenses of the Company’s Intellectual Property Rights for
use in consumer products, (vi) transactions existing on the Closing Date and described on Schedule 14(l) or (vii) as otherwise
permitted under the Existing Senior Secured Notes and the Existing Unsecured Notes.
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(l) Restricted
Issuances. The Company shall not, directly or indirectly, without the prior written consent of the Required Purchasers, (i) issue
any Notes (other than as contemplated by the Securities Purchase Agreement and the Notes) or (ii) issue any other securities that would
cause a breach or default under the Notes.
(m) Stay,
Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will 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 (wherever or whenever
enacted or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits or advantages
of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power granted to
the Holder by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.
(n) Taxes.
The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective assets or upon
their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom (except
where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(o) Independent
Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing, (y) upon
the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at any time
the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent, reputable
investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has occurred
(the “Independent Investigator”). If the Independent Investigator determines that such breach of this Note has occurred,
the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each holder of a
Note of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours, inspect all
contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and, to the extent
available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants
(including the accountants’ work papers) and any books of account, records, reports and other papers not contractually required
of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent Investigator
may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent
Investigator with such financial and operating data and other information with respect to the business and properties of the Company
as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs,
finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s officers,
directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said accountants
to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable times,
upon reasonable notice, and as often as may be reasonably requested.
26
15. [Reserved].
16. DISTRIBUTION
OF ASSETS. In addition to any adjustments pursuant to Sections 6(a) or 7, if the Company shall declare or make any dividend
or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return
of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon
complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and
assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately
prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its
right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent
Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
17. AMENDING
THE TERMS OF THIS NOTE. Except for Section 3(d), which may not be amended, modified or waived by the parties hereto, the prior
written consent of the Required Purchasers (as defined in the Securities Purchase Agreement) shall be required for any amendment, modification
or waiver to this Note. Any amendment, modification or waiver so approved shall be binding upon all existing and future holders of this
Note and any Other Notes; provided, however, that no such change, waiver or, as applied to any of the Notes held by any particular holder
of Notes, shall, without the written consent of that particular holder, (i) reduce the amount of Principal, reduce the amount of accrued
and unpaid Interest, or extend the Maturity Date, of the Notes, (ii) disproportionally and adversely affect any rights under the Notes
of any holder of Notes; or (iii) modify any of the provisions of, or impair the right of any holder of Notes under, this Section 17.
18. TRANSFER.
This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred by the Holder
without the consent of the Company, subject only to the provisions of Section 4.13 of the Securities Purchase Agreement.
27
19. REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and
deliver upon the order of the Holder a new Note (in accordance with Section 19(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a
new Note (in accordance with Section 19(d)) to the Holder representing the outstanding Principal not being transferred. The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the
Principal stated on the face of this Note.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder
a new Note (in accordance with Section 19(d)) representing the outstanding Principal.
(c) Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section 19(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.
(d) Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be
of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or
in the case of a new Note being issued pursuant to Section 19(a) or Section 19(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed
the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date,
as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the
Issuance Date.
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20. REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and
in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any
of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity.
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). No failure on the part of the Holder to exercise, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Holder of any right, power or
remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise
of any right or remedy of the Holder at law or equity or under this Note or any other document shall not be deemed to be an election
of the Holder’s rights or remedies under any such other document or at law or equity. 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 specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief
from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond
or other security. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable
the Holder to confirm the Company’s compliance with the terms and conditions of this Note (including, without limitation, compliance
with Section 7).
21. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original
Principal amount hereof.
22. CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be construed against
any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Note instead of just the provision in which
they are found. Unless expressly indicated otherwise, all section references are to sections of this Note. Terms used in this Note and
not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Closing
Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
29
23. 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 privilege. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 23 shall permit any waiver
of any provision of Section 3(d).
24. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i) In
the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a Black
Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable Redemption
Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company
or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two
(2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the
Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute
relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such Black Scholes
Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption
Price (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or
the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option,
select an independent, reputable investment bank to resolve such dispute.
(ii) The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 24 and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which
the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
30
(iii) The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 24 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under Delaware Uniform Arbitration Act, (ii) a dispute relating to a Conversion
Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred
under Section 7(a), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether
any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities,
(D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive
Issuance occurred, (iii) the terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected
investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized)
to make all findings, determinations and the like that such investment bank determines are required to be made by such investment bank
in connection with its resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations
and the like to the terms of this Note and any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its
sole discretion, shall have the right to submit any dispute described in this Section 24 to any state or federal court sitting in
Wilmington, Delaware in lieu of utilizing the procedures set forth in this Section 24 and (v) nothing in this Section 24 shall
limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any
matters described in this Section 24).
25. NOTICES;
CURRENCY; PAYMENTS.
(a) Notices.
Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken
pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting
forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date
on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with
respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or
other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder.
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(b) Currency.
All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing under
this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as published in the
Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference
to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c) Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth herein,
such payment shall be made in lawful money of the United States of America by a certified check drawn on the account of the Company and
sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address, in
the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement),
provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company
with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to
be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding
day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when due
(except to the extent such amount is simultaneously accruing Interest at the Default Rate hereunder) shall result in a late charge being
incurred and payable by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%) per annum from
the date such amount was due until the same is paid in full (“Late Charge”).
26. CANCELLATION.
After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid in full, this Note
shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
27. WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other
demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities
Purchase Agreement.
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28. GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to any provision
or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Delaware. Except as otherwise required by Section 24 above, the Company hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of Wilmington, New Castle County, State of Delaware, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, 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 any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, or to enforce a judgment or
other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 24.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
29. JUDGMENT
CURRENCY.
(a) If
for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 29 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i) the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which
such conversion is made pursuant to this Section 29(a)(ii) being hereinafter referred to as the “Judgment Conversion
Date”).
(b) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 29(a)(ii) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party
shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
33
30. SEVERABILITY.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that
it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions of
the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question
does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
31. MAXIMUM
PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder
exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company
to the Holder and thus refunded to the Company.
32. CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a) “1933
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than rights
of the type described in Section 6(a) hereof) that could result in a decrease in the net consideration received by the Company in
connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other
similar rights).
(d) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
34
(e) “Alternate
Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately available funds pursuant
to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A) higher of (I)
the highest price that the Common Stock trades at on the Trading Day immediately preceding the relevant Alternate Conversion Date and
(II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common Stock
delivered (or to be delivered) to the Holder on the applicable Share Delivery Deadline with respect to such Alternate Conversion from
(II) the quotient obtain by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable
Alternate Conversion, by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.
(f) “Alternate
Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of (i) the applicable
Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the greater of (x) the
Floor Price and (y) the lowest of the five (5) VWAPs of the Common Stock during the five (5) consecutive Trading Day period ending and
including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the
“Alternate Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock
during such Alternate Conversion Measuring Period.
(g)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.
(h) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the
Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any
of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the Holder’s
and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject
collectively the Holder and all other Attribution Parties to the Maximum Percentage.
35
(i) “Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible
Security or Adjustment Right (as the case may be).
(j) “Bloomberg”
means Bloomberg, L.P.
(k) “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day
on which the Federal Reserve Bank of New York is closed and/or any of the following exchanges on which the Common Stock is traded and
listed, or any successor(s) thereto, is not open for at least five (5) hours of trading: the Nasdaq Capital Market; the Nasdaq Global
Market; the Nasdaq Global Select Market; the New York Stock Exchange; or the NYSE American; and any successor to any of the foregoing
markets or exchanges.
(l) [Reserved].
(m) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of
Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such
reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for the purpose of changing
the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(n) “Change
of Control Redemption Premium” means 125%.
(o) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and
last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market
begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may
be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing
bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively,
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no
closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the
ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
24. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such period.
36
(p) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is each date the Company issued Notes
pursuant to the terms of the Securities Purchase Agreement.
(q) “Code”
means the United States Internal Revenue Code of 1986, as amended.
(r) [Reserved].
(s) “Common
Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock into which
such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(t) “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in
whole or in part) against loss with respect thereto.
(u) “Controlled
Group” means all members of a group of corporations and all members of a group of trades or businesses (whether or not incorporated)
under common control which, together with the Company, are treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, under Section 414(m) or (o) of the Code.
(v) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(w) “Current
Public Information Failure” means if a Registration Statement is not effective for any reason or the prospectus contained therein
is not available for use for any reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1)
of the 1933 Act, including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c) of
the 1933 Act or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i) of the 1933 Act or becomes such an issuer in the
future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) of the 1933 Act.
(x) “Default
Rate” means, as applicable, (i) with respect to any Interest paid in cash, fifteen percent (15%) per annum or (ii) with respect
to any Interest paid in shares of Common Stock, eighteen percent (18%) per annum, in each case, as may be adjusted from time to time
in accordance with Section 2.
(y) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Select Market or
the Nasdaq Global Market.
37
(z) “Equity
Conditions” means, with respect to an given date of determination: (i) on each day during the period beginning thirty calendar
days prior to such applicable date of determination and ending on and including such applicable date of determination either (x) one
or more registration statements of the Company (the “Registration Statements”) shall be effective and the prospectus
contained therein shall be available on such applicable date of determination (with, for the avoidance of doubt, any shares of Common
Stock previously sold pursuant to such prospectus deemed unavailable) for the resale of all shares of Common Stock to be issued in connection
with the event requiring this determination (or issuable upon conversion of the Conversion Amount being redeemed, as applicable, in the
event requiring this determination at the Alternate Conversion Price then in effect (without regard to any limitations on conversion
set forth herein)) (each, a “Required Minimum Securities Amount”)) or (y) all shares of Common Stock issuable upon
conversion of this Note (without regard to any limitations on conversion set forth herein) shall be eligible for sale pursuant to Rule
144 of the 1933 Act without the need for registration under any applicable federal or state securities laws (in each case, disregarding
any limitation on conversion of the Notes, other issuance of securities with respect to the Notes) and no Current Public Information
Failure exists or is continuing; (ii) on each day during the period beginning thirty calendar days prior to the applicable date of determination
and ending on and including the applicable date of determination (the “Equity Conditions Measuring Period”), the Common
Stock (including all shares of Common Stock issuable upon conversion of this Note (without regard to any limitations of conversion set
forth herein)) is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading
on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination
due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable
prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely
to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance
requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iii) during
the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of this
Note on a timely basis as set forth in Section 3 hereof and all other shares of capital stock required to be delivered by the Company
on a timely basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the
event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination)
may be issued in full without violating Section 3(d) hereof; (v) any shares of Common Stock to be issued in connection with the
event requiring determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination
(without regards to any limitations on conversion set forth herein)) may be issued in full without violating the rules or regulations
of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (vi) on each day during
the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have
occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably
be expected to cause (1) any Registration Statement to not be effective or the prospectus contained therein to not be available for the
resale of the applicable Required Minimum Securities Amount of shares of Common Stock issuable upon conversion of this Note (without
regard to any limitations of conversion set forth herein) or (2) any shares of Common Stock issuable upon conversion of this Note (without
regard to any limitations of conversion set forth herein) to not be eligible for sale pursuant to Rule 144 without the need for registration
under any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes, other issuance
of securities with respect to the Notes) and no Current Public Information Failure exists or is continuing; (viii) the Holder shall not
be in (and no other holder of Notes shall be in) possession of any material, non-public information provided to any of them by the Company,
any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on each
day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have
breached any representation or warranty in any material respect (other than representations or warranties subject to material adverse
effect or materiality, which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document,
including, without limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (x)
on the applicable date of determination (A) no Authorized Share Failure shall exist or be continuing and the applicable Required Minimum
Securities Amount of shares of Common Stock are available under the certificate of incorporation of the Company and reserved by the Company
to be issued pursuant to the Notes and (B) all shares of Common Stock to be issued in connection with the event requiring this determination
(or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination (without regards to any
limitations on conversion set forth herein)) may be issued in full without resulting in an Authorized Share Failure; (xi) on each day
during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist an Event of Default or an event
that with the passage of time or giving of notice would constitute an Event of Default; (xii) no bone fide dispute shall exist, by and
between any of holder of Notes, the Company, the Principal Market (or such applicable Eligible Market in which the Common Stock of the
Company is then principally trading) and/or FINRA with respect to any term or provision of any Note or any other Transaction Document
and (xiii) the shares of Common Stock issuable pursuant the event requiring the satisfaction of the Equity Conditions are duly authorized
and listed and eligible for trading without restriction on an Eligible Market.
38
(aa) “Equity
Conditions Failure” means that on any day during the period commencing twenty (20) Trading Days prior to the applicable Company
Optional Redemption Notice Date through the applicable Company Optional Redemption Date, the Equity Conditions have not been satisfied
(or waived in writing by the Holder) or there has been a Price Failure or Volume Failure.
(bb) [Reserved].
(cc) “Excluded
Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers or
employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan (as defined
above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options)
after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued and
outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such options
are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise
materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or
exercise of Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock
Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause
(i) above) is not lowered, none of such Convertible Securities or Options (other than standard options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder
and none of the terms or conditions of any such Convertible Securities or Options (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely
affects any of the Buyers; and (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise pursuant to the terms
of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription Date (other than
antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date).
(dd) “Existing
Senior Secured Notes” means those certain (i) senior secured convertible notes, issued from time to time, pursuant to that
certain Securities Purchase Agreement, dated as of August 15, 2022, by and among the Company and FF Simplicity Ventures LLC, as such
may be amended, modified, waived and/or supplemented, as applicable, from time to time and (ii) secured convertible notes, issued from
time to time, pursuant to that certain Securities Purchase Agreement, dated as of September 5, 2024, by and among the Company and certain
investors party thereto, as such may be amended, modified, waived and/or supplemented, as applicable, from time to time.
(ee) “Existing
Unsecured Notes” means those certain unsecured convertible notes, issued from time to time, pursuant to that certain Securities
Purchase Agreement, dated as of December 21, 2024, by and among the Company and certain investors party thereto, as such may be amended,
modified, waived and/or supplemented, as applicable, from time to time.
39
(ff) “Final
Closing” means the final closing of the Securities Purchase Agreement, which all the fund obligation set forth under Commitment
Annex has been fully paid.
(gg) “Financing
Documents” shall have the meaning as set forth in the Securities Purchase Agreement.
(hh) “Floor
Price” means $5.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events),
provided, however, the Company shall have the sole right to reduce the Floor Price, from time to time, to
a price per share not contrary to the rules and regulations promulgated by the Principal Market.
(ii)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire in any transaction or series or related transactions, either (x) at least 50% of the outstanding
shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by
all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement
or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including
through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject
Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding
shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement,
reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Note calculated as if any shares
of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented
by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities
to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their shares of
Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates
or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured
in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition
or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
40
(jj)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(kk) “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(ll) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP)
(other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has
not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (A) through (G) above.
(mm) “Intellectual
Property Rights” means trademarks, trade names, service marks, service mark registrations, service names, original works of
authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights and all applications and registrations therefor of the Company and/or any of its Subsidiaries.
(nn)
“Interest Date” means, with respect to any given calendar month, the first Trading Day of such calendar month.
(oo) “Interest
Rate” means ten percent (10%) per annum.
41
(pp) “Investment”
means any beneficial ownership (including stock, partnership or limited liability company interests) of or in any Person, or any loan,
advance or capital contribution to any Person or the acquisition of all, or substantially all, of the assets of another Person or the
purchase of any assets of another Person for greater than the fair market value of such assets.
(qq) [Reserved].
(rr)
“Maturity Date” shall mean [ ], 20[ ]1; provided, however, the Maturity Date may be extended at the option
of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall
have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through
the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or a Change of Control Notice is delivered prior to the Maturity Date, provided further that if a Holder elects
to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to Section
3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the conversion
of this Note.
(ss) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(tt) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(uu) [Reserved].
(vv) [Reserved].
(ww) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(xx) “Price
Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading Day during
the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed the Floor
Price (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after
the Issuance Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during any such measuring period.
1 Insert five (5) year anniversary of Issuance Date.
42
(yy) “Principal
Market” means the Nasdaq Capital Market.
(zz) “Redemption
Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption Notices and the Change
of Control Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”
(aaa) “Redemption
Premium” means 125%.
(bbb) “Redemption
Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices, the Company Optional
Redemption Prices, and each of the foregoing, individually, a “Redemption Price.”
(ccc)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(ddd) “Securities
Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date, by and among the Company
and the holders of the Notes party thereto, as may be amended from time to time.
(eee) “Subscription
Date” means March 21, 2025.
(fff) “Subsidiaries”
shall have the meaning as set forth in the Securities Purchase Agreement.
(ggg) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(hhh) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(iii) “Sufficient
Authorized Shares” means, for the purpose of this Note, that the Company has a sufficient number of authorized but unissued
and unreserved shares of Common Stock available for the conversion in full of the Notes at the Conversion Price then in effect.
43
(jjj) “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any
day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for
the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y)
with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.
(kkk) “Transaction
Documents” shall have the meaning as set forth in the Securities Purchase Agreement.
(lll) “Volume
Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume (as reported
on Bloomberg) of the Common Stock on the Principal Market on any Trading Day during the twenty (20) Trading Day period ending on the
Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”)
is less than $1,500,000 (as adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions
occurring after the Subscription Date).
(mmm) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg,
or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest
closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in Section 24. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
33. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of
this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business
Day immediately following such notice delivery date, publicly disclose such material, non-public 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 any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt
of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the
Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the
notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained in
this Section 33 shall limit any obligations of the Company, or any rights of the Holder, under Section 4.18 of the Securities Purchase
Agreement.
44
34. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company,
may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
35. TAXES.
(a) Without
limiting any other provision of this Note, any and all payments by the Company hereunder shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect
thereto (collectively referred to as “Taxes”) unless the Company is required to withhold or deduct any amounts for,
or on account of Taxes pursuant to any applicable law. If the Company shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to the Holder, (i) the sum payable shall be increased by the amount by which the sum payable would otherwise have
to be increased (the “make-whole sum”) to ensure that after making all required deductions (including deductions applicable
to the make-whole sum) the Holder would receive an amount equal to the sum it would have received had no such deductions been made, (ii)
the Company shall make such deductions and (iii) the Company shall pay the full amount withheld or deducted to the relevant governmental
authority within the time required. Upon the request of the Company, the Holder shall provide the Company with such duly completed and
executed forms or certificates prescribed by law as a basis for claiming an exemption from, or a reduction of, any Taxes imposed on payments
made hereunder.
(b) In
addition, the Company agrees to pay to the relevant governmental authority in accordance with applicable law any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or in
connection with the execution, delivery, registration or performance of, or otherwise with respect to, this Note (“Other Taxes”).
(c) The
Company shall deliver to the Holder official receipts, if any, in respect of any Taxes and Other Taxes payable hereunder promptly after
payment of such Taxes and Other Taxes or other evidence of payment reasonably acceptable to the Holder.
(d) If
the Company fails to pay any amounts in accordance with this Section 35, the Company shall indemnify the Holder within ten (10)
calendar days after written demand therefor, for the full amount of any Taxes or Other Taxes, plus any related interest or penalties,
that are paid by the Holder to the relevant governmental authority or other relevant governmental authority as a result of such failure.
(e) The
obligations of the Company under this Section 35 shall survive the termination of this Agreement and the payment of all amounts
payable hereunder.
[signature
page follows]
45
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set forth above.
Faraday Future Intelligent Electric, Inc.
By:
Name:
Yueting Jia
Title:
Global Chief Executive Officer
Convertible
Note - Signature Page
EXHIBIT
I
FARADAY
FUTURE INTELLIGENT ELECTRIC, INC.
CONVERSION NOTICE
Reference
is made to the Unsecured Convertible Note (the “Note”) issued to the undersigned by Faraday Future Intelligent Electric,
Inc., a Delaware corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby
elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par
value per share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined
herein shall have the meaning as set forth in the Note.
Date of
Conversion:
Aggregate
Principal to be converted:
Aggregate
accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such
Aggregate Interest to be converted:
AGGREGATE
CONVERSION AMOUNT
TO BE CONVERTED:
Please confirm
the following information:
Conversion
Price:
Number
of shares of Common Stock to be issued:
Please
issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as a certificate to the following name and to the following address:
Issue
to:
☐
Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC
Participant:
DTC
Number:
Account
Number:
Date: _____________ __,
Name of Registered Holder
By:
Name:
Title:
Tax ID:
E-mail Address:
EX-10.1 — FORM OF AMENDMENT AGREEMENT
EX-10.1
Filename: ea030222101ex10-1.htm · Sequence: 3
Exhibit 10.1
AMENDMENT
AGREEMENT
TO
SECURITIES
PURCHASE AGREEMENT
AND
INCREMENTAL
WARRANT
THIS
AMENDMENT AGREEMENT (the “Amendment”) is dated this [ ] day of August [ ], 2026, by and between Faraday Future Intelligent
Electric Inc., a Delaware corporation with offices located at 1990 E Grand Ave, El Segundo, CA, 90245 (the “Company”)
and the investor signatory hereto (the “Holder”). Capitalized terms used but not defined herein shall have the meaning
set forth in the March SPA (as defined below).
WHEREAS,
on March 21, 2025, the Company entered into that certain securities purchase agreement (as amended, the “March SPA”
and the transactions contemplated thereby, the “March Financing”) with, inter alia, the Holder, pursuant to
which the Company agreed to sell, and the Holder agreed to purchase, among others, (i) senior unsecured convertible notes (“Unsecured
Notes”); (ii) common stock purchase warrants (each, a “Common Warrant” and, together, the “Common
Warrants”) to purchase up to a number of shares of the Company’s Class A common stock, par value $0.0001 per share (the
“Common Stock”); and (iii) incremental note purchase warrants (the “Incremental Warrants”) to purchase
certain Incremental Notes;
WHEREAS,
the March Financing shall be completed in four Closings;
WHEREAS,
the First Closing occurred on April 4, 2025, the Second Closing occurred on May 28, 2025, the Third Closing occurred on July 11, 2025
(each, a “Completed Closing” and, collectively, the “Completed Closings”) and the Fourth Closing
has yet to occur;
WHEREAS,
pursuant to Section 7.3 of the March SPA, the Company shall deliver to the Holder at each Closing, (i) a Common Warrant to purchase up
to a number of shares of Common Stock equal to one hundred percent (100%) of the number of Conversion Shares issuable upon conversion
of the Unsecured Note issued to the Holder at such Closing; and (ii) an Incremental Warrant with an exercise price equal to the aggregate
principal amount of the Unsecured Note issued to such Holder at such Closing;
WHEREAS,
following the Completed Closings, the remaining Note Commitment Amount for each Purchaser is set forth on Schedule I hereto;
WHEREAS,
the Company and the Holder desire to, among other things, (i) amend the March SPA to split the Fourth Closing into two separate closings;
(ii) amend the March SPA to eliminate the Company’s obligation to issue, and the Holder’s right to receive, Common Warrants
and Incremental Warrants at the remaining closings; (iii) amend the preamble of the outstanding Incremental Warrants issued by the Company
to the Holder at each Completed Closing, to eliminate the Company’s obligation to issue, and the Holder’s right to receive,
Common Warrants upon exercise of such Incremental Warrants; and (iv) amend the Commitment Annex to reallocate a portion of the remaining
Note Commitment Amount for one Purchaser to another.
NOW,
THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows, effective as of the date of hereof:
Section
1. Split of Fourth Closing. The Holder and the Company agree that the Fourth Closing shall be divided into two separate closings
(respectively, the “Fourth Closing No. 1” and “Fourth Closing No. 2”, and together with the “Final
Closings”). All references to the Fourth Closing as used in the March SPA shall be replaced with references to the “Final
Closings”. In connection herewith, the form Unsecured Notes to be issued in each Final Closing and upon exercise of the outstanding
Incremental Warrants shall be substantially in the form set forth in Exhibit A hereto.
Section
2. Elimination of Closing Conditions. The Holder hereby irrevocably agrees to waive, with respect to the Final Closings, the condition
precedent set forth in Section 2.1(b)(ii) of the March SPA, with respect to the requirement of the effectiveness of the Registration
Statement.
Section
3. Amendment to March SPA. Notwithstanding anything in the March SPA to the contrary, the Holder and the Company agree that (a)
Section 2.1 and Section 7.3 of the March SPA are hereby amended such that the Company shall have no obligation to issue, and the Holder
shall have no right to purchase, (i) a Common Warrant; and (ii) an Incremental Warrant at the Final Closings.
Section
4. Re-allocation of Commitment. Notwithstanding anything in the March SPA to the contrary, the Holder and the Company agree that
the remaining Note Commitment Amount with respect to the Final Closings is hereby amended and restated as set forth on Schedule II
hereto, and each Purchaser shall fund such Purchaser’s Note Commitment Amount as set forth on Schedule III hereto.
Section
5. Amendment to Outstanding Incremental Warrants.
5.1
The preamble of each outstanding Incremental Warrant issued at a Completed Closing is hereby amended and restated in its entirety as
follows:
“THIS
INCREMENTAL NOTE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [HOLDER ]
or its permitted assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and
the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on
or prior to 5:00 p.m. (New York City time) on March 21, 2030 (the “Expiration Date”) but not thereafter, to subscribe
for and purchase from Faraday Future Intelligent Electric Inc., a Delaware corporation (the “Company”), one or more
unsecured convertible promissory notes, convertible into shares of Class A Common Stock of the Company, par value $0.0001 per share (“Common
Stock”), in the form attached to this Warrant as Exhibit A hereto (each a “Note”, and collectively,
the “Notes”), each accompanied by a number of shares of Series B Preferred Stock, par value $0.0001 per share, of
the Company (the “Series B Preferred Stock”) equal to the lesser of (1) the number of Conversion Shares into which
the Holder’s Notes are convertible and (2) the product of (x) the Holder’s Commitment Percentage (as defined in the Purchase
Agreement) multiplied by (y) nine million (9,000,000) minus the number of shares of Series B Preferred Stock held by the Holder as of
the exercise date. The purchase price of a Note, or portion thereof, under this Warrant shall be equal to the Exercise Price, as defined
in Section 2(b).”
2
5.2
Section 2(c) of each outstanding Incremental Warrant issued at a Completed Closing is hereby amended and restated in its entirety as
follows:
c) Delivery
of Shares of Series B Preferred Stock Upon Exercise. Upon exercise of this Warrant, in whole or in part, the Company shall also issue
to the Holder along with the Note issued upon such exercise, a number of shares of Series B Preferred Stock equal to the lesser of (1)
the number of Conversion Shares into which the Holder’s Notes are convertible and (2) the product of (x) the Holder’s Commitment
Percentage multiplied by (y) nine million (9,000,000) minus the number of shares of Series B Preferred Stock held by the Holder as of
the exercise date. Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the
holder of record of such shares of Series B Preferred Stock, irrespective of the date of delivery of the shares of Series B Preferred
Stock.
Section
6. Effectiveness. This Amendment is effective as of the time of execution of this Amendment by the Company and the Holder and
other amendments to the March SPA (each, an “Other Amendment” and, collectively, the “Other Amendments”)
identical in form and substance to this Amendment, signed by the Company and each other Purchaser (each, an “Other Holder”,
and collectively, the “Other Holders”).
Section
7. Governing Law; Jurisdiction; Waiver of Jury Trial. This Amendment shall be construed under the laws of the State of Delaware,
without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another
jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or indirectly from or in
connection with this Amendment shall be litigated only in the state and federal courts sitting in the City of Wilmington, New Castle
County, State of Delaware. The Company and the Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and
consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or
outside the State of Delaware by generally recognized overnight courier or certified or registered mail, return receipt requested, directed
to such party at its or his address set forth below (and service so made shall be deemed “personal service”) or by personal
service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY
RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AMENDMENT.
Section
8. Counterparts. This Amendment may be executed in two or more identical counterparts, all of which shall be considered one and
the same Amendment and shall become effective when counterparts have been signed by each party and delivered to the other party; provided
that an electronic signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and
effect as if the signature were an original, not an electronic signature.
3
Section
9. Severability. If any provision of this Amendment shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the remainder of this Amendment in that jurisdiction or the validity
or enforceability of any provision of this Amendment in any other jurisdiction.
Section
10. Independent Nature of Holder’s Obligations and Rights. The obligations of the Holder under this Amendment are several
and not joint with the obligations of any Other Holder, and the Holder shall not be responsible in any way for the performance of the
obligations of any Other Holder under any Other Amendments. Nothing contained herein or in any Other Amendment, and no action taken by
the Holder pursuant hereto, shall be deemed to constitute the Holder and Other Holders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holder and Other Holders are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this Amendment or any Other Amendment and the Company acknowledges
that, to the best of its knowledge, the Holder and the Other Holders are not acting in concert or as a group with respect to such obligations
or the transactions contemplated by this Amendment or any Other Amendment. The Company and the Holder confirm that the Holder has independently
participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder shall
be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Amendment,
and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for such purpose.
Section
11. Most Favored Nations. The Company hereby represents and warrants as of the date hereof and covenants and agrees that none
of the terms offered to any Other Holder with respect to an Other Amendment (each, a “Settlement Document”), is or
will be more favorable to such Person (other than any reimbursement of legal fees) than those of the Holder and this Amendment. If, and
whenever on or after the date hereof, the Company enters into a Settlement Document, then (i) the Company shall provide notice thereof
to the Holder immediately following the occurrence thereof and (ii) the terms and conditions of this Amendment shall be, without any
further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such
that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement
Document, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended
or modified term or condition, in which event the term or condition contained in this Amendment shall apply to the Holder as it was in
effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder.
The provisions of this Section 6 shall apply similarly and equally to each Settlement Document.
Section
12. Ratification. Except as otherwise expressly provided herein, the Transaction Documents, are, and shall continue to be, in
full force and effect and are hereby ratified and confirmed in all respects.
[Signature
Pages Follow]
4
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
FARADAY FUTURE INTELLIGENT ELECTRIC
INC.
By:
Name:
Title:
[Company
signature page to the Amendment]
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
THE
HOLDER:
_______________________
By:
Name:
Title:
ADDRESS:
_____________________________
_____________________________
_____________________________
_____________________________
[Holder
signature page to the Amendment]
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
+ Details
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
+ Details
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- Definition
Title of a 12(b) registered security.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
+ Details
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Data Type:
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Balance Type:
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- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
+ Details
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Data Type:
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Balance Type:
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
+ Details
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- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
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