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) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


 


Principal Amount: US$167,750.00Issue Date:
February 26, 2018 Purchase Price: US$167,750.00


 


CONVERTIBLE PROMISSORY NOTE


 


FOR
VALUE RECEIVED, VILACTO BIO INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order of AUCTUS FUND, LLC, a Delaware limited liability company, or registered assigns (the “Holder”)
the sum of US$167,750.00 together with any interest as set forth herein, on November 26, 2018 (the “Maturity Date”),
and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (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. This Note may not be prepaid in whole or in part except as otherwise explicitly set
forth herein with the written consent of the Holder which may be withheld for any reason or for no reason. Any amount of principal
or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty four percent (24%)
per annum or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”).
Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and
the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value
per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States
of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made
in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case
of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall
not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business
day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York
are authorized or required by law or executive order to remain closed. Each


 




    	 	1	 



    	 



    

 


capitalized term used herein,
and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date
hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).


 


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


 


The following terms shall apply to this Note:


 


ARTICLE I. CONVERSION RIGHTS


 


1.1 
Conversion Right. The Holder shall have the right from time to time, and at any time
following the Issue Date and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as
defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount
of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable
shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the
Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (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 the Notes or the unexercised or unconverted portion of any
other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein)
and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the
determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than
4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further,
however, that the limitations on conversion may be waived by the Holder (up to a maximum of 9.99%) upon, at the election
of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall
continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver).
The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion
Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion,
in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date
(the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note,
the sum of (1)


 




    	 	2	 



    	 



    

 


the principal amount of
this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any,
on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however, that the Borrower
shall have the right to pay any or all interest in cash plus (3) at the Holder’s option, Default Interest, if any,
on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.


 


1.2 
 Conversion Price.


 


Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal the lesser of (i) the lowest Trading Price (as defined below) during the previous twenty-five (25) Trading Day period
ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price (as defined herein)
(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The “Variable Conversion Price” shall mean 50% multiplied by the Market Price (as
defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price for the Common
Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB or applicable
trading market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the
OTC Pink is not the principal trading market for such security, the trading price of such security on the principal securities
exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any
of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink
sheets” by the National Quotation Bureau, Inc., or (ii) the closing bid price on the OTC Pink, OTCQB or applicable trading
market as reported by a Reporting Service designated by the Holder or, if the OTC Pink is not the principal trading market for
such security, the closing bid price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the
closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation
Bureau, Inc. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the
Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible
under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may
be adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common
Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If
the shares of the Borrower’s Common Stock have not been delivered within three (3) business days to the Borrower,
the Notice of Conversion may be rescinded. At any time after the Closing Date, if in the case that the Borrower’s Common
Stock is not deliverable by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery
of shares of the Borrower’s Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for
all future conversions under all Notes. If in the case that the Borrower’s Common
Stock is “chilled” for


 




    	 	3	 



    	 



    

 


deposit into the DTC system
and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under all Notes while
the “chill” is in effect. If in the case of both of the above, an additional cumulative 25% discount shall apply. Additionally,
if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading
shares after one hundred eighty-one (181) days from the Issue Date, an additional
30% discount will be attributed to the Conversion Price. If the Trading Price cannot
be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean
any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or on the principal securities exchange or
other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its transfer
agent and all DTC fees associated with any such issuance. Holder shall be entitled to deduct $500.00 from the conversion amount
in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion. If at any time the
Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole
discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount
for such conversion may be increased to include Additional Principal, where “Additional Principal” means such additional
amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such
conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by
the Holder to the par value price.


 


While this
Note is outstanding, each time any 3rd party has the right to convert monies owed to that 3rd party (or receive
shares pursuant to a settlement or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount
to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then
the H1older, in Holder’s sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments
in this Note) until this Note is no longer outstanding. While this Note is outstanding, each time any 3rd party has
a look back period greater than the look back period in effect under the Note at that time, including but not limited to under
Section 3(a)(9) and Section 3(a)(10), then the Holder, in Holder’s sole discretion, may utilize such greater number of look
back days until this Note is no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business
day of becoming aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding
sentences.


 


(a) 
Conversion Price During Major Announcements. Notwithstanding anything contained in
Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge
with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital
stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity
(including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock (or any
other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement
Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion
Price Termination Date (as defined below), be equal to the


 




    	 	4	 



    	 



    

 


lower of (x) the Conversion
Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would
otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined
as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean,
with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by
this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity
(in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction
or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.


 


(b)    
Pro Rata Conversion; Disputes. In the event of a dispute as to the number of
shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Borrower shall issue to the
Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section
4.13.


 


1.3  
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the
issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is
required at all times to have authorized and reserved 6 times the number of shares that is actually issuable upon full
conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved
Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations
pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and
validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to
its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at
the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall
be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the
outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates
for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute
full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue
the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.
Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of
any prior conversions.


 


If, at any
time the Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of the Holder,
the principal amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s
and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) per occurrence.


 


1.4 
 Method of Conversion


 







    	 	5	 



    	 



    

 


(a)  
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after the Issue Date, by


(A) submitting to the Borrower
a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior
to 5:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the
Borrower.


 


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


 


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


 


(d)  
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or
e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as
provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order
of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such
receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount
hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.


 


(e)  
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall
be deemed to be the holder of record of


 




    	 	6	 



    	 



    

 


the Common Stock issuable
upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced
to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I,
all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given
a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock
shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same,
any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective
of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.
The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received
by the Borrower before 5:00 p.m., New York, New York time, on such date.


 


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


 


(g)    
DTC Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any
reason, or, if the Conversion Price is less than $0.01 at any time while this Note is outstanding, the principal amount of
the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and
Borrower’s expectation that any principal amount increase will tack back to the Issue Date). In addition,
the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to
adjustment as provided in this Note.


 


(h)  
Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to
pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances
described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000
per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock until the Borrower
issues and delivers a certificate to the Holder or credit the Holder's balance account with OTC for the number of shares of
Common Stock to which the Holder is entitled upon such Holder's conversion of any Conversion Amount (under Holder's and
Borrower's expectation that any damages will tack back


 




    	 	7	 



    	 



    

 


to the Issue Date).. Such
cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option
of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall
be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate,
interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the
liquidated damages provision contained in this Section 1.4(h) are justified.


 


(i)     
Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from
the Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of
the Borrower’s Common Stock requested in the Notice of Conversion within three (3) business days from the date of
receipt of the Note of Conversion, (iii) the Holder is unable to procure a legal opinion required to have the shares of the
Borrower’s Common Stock issued unrestricted and/or deposited to sell for any reason related to the
Borrower’s standing, (iv) the Holder is unable to deposit the shares of the Borrower’s Common Stock requested in
the Notice of Conversion for any reason related to the Borrower’s standing, (v) at any time after a missed Deadline, at
the Holder’s sole discretion, or (vi) if OTC Markets changes the Borrower's designation to ‘Limited
Information’ (Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull & Crossbones),
‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign) or other trading restriction
on the day of or any day after the Conversion Date, the Holder maintains the option and sole discretion to rescind the Notice
of Conversion (“Rescindment”) with a “Notice of Rescindment.”


 


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


 




    	 	8	 



    	 



    

 


“NEITHERTHEISSUANCEANDSALEOFTHESECURITIES REPRESENTED
BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


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


 


1.6   Effect
of Certain Events.


 


(a)   Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in
which more than 50% of the voting power of the Borrower is disposed of, or 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
shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant
to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction
an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b)
hereof. “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 the Notes, 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


 




    	 	9	 



    	 



    

 


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 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 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. The Borrower shall
not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) 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)  
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or
sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock
issued directly to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers
(provided, however, that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of
Common Stock prior to the issuance of such shares), any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such
shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price
will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.


 




    	 	10	 



    	 



    

 


The Borrower
shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights
or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase
Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such
warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”)
and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price
then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the
case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable,
by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion
of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance
of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon
exercise of such Options. Notwithstanding anything contained herein, this Section 1.6(d) of the Note shall not apply to the Borrower’s
issuance of Common Stock to EMA Financial, LLC, or bona fide employees, consultants, or directors of the Borrower.


 


Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the
price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect,
then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof
at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.


 


(e)  
Purchase Rights. If, at any time when any Notes are 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


 




    	 	11	 



    	 



    

 


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.


 


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


 


1.9 
Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower
may prepay the amounts outstanding hereunder pursuant to the following terms and conditions:


 


(a)  
At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the
Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to
the Holder of the Note


 




    	 	12	 



    	 



    

 


to prepay the outstanding
Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied
by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid
principal amount of this Note plus (y) Default Interest, if any.


 


(b) 
 At any time during the period beginning the day which is ninety one


(91) days following the Issue
Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shall have the right,
exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note
(principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the
sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note plus (y) Default Interest, if any.


 


(c)  
After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of
prepayment.


 


1.10   
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 which shall be not more than three (3) Trading Days from the date of the Optional
Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment
of the applicable prepayment amount to or upon the order of the Holder as specified by the Holder in writing to the Borrower at
least one (1) business day prior to the Optional Prepayment Date. If the Borrower delivers an Optional Prepayment Notice and fails
to pay the applicable prepayment amount due to the Holder of the Note within two (2) business days following the Optional Prepayment
Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.


 


ARTICLE II. CERTAIN COVENANTS


 


2.1  
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution
(whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock
solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any
other payment or distribution in respect of its capital stock except for distributions pursuant to any
shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.


 


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


 


2.3   [Intentionally
Omitted].


 




    	 	13	 



    	 



    

 


2.4  
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, 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.


 


2.5   Advances
and Loans. 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 or make advances to any person, firm, joint venture or corporation,
including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans,
credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing
prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.


 


2.6  
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any
transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either
Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a
“3(a)(l0) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common
Stock related to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this note is outstanding, a liquidated damages charge
of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand Dollars $15,000, will be
assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to
the balance of this Note.


 


2.7  
Preservation of Existence, etc. 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.


 


2.8  
Non-circumvention. The Borrower hereby covenants and agrees that the Borrower 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.


 


2.9  
Repayment from Proceeds. While any portion of this Note is outstanding, if the Borrower receives cash proceeds from any
source or series of related or unrelated sources, including but not limited to, from payments from customers, the issuance of
equity or debt, the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line
of credit of the Borrower or the sale of assets, the Borrower shall, within one (1)


 




    	 	14	 



    	 



    

 


business day of Borrower’s
receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in its sole discretion
to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding
amounts owed under this Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default. In
the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject
to the terms of Section 1.9 herein.


 


ARTICLE III. EVENTS OF DEFAULT


 


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


 


3.1        
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof
or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.


 


3.2        
Conversion and the Shares. The Borrower (i) fails to issue shares of Common Stock to
the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of
the conversion rights of the Holder in accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent
to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this Note, (iii) directs its transfer agent not to transfer
or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any
certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note, (iv) fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations
described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not
to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a
Notice of Conversion, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note
is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within
forty eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower’s transfer agent in
order to process a conversion, and/or (viii) fails to maintain the Reserved Amount.


 


3.3        
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction
Expense Amount (as defined in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.


 


3.4        
Breach of Covenants. The Borrower breaches any material covenant or other material
term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such
breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.


 




    	 	15	 



    	 



    

 


3.5        
Breach of Representations and Warranties. Any representation or warranty of the Borrower
made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including,
without limitation, the Purchase Agreement), 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.


 


3.6        
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors or commence proceedings for its dissolution, 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
for the Borrower or for a substantial part of its property or business without its consent and shall not be discharged within sixty
(60) days after such appointment.


 


3.7         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 $50,000, 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.


 


3.8        
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted
by or against the Borrower or any subsidiary of the Borrower, or the Borrower admits in writing its inability to pay its debts
generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws
as applicable or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against
it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.


 


3.9        
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common
Stock on at least one of the OTC Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT,
or an equivalent replacement exchange


 


3.10                          
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act (including but not limited to becoming delinquent in its filings); and/or the Borrower
shall cease to be subject to the reporting requirements of the Exchange Act.


 


3.11                          
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business.


 


3.12                          
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,


 




    	 	16	 



    	 



    

 


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.


 


3.13                          
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),
or any disposition or conveyance of any material asset of the Borrower.


 


3.14                          
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.


 


3.15                          
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without
twenty (20) days prior written notice to the Holder.


 


3.16                          
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.


 


3.17                          
Cessation of Trading. Any cessation of trading of the Common Stock on at least one
of the OTC Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement
exchange, and such cessation of trading shall continue for a period of five consecutive (5) Trading Days.


 


3.18                          
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the
other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained
in any of the Other Agreements (as defined herein), after the passage of all applicable notice and cure or grace periods, shall,
at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall
be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other
Agreements by reason of a default under said Other Agreement or hereunder.
“Other Agreements” means, collectively, all agreements and instruments between,
among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder (and any affiliate of the Holder) or any other third
party, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include
the agreements and instruments defined as the Documents. Each of the loan transactions will be cross-defaulted with each other
loan transaction and with all other existing and future debt of Borrower to the Holder.


 




    	 	17	 



    	 



    

 


3.19                          
Bid Price. The Borrower shall lose the “bid” price for its Common Stock
($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2) and/or a market (including the
OTC Pink, OTCQB or an equivalent replacement exchange).


 


3.20                          
OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘No
Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’
or ‘Grey Market’ (Exclamation Mark Sign).


 


3.21                          
Inside Information. Any attempt by the Borrower or its officers, directors, and/or
affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers,
directors, and/or affiliates of, material non-public information concerning the Borrower, to the Holder or its successors and assigns,
which is not immediately cured by Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date.


 


		3.22	Unavailability of Rule 144. If,
at any time on or after the date which is six



(6) months after the Issue Date,
the Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to
the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order
to facilitate the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common
Stock pursuant to Rule 144, and (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


3.23                           Failure
to Register. The Borrower fails to (1) file a registration statement covering the Holder’s resale of all of the
Common Stock underlying the Note (the “Registration Statement”) within ninety (90) days following the Issue Date
(with the understanding that the minimum amount of shares of the Borrower’s common stock to be registered in the
Registration Statement with respect to the Holder shall be equal to or greater than the Reserved Amount), (ii) cause the
Registration Statement to become effective within one hundred fifty (150) days following the Issue Date, (iii) cause the
Registration Statement to remain effective until the Note is satisfied in full, (iv) comply with the registration
rights agreement between the Borrower and Holder entered into in connection with the issuance of this Note, or (v)
immediately amend the Registration Statement or file a new Registration Statement (and cause such Registration Statement to
become immediately effective) if there are no longer sufficient shares registered under the initial Registration Statement
for the Holder’s resale of all of the Common Stock underlying the Note. Upon the occurrence of any Event of
Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16. 3.17,
3.18, 3.19, 3.20, 3.21, 3.22, and/or 3.23 exercisable through the delivery of written notice to the Borrower by such Holders
(the “Default Notice”), the Note shall become immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount equal to (i) 150% (EXCEPT WITH RESPECT TO SECTION 3.2,
3.22, AND/OR 3.23, IN WHICH CASE 150% SHALL BE REPLACED WITH 200%) times the sum of (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the
date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof (the then outstanding principal amount of this Note to


 




    	 	18	 



    	 



    

 


the date of payment plus the
amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) at the
option of the Holder, the “parity value” of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in
accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the
“Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event
arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Trading Price for the Common Stock during the period beginning on the
date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the
“Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without
demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or 3.19 occurs or is continuing after
the six (6) month anniversary of this Note, then the principal amount of the Note shall increase by Fifteen Thousand and
No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal amount
increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest Trading Price during
the delinquency period as a base price for the conversion with the Variable Conversion Price shall be redefined to mean forty
percent (40%) multiplied by the Market Price (at the option of the Holder), subject to adjustment as provided in this Note.
For example, if the lowest Trading Price during the delinquency period is $0.01 per share and the conversion discount is 50%,
then the Holder may elect to convert future conversions at $0.005 per share. If this Note is not paid at Maturity Date, then
the outstanding principal due under this Note shall increase by Fifteen Thousand and No/100 United States Dollars
($15,000).


 


The Holder shall have the right
at any time, to require the Borrower to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock
of the Borrower equal to the Default Amount divided by the Conversion Price then in effect, subject to the terms of this Note.
This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any
party to give any notice or take any other action.


 


If the Holder shall commence an
action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder
prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys' fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.


 


ARTICLE IV. MISCELLANEOUS


 


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


 




    	 	19	 



    	 



    

 


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, 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 facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b)
on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be:


 


If to the Borrower,
to: Vilacto Bio Inc.


Fabriksvej 48


4700 Naestved Denmark Attn: Gert Andersen


E-mail: info@vilactobio.com


 


If to the Holder:


 


Auctus Fund, LLC


177 Huntington Avenue, 17th Floor Boston, MA 02115


Attn: Lou Posner Facsimile: (617) 532-6420


 


With a copy to
(which copy shall not constitute notice): Chad Friend, Esq., LL.M.


Legal & Compliance, LLC 330 Clematis
Street, Suite 217 West Palm Beach, FL 33401


e-mail: CFriend@LegalandCompliance.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 (and the
other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as
so amended or supplemented.


 




    	 	20	 



    	 



    

 


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. Neither the Borrower nor the Holder shall assign this Note or any
rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Holder may
assign its rights hereunder to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private
transaction from the Holder or to any of its “affiliates”, as that term is defined under the 1934 Act, without
the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal
amount of this Note represented by this Note may be less than the amount stated on the face hereof.


 


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


 


4.6  
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of Massachusetts or in the federal courts located in the
Commonwealth of Massachusetts. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of
any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY
TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note or any
other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal
service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement
or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law.


 


4.7  
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding
principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default
Interest on such interest, the


 




    	 	21	 



    	 



    

 


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. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase
Agreement.


 


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 proposed sale, lease or conveyance of all or substantially all
of the assets of the Borrower 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 thirty (30) 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 including, but not limited to, name changes,
recapitalizations, etc. as soon as possible under law.


 


4.10    
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other
amount deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that
it will not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all or a
portion of the principal or interest on this Note.


 


4.11    
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


 




    	 	22	 



    	 



    

 


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. No provision of this Note
shall alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of, and interest
on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


4.12    
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.


 


4.13     Dispute
Resolution. In the case of a dispute as to the determination of the
Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum, Closing or Maturity Date, the
closing bid price, or fair market value (as the case may be) or the arithmetic calculation of the Conversion Price or the
applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit the disputed determinations or
arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise
to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such
determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation (as the
case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Business Days, submit via
facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the
case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the
disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default
Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower
shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify the
Borrower and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed
determinations or calculations. Such investment bank’s or accountant’s determination or calculation shall be
binding upon all parties absent demonstrable error.


 


4.14    
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its
subsidiaries of any security with any term more favorable to the holder of such security or with a term in favor of the
holder of such security that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder
of such additional or more favorable term and such term, at Holder’s option, shall become a part of the transaction
documents with the Holder. The types of terms contained in another security that may be more favorable to the holder of such
security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback
periods, interest rates, original issue discounts, stock sale price, private placement price per share, and warrant
coverage.


 




    	 	23	 



    	 



    

 


4.15   
Piggyback Registration Rights. The Borrower shall include on the next registration
statement the Borrower files with SEC (or on the subsequent registration statement if such registration statement is withdrawn)
all shares issuable upon conversion of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding
principal balance of this Note, but not less than Fifteen Thousand and No/100 United States Dollars ($15,000), being immediately
due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.


 


 


[signature page follows] 




    	 	24	 



    	 



    

 


IN WITNESS WHEREOF, Borrower has
caused this Note to be signed in its name by its duly authorized officer as of the date first above written.


 


 


VILACTO BIO INC.


 


 


By: ______________ 


Name: Gert Andersen


Title: Chief Executive Officer


 









    	 	25	 



    	 



    

  


EXHIBIT A


NOTICE OF CONVERSION


 


The undersigned hereby elects
to convert $__________ principal amount of the Note (defined below) together with $___________of accrued and unpaid interest
thereto, totaling $___________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 Vilacto Bio Inc., a Nevada corporation (the “Borrower”),
according to the conditions of the convertible note of the Borrower dated as of February 26, 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 At Custodian system (“DWAC Transfer”).


 


Name of DTC Prime Broker: Account Number:


 


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


 


Name: [NAME]


Address: [ADDRESS]


 


Date of Conversion:


 


Applicable Conversion Price:$ _____________


Number of Shares of Common Stock to be Issued Pursuant
to Conversion of the Notes: _____________


Amount of Principal Balance Due remaining Under
the Note after this conversion: _____________


Accrued and unpaid interest remaining: _____________


 


[HOLDER]


 


 


By:__________


Name: [NAME]


Title: [TITLE]


Date: [DATE]






    	 	26