Exhibit 10.2


 


NEITHER
THE ISSUANCE NOR 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: $147,000.00	Issue Date: December
    26, 2017 









Purchase
Price: $127,500.00





Original
Issue Discount: $19,500.00


 


CONVERTIBLE
PROMISSORY NOTE


 


FOR
VALUE RECEIVED, REIGN SAPPHIRE CORPORATION, a Delaware corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of _________________________ , a _________________________ limited liability company, or registered
assigns (the “Holder”) the principal sum of $147,000.00 (the “Principal Amount”), together with a one-time
interest charge at the rate of ten percent (10%), at maturity or upon acceleration or otherwise, as set forth herein (the “Note”).
The consideration to the Borrower for this Note is $127,500.00 (the “Consideration”). At the closing, the outstanding
principal amount under this Note shall be $147,000.00, consisting of the Consideration plus the OID (as defined herein). The maturity
date shall be nine (9) months from the Issue Date (the “Maturity Date”), and is the date upon which the principal
sum, as well as any accrued and unpaid interest and other fees shall be due and payable. 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
by the Maturity Date, shall bear interest at the rate of the lesser of (i) eighteen percent (18%) per annum and (ii) the maximum
amount permitted by applicable law 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 the Borrower’s common stock (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.


 






     1


     


    

 


This
Note carries an original issue discount of $19,500.00 (the “OID”), to cover the Holder’s accounting fees, due
diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Note, which
is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $127,500.00, computed as follows:
the Principal Amount minus the OID.


 


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 additional terms shall also apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS


 


1.1          
Conversion Right. The Holder shall have the right at any time on or after the date which is 180 calendar days after the
Issue Date to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest 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 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived
(up to a maximum of 9.99%) 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.


 






     2


     


    

 


1.2          
Conversion Price.




 


(a)       Calculation
of Conversion Price. The Conversion Price shall be $0.08 per share (subject, in each case, to equitable adjustments for stock
splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events) (also subject to adjustment as further described herein). “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities
exchange or other securities market on which the Common Stock is then being traded.


 


Each
time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd
party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise)
at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in
the Note), then the Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable
adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, the Borrower enters
into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory
note), or Section 3(a)(10) transaction, in which any 3rd party has a look back period greater than the look back period
in effect under the Note at that time, then the Holder’s look back period shall automatically be adjusted to such greater
number of days until this Note is no longer outstanding. The adjustments in this paragraph, with respect to Section 3(a)(9) transactions,
shall not take effect unless the holder of the note with more favorable terms is eligible to convert. The Borrower shall give
written notice to the Holder, with the adjusted Conversion Price and/or adjusted look back period (each adjustment that is applicable
due to the triggering event), within one (1) business day of an event that requires any adjustment described in the two immediately
preceding sentences. All expenses incurred by Holder with respect to the Borrower’s transfer agent, for the issuance of
the Common Stock into which this Note is convertible into, shall immediately and automatically be added to the balance of the
Note at such time as the expenses are incurred by Holder (provided that the initial $100 of such expenses for each conversion
shall be paid by the Holder and shall not be added to the balance of the Note).


 


If
at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock,
then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the
Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal”
means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares
issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price
not been adjusted by the Holder to the par value price.


 






     3


     


    

 


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. The Borrower is required at all times to have
authorized and reserved three (3) 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.


 


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 on or after
the date which is 180 calendar days 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.


 






     4


     


    

 


(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.


 


(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.


 






     5


     


    

 


(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. Except as otherwise provided (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.”


 






     6


     


    

 


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 Borrower so that the sale or transfer is effected or
(ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does
not accept the opinion of counsel provided by the 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     
     [Intentionally Omitted].


 


1.7      
    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.


 






     7


     


    

 


ARTICLE
II. 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, and such breach continues for a period of
five (5) days.


 


3.2      
    Conversion and the Shares. The Borrower fails to reserve a sufficient amount of shares of common
stock as required under the terms of this Note (including Section 1.3 of this Note), 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) 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) 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 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 two (2)
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.


 


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 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, 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.


 






     8


     


    

 





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


 


3.6      
    Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower
or any subsidiary of the Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded
or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.


 


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


 


3.8     
     Delisting of Common Stock. The Borrower shall fail to maintain the listing or quotation of
the Common Stock on the OTCQB or an equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the
New York Stock Exchange, or the NYSE American.


 


3.9    
      Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act (including but not limited to becoming delinquent in its filings), and/or the Borrower
shall cease to be subject to the reporting requirements of the Exchange Act.


 


3.10         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         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 financial instrument outstanding in the
amount of at least $100,000.00, including but not limited to all convertible promissory notes, currently issued, or hereafter
issued, by the Borrower, to the Holder or any other 3rd party (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,
in which event the Holder shall be entitled to apply all rights and remedies of the Holder under the terms of this Note by reason
of a default under said Other Agreement or hereunder.


 






     9


     


    

 


Upon
the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 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 125% (EXCEPT THAT 125% SHALL BE REPLACED WITH 135% WITH RESPECT TO A DEFAULT UNDER SECTION 3.2) multiplied by the
then outstanding entire balance of the Note (including principal and accrued and unpaid interest) plus Default Interest,
if any, plus any amounts owed to the Holder pursuant to Sections 1.4(g) hereof (collectively, in the aggregate of all of
the above, the “Default Sum”), 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.


 


The
Holder shall have the right at any time to require the Borrower to issue the number of shares of Common Stock of the Borrower
equal to the Default Amount divided by the Conversion Price then in effect, subject to issuance in tranches due to the beneficial
ownership limitations contained in this Note.


 


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, facsimile, or electronic mail 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, upon electronic mail 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:


 


REIGN
SAPPHIRE CORPORATION 


9465
Wilshire Boulevard 


Beverly
Hills, CA 90212 


e-mail:
info@reignsc.com


 






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If
to the Holder:


 


_________________________


_________________________ 


_________________________ 


_________________________


 


4.3     
     Amendments. This Note and any provision hereof may only be amended by an instrument in writing
signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument,
shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4      
    Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited
investor” (as defined in 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 Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning
the transactions contemplated by this Note shall be brought only in the state and/or federal courts of New York, NY. 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.


 






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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      
    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.


 


4.9      
    Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay
this Note, during the initial 30 day period after the issuance of this Note, by making a payment to the Holder of an amount in
cash equal to 110% multiplied by the total amount outstanding under the Note. Further, the Borrower may prepay this Note, from
the 31st day through the 60th day after the issuance of this Note, by making a payment to the Holder of
an amount in cash equal to 120% multiplied by the total amount outstanding under the Note. Further, the Borrower may prepay this
Note, from the 61st day through the 90th day after the issuance of this Note, by making a payment to the
Holder of an amount in cash equal to 125% multiplied by the total amount outstanding under the Note. Further, the Borrower may
prepay this Note, from the 91st day through the 180th day after the issuance of this Note, by making a payment
to the Holder of an amount in cash equal to 130% multiplied by the total amount outstanding under the Note. The Borrower may not
prepay this Note after the 180th day after the issuance of this Note.


 


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


 






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4.11         Section
3(a)(10) Transactions. If at any time while this Note is outstanding, the Borrower enters into a transaction structured in
accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a “3(a)(10)
Transaction”), then a liquidated damages charge of 25% of the outstanding principal balance of this Note at that time, will
be assessed and will become immediately due and payable to the Holder, either in the form of cash payment or as an addition to
the balance of the Note, as determined by mutual agreement of the Borrower and Holder.


 


4.12         Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of
any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The
types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited
to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts,
stock sale price, private placement price per share, and warrant coverage. If the Holders exercises its rights under this Section
4.12 within 180 calendar days of the Issue Date, with respect to a more favorable conversion rate triggered by the Borrower’s
issuance of a security with a variable rate conversion formula, then the Borrower shall return the Redeemable Shares (as defined
in the securities purchase agreement entered into between the Borrower and the Holder on the Issue Date) back to the Borrower’s
treasury. With respect to promissory notes issued prior to the Issue Date, this Section 4.14 shall only apply if the holder of
the respective promissory note is eligible to convert pursuant to the terms thereunder.


 


[signature
page to follow]


 




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IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this December 26, 2017.


 


REIGN
SAPPHIRE CORPORATION


 





	By:	 	 
	Name: Joseph Segelman	 
	Title: Chief
    Executive Officer	 



 






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EXHIBIT
A -- NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert $ ______________ principal amount of the Note (defined below) into that number of shares
of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of REIGN
SAPPHIRE CORPORATION, a Delaware corporation (the “Borrower”) according to the conditions of the convertible note
of the Borrower dated as of December 26, 2017 (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: 





	 	 
	 	 



 


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:              ___________________


 


_________________________


 


	By:	 	 	 	 
	Name:	 	 
	Title:	 	 	 	 
	Date:	 	 



 



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