Exhibit 4.1


 


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS 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 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$300,000.00	Issue Date:  July 23, 2021
	Purchase Price: US$270,000.00	 


 


PROMISSORY NOTE


 


FOR VALUE
RECEIVED, SMARTMETRIC, INC., a Nevada corporation (hereinafter called the “Borrower”) (Trading Symbol: SMME),
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$300,000.00 (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 January 23, 2022 (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, $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 by mutual consent of the Holder and the Borrower to 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 twelve percent (12%) per annum for any period following the original Maturity Date, payable monthly.


 






     


     


    

 


This Note carries an original
issue discount of $30,000 (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 $270,000 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 UPON EVENT OF DEFAULT


 


1.1 Conversion Right.
The Holder shall have the right from time to time 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 provision 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 provision 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 provision. 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.


 






    	 	2	 



     


    

 


1.2
Conversion Price.


 


Calculation of Conversion
Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”) shall equal the lesser
of 90% (representing a 10% discount) multiplied by the lowest trading price (i) during the previous twenty (20) Trading Day period ending
on the Issuance Date, or (ii) during the previous twenty (20) Trading Day period ending on date of conversion of this Note. 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 OTC Pink, 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 3rd party has the right to convert monies owed to that 3rd
party (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 3rd
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.


 






    	 	3	 



     


    

 


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


 


(b)
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.


 


(c)
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).


 






    	 	4	 



     


    

 


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 four (4) 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.


 






    	 	5	 



     


    

 


(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.


 




    	 	6	 



     


    

 


(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 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.


 


(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 Variable Conversion Price shall be redefined
to mean seventy percent (70%) multiplied by the Market 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 OTC 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.”


 






    	 	7	 



     


    

 


(j) 
Security Interest. This Note is secured by certain shares of Series D Preferred Stock of the Company issued to the Holder
in connection with this Note and convertible into the Common Stock.


 


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.”


 






    	 	8	 



     


    

 


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.


 


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


 


(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.


 






    	 	11	 



     


    

 


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.


 


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.




    	 	12	 



     


    

 


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.


 


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 minimum
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 Certificate or 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 for a period of ten (10) days.


 




    	 	13	 



     


    

 


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 Deliver Transaction
Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined in the Purchase Agreement) to the Holder
within five (5) business days of the date such amount is due.


 


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 ten (10) days
after written notice thereof to the Borrower from the Holder.


 






    	 	14	 



     


    

 


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.


 


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 $150,000, 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 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 breach continues for a period of ten (10) 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 and such breach continues for a period of ten (10) days after written notice thereof to the Borrower
from the Holder.


 


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.


 




    	 	15	 



     


    

 


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 and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.


 


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.


 


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 ten (10) 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 and
such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.
“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 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 ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement exchange)
and such breach continues for a period of ten (10) days.


 




    	 	16	 



     


    

 


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 ten (10) days.


 


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
Reserved.


 


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 ten (10) days.


 


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: (A) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN OF SECTION 3.2, 3.9, 3.10, 3.16, 3.17, 3.19,
3.20, 3.22 OR 3.23, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS (X) ACCRUED AND UNPAID INTEREST ON THE UNPAID
PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT (THE “MANDATORY PREPAYMENT DATE”) PLUS (Y) DEFAULT INTEREST,
IF ANY, ON THE AMOUNTS REFERRED TO IN CLAUSES (W) AND/OR (X) PLUS (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3
AND 1.4(G) HEREOF, MULTIPLIED BY TWO (2); OR (B) IN THE EVENT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN ANY OTHER
SECTION, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS (X) ACCRUED AND UNPAID INTEREST ON THE UNPAID PRINCIPAL
AMOUNT OF THIS NOTE TO THE MANDATORY PREPAYMENT DATE, PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED TO IN
CLAUSES (W) AND/OR (X) PLUS (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF (THE THEN
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT PLUS THE AMOUNTS REFERRED TO IN CLAUSES (X), (Y) AND (Z)
SHALL COLLECTIVELY BE KNOWN AS THE “DEFAULT SUM”) or 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 with the Variable Conversion Price
shall be redefined to mean forty percent (40%) multiplied by the Market 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 Variable Conversion Price shall
be redefined to mean forty percent (40%) multiplied by the Market 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.


 




    	 	18	 



     


    

 


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:


 


SmartMetric,
Inc.


3960 Howard Hughes Parkway 

Suite 500


Las Vegas, NV 89169 

Attn: CEO


E-mail: ceo@smartmetric.com


  


If to the Holder:


 


AJB Capital Investments LLC 

4700 Sheridan Street, Suite
J 

Hollywood, FL 33021


Attn:                          


Email:                          


 


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


 






    	 	19	 



     


    

 


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 Wyoming 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.


 


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.




    	 	20	 



     


    

 


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.


 


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.


 




    	 	21	 



     


    

 


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.


 


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 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]


 




    	 	22	 



     


    

  


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.


 


	 	SMARTMETRIC, INC.
	 	 
	 	By:	                             
	 	Name:	Chaya Coleena Hendrick
	 	Title:	Chief Executive Officer


 




    	 	23	 



     


    

 


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 SmartMetric, Inc., a Nevada corporation (the “Borrower”), according to the conditions of the convertible note
of the Borrower dated as of July , 2021 (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]