Exhibit 10.1

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION THEREUNDER, CONFIRMED BY AN
OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE
PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
 
Principal Amount: $55,000
Issue Date: February 12, 2018
Actual Amount of Purchase Price: $50,000
 

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, CLS HOLDINGS USA, INC., a Nevada corporation (hereinafter
called the “Borrower” or the “Company”), hereby promises to pay to the order of
EFRAT INVESTMENTS LLC, or its registered assigns (the “Holder”), in the form of
lawful money of the United States of America, the principal sum of $55,000,
which amount is the $50,000 actual amount of the purchase price (the
“Consideration”) hereof plus an original issue discount in the amount of $5,000
(the “OID”) (the “Principal Amount”) and to pay interest on the unpaid Principal
Amount hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum
from the date hereof (the “Issue Date”) until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise, as
further provided herein. The maturity date shall be 18 months following the
Issue Date (the “Maturity Date”), and is the date upon which the principal sum,
the OID, as well as any accrued and unpaid interest and other fees, shall be due
and payable.

This Note is one of a series of notes (the “Notes”) in an undetermined aggregate
principal amount issued by the Company on or around the Issue Date.

This Note may not be prepaid or repaid in whole or in part except as otherwise
explicitly set forth herein.

Interest shall commence accruing on the date that the Note is fully funded and
shall be computed on the basis of a 365-day year and the actual number of days
elapsed.  Any Principal Amount or interest on this Note which is not paid when
due shall bear interest at the rate of the lesser of (i) fifteen percent (15%)
per annum and (ii) the maximum amount permitted by law from the due date thereof
until the same is paid (“Default Interest”).

All payments due hereunder (to the extent not converted into shares of Common
Stock in accordance with the terms hereof) shall be made in lawful money of the
United States of America. All payments shall be made at such address as the
Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the
case of any interest payment date which is not the date on which this Note is
paid in full, the extension of the due date thereof shall not be taken into
account for purposes of determining the amount of interest due on such date.

Each capitalized term used herein, and not otherwise defined, shall have the
meaning ascribed thereto in that certain Securities Purchase Agreement, dated as
of February 12, 2018, pursuant to which this Note was originally issued (the
“Purchase Agreement”).  As used in this Note, the term “business day” shall mean
any day other than a Saturday, Sunday or a day on which commercial banks in the
city of New York, New York are authorized or required by law or executive order
to remain closed.  As used herein, the term “Trading Day” means any day that
shares of Common Stock are trading or quoted on the OTCBB (as defined in the
Purchase Agreement), any tier of the NASDAQ Stock Market, the New York Stock
Exchange or the NYSE MKT.
 
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This Note is free from all taxes, liens, claims and encumbrances with respect to
the issue hereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Borrower and will not impose personal liability
upon the holder hereof.

The following terms shall apply to this Note:
 
ARTICLE I. CONVERSION RIGHTS
 
1.1  Conversion Right.

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

(b)  Automatic Conversion.  Subject to the Beneficial Ownership Limitation, if
(i) the closing price for the Common Stock on its principal trading market shall
equal or exceed 300% of the then applicable Conversion Price for a period of 10
consecutive Trading Days and (ii) the average daily trading volume for such 10
consecutive Trading Days shall equal or exceed $250,000 per day, then, provided
that there shall be either (x) an effective registration statement covering the
Conversion Shares or (y) the Conversion Shares are eligible for sale without any
limitations pursuant to Rule 144 under the 1933 Act, this Note shall
automatically, and without any action by any person, convert into shares of
Common Stock at the then effective Conversion Price (as hereinafter defined).
 
1.2 Conversion Price.  The per share conversion price into which the Principal
Amount and interest (including any Default Interest) under this Note shall be
convertible into shares of Common Stock hereunder shall be equal to $0.3125 (the
“Conversion Price”).
 
1.3 Authorized and Reserved Shares. The Borrower covenants that at all times
until the Note is satisfied in full, the Borrower will reserve from its
authorized and unissued Common Stock no less than an aggregate number of shares
of Common Stock as shall equal (i) the sum of the number of Conversion Shares
issuable upon the full conversion of this Note (assuming no payment of Principal
Amount or interest) as of any issue date (taking into
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consideration any adjustments to the Conversion Price pursuant to Section 2
hereof or otherwise) multiplied by (ii) one and a half (1.5) (the “Reserved
Amount”).  In the event that the Borrower shall be unable to reserve the
entirety of the Reserved Amount (the “Reserve Amount Failure”), the Borrower
shall promptly take all actions necessary to increase its authorized share
capital to accommodate the Reserved Amount (the “Authorized Share Increase”),
including without limitation, all board of directors actions and approvals and
promptly (but no less than 60 days following the calling and holding a special
meeting of its shareholders no more than 60 days following the Reserve Amount
Failure to seek approval of the Authorized Share Increase via the solicitation
of proxies.  The Borrower represents that upon issuance, the Conversion Shares
will be duly and validly issued, fully paid and non-assessable. In addition, if
the Borrower shall issue any securities or make any change to its capital
structure which would change the number of Conversion Shares into which this
Note shall be convertible at the then current Conversion Price, the Borrower
shall at the same time make proper provision so that thereafter there shall be a
sufficient number of shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of this Note. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue certificates for
the Conversion Shares or instructions to have the Conversion Shares issued as
contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this
Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates or causing the Company’s transfer
agent to electronically issue shares of Common Stock to execute and issue the
necessary certificates for the Conversion Shares or cause the Conversion Shares
to be issued as contemplated by Section 1.4(f) hereof in accordance with the
terms and conditions of this Note.
 
If, at any time the Borrower does not maintain the Reserved Amount it may be
considered an Event of Default under this Note.
 
1.4 Method of Conversion.
 
(a) Mechanics of Conversion.  This Note may be converted by the Holder in whole
or in part, on any Trading Day, at any time on or after the Issue Date, by
submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other
reasonable means of communication dispatched on the Conversion Date prior to
4:00 p.m., New York, New York time). Any Notice of Conversion submitted after
4:00 p.m., New York, New York time, shall be deemed to have been delivered and
received on the next Trading Day.
 
(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary
set forth herein, upon conversion of this Note in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Note to
the Borrower unless the entire unpaid Principal Amount is so converted. The
Holder and the Borrower shall maintain records showing the Principal Amount so
converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event of any
dispute or discrepancy, such records of the Borrower shall, prima facie, be
controlling and determinative in the absence of manifest error. Notwithstanding
the foregoing, if any portion of this Note is converted as aforesaid, the Holder
may not transfer this Note unless the Holder first physically surrenders this
Note to the Borrower, whereupon the Borrower will forthwith issue and deliver
upon the order of the Holder a new Note of like tenor, registered as the Holder
(upon payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid Principal Amount of this
Note. The Holder and any assignee, by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Note, the unpaid and unconverted Principal Amount of this
Note represented by this Note may be less than the amount stated on the face
hereof.
 
(c) Payment of Taxes. The Borrower shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on conversion of this
Note in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from
the Holder of a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements for conversion
as provided in this Section 1.4, the Borrower shall cause its transfer agent to
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issue and deliver or cause to be issued and delivered to or upon the order of
the Holder certificates for the Conversion Shares (or cause the electronic
delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof),
such delivery of Conversion Shares to occur within three (3) Trading Days after
such receipt (the “Deadline”) (and, solely in the case of conversion of the
entire unpaid Principal Amount and interest (including any Default Interest)
under this Note, surrender of this Note).  If absent circumstances outside its
control (such as acts of God, cyberattacks, terrorist attacks or similar
events), the Company’s transfer agent shall fail for any reason or for no reason
to issue to the Holder on or prior to the Deadline a certificate for the number
of Conversion Shares or to which the Holder is entitled hereunder and register
such Conversion Shares on the Company’s share register or to credit the Holder’s
balance account with DTC (as defined below) for such number of Conversion Shares
to which the Holder is entitled upon the Holder’s conversion of this Note (a
“Conversion Failure”), then, in addition to all other remedies available to the
Holder, (i) the Company shall pay in cash to the Holder on each day after the
Deadline and during such Conversion Failure an amount equal to 2.0% of the
product of (A) the sum of the number of Conversion Shares not issued to the
Holder on or prior to the Deadline and to which the Holder is entitled and (B)
the closing sale price of the Common Stock on the Trading Day immediately
preceding the last possible date which the Company could have issued such
Conversion Shares to the Holder without violating this Section 1.4(d); and (ii)
the Holder, upon written notice to the Company, may void its Notice of
Conversion 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 Notice of
Conversion; provided that the voiding of a Notice of Conversion shall not affect
the Company’s obligations to make any payments which have accrued prior to the
date of such notice. In addition to the foregoing, if on or prior to the
Deadline, the Company shall fail to issue and deliver a certificate to the
Holder and register such Conversion Shares on the Company’s share register or
credit the Holder’s balance account with DTC for the number of Conversion Shares
to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below, and if on or after
such Trading Day 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 shares of Common Stock issuable upon such exercise that the Holder
anticipated receiving from the Company, then the Company shall, within two (2)
Trading Days after 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 and other reasonable and customary
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Conversion Shares) or credit such Holder’s
balance account with DTC for such Conversion Shares shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such Conversion Shares or credit such Holder’s balance
account with DTC and pay cash to the Holder in an amount equal to the excess (if
any) of the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the closing sales price of the Common Stock on the date of
exercise.  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 improper failure to timely deliver certificates representing the
Conversion Shares (or to electronically deliver such Conversion Shares) upon the
conversion of this Note as required pursuant to the terms hereof.

(e) Obligation of Borrower to Deliver Common Stock. Three (3) Business Days
after receipt by the Borrower of a Notice of Conversion, the Holder shall be
deemed to be the holder of record of the Conversion Shares issuable upon such
conversion, the outstanding Principal Amount and the amount of accrued and
unpaid interest (including any Default Interest) under this Note shall be
reduced to reflect such conversion, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the portion of this
Note being so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as
provided herein, the Borrower’s obligation to issue and deliver the certificates
for the Conversion Shares (or cause the electronic delivery of the Conversion
Shares as contemplated by Section 1.4(f) hereof) shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the
Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any
obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in
connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is
received by the Borrower before 6:00 p.m., New York, New York time, on such
date.
 
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(f) Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering
physical certificates representing the Conversion Shares issuable upon
conversion hereof, provided the Borrower is participating in the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer or Deposit/Withdrawal
at Custodian programs and the sale of the Conversion Shares is registered under
the 1933 Act, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the
Conversion Shares issuable upon conversion hereof to the Holder by crediting the
account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent
Commission system.
 
1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion
of the Principal Amount and interest accrued on this Note (the “Conversion
Shares”) may not be sold or transferred unless (i) such shares are sold pursuant
to an effective registration statement under the 1933 Act or (ii) the Borrower
or its transfer agent shall have been furnished with an opinion of counsel
reasonably acceptable to the Borrower’s transfer agent (which opinion may be
issued by Company counsel or the Legal Counsel Opinion (as defined in the
Purchase Agreement)) to the effect that the shares to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration or (iii)
such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in and
verified in accordance with the Purchase Agreement). Except as otherwise
provided in the Purchase Agreement (and subject to the removal provisions set
forth below), until such time as the Conversion Shares have been registered
under the 1933 Act, each certificate for the Conversion Shares that has not been
so included in an effective registration statement or that has not been sold
pursuant to an effective registration statement, shall bear a legend
substantially in the following form, as appropriate:
 
“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) THE
AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS, CONFIRMED BY
AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE
PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
 
The legend set forth above shall be removed and the Company shall issue to the
Holder a certificate for the applicable Conversion Shares without such legend or
(as requested by the Holder) issue the applicable Conversion Shares by
electronic delivery by crediting the account of such holder’s broker with DTC,
if, unless otherwise required by applicable state securities laws, such
Conversion Shares are registered for sale under an effective registration
statement filed under the 1933 Act.  The Company shall be responsible for the
fees of its transfer agent and all DTC fees associated with any such issuance. 
The Holder agrees to sell all Conversion Shares, including those represented by
a certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any.  In the event that the
Company does not accept the opinion of counsel provided by the Holder with
respect to the transfer of Conversion Shares pursuant to an exemption from
registration, but the Company’s transfer agent is willing to accept such
opinion, at the Deadline, notwithstanding that the conditions of Rule 144, Rule
144A or Regulation S, as applicable, have been met, it may be considered an
Event of Default under this Note.
 
1.6 Effect of Certain Events.
 
(a) Effect of Merger, Consolidation, Etc. As long as the Note remains
outstanding, the Company shall not effect (i) the sale, conveyance or
disposition of all or substantially all of the assets of the Borrower, or (ii)
the consolidation, merger or other business combination of the Borrower with or
into any other Person (as defined below) or Persons when the Borrower is not the
survivor, unless the Person that purchases the Borrower’s
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assets or the Person into which the Borrower mergers or combines assumes the
obligations hereunder. “Person” shall mean any individual, corporation, limited
liability company, partnership, association, trust or other entity or
organization.
 
(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note
is issued and outstanding and prior to conversion of all of this Note, there
shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Borrower shall be changed into the same or a different number of
shares of another class or classes of stock or securities of the Borrower or
another entity, or in case of any sale or conveyance of all or substantially all
of the assets of the Borrower other than in connection with a plan of complete
liquidation of the Borrower, then (i) if the Borrower remains in existence, the
Holder of this Note shall thereafter have the right to receive upon conversion
of this Note, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock immediately theretofore issuable upon
conversion, such stock, securities or assets of the Borrower which the Holder
would have been entitled to receive in such transaction had this Note been
converted in full immediately prior to such transaction (without regard to any
limitations on conversion set forth herein), and in any such case appropriate
provisions shall be made with respect to the rights and interests of the Holder
of this Note to the end that the provisions hereof (including, without
limitation, provisions for adjustment of the Conversion Price and of the number
of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets
thereafter deliverable upon the conversion hereof; and (ii) if the Borrower is
not longer in existence or no longer owns a substantial portion of its assets,
subject to compliance with the next sentence, this Note shall no longer be an
obligation of Borrower. The Borrower shall not effectuate any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent
practicable, at least twenty (20) days prior written notice (but in any event at
least fifteen (15) days prior written notice) of the record date of the special
meeting of shareholders to approve, or if there is no such record date, the
consummation of, such merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event or sale of assets
(during which time the Holder shall be entitled to convert this Note) and (b)
the resulting successor or acquiring entity (if not the Borrower) assumes by
written instrument the obligations of this Section 1.6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or
share exchanges.
 
(c) Adjustment Due to Distribution. If the Borrower shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower’s shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be
entitled, upon any conversion of this Note after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.
 
(d) Purchase Rights. If, at any time when all or any portion of this Note is
issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase
Rights”) pro rata to the record holders of any class of Common Stock, then the
Holder of this Note will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on
conversion contained herein) 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 Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.
 
(e)  Dilutive Issuance.  If the Borrower, at any time while this Note or any
amounts due hereunder are outstanding, issues, sells or grants (or has issued,
sold or granted as of the Issue Date, as the case may be) any option to
purchase, or sells or grants any right to reprice, or otherwise disposes of, or
issues (or has sold or issued, as the case may be, or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or other
securities convertible into, exercisable for, or that otherwise entitle any
person or entity the right to acquire, shares of Common Stock (including,
without limitation, upon conversion of any convertible notes or warrants
outstanding as of or following the Issue Date), in each or any case at an
effective price per share that is lower than the then Conversion Price (such
lower price, the “Base Conversion Price” and such issuances, collectively, a
“Dilutive
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Issuance”) (it being agreed that if the holder of the Common Stock or other
securities so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices
or otherwise, or due to warrants, options or rights per share which are issued
in connection with such issuance, be entitled to receive shares of Common Stock
at an effective price per share that is lower than the Conversion Price, such
issuance shall be deemed to have occurred for less than the Conversion Price on
such date of the Dilutive Issuance), then the Conversion Price shall be reduced,
at the option of the Holder, to a price equal to the Base Conversion Price.

If the Company enters into a Variable Rate Transaction, 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 price per share
at which such securities could be issued in connection with such Variable Rate
Transaction. Such adjustment shall be made whenever such Common Stock or other
securities are issued.  Notwithstanding the foregoing, no adjustment will be
made under this Section 1.6(e) in respect of an Exempt Issuance.  In the event
of an issuance of securities involving multiple tranches or closings, any
adjustment pursuant to this Section 1.6(e) shall be calculated as if all such
securities were issued at the initial closing.

An “Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or
other securities to officers or directors of the Company pursuant to any stock
or option or similar equity incentive plan or pursuant to their employment
agreements, which is consistent with the Company’s prior business practices; (b)
shares of Common Stock or other securities to Consultants of the Company, (c)
shares of Common Stock upon conversion or exercise of securities outstanding on
the date hereof; (d) securities issued pursuant to a merger, consolidation,
acquisition or similar business combination, provided that any such issuance
shall only be to a Person (or to the equity holders of a Person) which is,
itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to
the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities; (e) securities issued pursuant to any
equipment loan or leasing arrangement, real property leasing arrangement or debt
financing from a bank or similar financial institution; or (f) securities issued
with respect to which the Holder waives its rights in writing under this Section
1.6(e).

(f)  Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events described in this
Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon
the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time
would be received upon conversion of the Note.
 
1.7 [Intentionally Omitted].
 
1.8 Status as Shareholder. Three (3) Business Days after submission of a Notice
of Conversion by a Holder (i) the Conversion Shares covered thereby (other than
the Conversion Shares, if any, which cannot be issued because their issuance
would exceed such Holder’s allocated portion of the Reserved Amount or
Beneficial Ownership Limitation) shall be deemed converted into shares of Common
Stock and (ii) the Holder’s rights as a Holder of such converted portion of this
Note shall cease and terminate, excepting only the right to receive certificates
for such shares of Common Stock and to any remedies provided herein or otherwise
available at law or in equity to such Holder because of a failure by the
Borrower to comply with the terms of this Note. Notwithstanding the foregoing,
if a Holder has not received certificates for all shares of Common Stock prior
to the tenth (10th) business day after the expiration of the Deadline with
respect to a conversion of any portion of this Note for any reason, then (unless
the Holder otherwise elects to retain its status as a holder of Common Stock by
so notifying the Borrower) the Holder shall regain the rights of a Holder of
this Note with respect to such unconverted portions of this Note and the
Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records to reflect
that such portion of this Note has not been converted. In all cases, the Holder
shall retain all of its rights and remedies for the Borrower’s failure to
convert this Note.
 
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1.9 Prepayment. Notwithstanding anything to the contrary contained in this Note
but subject to the following provisos, at any time prior to the 180th day
following the Issue Date, the Borrower shall have the right to prepay the
outstanding Principal Amount and interest (including any Default Interest) then
due under this Note, in whole or in part, in accordance with this Section 1.9. 
Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be
delivered to the Holder of the Note at its registered addresses and shall state:
(1) that the Borrower is exercising its right to prepay the Note, and (2) the
date of prepayment. Within two Business Days after the Holder’s receipt of the
Optional Prepayment Notice, the Holder shall have the right to convert all or a
portion of the amount proposed to be prepaid by the Borrower by delivering to
Borrower at its registered address and within such two Business Day period, a
Notice of Conversion.  If the Holder does not deliver a Notice of Conversion
within such two Business Day period or delivers a Notice of Conversion with
respect to less than the amount Borrower proposes o prepay, then Borrower shall
have two (2) Business Days to pay the Holder the amount of the proposed
prepayment (as reduced by any amount Holder elects to convert).  If Borrower
fails to pay Holder such amount within two (2) Business Days after the end of
the period during which Holder could exercise its Notice of Conversion, then
Borrower’s original Optional Prepayment Notice shall be void and if Borrower at
any point in the future wishes to prepay the Note, it must commence the
procedure set forth herein from the beginning.  If the Borrower elects to make a
prepayment, the Borrower shall make payment to the Holder of an amount in cash
equal to the sum of: (w) 110% multiplied by the portion of the Principal Amount
being prepaid plus (x) accrued and unpaid interest on the Principal Amount to
the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and (x).  If the Borrower exercises its right to
prepay the Note at any time from the 31st day through the 60th day following the
Issue Date, the Borrower shall make payment to the Holder of an amount in cash
equal to the sum of: (w) 115% multiplied by the portion of the Principal Amount
being prepaid plus (x) accrued and unpaid interest on the Principal Amount to
the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and (x).  If the Borrower exercises its right to
prepay the Note at any time from the 61st day through the 120th day following
the Issue Date, the Borrower shall make payment to the Holder of an amount in
cash equal to the sum of: (w) 120% multiplied by the portion of the Principal
Amount being prepaid plus (x) accrued and unpaid interest on the Principal
Amount to the Optional Prepayment Date plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and (x).  If the Borrower exercises its right
to prepay the Note at any time from the 121st day through the 180th day
following the Issue Date, the Borrower shall make payment to the Holder of an
amount in cash equal to the sum of: (w) 125% multiplied by the portion of the
Principal Amount being prepaid plus (x) accrued and unpaid interest on the
Principal Amount to the Optional Prepayment Date plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and (x).

ARTICLE II. CERTAIN COVENANTS
2.1 Intentionally Omitted.
2.2 Intentionally Omitted.
2.3 Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder’s written
consent (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan.
 
2.4 Restriction on Stock Repurchases and Debt Repayments. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent redeem, repurchase or otherwise acquire
(whether for cash or in exchange for property or other securities or otherwise)
in any one transaction or series of related transactions any shares of capital
stock of the Borrower or any warrants, rights or options to purchase or acquire
any such shares, or repay any pari passu or subordinated Indebtedness of
Borrower.
 
2.5 Sale of Assets. So long as the Borrower shall have any obligation under this
Note, the Borrower shall not, without the Holder’s written consent, which shall
not be unreasonably withheld, sell, lease or otherwise dispose of any
significant portion of its assets outside the ordinary course of business. Any
consent to the disposition of any assets may be conditioned on a specified use
of the proceeds of disposition.
 
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2.6 Advances and Loans; Affiliate Transactions. So long as the Borrower shall
have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, lend money, give credit, make advances to or enter
into any transaction with any person, firm, joint venture or corporation,
including, without limitation, its officers, directors, and employees, but
excluding its subsidiaries and other affiliates, except loans, credits or
advances (a) in existence or committed on the Issue Date and which the Borrower
has informed Holder in writing prior to the Issue Date or which is disclosed in
the SEC Documents, (b) transactions with affiliates consistent with the
Borrower’s past practices; (c) in regard to transactions with unaffiliated third
parties, made in the ordinary course of business or (d) in regard to
transactions with unaffiliated third parties, not in excess of $50,000. So long
as the Borrower shall have any obligation under this Note, the Borrower shall
not, without the Holder’s written consent, repay any affiliate (as defined in
Rule 144) of the Borrower in connection with any indebtedness or accrued amounts
owed to any such party.

2.7  Intentionally Omitted.

2.8 Preservation of Business and Existence, etc. So long as the Borrower shall
have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, change the nature of its proposed business or sell,
divest, or change the structure of any material assets other than in the
ordinary course of business or as disclosed in the SEC Documents. In addition,
so long as the Borrower shall have any obligation under this Note, the Borrower
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 (other than dormant Subsidiaries that have no or
minimum assets) 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.
Furthermore, so long as the Borrower shall have any obligation under this Note,
the Borrower shall not, without the Holder’s written consent, enter into
Variable Rate Transaction or investment.

2.9 Noncircumvention.  The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate or Articles of Incorporation or
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
the provisions of this Note and take all action as may be required to protect
the rights of the Holder.
2.10 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, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary 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.
ARTICLE III. EVENTS OF DEFAULT
 
It shall be considered an event of default if any of the following events listed
in this Article III (each, an “Event of Default”) shall occur, and be continuing
after Holder has given notice to Borrower thereof and Borrower has failed to
cure such event within five (5) Business Days thereafter:
 
3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
Principal Amount hereof or interest thereon when due on this Note, whether at
maturity, upon acceleration or otherwise.
 
3.2 Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares
to the Holder (or announces or threatens in writing that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note, (ii) fails to transfer or
cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for the Conversion Shares issuable to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this
Note, (iii) reserve the Reserved Amount at all times, or (iv) the Borrower
directs its transfer agent not to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or issuing) (electronically or in
certificated form) any certificate for the Conversion Shares issuable to the
Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, or fails to remove (or directs its transfer agent not to
remove or impairs, delays, and/or hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any
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certificate for any Conversion Shares issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note if the sale of
the Conversion Shares are then registered under the 1933 Act (or makes any
written announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and in all cases of (i) – (iv) any such
failure shall continue uncured (or any written announcement, statement or threat
not to honor its obligations shall not be rescinded in writing) for three (3)
Trading Days after the Holder shall have delivered a Notice of Conversion.  It
is an obligation of the Borrower to remain current in its obligations to its
transfer agent. It shall be an Event of Default of this Note, if a conversion of
this Note is delayed, hindered or frustrated due to a balance owed by the
Borrower to its transfer agent. If at the option of the Holder, the Holder
advances any funds to the Borrower’s transfer agent in order to process a
conversion, such advanced funds shall be paid by the Borrower to the Holder
within forty eight (48) hours of a demand from the Holder.  Notwithstanding the
foregoing, it shall not be an Event of Default if the failure hereunder is due
to the transfer agent’s failure to issue the Conversion Shares due to
circumstances outside its control such as a cyberattack, terrorist attack or
similar events.
 
3.3 Breach of Agreements and Covenants. The Borrower breaches any material
agreement, covenant or other material term or condition contained in the
Purchase Agreement, this Note, the Warrant described in the Purchase Agreement,
the Irrevocable Transfer Agent Instructions.
 
3.4 Breach of Representations and Warranties. Any representation or warranty of
the Borrower made in the Purchase Agreement, this Note, the Warrant described in
the Purchase Agreement, the Irrevocable Transfer Agent Instructions shall be
false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Note or the Purchase Agreement.
 
3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed.
 
3.6 Judgments. Any money judgment, writ or similar process shall be entered or
filed against the Borrower or any subsidiary of the Borrower or any of its
property or other assets for more than $100,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented
to by the Holder, which consent will not be unreasonably withheld.
 
3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be instituted by or
against the Borrower or any material subsidiary of the Borrower.
 
3.8 Delisting of Common Stock. The Borrower shall fail to maintain the listing
of the Common Stock on at least one of the Over the Counter Bulletin Board, the
OTCQB Market, any level of the OTC Markets, or any level of the Nasdaq Stock
Market or the New York Stock Exchange (including the NYSE MKT).
 
3.9 Failure to Comply with the 1934 Act. At any time after the Issue Date, the
Borrower shall fail to comply with the periodic reporting requirements of the
1934 Act and/or the Borrower shall cease to be subject to the reporting
requirements of the 1934 Act.  It shall not be an Event of Default under this
Section 3.9 if the Borrower shall file any Notification of Late Filing on Form
12b-25 with the SEC.
 
3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any
substantial portion of its business.
 
3.11 Cessation of Operations. Any cessation of operations by Borrower or
Borrower admits it is otherwise generally unable to pay its debts as such debts
become due, provided, however, that any disclosure of the Borrower’s ability to
continue as a “going concern” shall not be an admission that the Borrower cannot
pay its debts as they become due.
 
3.12 Maintenance of Assets. The failure by Borrower to maintain any material
intellectual property rights, personal, real property or other assets which are
necessary to conduct its business (whether now or in the future).
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3.13 Financial Statement Restatement. The restatement of any financial
statements filed by the Borrower with the SEC for any date or period from two
years prior to the Issue Date of this Note and until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the
unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.
 
3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common
Stock without twenty (20) days prior written notice to the Holder.
 
3.15 Replacement of Transfer Agent.  In the event that the Borrower proposes to
replace its transfer agent, the Borrower fails to provide, prior to the
effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to the Purchase Agreement
(including but not limited to the provision to irrevocably reserve shares of
Common Stock in the Reserved Amount) signed by the successor transfer agent to
Borrower and the Borrower.

3.16 DTC “Chill”. The DTC places a “chill” (i.e. a restriction placed by DTC on
one or more of DTC’s services, such as limiting a DTC participant’s ability to
make a deposit or withdrawal of the security at DTC) on any of the Borrower’s
securities.

3.17 Illegality. Any court of competent jurisdiction issues an order declaring
this Note, the Purchase Agreement or any provision hereunder or thereunder to be
illegal.

3.18. DWAC Eligibility.  In addition to the Event of Default in Section 3.16,
the Common Stock is otherwise not eligible for trading through the DTC’s Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs.

3.19 Cross-Default.  The declaration of an event of default by any lender or
other extender of credit to the Company under any notes, loans, agreements or
other instruments of the Company evidencing any Indebtedness of the Company
(including those filed as exhibits to or described in the Company’s filings with
the SEC), after the passage of all applicable notice and cure or grace periods.

3.20 Variable Rate Transactions. The Borrower (i) issues shares of Common Stock
(or convertible securities or Purchase Rights) in connection with a Variable
Rate Transaction (entered into in the future), or (ii) adjusts downward the
“floor price” at which shares of Common Stock (or convertible securities or
Purchase Rights) may be issued in connection with a Variable Rate Transaction
(entered into in the future).

3.21 Rights and Remedies Upon an Event of Default.  Upon the occurrence and
during the continuation of any Event of Default specified in this Article III,
this Note shall become immediately due and payable and the Borrower shall pay to
the Holder, in full satisfaction of its obligations hereunder, an amount (the
“Default Amount”) equal to the Principal Amount then outstanding plus accrued
interest (including any Default Interest) through the date of full repayment
multiplied by 115%.  Holder may, in its sole discretion, determine to accept
payment part in Common Stock and part in cash. For purposes of payments in
Common Stock, the conversion formula set forth in Section 1.2 shall apply.  Upon
an uncured Event of Default, all amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived by the Borrower, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall
be entitled to exercise all other rights and remedies available at law or in
equity.
 
ARTICLE IV. MISCELLANEOUS
 
4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privileges. All rights and remedies of the Holder existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
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4.2 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by e-mail or facsimile, with accurate confirmation generated by the
transmitting facsimile machine or confirmation of receipt if transmitted by
e-mail, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:

If to the Borrower, to:

CLS HOLDINGS USA, INC.
11767 South Dixie Highway, Suite 115
Miami, FL 33156
Attention: Jeffrey Binder
e-mail: jeff@clslabs.com

With a copy by e-mail only to (which copy shall not constitute notice):

BROAD AND CASSEL
1 North Clematis Street, Suite 500
West Palm Beach, Florida 33401
Attention:  Kathleen L. Deutsch, P.A.
e-mail: kdeutsch@broadandcassel.com
 
If to the Holder:
         Efrat Investments LLC             
         54 Lenox street                           
         Clifton NJ 07012                                   
Attention:  Pinny Rotter                             
e-mail: pinny@efratinvestments.com

 
4.3 Amendments. This Note and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.
 
4.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an “Accredited
Investor” (as defined in, and verified in accordance with, the Purchase
Agreement). Notwithstanding anything in this Note to the contrary, this Note may
be pledged as collateral by Holder in connection with a bona fide margin account
or other lending arrangement.
 
4.5 Cost of Collection. If default is made in the payment of this Note, the
Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.
 
4.6 Governing Law; Venue; Attorney’s Fees. This Note shall be governed by
and construed in accordance with the laws of the State of Nevada without regard
to principles of conflicts of laws.
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Any action brought by either party against the other concerning the transactions
contemplated by this Note or any other agreement, certificate, instrument or
document contemplated hereby shall be brought only in the state courts of New
York or in the federal courts located in the state and county of New York.  The
Borrower hereby irrevocably waives any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens.  THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, 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 TRANSACTIONS CONTEMPLATED HEREBY.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Note or
any other agreement, certificate, instrument or document contemplated hereby or
thereby 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 Note and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.  The prevailing party in any action or dispute brought
in connection with this the Note or any other agreement, certificate, instrument
or document contemplated hereby or thereby shall be entitled to recover from the
other party its reasonable attorney’s fees and costs.
 
4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to
pay an amount in excess of the outstanding Principal Amount (or the portion
thereof required to be paid at that time) plus accrued and unpaid interest plus
Default Interest on such interest, the Borrower and the Holder agree that the
actual damages to the Holder from the receipt of cash payment on this Note may
be difficult to determine and the amount to be so paid by the Borrower
represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn
a return from the sale of shares of Common Stock acquired upon conversion of
this Note at a price in excess of the price paid for such shares pursuant to
this Note. The Borrower and the Holder hereby agree that such amount of
stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.
 
4.8 Purchase Agreement. The Company and the Holder shall be bound by the
applicable terms of the Purchase Agreement and the documents entered into in
connection herewith and therewith.
 
4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder
of this Note shall have no rights as a Holder of Common Stock unless and only to
the extent that it converts this Note into Common Stock. The Borrower shall
provide the Holder with prior notification of any meeting of the Borrower’s
shareholders (and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a record of its
shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any Change
in Control or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or twenty (20) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section 4.9.
 
4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Note, that the Holder shall be
entitled, in addition to all other available remedies at law or in equity, and
in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce
specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.
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4.11 Construction; Headings. This Note shall be deemed to be jointly drafted by
the Company and all the Holder and shall not be construed against any 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.

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

4.13 Severability.  In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law (including any
judicial ruling), then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of this Note.

[signature page follows]

14

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by
its duly authorized officer on February 12, 2018.
 
CLS HOLDINGS USA, INC.

By:
 /s/ Jeffrey Binder
 
 
Name: Jeffrey Binder
 
 
Title:   Chief Executive Officer
 

 
15

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EXHIBIT A -- NOTICE OF CONVERSION
 
The undersigned hereby elects to convert $______________ principal amount of the
Note (defined below) into that number of shares of Common Stock to be issued
pursuant to the conversion of the Note (“Common Stock”) as set forth below, of
CLS HOLDINGS USA, INC., a Nevada corporation (the “Borrower”), according to the
conditions of the Senior Convertible Promissory Note of the Borrower dated as of
February ___, 2018 (the “Note”), as of the date written below. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any.
 
Box Checked as to applicable instructions:
 
☐
 
The Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system (“DWAC
Transfer”)(available only when the shares of Common Stock to be issued have been
registered under the 1933 Act).
 
 
 
 
 
Name of DTC Prime Broker:
 
 
Account Number:

 
☐
 
The undersigned hereby requests that the Borrower issue a certificate or
certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary, on an
attachment hereto:
 
 
 
 
 
                                                                      
                                                                   
                                                                   
                                                                   
Attention:                                                 
e-mail:                                                        

 

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