Exhibit
10.2
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Original
Issue Date: February 27, 2024
Date
of issuance of this Debenture: April 12, 2024
Original
Conversion Price (subject to adjustment herein): $0.6111
$1,100,000
8%
CONVERTIBLE DEBENTURE
DUE
DECEMBER 31, 2024
THIS
8% CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued 8% Convertible Debentures of Qualigen Therapeutics,
Inc., a Delaware corporation (the “Company”), having its principal place of business at 5857 Owens Avenue, Suite 300,
Carlsbad, CA 92008, designated as its 8% Convertible Debenture due December 31, 2024 (this debenture, as amended, restated, supplemented
or otherwise modified from time to time, the “Debenture” and, collectively with the other debentures of such series,
the “Debentures”).
FOR
VALUE RECEIVED, the Company promises to pay to Yi Hua Chen or his registered assigns (the “Holder”), or shall have
paid pursuant to the terms hereunder, the principal sum of $1,100,000 on the earlier of (i) the Company completing a Subsequent Financing
with gross proceeds at least equal to the then-outstanding principal amount of this Debenture, or (ii) December 31, 2024 (the “Maturity
Date”) or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest
to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions
hereof. This Debenture is subject to the following additional provisions:
Section
1.Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following
meanings:
“Alternate
Consideration” shall have the meaning set forth in Section 5(e).
“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary
thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment
for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that
it is generally unable to pay its debts as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure
to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action
for the purpose of effecting any of the foregoing.
“Base
Conversion Price” shall have the meaning set forth in Section 5(b).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.
“Buy-In”
shall have the meaning set forth in Section 4(c)(v).
“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50%
of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Warrants issued together
with the Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with
the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less
than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries,
taken as a whole) sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals
who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority
of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
“Conversion
Date” shall have the meaning set forth in Section 4(a).
“Conversion
Price” shall have the meaning set forth in Section 4(b).
“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms
hereof.
“Debenture
Register” shall have the meaning set forth in Section 2(c).
“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).
“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).
“Distribution”
shall have the meaning set forth in Section 5(d).
“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have paid all liquidated
damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an effective registration statement pursuant
to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to
the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable
future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents may be resold pursuant to Rule 144 without
volume or manner-of-sale restrictions or current public information requirements as determined by the counsel to the Company as set forth
in a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading
on a Trading Market and all of the shares of Common Stock issuable pursuant to the Transaction Documents are listed or quoted for trading
on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock
for the issuance of all of the shares of Common Stock then issuable pursuant to the Transaction Documents, (f) there is no existing Event
of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the
issuance of the shares in question (or, in the case of an Optional Redemption, the shares issuable upon conversion in full of the Optional
Redemption Amount) to the Holder would not violate the limitations set forth in Section 4(d) and Section 4(e) herein, (h) there has been
no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated,
(i) the Holder is not in possession of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors,
employees, agents or Affiliates, that constitutes, or may constitute, material non-public information of the Company and (j) for each
Trading Day in a period of 20 consecutive Trading Days prior to the applicable date in question, the daily trading volume for the Common
Stock on the principal Trading Market exceeds $85,000.
“Event
of Default” shall have the meaning set forth in Section 8(a).
“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).
“Interest
Payment Date” shall have the meaning set forth in Section 2(a).
“Issuable
Maximum” shall have the meaning set forth in Section 4(e).
“Late
Fees” shall have the meaning set forth in Section 2(d).
“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all accrued
and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand
or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied
by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher
VWAP, or (ii) 105% of the outstanding principal amount of this Debenture, plus 100% of accrued and unpaid interest hereon, and (b) all
other amounts, costs, expenses and liquidated damages due in respect of this Debenture.
“Notice
of Conversion” shall have the meaning set forth in Section 4(a).
“Optional
Redemption” shall have the meaning set forth in Section 6(a).
“Optional
Redemption Amount” means the sum of (a) 125% of the then outstanding principal amount of the Debenture subject to the Optional
Redemption, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Debenture.
“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).
“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).
“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).
“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).
“Original
Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless
of the number of instruments which may be issued to evidence such Debentures.
“Purchase
Agreement” means the Securities Purchase Agreement, dated as of February 26, 2024 among the Company and Alpha Capital Anstalt,
as amended, modified or supplemented from time to time in accordance with its terms.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
“Successor
Entity” shall have the meaning set forth in Section 5(e).
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the reasonable, actual and documented fees and expenses which shall be paid by the Company.
Section
2. Interest.
a)
Payment of Interest. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Debenture at the rate of 8% per annum, payable on the Maturity Date (such date, the “Interest Payment Date”)
(if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in
cash.
b)
Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the date of issuance of this Debenture until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest shall
cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers the Conversion Shares within
the time period required by Section 4(c)(ii) herein. Interest hereunder will be paid to the Person in whose name this Debenture is registered
on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”). Except
as otherwise provided herein, if at any time the Company pays interest to the holders of the Debentures, then such payment shall be distributed
ratably among the holders of the then-outstanding Debentures based on their (or their predecessor’s) initial purchases of Debentures
pursuant to the Purchase Agreement.
c)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 15% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue daily
from the date such interest is due hereunder through and including the date of actual payment in full.
d)
Prepayment. Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of
this Debenture without the prior written consent of the Holder.
Section
3. Registration of Transfers and Exchanges.
a)
Different Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.
b)
Investment Representations. This Debenture has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.
c)
Reliance on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent
of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.
Section
4. Conversion.
a)
Voluntary Conversion. At any time after the date of issuance of this Debenture until this Debenture is no longer outstanding,
this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from
time to time (subject to the conversion limitations set forth in Section 4(d) and Section 4(e) hereof). The Holder shall effect conversions
by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion
shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the first (1st) Business Day immediately following the date that such Notice of Conversion is deemed delivered
hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender
this Debenture to the Company unless the entire principal amount of this Debenture, plus all accrued and unpaid interest thereon, has
been so converted in which case the Holder shall surrender this Debenture as promptly as is reasonably practicable after such conversion
without delaying the Company’s obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall have the
effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and
the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver
an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute
or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and
any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the
face hereof.
b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $0.6111, subject to adjustment
herein (the “Conversion Price”).
c)
Mechanics of Conversion.
i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y)
the Conversion Price.
ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) 2 Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the Holder the Conversion Shares which, on or after the Effective Date, shall
be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing
the number of Conversion Shares being acquired upon the conversion of this Debenture. On or after the Effective Date, the Company shall
use its best efforts to deliver any Conversion Shares required to be delivered by the Company under this Section 4(c)(ii) electronically
through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.
iii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to
or as directed by the Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any
time on or before the Holder’s receipt of such Conversion Shares, to rescind such conversion, in which event the Company shall
promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the
Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.
iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a
waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Debenture shall elect
to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder
or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless
an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have
been sought and obtained. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon
a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section
4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of principal amount being converted, $10 per Trading Day for each Trading Day after such Share Delivery Date until such Conversion
Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or
declare an Event of Default pursuant to Section 8 hereof for the Company’s failure to deliver Conversion Shares within the period
specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the
Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
v.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by the Holder’s brokerage firm to purchase (in
an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating
to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any
other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including
any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common
Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell
order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder,
either reissue (if surrendered) this Debenture in a principal amount equal to the principal amount of the attempted conversion (in which
case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with respect
to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000.
The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request
of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to the Holder hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this Debenture as required pursuant
to the terms hereof.
vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out
of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture and payment
of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of
Persons other than the Holder (and the other holders of the Debentures), not less than such aggregate number of shares of the Common
Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments
and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.
vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Debenture.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up to the next whole share.
viii.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Debenture shall be made without charge to
the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion
Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Debenture so converted
and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that
such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and
all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.
d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have
the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the applicable
Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and the Holder’s Attribution Parties shall include the number of shares of Common Stock
issuable upon conversion of this Debenture with respect to which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) conversion of the remaining, unconverted principal amount of this Debenture beneficially
owned by the Holder or any of the Holder’s Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Debentures or the Warrants) beneficially owned by the Holder or any of the Holder’s
Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that
the limitation contained in this Section 4(d) applies, the determination of whether this Debenture is convertible (in relation to other
securities owned by the Holder together with any Attribution Parties) and of which principal amount of this Debenture is convertible
shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s
determination of whether this Debenture may be converted (in relation to other securities owned by the Holder together with any Attribution
Parties) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation, and
the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (B) a more recent public announcement by the Company, or (C) a more recent written notice
by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or the Holder’s Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon conversion of this Debenture. The Holder, upon not less than 61 days’ prior notice to the Company, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in
no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section
4(d) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day
after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to a successor holder of this Debenture.
e)
Issuance Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval, then
the Company may not issue, upon conversion of this Debenture, a number of shares of Common Stock which, when aggregated with any shares
of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (i) in connection with the conversion of
any Debentures issued pursuant to the Purchase Agreement, (ii) in connection with the exercise of any Warrants issued pursuant to the
Purchase Agreement and (iii) in connection with any Warrants issued to any registered broker-dealer as a fee in connection with the issuance
of the Securities pursuant to the Purchase Agreement, would exceed 1,176,467 shares of Common Stock (subject to adjustment for forward
and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder
shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the original principal amount of
the Holder’s Debenture by (y) the aggregate original principal amount of all Debentures issued on or after the Original Issue Date
to all holders of Debentures. In addition, each holder may allocate its pro-rata portion of the Issuable Maximum among Debentures and
Warrants held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a holder no longer holds any Debentures
or Warrants and the amount of shares issued to the holder pursuant to the holder’s Debentures and Warrants was less than the holder’s
pro-rata share of the Issuable Maximum.
Section
5. Certain Adjustments.
a)
Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) makes a Distribution or
Distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, this Debenture), (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the
Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event,
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made
pursuant to this Section 5 shall become effective immediately after the record date for the determination of stockholders entitled to
receive such Distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or
re-classification.
b)
Subsequent Equity Sales. Following receipt of Shareholder Approval, if, at any time while this Debenture is outstanding, the Company
or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes
of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such
lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower
than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price
shall be reduced to equal the Base Conversion Price, provided that the Base Conversion Price shall not be less than $0.1164 (subject
to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the date of the Purchase Agreement).
Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If the Company enters
into a Variable Rate Transaction, despite the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued
Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised.
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price,
conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance,
the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive
Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders
of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however,
that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as the Holder’s right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).
d)
Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Debenture, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Debenture (without regard to any limitations on conversion hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution
to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as the Holder’s
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
e)
Fundamental Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all
of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon
any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in
Section 4(d) and Section 4(e) on the conversion of this Debenture), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Debenture is
convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section 4(e) on the
conversion of this Debenture). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share
of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration the Holder receives upon any conversion of this Debenture following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the
“Successor Entity”) to assume in writing all of the obligations of the Company under this Debenture and the other
Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written
agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior
to such Fundamental Transaction and shall, at the option of the Holder of this Debenture, deliver to the Holder in exchange for this
Debenture a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Debenture
which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the shares of Common Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the conversion
of this Debenture) prior to such Fundamental Transaction, and with a conversion price which applies the Conversion Price hereunder to
such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose
of protecting the economic value of this Debenture immediately prior to the consummation of such Fundamental Transaction), and which
is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this
Debenture and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and
may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Debenture and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
g)
Notice to the Holder.
i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other Distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as a whole)
is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at the Holder’s last
address as it shall appear upon the Debenture Register, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, Distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, Distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to convert this Debenture during the 20-day period commencing on the date
of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
6. Redemption.
a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the date of issuance
of this Debenture, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such
notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem
some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional Redemption Amount
on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”,
such 20 Trading Day period, the “Optional Redemption Period” and such redemption, the “Optional Redemption”).
The Optional Redemption Amount shall be payable in full on the Optional Redemption Date. The Company may only effect an Optional Redemption
if each of the Equity Conditions shall have been met (unless waived in writing by the Holder) on each Trading Day during the period commencing
on the Optional Redemption Notice Date through the Optional Redemption Date and through and including the date payment of the Optional
Redemption Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any time during the Optional
Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within 3 Trading Days
after the first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents,
the Company is obligated to notify the Holder of the nonexistence of an Equity Condition, such notice period shall be extended to the
third Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall be null and void, ab initio.
The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption
Notice through the date all amounts owing thereon are due and paid in full. The Company’s determination to pay an Optional Redemption
shall be applied ratably to all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial
purchases of Debentures pursuant to the Purchase Agreement.
b)
Redemption Procedure. The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption Date.
If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable due date, interest
shall accrue thereon at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted by applicable law until such
amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption Amount remains
unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such Optional
Redemption, ab initio. Notwithstanding anything to the contrary in this Section 6, the Company’s determination to redeem
or its elections under Section 6(a) shall be applied ratably among the holders of Debentures. The Holder may elect to convert the outstanding
principal amount of the Debenture pursuant to Section 4(a) prior to actual payment in cash for any redemption under this Section 6 by
the delivery of a Notice of Conversion to the Company.
Section
7. Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at least 50% in
principal amount of the then outstanding Debentures shall have otherwise given prior written consent, the Company shall not, and shall
not permit any of the Subsidiaries to, directly or indirectly:
a)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder (provided, however, that nothing herein shall prevent the Company from amending its charter
documents to effectuate a forward or reverse stock split);
b)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under the Transaction
Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing employees, officers and directors of the Company,
provided that such repurchases shall not exceed an aggregate of $200,000 for all employees, officers and directors during the term of
this Debenture;
c)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than (i) the Debentures and (ii) regularly
scheduled principal and interest payments under the terms of any Permitted Indebtedness, provided that such payments shall not be permitted
if, at such time, or after giving effect to such payment, any Event of Default exist or occur;
d)
pay cash dividends or Distributions on any equity securities of the Company, except that any Subsidiary may, directly or indirectly,
pay any dividend or Distribution to the Company;
e)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of
the Company (even if less than a quorum otherwise required for board approval); or
f)
enter into any agreement with respect to any of the foregoing.
Section
8. Events of Default.
a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and
whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or governmental body):
i.
any default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing to
a Holder on any Debenture, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default is not cured within 3 Trading Days;
ii.
the Company shall fail to materially observe or perform any other covenant or agreement contained in the Debentures (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(xi) below), which failure is not cured, if possible to cure, within the earlier to occur of (A) 15 Trading Days after notice of such
failure sent by the Holder or by any other Holder to the Company and (B) 15 Trading Days after the Company has become or should have
become aware of such failure;
iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall
occur under (A) any of the Transaction Documents, which failure is not cured, if possible to cure, within 15 Trading Days following notice
of failure sent by the Holder to the Company;
iv.
any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder pursuant to the Transaction
Documents shall be untrue or incorrect in any material respect as of the date when made or deemed made, which default is not cured within
5 Trading Days;
v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;
vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any
indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater
than $500,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become due and payable;
vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing
or quotation for trading thereon within 10 Trading Days;
viii.
the Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental Transaction
or shall agree to sell or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether
or not such sale would constitute a Change of Control Transaction);
ix.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the 4th Trading Day after a Conversion Date pursuant
to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s
intention to not honor requests for conversions of any Debentures in accordance with the terms hereof;
x.
the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill” that lasts for more than 3 Trading Days;
xi.
any monetary judgment, writ or similar final process not covered by any insurance shall be entered or filed against the Company, any
Subsidiary or any of their respective property or other assets for more than $1,000,000, and such judgment, writ or similar final process
shall remain unvacated, unbonded or unstayed for a period of 60 calendar days; or
xii.
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred.
b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at
the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days after the occurrence
of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue
at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon the payment in full
of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with
such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of the Holder’s
rights and remedies hereunder and all other remedies available to the Holder under applicable law. Such acceleration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until
such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.
Section
9. Miscellaneous.
a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by email attachment, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set forth above, or such other email address, or address as the Company
may specify for such purposes by notice to the Holder delivered in accordance with this Section 9(a). Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by email attachment, or sent by a
nationally recognized overnight courier service addressed to each Holder at the email address or address of the Holder appearing on the
books of the Company, or if no such email attachment or address appears on the books of the Company, at the principal place of business
of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email attachment to the
email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered via email attachment to the email address set forth
on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv)
upon actual receipt by the party to whom such notice is required to be given.
b)
Absolute Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation
of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein.
c)
Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen
or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only
upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to
the Company.
d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Wilmington. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such Delaware courts, or such Delaware Courts are improper or inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.
e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any
other occasion. Any waiver or amendment by the Company or the Holder must be in writing.
f)
Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit
the execution of every such as though no such law has been enacted.
g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture shall
be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or
the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining
any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security
being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder
to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Debenture.
h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be
deemed to limit or affect any of the provisions hereof.
Section
10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the
Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating
to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such
material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating
to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
*********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.
| |
qualigen
therapeutics, inc. |
| |
|
| |
By:
|
/s/
Michael S. Poirier |
| |
Name: |
Michael
S. Poirier |
| |
Title: |
Chief
Executive Officer |
ANNEX
A
NOTICE
OF CONVERSION
The
undersigned hereby elects to convert principal under the 8% Convertible Debenture due December 31, 2024 of Qualigen Therapeutics, Inc.,
a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”), of the
Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for
any conversion, except for such transfer taxes, if any.
By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that the Holder’s ownership of
the Common Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d)
of the Exchange Act.
The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer
of the aforesaid shares of Common Stock.
| Conversion
calculations: |
|
|
| |
|
Date
to Effect Conversion: |
| |
|
|
| |
|
Principal
Amount of Debenture to be Converted: |
| |
|
|
| |
|
Number
of shares of Common Stock to be issued: |
| |
|
|
| |
|
Signature: |
| |
|
|
| |
|
Name: |
| |
|
|
| |
|
Address
for Delivery of Common Stock Certificates: |
| |
|
|
| |
|
Or |
| |
|
|
| |
|
DWAC
Instructions: |
| |
|
|
| |
|
Broker
No:_____________ |
| |
|
Account
No:___________ |
Schedule
1
CONVERSION
SCHEDULE
The
8% Convertible Debentures due on December 31, 2024 in the aggregate principal amount of $1,100,000 are issued by Qualigen Therapeutics,
Inc., a Delaware corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.
Dated:
|
Date
of Conversion
(or
for first entry, the date of
issuance of this Debenture) |
|
Amount
of Conversion |
|
Aggregate
Principal Amount Remaining Subsequent to Conversion
(or
original Principal Amount)
|
|
Company
Attest |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
