Exhibit 4.2


 


NEITHER THIS SECURITY NOR THE SECURITIES
INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL IN A FORM ACCEPTABLE TO
THE COMPANY.


 


	Original Issue Date: April __, 2017	
        Principal Amount: $________

        Purchase Price: $________



 


8% original
issue discount SENIOR SECURED


CONVERTIBLE
PROMISSORY NOTE


DUE
APRIL 28, 2018


 


THIS 8% ORIGINAL ISSUE DISCOUNT
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE is the duly authorized and validly issued convertible promissory note of Mantra Venture
Group Ltd., a British Columbia corporation, (the “Company”), having its principal place of business at c/o AW
Solutions, Inc., 300 Crown Oak Centre Drive, Longwood, Florida 32750, designated as its 8% Original Issue Discount Senior Secured
Convertible Promissory Note due April 28, 2018 (the “Note”).


 


FOR VALUE RECEIVED, the Company
promises to pay to _________ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms
hereunder, the principal sum of $440,000 on April 28, 2018 (the “Maturity Date”) or such earlier date as this
Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted
and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following
additional provisions:


 


Section 1.     Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement (as defined below) and (b) the following terms shall have the following
meanings:


 


“Alternate Consideration”
shall have the meaning set forth in Section 5(e).


 






    


     


    

 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or
any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such
case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment, (e) the Company or
any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant
Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its
debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of
the foregoing.


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 


“Board of Directors”
means the board of directors of the Company.


 


“Buy-In”
shall have the meaning set forth in Section 4(c)(v).


 


“Change of Control
Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of one-third
(1/3rd) of the aggregate votes of the then-issued and outstanding voting securities of the Company on such basis as is then required
by the Company’s charter documents (other than by means of conversion of the Note), (b) the Company merges into or consolidates
with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction,
the stockholders of the Company immediately prior to such transaction own less than two-thirds (2/3rds) of the aggregate voting
power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of
its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than two-thirds
(2/3rds) of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time
or within a three year period of more than one-half (1/2) of the members of the Board of Directors which is not approved by a majority
of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving
as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members
of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Limitation” shall have the meaning set forth in Section 5(f).


 






    2


     


    

 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.


 


“DTC”
means the Depository Trust Company.


 


“DTC/FAST Program”
means the DTC’s Fast Automated Securities Transfer Program.


 


“DWAC Eligible”
means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including,
without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s
underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are
otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of
the Conversion Shares via DWAC.


 


“Equity Conditions”
means each of the following conditions: (a) the Company shall have duly honored all conversions and redemptions scheduled to occur
or occurring, including conversions pursuant to one or more Notices of Conversion of the Holder, if any, (b) the Company shall
have paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c) on each day during the Equity
Conditions Measuring Period, either (i) there is an effective Registration Statement pursuant to which the Holder is permitted
to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Documents (and the Company
believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Conversion
Shares issuable pursuant to the Documents (and shares issuable in lieu of cash payments of interest) may be resold pursuant to
Rule 144 without volume or manner-of-sale restrictions as determined by the counsel to the Company as set forth in a written opinion
letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) on each day during the Equity Conditions
Measuring Period, the Common Stock is trading on a Trading Market and all of the shares of Common Stock issuable pursuant to the
Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good faith, that trading of the
Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized
but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares of Common Stock then issuable
pursuant to the Documents, (f) on each day during the Equity Conditions Measuring Period, there is no existing Event of Default
and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the issuance
of the shares of Common Stock in question to the Holder would not violate the limitations set forth in Section 4(d) herein, (h)
on each day during the Equity Conditions Measuring Period, there has been no public announcement of a pending or proposed Fundamental
Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder is not in possession of any
information provided by the Company that constitutes, or may constitute, material non-public information, (j) the Company has timely
filed (or obtained extensions in respect thereof and filed within the applicable grace period) all reports other than Current Reports
on Form 8-K required to be filed by the Company after the date hereof pursuant to the Exchange Act, (k) on each day during the
Equity Conditions Measuring Period, the Company’s shares of Common Stock have a closing price equal to or in excess of $0.01,
subject to adjustment for splits, dividends, etc. as set forth herein, and (l) on each day during the Equity Conditions Measuring
Period, the Company’s shares of Common Stock are DWAC Eligible and not subject to a “DTC chill”.


 






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“Equity Conditions
Measuring Period” means each day during the period beginning twenty (20) Trading Days prior to the applicable date of
determination and ending on and including the applicable date of determination or, if applicable, such shorter period beginning
on the Original Issue Date and ending on and including the applicable date of determination.


 


“Event of Default”
shall have the meaning set forth in Section 6(a).


 


“Exempt Issuance”
means the issuance of (a) shares of Common Stock, options or other equity awards (including, without limitation, restricted awards)
to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose,
by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose and subsequently ratified by the stockholders of the Company, (b) securities upon the exercise
or exchange of or conversion of any Securities issued pursuant to the Purchase Agreement and/or other securities directly or indirectly
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided
that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities, or (c) securities issued pursuant to mergers, consolidations,
acquisitions, similar business combinations or strategic transactions approved by a majority of the disinterested directors of
the Company, 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.


 


“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).


 


“Indebtedness”
shall have the meaning ascribed to such term in the Purchase Agreement.


 


“Late Fees”
shall have the meaning set forth in Section 2(d).


 


“New York Courts”
shall have the meaning set forth in Section 8(d).


 






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“Note Register”
shall have the meaning set forth in Section 2(c).


 


“Notice of Conversion”
shall have the meaning set forth in Section 4(a).


 


“Original Issue
Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence such Note.


 


“Purchase Agreement”
means the Securities Purchase Agreement, dated as of April 28, 2017 by and among the Company, the original Holder, and the other
parties named therein, if any, as amended, modified or supplemented from time to time in accordance with its terms.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Share Delivery
Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Successor Entity”
shall have the meaning set forth in Section 5(e).


 


“Trading Day”
means a day on which the principal Trading Market is open for trading.


 


“Variable
Rate Transaction” means a transaction in which the Company issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion
price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations
for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company
or the market for the Common Stock.


 


“VWAP”
means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading
Market is not the principal trading market for such security, then on the principal securities exchange or securities market on
which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New
York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, recapitalization or other similar transaction during such period.


 






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Section 2.       Interest.


 


a)       Payment
of Interest in Cash or Kind. The Company shall pay interest to the Holder on the principal amount of this Note at the rate
of 8% per annum (which interest rate may be increased as provided elsewhere herein). All interest provided for in this Section
(2)(a) shall be due and payable on the Maturity Date (the “Fixed Interest Payment Date”); provided, however,
notwithstanding anything to the contrary provided herein or elsewhere, interest accrued but not yet paid will be due and payable
upon any conversion, prepayment, and/or acceleration whether as a result of an Event of Default or otherwise with respect to the
principal amount being so converted, prepaid and/or accelerated. All interest payments hereunder will be payable in cash or, at
the Company’s discretion, subject to the Equity Conditions being satisfied on the date of such payment, in Common Stock at
the Conversion Price.


 


b)       Interest
Make Whole. In the event that this Note is converted, prepaid and/or accelerated whether as a result of an Event of Default
or otherwise prior to the Maturity Date, the Company shall pay to the Holder, in addition to any other amounts then owed, upon
such conversion, prepayment, and/or acceleration, an amount in interest equal to the amount of interest on the principal amount
so converted, prepaid and/or accelerated that would otherwise have been payable if such principal amount had remained outstanding
until the Maturity Date.


 


c)       Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30-calendar day periods, and
shall accrue commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued
and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will
be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers
of this Note (the “Note Register”).


 


d)       Late
Fees. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 16% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue
daily from the date such interest is due hereunder through and including the date of actual payment in full.


 


Section 3.       Registration of Transfers and
Exchanges.


 


a)       Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.


 






    6


     


    

 


b)       Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in
the Purchase Agreement and may be transferred or exchanged only in compliance therewith and applicable federal and state securities
laws and regulations.


 


c)       Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.


 


Section 4.       Conversion.


 


a)       Voluntary
Conversion. At any time and from time to time, commencing on the Original Issue Date until this Note is no longer outstanding,
this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from
time to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions
by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Note and/or any other amounts due under this Note to
be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If
no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall
not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, all accrued and
unpaid interest thereon and all other amounts due under this Note have been so converted. Conversions hereunder shall have the
effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion amount. The Holder
and the Company shall maintain a Conversion Schedule showing the principal amount(s) and/or any other amounts due under this Note
converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business
Day of delivery of such Notice of Conversion. 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 may be less than the amount stated on the face hereof.


 


b)       Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to 75% of the lowest VWAP during the fifteen (15)
Trading Days immediately prior to the Conversion Date (the “Conversion Price”). All such foregoing determinations
will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction
that proportionately decreases or increases the Common Stock during such measuring period.


 






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c)       Mechanics
of Conversion.


 


i.        Conversion
Shares Issuable Upon a Conversion. The number of Conversion Shares issuable upon a conversion hereunder shall be determined
by the quotient obtained by dividing (x) the sum of (i) the outstanding principal to be converted as provided in the applicable
Notice of Conversion, (ii) accrued and unpaid interest thereon (if the Company has elected to pay interest in shares of Common
Stock) and (iii) any other amount due under this Note by (y) the Conversion Price.


 


ii.       Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing
the Conversion Shares, which, on or after the date on which the resale of such Conversion Shares are covered by and are being sold
pursuant to an effective Registration Statement or such Conversion Shares are eligible to be sold under Rule 144 without the need
for current public information and the Company has received an opinion of counsel to such effect acceptable to the Company (which
opinion the Company will be responsible for obtaining at its own cost) shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired
or being sold, as the case may be, upon the conversion of this Note, and (B) payment in the amount of accrued and unpaid interest
(if the Company has elected to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company
under this Section 4(c) shall be delivered electronically through DTC or another established clearing corporation performing similar
functions, unless the Company or its Transfer Agent does not have an account with DTC and/or is not participating in the DTC/FAST
System, in which case the Company shall issue and deliver to the address as specified in such Notice of Conversion a certificate
(or certificates), registered in the name of the Holder or its designee, for the number of Conversion Shares to which the Holder
shall be entitled. If the Conversion Shares are not being sold pursuant to an effective Registration Statement or if the Conversion
Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public
information, the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:


 


“THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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 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 ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. ”


 






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iii.      Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Notice of Conversion, in
which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Company the certificate or certificates issued to such Holder pursuant to the rescinded Notice of Conversion.


 


iv.      Obligation
Absolute. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance
with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same,
any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or
any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver
by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to
convert any or all of the outstanding principal amount hereof, the Company may not refuse
conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit
of the Holder in the amount of 100% of the outstanding principal amount of this Note, which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute. In the absence of such injunction,
the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If
the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii)
by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, $500 per Trading Day for each Trading Day
after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein
shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for the
Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law.


 






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v.       Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating
to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition
to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase
price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number
of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale
price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B)
at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the
attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of
Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.


 


vi.      Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock a number of shares of Common Stock at least equal to the Required Minimum (as defined in the
Purchase Agreement) for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as
herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder. The
Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable.


 






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vii.     Insufficient
Authorized Shares. If, notwithstanding Section 4(c)(vi), and not in limitation thereof, at any time while any of the Notes
remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the amount
specified in Section 4(c)(vi) (an “Authorized Share Failure”), then the Company shall immediately take all action
necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the applicable amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the
number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with
a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares
of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. In the event
that the Company is prohibited from issuing shares of Common Stock upon any conversion due to the failure by the Company to have
sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number
of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure Shares
to the Holder, the Company shall pay cash in exchange for the portion of the Note convertible into such Authorized Failure Shares
at a price equal to the sum of the product of (x) such number of Authorized Failure Shares and (y) the greatest closing sale price
of the Common Stock on any Trading Day during the period commencing on the date the Authorized Failure Shares should have been
issued pursuant to the terms of this Note and ending on the date of such issuance of payment under this Section 4(c)(vii).


 


viii.    Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to
any fraction of a share that the Holder would otherwise be entitled to purchase upon such conversion, the Company shall, at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share.


 


ix.      Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note
so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any
Notice of Conversion.


 






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d)       Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that, after giving effect to the conversion set forth on the applicable Notice
of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder
or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates
shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock that are issuable upon (i) conversion of the remaining, unconverted
principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous
to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the
preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section
4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together
with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and
the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted
(in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible,
in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed
to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions
set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In
addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number
of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the
most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case
may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the
Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request
of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the
date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares
of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior written
notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial
Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any such increase or decrease will not be effective
until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Note.


 






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Section 5.       Certain
Adjustments.


 


a)       Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for the avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment
of interest on, the Note), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event
of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares
of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or reclassification.


 


b)       Except
as hereinafter provided, in case the Company shall at any time after the date hereof issue or sell any shares of Common Stock other
than an Exempt Issuance, for a consideration per share less than the Exercise Price in effect immediately prior to the issuance
or sale of such shares, or without consideration, then forthwith upon such issuance or sale, the Exercise Price shall (until another
such issuance or sale) be reduced to the price (calculated to the nearest full cent) determined by dividing (A) an amount equal
to the sum of (X) the product (a) the total number of shares of Common Stock outstanding immediately prior to such issuance or
sale, multiplied by (b) the Exercise Price in effect immediately prior to such issuance or sale, plus (Y) the aggregate of the
amount of all consideration, if any, received by the Company upon such issuance or sale, by (B) the total number of shares of Common
Stock outstanding immediately after such issuance or sale; provided, however, that in no event shall the Exercise
Price be adjusted pursuant to this computation to an amount in excess of the then current Exercise Price.


 






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For the purposes of any computation
to be made in accordance with this Section 5(b) the following provisions shall be applicable:


 


(i)      In case of the issuance or sale of shares
of Common Stock for a consideration part or all of which shall be cash, the amount of the cash consideration therefor shall be
deemed to be the amount of cash received by the Company for such shares (or, if shares of Common Stock are offered by the Company
for subscription, the subscription price, or, if such securities shall be sold to underwriters or dealers for public offering without
a subscription offering, the initial public offering price) before deducting therefor any compensation paid or discount allowed
in the sale, underwriting or purchase thereof by underwriters or dealers or others performing similar services, or any expenses
incurred in connection therewith. If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have
issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted
or exercised.


 


(ii)      In
case of the issuance or sale (otherwise than as a dividend or other distribution on any stock of the Company) of shares of Common
Stock for a consideration part or all of which shall be other than cash, the amount of the consideration therefor other than cash
shall be deemed to be the value of such consideration as determined in good faith by the Board of Directors of the Company.


 


(iii)    Shares
of Common Stock issuable by way of dividend or other distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date for the determination of shareholders entitled to
receive such dividend or other distribution and shall be deemed to have been issued without consideration.


 


c)       Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights that the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation and the Conversion Limitation)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation or the Conversion Limitation, then
the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation or the Conversion Limitation, as applicable).


 






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d)       Pro
Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Note (without regard to any limitations on conversion hereof, including without limitation,
the Beneficial Ownership Limitation and the Conversion Limitation) immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate
in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation or the Conversion Limitation,
then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance
for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation or the Conversion Limitation, as applicable).


 


e)       Fundamental
Transaction. If, at any time while this Note is outstanding (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person, whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other
business combination) (each, a “Fundamental Transaction”), then, upon any subsequent conversion of this Note,
the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately
prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of
this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior
to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes
of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Note and the other Documents (as defined in the Purchase
Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall,
at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Note that is convertible for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental
Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic
value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the
other Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right
and power of the Company and shall assume all of the obligations of the Company under this Note and the other Documents with the
same effect as if such Successor Entity had been named as the Company herein.


 






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f)       Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.


 


g)       Notice
to the Holder.


 


i.     
  Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of
this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such adjustment.


 


ii.       Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding-up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes,
or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this
Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice
except as may otherwise be expressly set forth herein.


 






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Section 6.       Events of Default.


 


a)       “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):


 


i.    
   any default in the payment of (A) the principal amount of the Note or (B) interest, liquidated damages,
Late Fees and other amounts owing to the Holder on the Note, as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest
payment or other default under clause (B) above, is not cured within three (3) Trading Days;


 


ii.      the Company shall fail to observe or perform any other material covenant or agreement contained in the Note
(and other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion,
which breach is addressed in clause (vii) below), which failure is not cured, if possible to cure, within the earlier to
occur of (A) five (5) Trading Days after notice of such failure sent by the Holder to the Company and (B) ten (10) Trading
Days after the Company has become or should have become aware of such failure;


 


iii.  
   a default or event of default (subject to any grace or cure period provided in the applicable agreement,
document or instrument) shall occur under any of the Documents;


 


iv.     any representation or warranty made in this Note, any other Documents, any written statement pursuant
hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;


 


v.   
  the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be
subject to a Bankruptcy Event;


 


vi.     the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock through the DTC
is no longer available, “frozen” or “chilled”;


 


vii.    the
Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the fifth (5th) Trading Day after
a Share Delivery Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way
of public announcement, of the Company’s intention to not honor requests for conversions of the Note in accordance with the
terms hereof;


 


viii.   the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable); and


 


ix.     the
Company shall fail to maintain sufficient reserved shares pursuant to Section 4.4 of the Purchase Agreement.


 






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x.      the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;


 


xi.      the
Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 50% of its
assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);
or


 


xii.     any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days.


 


b)       Remedies
Upon Event of Default. If any Event of Default occurs, then at the Holder’s election, this Note shall become immediately
due and payable in an amount equal to 125% of (i) the outstanding principal amount of this Note, and (ii) accrued but unpaid interest,
liquidated damages and other amounts owing in respect thereof through the date of acceleration. After the occurrence of any Event
of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate
equal to the lesser of 2% per month (24% per annum) or the maximum rate permitted under applicable law (with a credit for any “unused”
guaranteed interest). Upon the payment in full of the outstanding principal amount of this Note, plus accrued but unpaid interest,
liquidated damages and other amount owing in respects thereof, the Holder shall promptly surrender this Note to or as directed
by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such
acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights
as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.


 






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Section 7.       Prepayment.


 


a)       At
any time and from time to time, the Company may by delivering written notice of its election to the Holder prepay all or any portion
of this Note in cash by paying the applicable Prepayment Amount (as defined below) pursuant to this Section 7. The written notice
shall, among other items, state the date the Prepayment Amount is to be paid to the Holder, which shall not in any event be earlier
than ten (10) calendar days from the date of mailing of the prepayment notice to the Holder (the “Prepayment Date”).
If the Company exercises its right to prepay all or any portion of the Note in accordance with this Section 7, and no Event of
Default then exists which has not been waived by the Holder, the Company shall make payment to the Holder of an amount in cash
equal to the product of (x) the sum of (A) the then-outstanding principal amount of this Note and (B) all accrued but unpaid interest
thereon, multiplied by (y) 115% if the Prepayment Date is on or prior to the 90th day following the Original Issue Date,
120% if the Prepayment Date is on or between the 91st day following the Original Issue Date and 179th day
following the Original Issue Date and 125% if the Prepayment Date is on or after the 180th day following the Original
Issue Date and prior to the Maturity Date, to which calculated amount the Company shall add all other amounts owed pursuant to
this Note, including, but not limited to, all Late Fees and liquidated damages (the “Prepayment Amount”). The
Holder may continue to convert the Note from the date notice of the prepayment is given until the date the Holder receives in full
the Prepayment Amount.


 


b)       On
the Original Issue Date, the Holder shall be assigned accounts receivable of the Company equal to 110% of the Principal Amount
of this Note. As such accounts receivable are collected in cash, the Holder shall have the option to apply such cash to the outstanding
amounts due Holder pursuant to this Note in accordance with Section 7(a) herein. In the alternative, the Holder may remit such
cash to the Company.


 


Section 8.       
Negative Covenants. As long as any portion of this Note remains outstanding, unless the Holders of at least 50% in principal
amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit
any of the Subsidiaries to, directly or indirectly:


 


a)       amend
its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;


 


b)       pay
cash dividends or distributions on any equity securities of the Company;


 


c)       enter
into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is expressly approved by a majority of the directors of the
Company (even if less than a quorum otherwise required for board approval);


 


d)       incur,
guarantee or assume or suffer to exist any Indebtedness, other than the Indebtedness evidenced by this Note and the other Notes,
except for debt incurred for working capital which is subordinate to the rights of the Holders and for which no cash payments may
be made at any time when Notes remain outstanding;


 


e)       redeem,
repurchase or declare or pay any cash dividend or distribution on any of its capital stock;


 


f)       sell,
lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the AW Solutions,
Inc. Subsidiary, whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments,
transfers, conveyances and other dispositions of such assets or rights by AW Solutions, Inc. in the ordinary course of business
consistent with its past practice for fair consideration, (ii) sales of inventory and product in the ordinary course of business
consistent with past practice for fair consideration, and (iii) a sale or disposition of assets to a third party that has been
approved by the Board of Directors; or


 


g)       enter
into any agreement with respect to any of the foregoing.


 






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Section 9.       Miscellaneous.


 


a)       Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Company, at the address set forth above or such other address as the Company may specify
for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a
nationally recognized overnight courier service addressed to the Holder at the facsimile number or address of the Holder appearing
on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place
of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:00 p.m. (New York City time)
on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:00
p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.


 


b)       Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.


 


c)       Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.


 






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d)       Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough
of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of the Documents), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions contemplated hereby. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this 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 applicable law. If any party
shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 


e)       Amendment;
Waiver. Any provision of this Note may be amended by a written instrument executed by the Company and the Holder, which amendment
shall be binding on all successors and assigns. Any provision of this Note may be waived by the Holder, which waiver shall be binding
on all successors and assigns. Any waiver by the Company or the Holder must be in writing. Any waiver by the Company or the Holder
of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence
to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Note on any other occasion.


 


f)       Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.


 






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g)       Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such power as though no such law has been enacted.


 


h)       Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Documents (including, without limitation,
the security agreements referenced in the Purchase Agreement), at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages
for any failure by the Company to comply with the terms of this Note.  The Company covenants to the Holder that there shall
be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein
with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder
and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach
or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required.
The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder
to confirm the Company’s compliance with the terms and conditions of this Note.


 


i)       Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.


 


j)       Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit
or affect any of the provisions hereof.


 


k)       Disclosure.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries, the Company shall within four (4) Business Days after such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, non-public information relating to the Company or its Subsidiaries, the Company shall so indicate to the Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.


 


*********************


 


(Signature Pages Follow)




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IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.


 





	 	MANTRA VENTURE GROUP LTD.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Facsimile
    No. for delivery of Notices:                




 




    23


     


    

 


ANNEX
A


 


NOTICE OF CONVERSION


 


The undersigned hereby
elects to convert the 8% Original Issue Discount Convertible Promissory Note due April 28, 2018 of Mantra Venture Group Ltd., a
British Columbia corporation (the “Company”), into shares of common stock of the Company (the “Common
Stock”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued
in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and
is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will
be charged to the holder for any conversion, except for such transfer taxes, if any.


 


By the delivery of this
Notice of Conversion, the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed
the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.


 


The undersigned agrees
to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock, if the resale of any such shares of Common Stock are covered by and are being sold pursuant to
an effective Registration Statement.


 


Conversion calculations:


 


Date to Effect Conversion:
________________________


 


Principal Amount of
Note to be Converted: ____________


 


Number of Shares of Common Stock
to be Issued: _______


 


Signature: _____________________________________


 


Name: ________________________________________


 


Delivery Instructions:


 




    


     


    

 


Schedule 1


 


CONVERSION SCHEDULE


 


This 8% Original Issue Discount Convertible
Promissory Note due on April 28, 2018 in the principal amount of $________ is issued by Mantra Venture Group Ltd., a British Columbia
corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.


 


Dated:


 


	
        

        Date of Conversion

        (or for first entry, Original Issue Date)
	
        

        Amount of Conversion
	
        

        Aggregate Principal Amount Remaining Subsequent
        to Conversion

        (or original Principal Amount)
	
        

        Company Attest