Exhibit 10.2


 





Execution
Version


 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS PROMISSORY NOTE 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 OR OTHER APPLICABLE
EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 





	Principal Amount: US$600,000.00	Issue Date: October 13, 2022
	Purchase Price: US$540,000.00	 


 





PROMISSORY
NOTE


 


FOR
VALUE RECEIVED, Sollensys Corp, a Nevada corporation (hereinafter called the “Borrower”) (Trading Symbol:
SOLS), hereby promises to pay to the order of AJB Capital Investments LLC, a Delaware limited liability company, or
registered assigns (the “Holder”) the sum of US$600,000.00 (the “Principal”) together with guaranteed
interest (the “Interest”) on the Principal balance hereof in the amount of ten percent (10%) (the “Interest
Rate”) per calendar year from the date hereof (the “Issue Date”). All Principal and Interest owing hereunder,
along with any and all other amounts, shall be due and owing on April 13, 2023 (the “Maturity Date”). Interest shall
accrue on a monthly basis and is payable on the first of each month following the Issue Date or upon acceleration or by prepayment
or otherwise. Notwithstanding the foregoing, the final payment of Principal and Interest shall be due on the Maturity Date. This
Note may be prepaid in whole or in part as set forth herein. Any amount of Principal or Interest on this Note which is not paid when
due shall bear interest at the rate of the lesser of (i) eighteen percent (18%) per annum and (ii) the maximum amount permitted
under law from the due date thereof until the same is paid (the “Default Interest”). Default Interest shall commence
accruing upon an Event of Default and shall be computed on the basis of a 360-day year and the actual number of days elapsed. All
payments due hereunder (to the extent not converted into common stock of the Borrower, $0.001 par value per share (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall
be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions
of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the
same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is
not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law
or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed
thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the
“Purchase Agreement”). The Maturity Date may be extended at the sole discretion of the Borrower up to six (6) months
following the date of the original Maturity Date hereunder. In the event that the Maturity Date is extended, the interest rate shall
equal fifteen percent (15%) per annum for any period following the original Maturity Date, payable monthly.


 






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This
Note carries an original issue discount of $60,000 (the “OID”), to cover the Holder’s monitoring costs associated 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 $540,000 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 terms shall also apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS


 


1.1 Conversion
Right. The Holder shall have the right from time to time only following an Event of Default, and ending on the date of
payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the
remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal, interest,
penalties, and all other amounts under this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a
“Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of
this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the
Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of
shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. 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 or Borrower’s transfer agent 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 or Borrower’s transfer agent before 11:59 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, provided however, that the Borrower shall have the right to pay any or all interest in cash plus (3)
at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or
(2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof.


 






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		1.2	Conversion
                                            Price.



 


(a) Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”) shall
equal the volume weighted average trading price (i) during the previous ten (10) Trading Day period ending on the date of issuance of
this Note, or (ii) during the previous ten (10) Trading Day period ending on the Conversion Date, whichever is lower. To the extent the
Conversion Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary
to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor
all conversions submitted pending this adjustment. If the shares of the Borrower’s Common Stock have not been delivered within
three (3) business days to the Borrower or Borrower’s transfer agent, the Notice of Conversion may be rescinded. At any time after
the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable by DWAC (including if the Borrower’s
transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock specified in a Notice of
Conversion), an additional 10% discount will apply for all future conversions under all Notes until DWAC delivery becomes available.
If in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible for
clearing deposit, an additional 15% discount shall apply for all future conversions under all Note until such chill is lifted. Additionally,
if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares
after one hundred eighty-one (181) days from the Issue Date (other than as a result of the Holder’s status as an affiliate of the
Company), an additional 15% discount will be attributed to the Conversion Price. If the trading price cannot be calculated for such security
on such date in the manner provided above, the trading price shall be the fair market value as mutually determined by the Borrower and
the Holder. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB Market (the
“OTCQB”) or on the principal securities exchange or other securities market on which the Common Stock is then being traded.
The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. Holder shall
be entitled to deduct $500.00 from the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated
with each Notice of Conversion.


 


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


 






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(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the
Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in
which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or
substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a
tender offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the
announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the
Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date
(as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on
the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price
Termination Date, the Conversion Price shall be determined as set forth in this Section 1.2(b). For purposes hereof, “Adjusted
Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme)
for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case
of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the
termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to
become operative.


 


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


 


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
the Conversion Price hereunder shall equal such par value for such conversion and the Conversion Amount for such conversion shall 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 subject to the minimum price set forth in this Section 1.2(c).


 






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1.3 Authorized
Shares. The Borrower covenants that during the period while any outstanding balance is owing hereunder or any conversion of the
Note is available, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase
Agreement. The Borrower is required at all times to have authorized and reserved five (5) times the number of shares that is
actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the
“Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s
obligations pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its
capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then
current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient
number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The
Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable
upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and
agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of
Common Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved
Amount be lower than the initial Reserved Amount, regardless of any prior conversions.


 


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


 


		1.4	Method
                                            of Conversion.



 


(a) Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time
after an Event of Default, by (A) submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by facsimile,
e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 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.


 






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


 


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


 


(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid
interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article
I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common
Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof,
the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit
such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion
shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 11:59 p.m., New York, New York time,
on such date.


 


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


 






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(g) DTC
Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason, the principal
amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s and Borrower’s
expectation that any principal amount increase will tack back to the Issue Date) and the Conversion Price shall be redefined to mean
seventy percent (70%) multiplied by the Conversion Price, subject to adjustment as provided in this Note.


 


(h) Failure
to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of
this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure
shall be governed by such Section) the Borrower shall pay to the Holder $1,000 per day in cash, for each day beyond the Deadline that
the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such Holder’s conversion
of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages will tack back to the Issue Date). Such
cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the
Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added
to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such
additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that
the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with
such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision
contained in this Section 1.4(h) are justified.


 


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


 






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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 other applicable exemption or (iv) such shares are transferred to an “affiliate” (as defined
in Rule 144) of the Holder who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is
an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have
been registered under the Act or otherwise may be sold pursuant to Rule 144 or other applicable exemption 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 OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is
effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the
Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 or other
applicable exemption 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.


 






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		1.6	Effect
                                            of Certain Events.



 


(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of
the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into
any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default
(as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition
to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof.
“Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity
or organization.


 


(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the
Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result
of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes
of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets
of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter
have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would
have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without
regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to
the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower
shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, fifteen (15)
days prior written notice (but in any event at least ten (10) days prior written notice) of the record date of the special meeting of
shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b)
the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.


 






    9


     


    

 


(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to
the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off))
(a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record
for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the
Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common
Stock on the record date for the determination of shareholders entitled to such Distribution.


 


(d) Adjustment
Due to Dilutive Issuance. If, at any time when the Note is issued and outstanding, the Borrower issues or sells, or in accordance
with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued in an Exempt Issuance (as
defined in the Purchase Agreement), any shares of Common Stock for a consideration per share (before deduction of reasonable expenses
or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date
of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive
Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive
Issuance.


 


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


 






    10


     


    

 


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


 


(e) Purchase
Rights. If, at any time when the Note is issued and outstanding, the Borrower issues any convertible securities or rights to purchase
stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common
Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase
Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 


(f) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and
furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder
a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon
conversion of the Note.


 


1.7 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.


 






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1.8 Prepayment.
The Borrower may at any time pay or prepay all or any portion of the amounts outstanding hereunder by making a payment to the Holder
of an amount in cash equal to the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note plus (y) Default Interest, if any.


 


ARTICLE
II. CERTAIN COVENANTS


 


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


 


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


 


2.3 Borrowings.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person,
firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer
to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower
has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors financial institutions or other lenders
incurred in the ordinary course of business, (c) borrowings, the proceeds of which shall be used to repay this Note, or (d) borrowings
which are expressly subordinated to this Note.


 


2.4 Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any
consent to the disposition of any assets shall be conditioned on a specified use of the proceeds towards the repayment of this Note.


 


2.5 Advances
and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without
limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in
existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made
in the ordinary course of business or


(c)
not in excess of $100,000.


 






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


 


2.7 Preservation
of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimal
assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned
or leased by it or in which the transaction of its business makes such qualification necessary.


 


2.8 Non-circumvention.
The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Articles of Incorporation or Bylaws, or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times
in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder.


 


ARTICLE
III. EVENTS OF DEFAULT


 


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


 


3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at
maturity, upon acceleration or otherwise and such failure continues for a period of five (5) days after written notice thereof to the
Borrower from the Holder.


 






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3.2 Conversion
and the Shares. The Borrower (i) fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the
terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, (iii) directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in
transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, (iv) fails to remove (or directs its
transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall
continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing)
for three (3) business days after the Holder shall have delivered a Notice of Conversion, (v) fails to remain current in its
obligations to its transfer agent, (vi) causes a conversion of this Note to be delayed, hindered or frustrated due to a balance owed
by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty eight (48) hours of a demand from the Holder, any
amount of funds advanced by Holder to Borrower’s transfer agent in order to process a conversion, (viii) fails to reserve
sufficient amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails to provide a Rule 144 opinion
letter from the Borrower’s legal counsel to the Holder, covering the Holder’s resale into the public market of the
respective conversion shares under this Note, within two (2) business days of the Holder’s submission of a Notice of
Conversion to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that Holder submits the
respective Notice of Conversion and the date of the respective Notice of Conversion must be on or after the date which is six (6)
months after the date that the Holder funded the Purchase Price under this Note), and/or (x) an exemption under Rule 144 is
unavailable for the Holder’s deposit into Holder’s brokerage account and resale into the public market of any of the
conversion shares under this Note at any time after the date which is six (6) months after the date that the Holder funded the
Purchase Price under this Note (other than as a result of Holder’s status as an affiliate of the Borrower).


 


3.3 Failure
to Register Shares. The Borrower fails to register the Commitment Fee Shares as required by the Purchase Agreement or the Warrant
Shares as required by the Warrant.


 


3.4 Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral
documents including but not limited to the Purchase Agreement and such breach continues for a period of seven (7) calendar days after
written notice thereof to the Borrower from the Holder.


 


3.5 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or
misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect
on the rights of the Holder with respect to this Note or the Purchase Agreement.


 


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


 






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3.7 Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of
its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days
unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.


 


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


 


3.9 Delisting
of Common Stock. The Borrower shall fail to maintain the listing or quotation of the Common Stock on at least one of the OTC Pink,
OTCQB, OTCQX, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange
and such failure continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.


 


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


 


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


 


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


 


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


 


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


 


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


 






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


 


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


 


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


 


3.19 Bid
Price. The Borrower shall lose the “bid” price for its Common Stock ($0.001 on the “Ask” with zero market
makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB, OTCQX, or an equivalent replacement exchange)
and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.


 


3.20 OTC
Markets Designation. OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat
Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign)
and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.


 


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


 


3.22 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder is unable to (i)
obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s
conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and (ii)
thereupon deposit such shares into the Holder’s brokerage account (in each case, other than as a result of Holder’s
status as an affiliate of the Borrower).


 






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3.23 Delisting
or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock (i) is suspended
from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level of the OTC Markets, any
tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American and such breach continues for a period of five (5)
days after written notice thereof to the Borrower from the Holder.


 


3.24 UPON
THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3 OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY AND AUTOMATICALLY DUE AND
PAYABLE WITHOUT DEMAND, PRESENTMENT, OR NOTICE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO: (I) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS
(X) ACCRUED AND UNPAID INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT (THE “MANDATORY PREPAYMENT
DATE”) PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED TO IN CLAUSES (X) AND/OR (Y) PLUS (Z) ANY AMOUNTS
OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF, MULTIPLIED BY TWO (2); (THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS
NOTE TO THE DATE OF PAYMENT PLUS THE AMOUNTS REFERRED TO IN CLAUSES (X), (Y) AND (Z) SHALL COLLECTIVELY BE KNOWN AS


THE
“DEFAULT SUM”) or (ii) at the option of the Holder, the “parity value” of the Default Sum to be prepaid,
where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such
Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the
“Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as
a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied
by (b) the highest trading price for the Common Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are
expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder
shall be entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9,
3.10 and/or 3.19 occurs or is continuing after the nine (9) month anniversary of this Note, then the principal amount of the Note
shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation
that any principal amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest trading
price during the delinquency period as a base price for the conversion and the Conversion Price shall be redefined to mean forty
percent (40%) multiplied by the Conversion Price, subject to adjustment as provided in this Note. For example, if the lowest trading
price during the delinquency period is $0.50 per share and the conversion discount is 50%, then the Holder may elect to convert
future conversions at $0.25 per share. If this Note is not paid at Maturity Date, then the outstanding principal due under this Note
shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).


 






    17


     


    

 


The
Holder shall have the right at any time after an Event of Default occurs under this Note to require the Borrower to immediately issue,
in lieu of the Default Amount and/or Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or
Default Sum divided by the Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial
ownership limitations contained herein). This requirement by the Borrower shall automatically apply upon the occurrence of an Event of
Default without the need for any party to give any notice or take any other action.


 


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


 


If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an
attorney, the Holder shall be entitled to use the lowest trading price during the delinquency period as a base price for the conversion
and the Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Conversion Price, subject to adjustment as
provided 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, electronic mail, 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 electronic mail or 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:


 


Sollensys
Corp


1470
Treeland Blvd SE


Palm Bay, Florida 32909


Attn: Donald Beavers


E-mail:
don@sollensys.com


 






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If to the Holder:


 


AJB
Capital Investments LLC


4700
Sheridan Street, Suite J


Hollywood, FL 33021


Attn:
Ari Blaine


Email:
ari@ajbcapitalinvestments.com


 


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


 


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


 


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


 






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


 


4.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any
other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote
in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days
prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is
earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event,
and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at
such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially
simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9 including, but not limited to,
name changes, recapitalizations, etc. as soon as possible under law.


 






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


 


4.11 Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach
of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the
provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to
enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security
being required. No provision of this Note shall alter or impair the obligation of the Borrower, which is absolute and unconditional,
to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


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


 


4.13 Dispute
Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or
Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic
calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit
the disputed determinations or arithmetic calculations via electronic mail (i) within two (2) Business Days after receipt of the applicable
notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the
Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination
or calculation within two


(2)
Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the
Holder, then the Borrower shall, within two (2) Business Days, submit via electronic mail (a) the disputed determination of the
Conversion Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank
selected by the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion
Amount, any prepayment amount or Default Amount, Default Sum to an independent, outside accountant selected by the Holder that is
reasonably acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the
determinations or calculations and notify the Borrower and the Holder of the results no later than ten (10) Business Days from the
time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s determination or
calculation shall be binding upon all parties absent demonstrable error.


 






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


 


4.15 Piggyback
Registration Rights. The Borrower shall provide Holder with the option to include on each registration statement that the Borrower
files with SEC all shares issuable upon conversion of this Note. The Borrower’s failure to comply with this Section 4.15 shall
result in liquidated damages of twenty-five percent (25%) of the outstanding principal balance of this Note, but not less than Fifteen
Thousand and No/100 United States Dollars ($15,000), being immediately due and payable to the Holder at its election in the form of cash
payment or addition to the balance of this Note.


 


[signature
page follows]


 






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


 





	 	Sollensys Corp
	 	 	 
	 	By:	/s/ Donald Beavers
	 	Name:	Donald Beavers
	 	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) together with
$                   of accrued
and unpaid interest thereto, totaling
$                   into that
number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth
below, of Sollensys Corp, a Nevada corporation (the “Borrower”), according to the conditions of the convertible note of
the Borrower dated as of October 13, 2022 (the “Note”), as of the date written below. No fee will be charged to the
Holder for any conversion, except for transfer taxes, if any.


 


Box
Checked as to applicable instructions:


 


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



 


Name
of DTC Prime Broker:


Account
Number:


 


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



 


Name:
[NAME]


Address:
[ADDRESS]


 





	 	 	Date
of Conversion:		 
	 	 	Applicable
Conversion Price: $	$	 
	 	 	Number of Shares of Common Stock	 	 
	 	 	to
be Issued Pursuant to	 	 
	 	 	Conversion
of the Notes:		 
	 	 	Amount of Principal Balance Due	 	 
	 	 	remaining
Under the Note after	 	 
	 	 	this
conversion:		 
	 	 	Accrued and unpaid interest remaining:		 






 


[HOLDER]


 





	 	 	By:		 









Name: [NAME]


Title:
[TITLE]


Date: [DATE]


 






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