Exhibit
4.7


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


Original
Issue Date: February 8, 2019


Fixed
Conversion Price (subject to adjustment herein): $0.50


 


Original
Principal Amount: $580,536.60


Purchase
Price: $580,536.60


 


SENIOR
SECURED


CONVERTIBLE
PROMISSORY NOTE


DUE
FEBRUARY 8, 2020


 


THIS
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued debt obligation of EVIO, Inc., a Colorado corporation
(the “Company” or the “Borrower”), having its principal place of business at 2340 W. Horizon
Ridge Pkwy, Suite 120, Henderson, NV 89052, designated as its Senior Secured Convertible Promissory Note due February 8, 2020
(the “Note”).


 


FOR
VALUE RECEIVED, the Company promises to pay to Bellridge Capital, L.P. or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $580,536.60, Late Fees (as defined below), and any other
sums due hereunder on February 8, 2020 (the “Maturity Date”), or such earlier date as this Note is required
or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:


 


Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Exchange Agreement and (b) the following terms shall have
the following meanings:


 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within sixty (60) days after commencement; (c) the Company or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered; (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it
or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment;
(e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its
consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.


 




    	 



     


    

 


“Base
Share Price” shall have the meaning set forth in Section 5(d).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 


“Board
of Directors” means the Company’s board of directors.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which the New York Federal Reserve Bank is closed.


 


“Buy-In”
shall have the meaning set forth in Section 4(c)(v).


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of fifty percent (50%) of the voting securities of the Company (other than by means of conversion of the Note), (b)
the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and,
after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than fifty-one
percent (51%) of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells
or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to
such transaction own less than fifty-one percent (51%) of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.


 




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“Common
Stock” means the common stock, par value $0.0001 per share, of the Company


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.


 


“Default
Payment Date” shall have the meaning set forth in Section 7(b).


 


“Default
Variable Conversion Price” means 60% of the Trading Price in the twenty (20) Trading Days prior to the Conversion Date.


 


“Dilutive
Issuance” shall have the meaning set forth in Section 5(d).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(d).


 


“DTC”
means the Depository Trust Company.


 


“DTC
Chill” shall have the meaning set forth in Section 7(a)(vii).


 


“DWAC”
means Deposit Withdrawal at Custodian as defined by the DTC.


 


“Event
of Default” shall have the meaning set forth in Section 7(a).


 


“Exchange
Agreement” means the Exchange Agreement, dated as of February 8, 2019, by and between the Company and the original Holder,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors, advisors or
independent contractors of the Company issued pursuant to a Company’s equity incentive plan and reserved for such purpose,
(b) shares of Common Stock issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar
business combination approved by the Board of Directors; (c) shares of Common Stock issued pursuant to any equipment loan or leasing
arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the
Board of Directors or (d) shares of Common Stock with respect to which the holders of a majority of the outstanding Notes issued
in connection with all of the Transaction Documents have waived their anti-dilution rights.


 


“Fixed
Conversion Price” shall have the meaning set forth in Section 4(b).


 


“Late
Fees” shall have the meaning set forth in Section 2(b).


 




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“Leak-Out”
shall have the meaning set forth in Section 8(k).


 


“Mandatory
Default Amount” means either, at the Holder’s discretion (i) the conversion of the outstanding principal amount
of this Note, plus all accrued and unpaid interest hereon, converted at the Default Variable Conversion Price or (ii) the payment
of 135% of the outstanding principal amount of this Note and accrued and unpaid interest hereon, in addition to, for both (i)
and (ii) above, the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.


 


“Mandatory
Redemption” shall have the meaning set forth in Section 6(c).


 


“Mandatory
Redemption Amount” means if (A) the Company is required to prepay the Note due to a Qualified Offering at any time within
the initial thirty (30) days following the Original Issue Date, the Company shall make payment to the Holder of an amount in cash
equal to the sum of: (x) 105% multiplied by the then outstanding principal amount of this Note plus (y) accrued and unpaid interest
on the outstanding principal amount to the Mandatory Redemption Date (as defined herein) plus (z) all liquidated damages and other
amounts then due in respect of this Note; and (B) the Company is required to prepay the Note due to a Qualified Offering at any
time on or after the 31st day following the Original Issue Date, the Company shall make payment to the Holder of an amount in
cash equal to the sum of: (x) 120% multiplied by the then outstanding principal amount of this Note plus (y) accrued and unpaid
interest on the principal amount to the Mandatory Prepayment Date plus (z) all liquidated damages and other amounts then due in
respect of this Note.


 


“Mandatory
Redemption Date” shall have the meaning set forth in Section 6(c).


 


“Mandatory
Redemption Exercise Notice” shall have the meaning set forth in Section 6(c).


 


“Mandatory
Redemption Notice” shall have the meaning set forth in Section 6(c).


 


“Mandatory
Redemption Notice Date” shall have the meaning set forth in Section 6(c).


 


“New
York Courts” shall have the meaning set forth in Section 8(d).


 


“Note
Register” shall have the meaning set forth in Section 2(c).


 


“Notice
of Conversion” shall have the meaning set forth in Section 4(a).


 


“Original
Issue Date” means the date of the first issuance of the Note, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Note.


 


“Optional
Redemption” shall have the meaning set forth in Section 6(a).


 




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“Optional
Redemption Amount” means, if (a) within 30 days of the Original Issue Date, the sum of (i) 105% of the then outstanding
principal amount of this Note which the Company elects to redeem pursuant to an Optional Redemption plus (ii) all accrued but
unpaid interest, and all liquidated damages and other amounts then due in respect of this Note or (b) if on or after the 31st
day after the Original Issue Date, the sum of (i) 120% of the then outstanding principal amount of this Note which the Company
elects to redeem pursuant to an Optional Redemption plus (ii) all accrued but unpaid interest and all liquidated damages and other
amounts due in respect of this Note.


 



“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).


 


“Permitted
Indebtedness” means the indebtedness evidenced by the Note.


 


“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien
and (c) Liens incurred in connection with Permitted Indebtedness.


 


“Qualified
Offering” means the consummation by the Company of single offering (including, without limitation, equity, debt, or
otherwise) with gross proceeds to the Company equal to or greater than $2,000,000.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, any market or quotation service of the OTC Markets Group or the OTC Bulletin Board (or any successors
to any of the foregoing).


 




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“Trading
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on a Trading Market, the lowest price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market,
the lowest price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common
Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported
in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.


 


“Variable
Conversion Price” shall have the meaning set forth in Section 4(a).


 


“Variable
Rate Transaction” means a transaction in which the Company issues or sells Common Stock or Common Stock Equivalents
either (i) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading
prices of or quotations for the Common Stock at any time after the initial issuance of such debt or equity securities or (ii)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock (other than pursuant to terms and conditions applicable to such Common Stock
Equivalents in effect as of the date hereof and disclosed in filings of the Company with the Commission prior to the date hereof).


 


Section
2. Interest.


 


a)
Payment of Interest in Cash. Subject to Section 2(b) and Section 7, the Company shall pay interest to the
Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of ten percent (10%) per annum.


 


b)
Late Fee. Upon the occurrence and during the continuance of an Event of Default, the Company shall pay a late fee in cash
to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at an interest rate equal to the
lesser of eighteen percent (18%) per annum or the maximum rate permitted by applicable law (the “Late Fees”)
which shall accrue daily from the date of the occurrence and during the continuance of such Event of Default hereunder through
and including the date of actual payment in full. Interest hereunder will be paid to the Person in whose name this Note is registered
on the records of the Company regarding registration and transfers of this Note (the “Note Register”).


 




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Section
3. Registration of Transfers and Exchanges.


 


a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.


 


b)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Exchange Agreement and may be transferred or exchanged only in compliance with the Exchange Agreement and applicable
federal and state securities laws and regulations.


 


c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.


 


Section
4. Conversion.


 


(a)
Voluntary Conversion. At any time after
the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into shares
of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth
in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form
of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal
amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such
Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder,
the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note,
plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain
records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to
any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or
discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. 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 may be less than the amount stated
on the face hereof.


 




    	7



     


    

 


(b)
Conversion Price. The conversion price
in effect on any Conversion Date shall be equal to the lower of $0.50 (the “Fixed Conversion Price”) or 70%
of the Trading Price in the fifteen (15) Trading Days prior to the Conversion Date (the “Variable Conversion Price”,
and collectively with the Fixed Conversion Price and the Default Variable Conversion Price, the “Conversion Price”).
Notwithstanding anything herein to the contrary, at any time after the occurrence and during the continuance of any Event of Default
the Holder may require the Company to, at such Holder’s option and otherwise in accordance with the provisions for conversion
herein, convert all or any part of this Note into Common Stock at the Default Variable Conversion Price. All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that
proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 7 hereof and the Holder shall have the
right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.


 


(c)
Mechanics of Conversion.


 


i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price.


 


ii.
Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing
the Conversion Shares which, on or after the six (6)-month anniversary of the Original Issue Date shall be free of restrictive
legends and trading restrictions (other than those which may then be required by the Exchange Agreement) representing the number
of Conversion Shares being acquired upon the conversion of this Note and (B) a bank check in the amount of the Late Fee. Except
in the case of any certificate or certificates bearing a restrictive legend, all certificate or certificates required to be delivered
by the Company under this Section 4(c) shall be delivered electronically through the DTC or another established clearing
corporation performing similar functions. If the Conversion Date is prior to the six (6)-month anniversary of the Original Issue
Date, then the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:


 




    	8



     


    

 


“THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY
THE SECURITIES.”


 


iii.
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not
delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written
notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in
which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.


 


iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the
event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or
enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for
the benefit of the Holder in the amount of 100% of the outstanding principal amount of this Note, which is subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of
which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue
Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver
to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay
to the Holder, in cash, as liquidated damages and not as a penalty, for each $10,000 of principal amount being converted, $10
per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin
to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion.
Notwithstanding the foregoing, the maximum amount of liquidated damages that must be paid by the Company pursuant to this Section
4(c)(iv) shall be an amount equal to one percent (1%) of the aggregate principal amount being converted. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 7 hereof for the
Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law.


 




    	9



     


    

 


v.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to
purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon
the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to
the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the
principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements
under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to
the terms hereof. If the Company pays Holder pursuant to this Section, it will not owe Holder any liquidated damages pursuant
to Section 4(c)(iv) above.


 






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vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 350% of the Required
Minimum (to be adjusted monthly) for the sole purpose of issuance upon conversion of this Note and payment of interest on this
Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than
the Holder (and the other holders of the Note), not less than such aggregate number of shares of the Common Stock as shall (subject
to the terms and conditions set forth in the Exchange Agreement) be issuable (taking into account the adjustments and restrictions
of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment of interest hereunder.
The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.


 


vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.


 


viii.
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion.


 




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(d)
Holder’s Conversion Limitations.
The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this
Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together
with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates)
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of
Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the
number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this
Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set
forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation
contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities
owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole
discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which
principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that
such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely
on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most
recent periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public announcement by the Company,
or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder.
The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion
of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue
to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to
the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to
a successor holder of this Note.


 




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Section
5. Certain Adjustments.


 


(a)
Stock Dividends and Stock Splits. If the
Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions
payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall
not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Note), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares
of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately
before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.


 


(b)
Most Favored Nation Status. If the Company
or any subsidiary thereof, as applicable, at any time while this Note is outstanding, shall sell or grant any option to purchase,
or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase
or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Conversion Price
then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive
Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common Stock Equivalents so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled
to receive Common Stock at an effective price per share that is less than the Conversion Price, such issuance shall be deemed
to have occurred for less than the Conversion Price on such date of the Dilutive Issuance at such effective price), then simultaneously
with the consummation of each Dilutive Issuance the Conversion Price shall be reduced and only reduced to equal the Base Share
Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing,
no adjustments shall be made, paid or issued under this Section 5(d) in respect of an Exempt Issuance or any issuance or grant
to Holder, whether under this Note or otherwise. The Company shall notify the Holder, in writing, no later than the Trading Day
following the issuance or deemed issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(d), indicating
therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides
a Dilutive Issuance Notice pursuant to this Section 5(d), upon the occurrence of any Dilutive Issuance, the Holder is entitled
to receive a number of Conversion Shares based upon the Base Share Price regardless of whether the Holder accurately refers to
the Base Share Price in the Notice of Conversion. If the Company enters into a Variable Rate Transaction the Company shall be
deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such
securities may be converted or exercised.


 




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(c)
Pro Rata Distributions. During such time
as this Note is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights
to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution
to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


(d)
Calculations. All calculations under this
Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this
Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum
of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.


 






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(e)
Notice to the Holder.


 


i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section
5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.


 


ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder
at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries,
the Company shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K. The Holder shall remain
entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the
event triggering such notice except as may otherwise be expressly set forth herein.


 




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Section
6. Optional Redemption.


 


a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the
Original Issue Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the
date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election
to redeem some or all of the then outstanding principal amount of this Note for cash for an amount equal to the Optional Redemption
Amount on the tenth (10th) Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption
Date”, such ten (10)-Trading Day period, the “Optional Redemption Period” and such redemption, the
“Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.
The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional
Redemption Notice through the date all amounts owing thereon are due and paid in full.


 


b)
Optional Redemption Procedure. The payment of cash pursuant to an Optional Redemption shall be payable on the Optional
Redemption Date. If any portion of the payment pursuant to an Optional Redemption shall not be paid by the Company by the applicable
due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
by applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion
of the Optional Redemption Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given
at any time thereafter, to invalidate such Optional Redemption, ab initio, and, with respect to the Company’s failure to
honor the Optional Redemption, the Company shall have no further right to exercise such Optional Redemption. Notwithstanding anything
to the contrary in this Section 6, the Company’s determination to redeem in cash shall be applied ratably among the
Holders of Notes. The Holder may elect to convert the outstanding principal amount of this Note pursuant to Section 4 prior to
actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the Company.


 


c)
Mandatory Redemption at Election of Holder. Subject to the provisions of this Section 6, if, at any time while this Note
is outstanding, the Company shall carry out a Qualified Offering, the Holder shall have the right to require the Company to first
use up to twenty percent (20%) of the gross proceeds of such Qualified Offering to redeem all or a portion of this Note for an
amount equal to the Mandatory Redemption Amount (such redemption, the “Mandatory Redemption”). The Holder may
continue to convert the Note from the Mandatory Redemption Notice Date (defined below) until the Mandatory Redemption Date. The
Company shall deliver notice to the Holder of the details of the Qualified Offering at least five (5) Trading Days prior to the
closing of the Qualified Offering (“Mandatory Redemption Notice”, and the date such Mandatory Redemption Notice
is deemed delivered hereunder, the “Mandatory Redemption Notice Date”). If the Holder exercises its right herein
to require a Mandatory Redemption by delivering notice to the Company within five (5) Trading Days of the Mandatory Redemption
Notice Date (“Mandatory Redemption Exercise Notice”), the Company shall effect the Mandatory Redemption and
pay the Mandatory Redemption Amount to the Holder on or prior to the second (2nd) Trading Day following the consummation of the
Qualified Offering (“Mandatory Redemption Date”). The Company’s payment of the Mandatory Redemption Proceeds
shall be applied ratably to all of the holders of the then outstanding Notes which exercise the right to require a Mandatory Redemption
on the basis of their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement. Notwithstanding
the foregoing, this Section 6 shall not apply with respect to an Exempt Issuance, except that no Variable Rate Transaction shall
be an Exempt Issuance.


 




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d)
Mandatory Redemption Procedure. The payment of cash pursuant to a Mandatory Redemption shall be payable in full on the
Mandatory Redemption Date. If any portion of the payment pursuant to a Mandatory Redemption shall not be paid by the Company by
the applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum
rate permitted by applicable law until such amount is paid in full. Notwithstanding anything to the contrary in this Section 6,
in addition to, and without limiting any other rights hereunder and under the other Transaction Documents, the Holder may elect,
by written notice to the Company at any time following the Mandatory Redemption Notice Date through the date of actual payment
in full in cash of the Mandatory Redemption Amount, to rescind such Mandatory Redemption. The Company covenants and agrees that
it will honor all Notices of Conversion tendered from the date of delivery of the Mandatory Redemption Exercise Notice through
the date all amounts owing thereon are due and paid in full, provided that any such Notice of Conversion shall first apply to
any portion of the Note that is not subject to the Mandatory Redemption unless the Notice of Conversion expressly states that
it shall apply to a portion of the Note that is subject to the Mandatory Redemption.


 


Section
7. Events of Default.


 


a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):


 


i.
any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing
to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date
or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within three (3) Trading Days;


 


ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Note (other than a breach by the
Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(ix) below), including, but not limited to, a breach of Section 8(k), which failure is not cured, if possible to cure,
within the earlier to occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder
to the Company and (B) ten (10) Trading Days after the Company has become or should have become aware of such failure;


 


iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below);


 




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iv.
any representation or warranty made in this Note or any other Transaction Documents, any written statement pursuant hereto or
thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue
or incorrect in any material respect as of the date when made or deemed made;


 


v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;


 


vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;


 


vii.
the Common Stock shall no longer be eligible for listing or quotation for trading on the OTCQB and shall not become eligible to
resume listing or quotation for trading thereon or on the OTCQB within five (5) Trading Days, or the transfer of shares of Common
Stock through the DTC System is no longer available or “chilled” (“DTC Chill”) and the Company
has not cured such DTC Chill within thirty (30) Trading Days from receipt of notice that a DTC Chill has occurred;


 


viii.
the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of fifty
percent (50%) of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction;


 


ix.
the Company shall fail for any reason to deliver certificates representing the Conversion Shares via DWAC to the Holder prior
to the second (2nd) Trading Day after a Conversion Date pursuant to Section 4(c), or the Company shall provide
at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests
for conversions of the Note in accordance with the terms hereof;


 


x.
the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable), provided, that an Event of Default will not be deemed
to have occurred if the Company files its Annual Report on Form 10-K for the fiscal year ended September 30, 2018 with the SEC
on or before February 28, 2019;


 




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xi.
if the Borrower or any Significant Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian
or liquidator of it or any of its properties; (ii) admit in writing its inability to pay its debts as they mature; (iii) make
a general assignment for the benefit of creditors; (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for
relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute of any other jurisdiction or foreign country; or (v) file a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of
a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance
of or for the purpose of effecting any of the foregoing;


 


xii.
if any order, judgment or decree shall be entered, without the application, approval or consent of the Borrower or any Significant
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Borrower
or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Borrower or any Subsidiary, or of all or
any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of
sixty (60) days;


 


xiii.
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Borrower
or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in
the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within forty-five (45) days
after the date thereof;


 


xiv.
the Company shall fail to maintain a sufficient number of reserved shares pursuant to Section 4(c)(vi) hereof and the Exchange
Agreement; or


 


xv.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days.


 






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b)
Remedies Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(e), if
any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election,
immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results
in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to
the lesser of 1.5% per month (18% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the
Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such
acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or
other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its
rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until
such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall
affect any subsequent Event of Default or impair any right consequent thereon. The Mandatory Default Amount, whether payable in
cash or in shares, shall be due and payable or issuable, as the case may be, within five (5) Trading Days of the date on which
the notice for the payment therefor is provided by a Holder (the “Default Payment Date”). If the Company fails
to pay in full the Mandatory Default Amount hereunder on the date such amount is due in accordance with this Section 7(b)
(whether in cash or shares of Common Stock), the Company will pay interest thereon at a rate equal to the lesser of 1.5% per month
(18% per annum) or the maximum rate permitted by applicable law, accruing from such date until the Mandatory Default Amount, plus
all such interest thereon, is paid in full.


 


Section
8. Miscellaneous.


 


a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, electronically, by facsimile, or sent by a
nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile
number, email address or address as the Company may specify for such purposes by notice to the Holder delivered in accordance
with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder
shall be in writing and delivered personally, electronically, by facsimile, or sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the
Company, or if no such facsimile number, email address or address appears on the books of the Company, at the principal place
of business of such Holder, as set forth in the Exchange Agreement. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time)
on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.


 






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b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company. This Note ranks pari passu with all other Notes now or hereafter issued pursuant to the Transaction Documents.


 


c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.


 


d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding 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 Note 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 applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.


 






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f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.


 


g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note.


 


h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.


 




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i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.


 


j)
Secured Obligation. The obligations of the Company under this Note are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement, dated as of February 8, 2019 between the Company, the Subsidiaries of the Company and the
Secured Parties (as defined therein).


 


k)
Lock-Up and Leak-Out. Except for an Exempt Issuance, for so long as this Note remains outstanding or the Holder beneficially
owns any Conversion Shares, the Company shall not commence or participate in a Subsequent Financing transaction, unless the investor(s)
in such transaction agree that such investor(s) in the aggregate shall not sell an amount of shares of Common Stock in excess
of ten percent (10%) of the daily average dollar volume of Common Stock (a “Leak-Out”). The Company shall be
responsible for ensuring that in any such Subsequent Financing, that the terms of such Leak-Out are accurately described in a
timely filed Current Report on Form 8-K with the SEC and the Company shall file as an exhibit to such Current Report on Form 8-K,
the form of Leak-Out agreement utilized in such Subsequent Financing.


 


*********************


 


(Signature
Pages Follow)


 




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IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.


 


	 	EVIO, INC.
	 	 	 
	 	By:	
	 	Name: 	William Waldrop
	 	Title:	Chief Executive Officer
	 	 	 
	 	Facsimile No. for delivery of Notices: (541) 727-5361



 




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ANNEX
A 


 


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Senior Secured Convertible Promissory Note due February 8, 2020 of EVIO,
Inc., a Colorado corporation (the “Company”), into shares of common stock, par value $0.0001 per share, of
the Company (the “Common Stock”) according to the conditions hereof, as of the date written below. If shares
of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d)
of the Exchange Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.


 


Conversion
Information


 


	Date
    to Effect Conversion: ____________________________________________	 
	 	 
	Outstanding
    Principal: _______________________________________________	 
	 	 
	Outstanding
    Interest: ________________________________________________	 
	 	 
	Principal
    Amount of Note to be Converted: ________________________________	 
	 	 
	Interest
    Amount of Note to be Converted: _________________________________	 
	 	 
	Conversion
    Price Calculations:	 
	 	 
	Total
    Shares of Common Stock to be Issued:	 
	 	 
	Outstanding
    Principal After Conversion: __________________________________	 
	 	 
	Outstanding
    Interest After Conversion: ___________________________________	 


 


	DWAC
    Instructions	Physical
    Delivery
	 	 
	Broker:	 
	 	Issue
    to:
	DTC#:	 
	 	Address:
	Account:	 
	 	 
	Account
    Name:	 



 


	Entity
    Name: 	 	 
	 	 	 
	Signatory
    Name:	 	 
	 	 	 
	Title:	 	 
	 	 	 
	Signature:
    	 	 


 




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