Code Green Apparel Corp. 8-K


 


Exhibit 10.2


 





SECURITIES PURCHASE AGREEMENT


 


This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of January 29, 2018, by and between Code Green Corporation, Inc.,
a Nevada, with headquarters located 31642 Pacific Coast Highway, Suite 102, Laguna Beach, CA, 92651 (the “Company”),
and CAREBOURN CAPITAL, L.P., a Delaware limited partnership (the “Buyer”).


 


WHEREAS:


 


A.           The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”);


 


B.           Buyer
desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 12%
convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$92,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), that may be convertible into shares of common stock, $0.001 par value per
share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth
in such Note. This Agreement, the Note, the and such other agreements entered into between the Company and Buyer in connection
with the sale of the Note are collectively referred to hereinafter as the “Transaction Documents”.


 


C.           The
Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto; and


 


NOW THEREFORE, the
Company and the Buyer severally (and not jointly) hereby agree as follows:


 


1.            PURCHASE AND SALE
OF NOTE.


 


a.     Purchase
of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer
and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s
name on the signature pages hereto.


 


b.     Form
of Payment.   On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note
to be issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note
in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature
pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer, against delivery
of such Purchase Price.


 






    


     


    

 


c.     Closing
Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Sections 6 and Section 7 below,
the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 4:30
P.M., Eastern Standard Time on or about January 29, 2018, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to
by the parties.


 


2.            REPRESENTATIONS AND WARRANTIES OF THE BUYER. The
Buyer represents and warrants to the Company that:


 


a.     Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and any potential shares of Common Stock issuable upon conversion
of or otherwise issuable by the Company pursuant to the Note (including, without limitation, such additional shares of Common
Stock, if any, as are issuable (i) on account of interest on the Note or (ii) as a result of the events described in Article I
of the Note, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively
with the Note, the “Securities”) for its own account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act.


 


b.     Accredited
Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an
“Accredited Investor”).


 


c.     Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance
upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.


 


d.     Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors and which are available to the public. The
Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to be, afforded the
opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any
material nonpublic information and will not disclose such information unless such information is disclosed to the public
prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the
Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the
Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of
the Company’s representations and warranties made herein.


 






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e.     Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.


 


f.      Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in
comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to
an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”))
of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of
the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only
in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case).


 


g.     Legends.
The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the 1933 Act may
be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that
can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):


 


“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.”


 






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The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction
as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company
with 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 Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is affected. The Buyer agrees to sell all Securities, including those represented by
a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In
the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.


 


h.     Authorization;
Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly
executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable
in accordance with its terms.


 


i.      Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages
hereto.


 






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3.           
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:


 


a.     Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation
duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full
power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries
of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries
is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership
or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material
adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any,
taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection
herewith. “Subsidiaries” means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.


 


b.     Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and
perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities,
in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and
the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note
and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been
duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of
Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized
representative, and such authorized representative is the true and official representative with authority to sign this Agreement
and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms.


 


c.     Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of: (i) 2,000,000,000 shares of Common
Stock, $0.001 par value per share, of which 1,329,399,555 shares are issued and outstanding; and (ii) 10,000,000
A & B shares of preferred stock, $0.001 par value per share, of which 66,000 (1,000 of A & 65,000 of
B) shares are issued and outstanding; Except as disclosed in the SEC Documents, no shares are reserved for issuance
pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than
the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and -0- shares are reserved
for issuance upon conversion of the Note. All of such outstanding shares of capital stock are,
or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company. Except as disclosed
in the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or
rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares
of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are
no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of
its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in
any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the
issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the
Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities
convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect
thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief
Executive on behalf of the Company as of the Closing Date.


 






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d.     Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance pursuant to the
terms of the Note and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid
and non-assessable, and 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 Company and will not impose personal liability upon
the holder thereof.


 


e.     Acknowledgment of
Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common
Stock if the issuance of the Conversion Shares upon conversion of the Note occurs.     The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the
Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of
other shareholders of the Company.


 


f.      No
Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of
the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or
instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational
documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or
lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action that would give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or
affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The
businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the
Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the
Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to
execute, deliver or perform any of its obligations under this Agreement, the Note in accordance with the terms hereof or
thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion
of the Note. All consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The
Company is not in violation of the listing requirements of the OTC Markets Group Inc. (the “OTC Markets”) or any
similar quotation system, and does not reasonably anticipate that the Common Stock will be delisted by the OTC Markets or any
similar quotation system, in the foreseeable future. The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.


 






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g.     SEC
Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by
reference therein, being hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the
Buyer true and complete copies of the SEC Documents or they have been publicly available, except for such exhibits and
incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or
has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated
in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included
in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all
material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company
included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to November 14, 2012, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be
reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition
or operating results of the Company. The Company is subject to the reporting requirements of the


1934 Act. For the avoidance of doubt, filing
of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”)
shall satisfy all delivery requirements of this Section 3(g).


 






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h.     Absence
of Certain Changes. Since January 12, 2018, there has been no material adverse change and no material adverse development
in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act
reporting status of the Company or any of its Subsidiaries.


 


i.      Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 


j.      Patents,
Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use
all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to
conduct its business as now operated (and, as presently contemplated to be operated in the future); Except as disclosed in
the SEC Documents, there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s
knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property
necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future);
to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products,
services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is
unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.


 






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k.     No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.


 


l.      Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign
income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only
to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment
of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and
has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed
a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or
local tax. None of the Company’s tax returns is presently being audited by any taxing authority.


 


m.    Certain Transactions.
Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and
other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company
is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or partner.


 


n.     Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has
occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations
or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 






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o.     Acknowledgment
Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting
solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of     its     respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its
representatives.


 


p.     No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer
will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its securities.


 


q.     No
Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby, with the exception of the fees identified
in the Placement Agent Agreement entered into by the Company with Moody Capital Solutions, Inc.


 


r.      Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.


 






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s.     Environmental Matters.





 


(i)             There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal,
state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of
the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The
term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


(ii)            Other
than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the
period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.


 


(iii)           There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


t.      Title
to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have
a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 


u.     Internal
Accounting Controls. Except as disclosed in the SEC Documents, the Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.


 






    11


     


    

 


v.     Foreign Corrupt Practices. Neither
the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company
or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or employee.


 


w.     Solvency. The
Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair
market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after
giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that
would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company
did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability
to continue as a “going concern” shall not, by itself, be a violation of this Section 3(w).


 


x.     No Investment Company.
The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company
is not controlled by an Investment Company.


 


y.  
Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties
set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of Default as that term is defined in the Note.


 


4.            COVENANTS.


 


a.     Best
Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described
in Section 6 and 7 of this Agreement.


 


b.     Form
D; Blue Sky Laws. If required under applicable law, the Company agrees to file a Form D with respect to the Securities
as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on
or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities
for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue
sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyer on or prior to the Closing Date.


 






    12


     


    

 


c.     Use
of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes
and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise
or other person (except in connection with its currently existing direct or indirect Subsidiaries or pending merging partner(s)).


 


d.     Right
of First Offer. For amounts less than the current Principal Balance owed to Buyer by the Company,
the Company shall have first delivered to the Buyer, within the earlier of i) at least seventy two (72) hours following the Company’s
decision to initiate a Future Offering or ii) within seventy two (72) hours of the Company’s receipt of such Future Offering
(as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof, and providing
the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being
offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence
and the preceding sentence are collectively referred to as the “Right of First Offer”) (and subject to the exceptions
described below), the Company will not conduct any bridge debt financing (including debt with an equity component) (“Future
Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In
the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the
Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms
and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period
following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated
by such proposed Future Offering, as amended.     The foregoing sentence shall apply to successive amendments
to the terms and conditions of any proposed Future Offering.     The Right of First Offer shall not apply
to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous
offering pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants or
other advisors approved by the Board, (iii) issuances to strategic partners or other parties in connection with a commercial relationship,
or providing the Company with equipment leases, real property leases or similar transactions approved by the Board (iv) issuances
of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership
or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition
of a business, product or license by the Company. The Right of First Offer also shall not apply to the issuance of securities upon
exercise or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof
or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or
restricted stock plan approved by the shareholders of the Company.





 






    13


     


    

 


e.     Expenses.
At the Closing, the Company shall reimburse Buyer in an amount not to exceed $5,000.00  for expenses incurred by them in
connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to
be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’
fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of
the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow
fees, and costs of restructuring the transactions contemplated by the Documents. The Company’s obligation to reimburse Buyer’s
expenses with respect to this transaction shall be limited to the above identified $5,000.00, which such amount shall be
withheld from the proceeds paid to the Company upon the closing of this transaction.


 


f.      Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns,
or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K
its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press
releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the
shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.
For the avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above
via a recognized wire service shall satisfy the delivery requirements of this Section 4(f).


 


g.     Listing. The
Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC Markets or any equivalent replacement
exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New
York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges,
as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from the OTC Markets
and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the
Common Stock for listing on such exchanges and quotation systems.


 


h.     Corporate
Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall
not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all
or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the
Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is
a publicly traded corporation whose Common Stock is listed for trading on the OTC Markets, Nasdaq, Nasdaq, SmallCap, NYSE or AMEX,
or any applicable trading exchange.


 






    14


     


    

 


i.      No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.


 


j.      Failure
to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting
requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.


 


k.     Trading
Activities. Neither the Buyer nor its affiliates has an open short position (or other hedging
or similar transactions) in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates
not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.


 


l.     Breach
of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under Section 3.3 of the Note.


 


5.            Transfer
Agent Instructions. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares 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, all such certificates shall bear the restrictive legend specified in Section 2(g) of
this Agreement. The Company warrants that: (i) no stop transfer instructions to give effect to Section 2(f) hereof (in the
case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares 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), will be given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and
the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in
transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares to be issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it
will not fail 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 Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by
the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set
forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the
Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel in form, substance
and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities
may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer
provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer,
and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from
restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section may be inadequate and agrees, in the event of a breach or threatened breach by the Company of
the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and
without any bond or other security being required.


 






    15


     


    

 


6.            CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company
hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion:


 





a.     The Buyer shall have executed
this Agreement and delivered the same to the Company.


 





b.     The Buyer shall have delivered
the Purchase Price in accordance with Section 1(b) above.


 


c.     The
representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and
the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.


 


d.     No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


7.            CONDITIONS
PRECEDENT TO THE BUYER’S OBLIGATION  TO PURCHASE. The obligation of the Buyer hereunder to
purchase the Note at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time
in its sole discretion:


 


a.     The Company shall have
executed this Agreement and delivered the same to the Buyer.





 






    16


     


    






b.     The Company shall have
delivered to the Buyer duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.


 


c.     The
Buyer shall have received a share reservation agreement signed by the Company and its transfer agent in a form satisfactory to
the Buyer and its counsel.


 


d.     The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited
to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions
relating to the transactions contemplated hereby.


 


e.     No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


f.     No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act
reporting obligations.


 


g.     The
Conversion Shares shall have been authorized for quotation on the OTC Markets or any similar quotation system and trading in the
Common Stock on the OTC Markets or any similar quotation system shall not have been suspended by the SEC or the OTC Markets or
any similar quotation system.


 


h.     The Buyer shall have received an
officer’s certificate described in Section 7(d) above, dated as of the Closing Date.


 


8.            GOVERNING LAW; MISCELLANEOUS.


 


a.     Governing
Law. Except in the case of the Mandatory Forum Selection provisions in Section 8(b) below, which clause shall be
governed and interpreted in accordance with Florida law, this Agreement and all other Transaction Documents shall be
delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of the State of
Minnesota, and for all purposes shall be construed in accordance with the laws of such state, without giving effect to the
choice of law provisions of such state.


 






    17


     


    

 


b.     Mandatory
Forum Selection. Any action brought by either party against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of Minnesota or in the federal courts located in the state of Minnesota. The parties
to this Agreement 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 Company and Buyer
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 Agreement 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.


 


c.     Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or by e-mail
delivery of a “.pdf’ format file or other similar format file, such signature shall be deemed an original for all purposes
and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile
or “.pdf’ signature page was an original thereof.


 


d.     Headings. The
headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this
Agreement.


 


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


 


f.      Entire
Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in
interest of the Buyer.


 






    18


     


    

 


g.     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 Company, to:


 


Code Green Apparel Corporation


31642 Pacific Coast Highway


Suite 102


Laguna Beach, CA, 92651


ATTN: George@codegreenapparel.com


 


With a copy by fax/email only to (which copy shall not constitute
notice):


 


If to the Buyer, to:


 


CAREBOURN CAPITAL, L.P.


8700 Black Oaks Lane N.


Maple Grove MN 55311


Attn: Chip Rice, Managing Member


Email: info@carebourncapital.com


 


Each party shall provide notice to the other party of any change
in address.


 


h.     Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any
person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term
is defined under the 1934 Act, without the consent of the Company.


 









    19


     


    




 


i.      Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


j.      Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement notwithstanding
any investigation by Buyer shall survive the closing hereunder and shall be deemed to be continuing representations and warranties
until such time as the Company have fulfilled all of its obligations to Buyer hereunder and under all other Transaction Documents,
and Buyer has been indefeasibly paid in full and disposed of any and all Conversion Shares held by Buyer.


 


k.     The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or
damage arising as a result of or related to any breach by the Company of any of its representations, warranties and covenants set
forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they
are incurred.


 


l.      Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


m.    No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.


 


n.     Remedies.


 


(i)             The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Agreement, that the Buyer 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 Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic
loss and without any bond or other security being required.


 


(ii)             In
addition to any other remedy provided herein or in any document executed in connection herewith, Borrower shall pay Holder for
all costs, fees and expenses in connection with any litigation, contest, dispute, suit or any other action to enforce any rights
of Holder against Borrower in connection herewith, including, but not limited to, costs and expenses and attorneys’ fees, and costs
and time charges of counsel to Holder.








 






    20


     


    

 


o.     Publicity.
The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC,
OTC Markets or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC,
OTC Markets (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable
law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its
release and shall be provided with a copy thereof and be given an opportunity to comment thereon).


 


p.     Role
of Counsel. The Company acknowledges its understanding that this Agreement and other agreements entered into in connection with
the Agreement were prepared at the request of the Buyer by [Legal & Compliance, LLC], legal counsel for the Buyer and that
such law firm or any of its attorneys did not represent the Company in conjunction with this Agreement, the Transaction Documents
or any of the related transactions. The Company, as further evidenced by its signature below, acknowledges that is has had the
opportunity to obtain the advice of independent counsel of their choosing prior to the execution of this Agreement and that it
has availed itself of this opportunity to the extent the Company deemed necessary and advisable. By its signature below, the Company
represents and warrants that they it understands the terms and conditions of this Agreement.


  


[- Signature page follows -]





 






    21


     


    

  


IN WITNESS WHEREOF,
the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written. 





	 	 	 	 
	CODE GREEN APPAREL CORPORATION	 
	 	 	 	 
	By: 		 
	Name: GEORGE POWELL III	 
	Title: CEO	 
	 	 	 	 
	CAREBOURN CAPITAL, L.P.	 
	 	 	 	 
		By:	Carebourn Partners, LLC,	 
	 	 	a Minnesota limited liability company,

 its General
Partner	 
	 	 	 	 
	 	By:		 
	 	 	Name: Chip Rice	 
	 	 	Title: Managing Member	 


 







	AGGREGATE SUBSCRIPTION AMOUNT:	 
	 	 
	Aggregate Principal Amount of Note:	$     92,000.00
	 	 
	Aggregate Purchase Price:	$     80,000.00







 









    22


     


    

 





CORPORATE RESOLUTION OF THE BOARD
OF DIRECTORS OF


Code Green Apparel Corporation


 


We, the undersigned, do hereby certify that
at a meeting of the Board of Directors of Code Green Apparel Corporation, a corporation organized under the laws of the
Nevada (the “Corporation”), duly held on January 29, 2018, at which said meeting no less than a majority of
the Directors were present and voting throughout, the following resolution, upon motions made, seconded and carried, was duly adopted
and is now in full force and effect:


 


WHEREAS, the Board
of Directors of the Corporation deem it in the best interests of the Corporation to enter into the Securities Purchase Agreement
dated January 29, 2018 (the “Agreement”), in connection with the issuance of an 12% convertible note
of the Corporation, in the aggregate principal amount of $92,000.00 (the “Note”), that may be convertible into
shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and
subject to the limitations and conditions set forth in such Note, along with an irrevocable letter agreement with American Registrar
& Transfer, Co., the Corporation’s transfer agent (the “Transfer Agent”), with respect to the reserve
of shares of common stock of the Corporation to be issued upon any conversion of the Note; the issuance of such shares of common
stock in connection with a conversion of the Note; and the indemnification of the Transfer Agent for all loss, liability, or
expense in carrying out the authority and direction contained in the irrevocable letter agreement (the “Letter Agreement”);


 


NOW, THEREFORE, BE IT:


 


RESOLVED, that the
Corporation is hereby authorized to enter into the Agreement, the Note and the Letter Agreement which provides in pertinent part:
(i) reserve shares of common stock of the Corporation to be issued upon any conversion of the Note; (ii) issue such shares of common
stock in connection with a conversion of the Note (issuance upon receipt of a notice of conversion of the holder of the Note) without
any further action or confirmation by the Corporation; and the Corporation indemnifies the Transfer Agent for all loss, liability,
or expense in carrying out the authority and direction contained in the Letter Agreement:


 


RESOLVED, that any
executive officer of the Corporation be, and hereby is, authorized, empowered and directed, from time to time, to take such additional
action and to execute, certify and deliver to the transfer agent of the Corporation, as any appropriate or proper to implement
the provisions of the foregoing resolutions:


 


The undersigned, do hereby
certify that we are members of the Board of Directors of the Corporation; that the attached is a true and correct copy of resolutions
duly adopted and ratified at a meeting of the Board of Directors of the Corporation duly convened and held in accordance with its
by-laws and the laws of the Corporation’s state of incorporation, as transcribed by us from the minutes; and that the same
have not in any way been modified, repealed or rescinded and are in full force and effect.





 




    


     


    





 





IN WITNESS WHEREOF, we have hereunto set our hands as
Members of the Board of Directors of the Corporation.





	Dated: January 29, 2018	 
	 	 
	 	 	 
	 	Name: George Powell III
	 	Title: CEO & Secretary