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: $47,500.00	Issue Date: July 28, 2015
    
	Purchase Price: $47,500.00	 






 


CONVERTIBLE
PROMISSORY NOTE


 


FOR
VALUE RECEIVED,
SKINVISIBLE, INC.,
a Nevada
corporation (hereinafter
called the
“Borrower”), hereby
promises to
pay to
the order
VIS VIRES
GROUP, INC.,
a New
York corporation,
or registered
assigns (the
“Holder”) the sum
of $47,500.00 together
with any interest
as set forth herein, on April
30, 2016 (the “Maturity Date”),
and to pay interest on the unpaid
principal balance hereof at
the rate of
eight percent (8%)
(the “Interest Rate”)
per annum from
the date hereof (the
“Issue Date”) until the same
becomes due and payable, whether
at maturity or upon
acceleration or by
prepayment or otherwise.
This Note may
not be prepaid in whole
or in part except as
otherwise explicitly set forth
herein. Any amount of principal or interest
on this Note
which is not
paid when
due shall
bear interest
at the rate
of twenty two percent (22%) per
annum from the due date thereof until
the same is paid (“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 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 during
the period beginning
on the date
which is one
hundred eighty
(180) days
following the date
of this Note
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 (and accrued
interest) 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 (the “Conversion
Price”) 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 9.99% 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 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) 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, 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.



 


(a)   
Calculation of
Conversion Price.
The conversion
price (the
“Conversion Price”)
shall equal
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
58% multiplied
by the Market
Price (as
defined herein)
(representing a discount rate
of 42%). “Market
Price” means
the average
of the lowest
three (3) Trading Prices (as
defined below) for the Common
Stock during
ten (10) 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 closing bid price
on the Over-the-Counter Bulletin
Board, Pink Sheets electronic
quotation system or applicable
trading market (the “OTC”)
as reported by a reliable
reporting service (“Reporting Service”)
designated by the Holder (i.e.
Bloomberg) or, if the OTC 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”. 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, or on the
principal securities exchange
or other securities
market on which the Common Stock
is then being traded.




    	 



    	 



    

 


 


(b)  
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 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.


 


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 six 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 hereunder. 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.




    	 



    	 



    

 


 


If,
at any
time the
Borrower does not
maintain the Reserved
Amount it will
be considered
an Event of Default under
Section 3.2 of the Note.


 


		1.4	Method
                                         of
                                         Conversion.



 


(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
6:00 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 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
6:00 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 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 Agent Commission (“DWAC”)
system.


 


(g)  
Failure to
Deliver Common
Stock Prior
to 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. 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(g)
are justified.


 


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:


 


“NEITHER
THE ISSUANCE
AND SALE OF
THE SECURITIES
REPRESENTED BY
THIS CERTIFICATE
NOR THE SECURITIES
INTO WHICH
THESE SECURITIES
ARE EXERCISABLE
HAVE BEEN
REGISTERED UNDER
THE SECURITIES
ACT OF
1933, AS
AMENDED, OR APPLICABLE
STATE SECURITIES
LAWS. THE
SECURITIES MAY
NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS
AMENDED, OR (B)
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
accepted by the Company 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 Company
does not accept the opinion of counsel
provided by the Holder 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 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)  
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 acquired
if such Holder
had held the number of shares
of Common Stock acquirable upon
complete conversion of this Note
(without regard to any limitations
on conversion contained herein)
immediately before the date
on which a record is
taken for the grant, issuance
or sale of such
Purchase Rights or, if no such
record is taken, the date as
of which the record holders
of Common Stock are to be
determined for the grant,
issue or sale of
such Purchase Rights.


 


(e)   
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 
Trading Market
Limitations. Unless
permitted by
the applicable
rules and
regulations of the
principal securities
market on which
the Common Stock
is then
listed or
traded, in
no event shall the Borrower
issue upon conversion of or
otherwise pursuant to
this Note and
the other Notes issued pursuant
to the Purchase Agreement more
than the maximum number
of shares of Common
Stock that
the Borrower can
issue pursuant to any rule
of the principal United States
securities market on which the
Common Stock is then traded
(the “Maximum Share Amount”),
which shall be 9.99%
of the total
shares outstanding on the Closing
Date (as defined in the Purchase Agreement),
subject to equitable adjustment
from time to time for
stock splits, stock dividends,
combinations, capital reorganizations
and similar events
relating to the Common Stock occurring
after the date hereof.
Once the Maximum Share Amount
has been issued,
if the Borrower fails to eliminate
any prohibitions under applicable
law or the rules or regulations
of any stock exchange, interdealer
quotation system or other self-regulatory
organization with jurisdiction
over the Borrower
or any of its securities
on the Borrower’s ability
to issue shares
of Common Stock
in excess
of the Maximum Share
Amount, in lieu
of any further
right to convert this Note, this
will be considered an
Event of Default under Section
3.3 of the Note.


 


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,
at any
time during the
periods set
forth on
the table
immediately following this
paragraph (the
“Prepayment Periods”),
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,
in accordance
with this
Section 1.9.
Any notice
of prepayment
hereunder (an “Optional Prepayment
Notice”) shall be delivered
to the Holder of the Note at
its registered
addresses and
shall state:
(1) that the Borrower
is exercising its right
to prepay the Note, and (2)
the date of prepayment 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 Optional Prepayment Amount
(as defined below) to Holder,
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
exercises its right
to prepay the Note,
the Borrower
shall make
payment to the Holder of an
amount in cash (the “Optional
Prepayment Amount”) equal to the percentage
(“Prepayment Percentage”) as
set forth in the table immediately
following this paragraph opposite the applicable
Prepayment Period, 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 to the
Optional Prepayment Date
plus (y) Default Interest,
if any, on
the amounts referred to in clauses
(w) and (x) plus (z)
any amounts owed to the Holder
pursuant to Sections 1.3 and
1.4(g) hereof. If the
Borrower delivers an Optional
Prepayment Notice and fails to pay
the Optional 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. 


 


	Prepayment
    Period	Prepayment
    Percentage
	1.The
    period beginning
    on the Issue Date
    and ending
    on the date which
    is thirty (30) days
    following the
    Issue Date.	125%
	2.The
    period beginning
    on the date which
    is thirty- one (31)
    days following
    the Issue
    Date and ending
    on the date
    which is sixty
    (60) days following
    the Issue Date	130%
	3.The
                                         period beginning
                                         on the date which
                                         is sixty-one

        (61)
        days following
        the Issue Date and
        ending on the
        date which is
	135%




    	 



    	 



    

 


 


	ninety
    (90) days following
    the Issue Date	
	4.The
                                         period beginning
                                         on the date that
                                         is ninety-one

        (91)
        day from the Issue
        Date and ending one
        hundred twenty
        (120) days following
        the Issue Date
	140%
	5.
    The period beginning
    on the date that
    is one hundred
    twenty-one (121) day
    from the Issue Date
    and ending
    one hundred fifty
    (150) days
    following the Issue
    Date	145%
	6.The
    period beginning on the
    date that
    is one hundred
    fifty-one (151) day
    from the Issue
    Date and ending
    one hundred
    eighty (180)
    days following
    the Issue Date	150%


 


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


  


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 
Borrowings. So
long as the
Borrower shall
have any
obligation under
this Note,
the Borrower
shall not, without
the Holder’s
written consent,
(a) create,
incur, assume
guarantee, endorse, contingently
agree to purchase or otherwise
become liable upon the obligation
of any other
person, firm, partnership, joint venture
or corporation, except by
the endorsement of negotiable
instruments for deposit
or collection, or
(b) suffer
to exist any liability




    	 



    	 



    

 


 


for
 borrowed
 money,
 except
 any  borrowings
 that 
does  not 
render  the 
Borrower  a 
"Shell" company as
defined in Rule 12b-2 under the
Securities Exchange Act of 1934.


 


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. 


 


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
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, 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, the Borrower
directs its transfer agent not
to transfer or delays,
impairs, and/or hinders its transfer
agent in transferring (or issuing)
(electronically or in certificated form) any
certificate for 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,
or fails to remove (or
directs its transfer agent not to remove
or impairs, delays,
and/or hinders its transfer
agent from removing)
any restrictive legend
(or to withdraw any stop transfer
instructions in respect thereof) on any 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.
It is
an obligation
of the Borrower
to remain
current in
its obligations
to its transfer
agent. It shall be an event of
default of this Note,
if a conversion of this Note
is delayed, hindered or frustrated
due to a balance owed
by the Borrower to its transfer
agent. If at the option of the Holder,
the Holder advances
any funds to the Borrower’s
transfer agent in order to process
a conversion, such advanced
funds shall be paid by the Borrower
to the Holder within forty eight
(48) hours of a demand from the
Holder.


 


3.3 
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.


 


3.4 
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.


 


3.5 
Receiver or
Trustee.
The Borrower
or any
subsidiary of
the Borrower
shall make
an assignment
for the benefit
of creditors,
or apply for
or consent
to the appointment
of a receiver
or trustee for
it or for
a substantial
part of
its property or
business, or such
a receiver
or trustee shall otherwise
be appointed.


 


3.6 
Judgments. Any
money judgment,
writ or
similar process
shall be entered
or filed
against the
Borrower or
any subsidiary of
the Borrower
or any of
its property or
other assets
for more
than $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.


 


3.7 
Bankruptcy. Bankruptcy,
insolvency, reorganization
or  liquidation
proceedings or
other proceedings,
voluntary or
involuntary, for
relief under any
bankruptcy law or
any law for
the relief
of debtors shall
be instituted by
or against the Borrower
or any subsidiary of
the Borrower.


 


3.8 
Delisting of
Common Stock. The
Borrower shall fail
to maintain the listing of
the Common Stock
on at
least one
of the OTC
(which specifically includes
the Pink Sheets
electronic quotation
system) or
an equivalent
replacement exchange,
the Nasdaq
National Market, the Nasdaq
SmallCap Market, the New York
Stock Exchange, or the American
Stock Exchange.




    	 



    	 



    

 


 


3.9 
Failure to
Comply with
the Exchange
Act.
The Borrower
shall fail
to comply with
the reporting
requirements of
the Exchange Act;
and/or the Borrower
shall cease
to be subject
to the reporting requirements
of the Exchange
Act.


 


3.10         
Liquidation. Any
dissolution, liquidation,
or winding
up of Borrower
or any substantial
portion of its business.


 


3.11         
Cessation of Operations.
Any cessation
of operations
by Borrower
or Borrower
admits it
is otherwise
generally unable to
pay its
debts as
such debts
become due,
provided, however, that
any disclosure
of the Borrower’s
ability to continue as a
“going concern” shall
not be an admission that
the Borrower cannot
pay its debts as
they become due.


 


3.12         
Maintenance of
Assets.The failure
by Borrower
to maintain
any material intellectual
property rights, personal,
real property or
other assets
which are necessary to
conduct its business (whether
now or in the
future).


 


3.13         
Financial Statement
Restatement. The
restatement of any
financial statements
filed by the
Borrower with
the SEC
for any date
or period from
two years
prior to the
Issue Date
of this Note
and until this
Note is no
longer outstanding,
if the result
of such restatement
would, by comparison
to the unrestated
financial statement,
have constituted
a material adverse effect
on the rights of the Holder with
respect to this Note or the Purchase
Agreement.


 


3.14         
Reverse Splits.The Borrower
effectuates a reverse
split of its
Common Stock without
twenty (20)
days prior written notice to
the Holder. 


 


3.15         
Replacement of Transfer
Agent. In
the event that
the Borrower proposes to replace
its transfer
agent, the Borrower
fails to provide,
prior to the
effective date
of such
replacement, a
fully executed
Irrevocable Transfer
Agent Instructions
in a form
as initially delivered
pursuant to the Purchase Agreement
(including but not limited to
the provision to irrevocably
reserve shares of Common Stock
in the Reserved Amount)
signed by the successor transfer
agent to Borrower and the Borrower. 


 


3.16         
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,
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,
including, without
limitation, promissory
notes; provided, however,
the term “Other Agreements”
shall not include
the related or companion
documents to
this Note. 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.


 


Upon
the occurrence
of any Event
of Default specified
in Section
3.1 (solely
with respect
to failure
to pay the
principal hereof
or interest
thereon when
due at
the Maturity Date),
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
the Default Sum (as
defined herein). UPON THE
OCCURRENCE OF ANY EVENT OF
DEFAULT SPECIFIED IN SECTION
3.2, 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: (Y) THE DEFAULT
SUM (AS


DEFINED
HEREIN); MULTIPLIED
BY (Z)
TWO (2).
Upon the occurrence
of any
Event of Default,
other than
Section 3.2, 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 the greater of (i) 150%
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 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) 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 Closing
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.


 


If
the Borrower
fails to pay
the Default
Amount within
five (5)
business days
of written
notice that
such amount
is due and
payable, then the
Holder shall
have the
right at
any time,
so long and
to the extent
that there
are sufficient
authorized shares,
to require
the Borrower,
upon




    	 



    	 



    

 


 


written
notice, to
convert the
Default Amount
into shares
of Common Stock
of the Borrower
pursuant to Section 1.1 hereof. 


 


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.


 


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:
SKINVISIBLE, INC.


6320
S. Sandhill Road -
Suite 10 Las
Vegas, NV


Attn:
TERRY HOWLETT, Chief Executive
Officer facsimile:


 


With
a copy by
fax only to (which
copy shall not constitute notice):
[enter name of law
firm]


Attn:
[attorney name]
[enter address line 1] [enter
city, state, zip]


facsimile:
[enter fax number]




    	 



    	 



    

  


If
to the Holder:


VIS
VIRES GROUP, INC.


111
Great Neck Road
– Suite 216,
Great Neck, NY
11021


Attn:
Curt Kramer, President


e-mail:
info@visviresgroup.com


 


 


With
a copy by
fax only to (which
copy shall not constitute notice):
Naidich Wurman 
LLP


111
Great Neck Road
– Suite 214
Great Neck, NY
11021


Att:
Judah A. Eisner,
Esq. facsimile: 516-466-3555


 


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.


 


4.4 
Assignability. This
Note shall
be binding upon
the Borrower
and its
successors and
assigns, and
shall inure
to be the
benefit of
the Holder
and its
successors and
assigns. Each
transferee of this Note must
be an “accredited
investor” (as defined in Rule 501(a) of the 1933
Act). 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.


 


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


 


4.6 
Governing Law.
This Note
shall be governed
by and
construed in accordance
with the laws
of the State
of New
York 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 New York
or in the federal
courts located
in the state and
county of Nassau. 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
and Holder
waive trial by jury.
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 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.


 


4.10         
Remedies. The
Borrower acknowledges
that a
breach by
it of its
obligations hereunder
will cause
irreparable harm
to the Holder,
by vitiating
the intent
and purpose of the transaction
contemplated hereby. Accordingly,
the Borrower acknowledges that
the remedy at
law for
a breach
of its obligations
under this Note
will be inadequate
and agrees,
in the event of
a breach or threatened
breach by the Borrower
of the
provisions of this Note, that
the Holder shall
be entitled,
in addition
to all
other available
remedies at
law or in
equity, and
in addition to the penalties
assessable herein, to an
injunction or injunctions restraining,
preventing or curing any breach
of this Note and
to enforce specifically the terms
and provisions
thereof, without
the necessity
of showing economic
loss and
without any
bond or other
security being required. 


 


IN
WITNESS
WHEREOF,
Borrower
has caused
this Note
to be signed
in its name
by its duly
authorized officer this July
28, 2015.


 


SKINVISIBLE,
INC.


 


By:
/s/ TERRY
HOWLETT


Chief
Executive Officer




    	 



    	 



    




 


EXHIBIT
A -- 
NOTICE OF
CONVERSION


 


The
undersigned hereby
elects to convert
$_______principal amount
of the
Note (defined
below) into
that number
of shares
of Common
Stock to be
issued pursuant
to  the
conversion of the Note
(“Common Stock”)
as set forth below,
of SKINVISIBLE, INC.,
a Nevada corporation (the
“Borrower”) according
to the conditions
of the convertible note
of the
Borrower dated as
of July 28,
2015 (the
“Note”), as of
the date
written below.
No fee
will be
charged to
the Holder
for any conversion,
except for
transfer taxes,
if any.


 


Box
Checked as to applicable
instructions:


 


[
] The Borrower
shall electronically
transmit the
Common Stock
issuable pursuant
to this
Notice of
Conversion to
the account
of the
undersigned or
its nominee
with DTC
through its Deposit
Withdrawal Agent
Commission system
(“DWAC Transfer”).


 


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:


 


VIS
VIRES GROUP, INC.


111
Great Neck Road
– Suite 216,


Great
Neck, NY 11021
Attention: Certificate
Delivery


e-mail:
info@visviresgroup.com


 


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:______


 


VIS
VIRES GROUP, INC.


 


By:



Name:
 Curt
Kramer


Title:President