SECURITIES PURCHASE
AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 9, 2019, is entered into by and between AB
INTERNATIONAL GROUP CORP., a Nevada corporation, (the “Company”) and PEAK ONE OPPORTUNITY FUND, L.P., a Delaware limited
partnership (the “Buyer”).


 


WITNESSETH:


 


WHEREAS,
the Company and the Buyer are executing and delivering this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the
“1933 Act”), and/or Section 4(a)(2) of the 1933 Act; and


 


WHEREAS,
the Buyer wishes to purchase from the Company, and the Company wishes to sell the Buyer, upon the terms and subject to the
conditions of this Agreement, securities consisting of the Company’s convertible debentures (the “Debentures”),
each of which are in the form of Exhibit A hereto, which will be convertible into shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), in the aggregate principal amount of up to Two Hundred Thirty Five
Thousand and 00/100 Dollars ($235,000.00), for an aggregate Purchase Price of up to Two Hundred Eleven Thousand Five Hundred and
00/100 Dollars ($211,500.00), as well as that certain Warrant (as defined herein), all upon the terms and subject to the conditions
of this Agreement, the Debentures, and other related documents;


 


NOW
THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


 


		1.	DEFINITIONS; AGREEMENT TO PURCHASE.



 


a.                  
Certain Definitions. As used herein, each of the following terms has the meaning set
forth below, unless the context otherwise requires:


 


(i)                 
“Affiliate” means, with respect to a specific Person referred to in the relevant
provision, another Person who or which controls or is controlled by or is under common control with such specified Person.


 


(ii)               
“Certificates” means certificates representing the Conversion Shares issuable
hereunder, each duly executed on behalf of the Company and issued hereunder.


 


(iii)             
“Closing Date” means the date on which one of the two (2) Closings are held, which
are the Signing Closing Date and the Second Closing Date.


 


		(iv)	[Reserved]



 




    	 	1	 



    	 



    

 


		(v)	“Commitment Fee” shall have the meaning ascribed to such
term in



Section 12(a).


 


		(vi)	“Common Stock” shall have the meaning ascribed to such term
in the



Recitals.


 


(vii)            
“Conversion Amount” shall mean the Conversion Amount as defined in the Debentures,
provided, however that for purposes of the foregoing calculation, the full indebtedness under the Debentures shall be deemed
immediately convertible, notwithstanding the 4.99% limitation on ownership set forth in the Debentures.


 


		(viii)	“Conversion Price” means the Conversion Price as defined
in the



Debentures.


 


(ix)              
“Conversion Shares” means the shares of Common Stock issuable upon conversion
of the Debentures.


 


(x)                
“DWAC Operational” means that the Common Stock is eligible for clearing through
the Depository Trust Company (“DTC”) via the DTC’s Deposit Withdrawal Agent Commission or “DWAC”
system and active and in good standing for DWAC issuance by the Transfer Agent (as defined herein).


 


		(xi)	“Dollars” or “$” means United States Dollars.



 


		(xii)	“Exchange Act” means the Securities Exchange Act of 1934,
as amended.



 


		(xiii)	“Investments” means Peak One Investments, LLC, the general
partner of



the Buyer.


 


		(xiv)	“Irrevocable Resolutions” has the meaning set forth in Section
8(i).



 


(xv)            
“Market Price of the Common Stock” means (x) the closing bid price of the Common
Stock for the period indicated in the relevant provision hereof (unless a different relevant period is specified in the relevant
provision), as reported by Bloomberg, LP or, if not so reported, as reported on the OTCQB, OTCQX or OTC Pink or (y) if the Common
Stock is listed on a stock exchange, the closing price on such exchange, as reported by Bloomberg LP.


 


(xvi)          
“Material Adverse Effect” means a material adverse effect on the business, operations
or condition (financial or otherwise) or results of operation of the Company and its Subsidiaries taken as a whole, in the reasonable
commercial discretion of the Buyer, irrespective of any finding of fault, magnitude of liability (or lack of financial liability).
Without limiting the generality of the foregoing, the occurrence of any of the following, in the reasonable commercial discretion
of the Buyer, shall be considered a Material Adverse Effect: (i) any final money, judgment, writ or warrant of attachment, or similar
process (including an arbitral determination) in excess of Fifty Thousand Dollars ($50,000) shall be entered or filed against the
Company or any of its Subsidiaries (including, in any event, products liability claims against the Company or its Subsidiaries),
(ii) the suspension or withdrawal of any governmental authority or permit


 




    	 	2	 



    	 



    

 


pertaining to a material
amount of the Company’s or any Subsidiary’s products or services, (iii) the loss of any material insurance coverage
(including, in any case, comprehensive general liability coverage, products liability coverage or directors and officers coverage,
in each case in effect at the time of execution and delivery of this Agreement), (iv) an action by a regulatory agency or governmental
body affecting the Common Stock (including, without limitation, (1) the commencement of any regulatory investigation of which the
Company is aware, the suspension of trading of the Common Stock by the Financial Industry Regulation Authority (“FINRA”),
the SEC, the OTC Bulletin Board (“OTCBB”) or the OTC Markets Group, Inc., the failure of the Common Stock to be DTC
eligible or the placing of the Common Stock on the DTC “chill list” or (2) the engaging in any market manipulation
or other unlawful or improper trading or other activity by any Affiliate), (v) the Company’s independent registered accountants
shall resign under circumstances where a disagreement exists between the Company and its independent registered accountants, (vi)
the Company shall fail to timely file any disclosure document as required by applicable federal or state securities laws and regulations
or by the rules and regulations of any exchange, trading market or quotation system to which the Company or the Common Stock is
subject, or (vii) the Chief Executive Officer of the Company or any other key full-time officer or director of the Company, shall,
for any reason (including, without limitation, termination, resignation, retirement, death or disability) cease to act on behalf
of the Company in the same role and to the same extent as his or her involvement as of the date of execution and delivery of this
Agreement.


 


(xvii)        
“Person” means any living person or any entity, such as, but not necessarily limited
to, a corporation, partnership or trust.


 


(xviii)      
“Purchase Price” means the price that the Buyer pays for the Debentures at each
respective Closing, which are the Signing Purchase Price and the Second Purchase Price, as the case may be.


 


(xix)          
“Registrable Securities” shall mean the Conversion Shares, and, to the extent
applicable, and any other shares of capital stock or other securities of the Company or any successor to the Company that are issued
upon exchange of Conversion Shares and/or such Restricted Stock.


 


(xx)            
“Registration Statement” shall mean any registration statement filed or contemplated
to be filed by the Company with the SEC under the Securities Act.


 


(xxi)          
“Restricted Stock” shall mean shares of Common Stock which are not freely trading
shares when issued.


 


(xxii)        
“Securities” means the Debentures, the Shares, Warrant, Shares of Common Stock
issuable upon exercise of the Warrant.


 


		(xxiii)	“Shares” means the Conversion Shares.



 


		(xxiv)	“Second Closing Date” shall have the meaning ascribed to
such term in



Section 6(b).


 




    	 	3	 



    	 



    

 


 


(xxv)         
“Second Debenture” means the second of the two (2) Debentures, in the principal
amount of One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00), which is issued by the Company to the Buyer on the Second
Closing Date.


 


(xxvi)       
“Second Purchase Price” shall be One Hundred Thirty Five Thousand and 00/100 Dollars
($135,000.00)


 


		(xxvii)	“Signing Closing Date” shall have the meaning ascribed to
such term in



Section 6(a).


 


(xxviii)     
“Signing Debenture” means the first of the two (2) Debentures, in the principal
amount of Eighty Five Thousand and 00/100 Dollars ($85,000.00), to be issued by the Company to the Buyer on the Signing Closing
Date.


 


(xxix)       
“Signing Purchase Price” shall be Seventy Six Thousand Five Hundred and 00/100
Dollars ($76,500.00).


 


		(xxx)	“Subsidiary” shall have the meaning ascribed to such term
in Section 3(b).



 


		(xxxi)	[Intentionally Omitted].



 


		(xxxii)	[Intentionally Omitted].



 


		(xxxiii)	[Intentionally Omitted].



 


(xxxiv)     
“Transaction Documents” means, collectively, this Agreement, the Debentures, the
Transfer Agent Instruction Letter, the Irrevocable Resolutions and the other agreements, documents and instruments contemplated
hereby or thereby.


 


		(xxxv)	“Transfer Agent” shall have the meaning ascribed to such
term in Section



4(a).


 


(xxxvi)     
“Transfer Agent Instruction Letter” shall have the meaning ascribed to such term
in Section 5(a).


 


		b.	Purchase and Sale of Debentures.



 


(i)    
The Buyer agrees to purchase from the Company, and the Company agrees to sell to the Buyer,
the Debentures and Warrant on the terms and conditions set forth below in this Agreement and the other Transaction Documents. The
Warrant shall be earned in full as an inducement fee as of the Signing Closing Date.


 


(ii)   
Subject to the terms and conditions of this Agreement and the other Transaction Documents,
the Buyer will purchase the Debentures and Warrant at certain closings (each, a “Closing”) to be held on certain respective
Closing Dates.


 




    	 	4	 



    	 



    

 


		c.	[Reserved]



 


		(i)	[Reserved]



 


		(ii)	[Reserved]



 


		2.	BUYER’S REPRESENTATIONS, WARRANTIES, ETC.



 


The Buyer represents and warrants
to, and covenants and agrees with, the Company as follows:


 


a.      
Investment Purpose. Without limiting the Buyer’s right to sell the Shares pursuant
to a Registration Statement, Buyer is purchasing the Debentures, and will be acquiring the Conversion Shares, for its own account
for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection
with any distribution thereof.


 


b.      
Accredited Investor Status. Buyer is (i) an “accredited investor” as that
term is defined in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced
in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business
and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in
any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Securities.


 


c.      
Subsequent Offers and Sales. All subsequent offers and sales of the Securities by the
Buyer shall be made pursuant to registration of the Shares under the 1933 Act or pursuant to an exemption from registration and
compliance with applicable states’ securities laws.


 


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


 


e.      
Information. Buyer and its advisors have been furnished with all materials relating
to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have
been requested by the Buyer. Buyer and its advisors have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers to any such inquiries. Without limiting the generality of the foregoing, Buyer has also
had the opportunity to obtain and to review the Company’s Annual Report on Form 10-K for the fiscal year ended August 31,
2019.


 




    	 	5	 



    	 



    

 


f.       
Investment Risk. Buyer understands that its investment in the securities constitutes
high risk investment, its investment in the Securities involves a high degree of risk, including the risk of loss of the Buyer’s
entire investment.


 


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


 


h.      
Organization; Authorization. Buyer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. This Agreement and the other Transaction Documents have been duly
and validly authorized, executed and delivered on behalf of the Buyer and create a valid and binding agreement of the Buyer enforceable
in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium
and other similar laws affecting the enforcement of creditors’ rights generally.


 


i.       
Residency. The state in which any offer to sell Securities hereunder was made to or
accepted by the Buyer is the state shown as the Buyer’s address contained herein, and Buyer is a resident of such state only.


 


		3.	COMPANY REPRESENTATIONS AND WARRANTIES, ETC.



 


The Company represents and warrants to the Buyer that:


 


a.      
Concerning the Debentures and the Shares. There are no preemptive rights of any stockholder
of the Company to acquire the Debentures or the Shares.


 


b.       Organization;
Subsidiaries; Reporting Company Status. Attached hereto as Schedule 3(b) is an organizational chart describing all
of the Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and other Affiliates,
including the relationships among the Company and such Subsidiaries, including as to each Subsidiary its jurisdiction of
organization and the percentage of ownership held by the Company, and the parent
company of the Subsidiary, including the percentage of ownership of the Company held by it. The Company and each Subsidiary
is a corporation or other form of businesses entity duly organized, validly existing and in good standing under the laws its
respective jurisdiction of organization, and each of them has the requisite corporate or other power to own its
properties and to carry on its business as now being conducted. The Company and each Subsidiary is duly qualified as a
foreign corporation or other entity to do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect. The Common Stock is listed and traded on the OTCM (as defined
below) (trading symbol: ABQQ). The Company has received no notice, either oral or written, from FINRA, the SEC, or any other
organization, with respect to the continued eligibility of the Common Stock for such listing, and the Company has maintained
all requirements for the continuation of such listing. The Company is an operating company in that, among other things (A)
it primarily engages, wholly or substantially, directly or indirectly through a majority owned


 




    	 	6	 



    	 



    

 


Subsidiary or
Subsidiaries, in the production or sale, or the research or development, of a product or service other than the investment of
capital, (B) it is not an individual or sole proprietorship, (C) it is not an entity with no specific business plan or
purpose and its business plan is not to engage in a merger or acquisition with an unidentified company or companies or other
entity or person, and (D) it intends to use the proceeds from the sale of the Debentures solely for the operation of the
Company’s business and uses other than personal, family, or household purposes.


 


c.      
Authorized Shares. Schedule 3(c) sets forth all capital stock and derivative
securities of the Company that are authorized for issuance and that are issued and outstanding. All issued and outstanding shares
of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Company has sufficient authorized
and unissued shares of Common Stock as may be necessary to effect the issuance of the Shares, assuming the prior issuance and exercise,
exchange or conversion, as the case may be, of all derivative securities authorized, as indicated in Schedule 3(c). The
Shares have been duly authorized and, when issued upon conversion of, or as interest on, the Debentures, the Shares will be duly
and validly issued, fully paid and non-assessable and will not subject the holder thereof to personal liability by reason of being
such holder. At all times, the Company shall keep available and reserved for issuance to the holders of the Debentures shares of
Common Stock duly authorized for issuance against the Debentures. As of the effective date of this Agreement, other than as reflected
in the SEC Documents (as defined in this Agreement) of the Company (i) there are no outstanding options, warrants, scrip, rights
to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the
Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933
Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in
any agreement providing rights to security holders) that will be triggered by the issuance of the Securities, Warrant, and/or Common
Stock underlying the Warrant.


 


d.     
Authorization. This Agreement, the issuance of the Debentures (including without limitation
the incurrence of indebtedness thereunder), the issuance of the Conversion Shares under the Debentures, and the other transactions
contemplated by the Transaction Documents, have been duly, validly and irrevocably authorized by the Company, and this Agreement
has been duly executed and delivered by the Company. The Company’s board of directors, in the exercise of its fiduciary duties,
has irrevocably approved the entry into and performance of the Transaction Documents, including, without limitation the sale of
the Debentures and the issuance of Conversion Shares, based upon a reasonable inquiry concerning the Company’s financing
objectives and financial situation. Each of the Transaction Documents, when executed and delivered by the Company, are and will
be, valid, legal and binding agreements of the Company, enforceable in accordance with their respective terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of
creditors’ rights generally.


 




    	 	7	 



    	 



    

 





e.      
Non-contravention. The execution and delivery of the Transaction Documents, the issuance
of the Securities and the consummation by the Company of the other transactions contemplated by this Agreement and the Debentures
(including without limitation the incurrence of indebtedness thereunder) do not and will not conflict with or result in a breach
by the Company of any of the terms or provisions of, or constitute a default under (i) the articles of incorporation or by-laws
of the Company, each as currently in effect, (ii) any indenture, mortgage, deed of trust, or other material agreement or instrument
to which the Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for
the Common Stock, except as herein set forth or an event which results in the creation of any lien, charge or encumbrance upon
any assets of the Company or the triggering of any anti- dilution rights, rights of first refusal or first offer on the part of
holders of the Company’s securities, (iii) to its knowledge, any existing applicable law, rule, or regulation or any applicable
decree, judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental
body having jurisdiction over the Company or any of its properties or assets, or (iv) the Company’s listing agreement for
its Common Stock (if applicable).


 


f.       
Approvals. No authorization, approval or consent of any court, governmental body, regulatory
agency, self-regulatory organization, or stock exchange or market or the stockholders of the Company is required to be obtained
by the Company for the entering into and performing this Agreement and the other Transaction Documents (including without limitation
the issuance and sale of the Securities to the Buyer as contemplated by this Agreement) except such authorizations, approvals and
consents that have been obtained, or such authorizations, approvals and consents, the failure of which to obtain would not have
a Material Adverse Effect.


 


g.      
SEC Documents; Rule 144 Status. None of the SEC Documents contained, at the time they
were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary
to make the statements made therein in light of the circumstances under which they were made, not misleading. The Company has filed
all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the “SEC Documents”). The Company is not aware of any
event occurring on or prior to the execution and delivery of this Agreement that would require the filing of, or with respect to
which the Company intends to file, a Form 8-K after such time. The Company satisfies the requirements of Rule 144(i)(2), and the
Company shall continue to satisfy all applicable requirements of Rule 144 (or any successor thereto) for so long as any Securities
are outstanding and not registered pursuant to an effective Registration Statement filed with the SEC.


 


h.      
Absence of Certain Changes. Since August 31, 2019, when viewed from the perspective
of the Company and its Subsidiaries taken as a whole, there has been no material adverse change and no material adverse development
in the business, properties, operations, condition (financial or otherwise), or results of operations of the Company and its Subsidiaries


 




    	 	8	 



    	 



    

 


(including, without limitation,
a change or development which constitutes, or with the passage of time is reasonably likely to become, a Material Adverse Effect),
except as disclosed in the SEC Documents. Since August 31, 2019, except as provided in the SEC Documents, the Company has not (i)
incurred or become subject to any material liabilities (absolute or contingent) except liabilities incurred in the ordinary course
of business consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance or paid any material
obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistent
with past practices; (iii) declared or made any payment or distribution of cash or other property to stockholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital stock;
(iv) sold, assigned or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course of
business consistent with past practices; (v) suffered any substantial losses or waived any rights of material value, whether or
not in the ordinary course of business, or suffered the loss of any material amount of existing business; (vi) made any changes
in employee compensation, except in the ordinary course of business consistent with past practices; or (vii) experienced any material
problems with labor or management in connection with the terms and conditions of their employment.


 


i.       
Full Disclosure. There is no fact known to the Company (other than general economic
conditions known to the public generally or as disclosed in the SEC Documents) that has not been disclosed in writing to the Buyer
that (i) would reasonably be expected to have a Material Adverse Effect, (ii) would reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations pursuant to the Transaction Documents, or (iii) would reasonably be
expected to materially and adversely affect the value of the rights granted to the Buyer in the Transaction Documents.


 


j.       
Absence of Litigation. Except as described in the SEC Documents, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Company,
threatened against or affecting the Company, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect
or which would adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations
under, any of the Transaction Documents. The Company is not a party to or subject to the provisions of, any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality which could reasonably be expected to have a Material Adverse
Effect.


 


k.      
Absence of Liens. The Company’s assets are not encumbered by any liens or mortgages
except as described in the SEC Documents.


 


l.       
Absence of Events of Default. No event of default (or its equivalent term), as defined
in the respective agreement, indenture, mortgage, deed of trust or other instrument, to which the Company is a party, and no event
which, with the giving of notice or the passage of time or both, would become an event of default (or its equivalent term) (as
so defined in such document), has occurred and is continuing, which would have a Material Adverse Effect.


 




    	 	9	 



    	 



    

 


m.    
No Undisclosed Liabilities or Events. The Company has no liabilities or obligations
other than those disclosed in the SEC Documents or those incurred in the ordinary course of the Company’s business since
August 31, 2019, and which individually or in the aggregate, do not or would not have a Material Adverse Effect. No event or circumstances
has occurred or exists with respect to the Company or its properties, business, condition (financial or otherwise), or results
of operations, which, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There are no proposals currently under consideration
or currently anticipated to be under consideration by the Board of Directors or the executive officers of the Company which proposal
would (x) change the articles of incorporation, by-laws or any other charter document of the Company, each as currently in effect,
with or without shareholder approval, which change would reduce or otherwise adversely affect the rights and powers of the shareholders
of the Common Stock or (y) materially or substantially change the business, assets or capital of the Company.


 


n.      
No Integrated Offering. Neither the Company nor any of its affiliates nor any Person
acting on its or their behalf has, directly or indirectly, at any time during the six month period immediately prior to the date
of this Agreement made any offer or sales of any security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under Rule 506 of Regulation D in connection with the offer
and sale of the Securities as contemplated hereby. Neither the Company nor any of its affiliates nor any Person acting on its or
their behalf has, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security
under circumstances that would require registration under the Securities Act of the issuance of the Securities to the Buyer. The
issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past,
current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.


 


o.      
Dilution. The number of Shares issuable upon conversion of the Debentures may increase
substantially in certain circumstances, including, but not necessarily limited to, the circumstance wherein the Market Price of
the Common Stock declines prior to the conversion of the Debentures. The Company’s executive officers and directors have
studied and fully understand the nature of the securities being sold hereby and recognize that they have a potential dilutive effect
and further that the conversion of the Debentures and/or sale of the Conversion Shares may have an adverse effect on the Market
Price of the Common Stock. The Board of Directors of the Company has concluded, in its good faith business judgment that such issuance
is in the best interests of the Company. The Company specifically acknowledges that its obligation to issue the Conversion Shares
upon conversion of the Debentures is binding upon the Company and enforceable regardless of the dilution such issuance may have
on the ownership


%s of other shareholders of the
Company.


 


p.      
Regulatory Permits. The Company has all such permits, easements, consents, licenses,
franchises and other governmental and regulatory authorizations from all appropriate federal, state, local or other public authorities
(“Permits”) as are necessary to own and lease its properties and conduct its businesses in all material respects in
the manner described in the SEC Documents and as currently being conducted. All such Permits are in full


 




    	 	10	 



    	 



    

 


force and effect and the
Company has fulfilled and performed all of its material obligations with respect to such Permits, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination thereof or will result in any other material impairment
of the rights of the holder of any such Permit, subject in each case to such qualification as may be disclosed in the SEC Documents.
Such Permits contain no restrictions that would materially impair the ability of the Company to conduct businesses in the manner
consistent with its past practices. The Company has not received notice or otherwise has knowledge of any proceeding or action
relating to the revocation or modification of any such Permit.


 


q.      
Residency. The state in which any offer to sell Securities hereunder was made or accepted
by the Seller is the state shown as the Seller’s address contained herein, and Seller is a resident of such state only.


 


r.       
Hazardous Materials. The Company is in compliance with all applicable Environmental
Laws in all respects except where the failure to comply does not have and could not reasonably be expected to have a Material Adverse
Effect. For purposes of the foregoing:


 


“Environmental
Laws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”
law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, the environment or any Hazardous Material.


 


“Hazardous
Material” means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any Environmental Law.


 


s.       
Independent Public Accountants. The Company’s auditor is an independent registered
public accounting firm with respect to the Company, as required by the 1933 Act, the Exchange Act and the rules and regulations
promulgated thereunder.


 


t.       
Internal Accounting Controls. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management’s general
or specific authorization; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain accountability for assets; (3) access to assets is permitted only
in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.


 


u.      
Brokers. Except with respect to J. H. Darbie & Co., Inc., no Person (other than
the Buyer and its principals, employees and agents) is entitled to receive any consideration from the Company or the Buyer arising
from any finder’s agreement, brokerage agreement or other agreement to which the Company is a party.


 




    	 	11	 



    	 



    

 





v.      
DWAC Operational; DRS. The Company is currently and shall remain DWAC Operational and
eligible for DRS


 


		4.	CERTAIN COVENANTS AND ACKNOWLEDGMENTS.



 


a.      
Transfer Restrictions. The parties acknowledge and agree that (1) the Debentures have
not been registered under the provisions of the 1933 Act and the Shares have not been registered under the 1933 Act, and may not
be transferred unless (A) subsequently registered thereunder or (B) the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration; (2) any sale of the Securities made in reliance on Rule 144 promulgated under
the 1933 Act (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such Securities under circumstances in which the seller, or the Person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder, (3) at the request of the Buyer, the Company shall, from time
to time, within two (2) business days of such request, at the sole cost and expense of the Company, either (i) deliver to its transfer
agent and registrar for the Common Stock (the “Transfer Agent”) a written letter instructing and authorizing the Transfer
Agent to process transfers of the Shares at such time as the Buyer has held the Securities for the minimum holding period permitted
under Rule 144 or the applicable exemption, subject to the Buyer’s providing to the Transfer Agent certain customary representations
contemporaneously with any requested transfer, or (ii) at the Buyer’s option or if the Transfer Agent requires further confirmation
of the availability of an exemption from registration, furnish to the Buyer an opinion of the Company’s counsel in favor
of the Buyer (and, at the request of the Buyer, any agent of the Buyer, including but not limited to the Buyer’s broker or
clearing firm) and the Transfer Agent, reasonably satisfactory in form, scope and substance to the Buyer and the Transfer Agent,
to the effect that a contemporaneously requested transfer of shares does not require registration under the 1933 Act, pursuant
to the 1933 Act, Rule 144 or other regulations promulgated under the 1933 Act and (4) neither the Company nor any other Person
is under any obligation to register the Securities (other than pursuant to this Agreement) under the 1933 Act or to comply with
the terms and conditions of any exemption thereunder.


 


b.      
Restrictive Legend. The Buyer acknowledges and agrees that the Debentures, and, until
such time as the Shares have been registered under the 1933 Act as contemplated hereby and sold in accordance with an effective
Registration Statement, certificates and other instruments representing any of the Securities shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed against transfer of any such Securities):


 


THIS SECURITY HAS NOT 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.


 




    	 	12	 



    	 



    




 


c.          
Piggy-Back Registration Rights. From and after the Signing Closing Date and until eighteen
(18) months after the Signing Closing Date, if the Company contemplates making an offering of Common Stock (or other equity securities
convertible into or exchangeable for Common Stock) registered for sale under the Securities Act or proposes to file a Registration
Statement covering any of its securities, the Company shall at each such time give prompt written notice to Investments and Buyer
of its intention to do so and of the registration rights granted under this Agreement. Upon the written request of Investments
and/or Buyer made within thirty (30) days after the receipt of any such notice (which request shall specify the Registrable Securities
intended to be disposed of by Investments and/or Buyer and the intended method of disposition thereof), the Company shall, at its
sole cost and expense, use its best efforts to effect the registration of all Registrable Securities which the Company has been
so requested to register Investments and/or Buyer, to the extent requisite to permit the disposition (in accordance with the intended
methods of disposition) of the Registrable Securities by Investments and/or Buyer, by inclusion of such Registrable Securities
in the Registration Statement which covers the securities which the Company proposes to register; provided, that if the Company
is unable to register the full amount of Registrable Securities in an “at the market offering” under SEC rules and
regulations due to the high percentage of the Company’s Common Stock the Registrable Securities represents (giving effect
to all other securities being registered in the Registration Statement), then the Company may reduce, on a pro rata basis, the
amount of Registrable Securities subject to the Registration Statement to a lesser amount which equals the maximum number of Registrable
Securities that the Company is permitted to register in an “at the market offering”; and provided, further, that if,
at any time after giving written notice of its intention to register any Registrable Securities and prior to the effective date
of the Registration Statement filed in connection with such registration, the Company shall determine for any reason either not
to register or to delay registration of such Registrable Securities, the Company may, at its election, give written notice of such
determination to Investments and/or the Buyer and, thereupon, (i) in the case of a determination not to register, the Company shall
be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation
to pay the expenses of registration in connection therewith), and (ii) in the case of a determination to delay registering such
Registrable Securities, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in
registering such other securities. If Buyer shall have transferred all or part of its Registrable Securities, then for purposes
of this Section, the term “Buyer” shall reference Buyer and/or such transferee(s).


 


d.     
Securities Filings. The Company undertakes and agrees to make all necessary filings
(including, without limitation, a Form D) in connection with the sale of the Securities to the Buyer required under any United
States laws and regulations applicable to the Company (including without limitation state “blue sky” laws), or by any
domestic securities exchange or trading market, and to provide a copy thereof to the Buyer promptly after such filing.


 




    	 	13	 



    	 



    




 


e.      
Reporting Status; Public Trading Market; DTC Eligibility. So long as the Buyer and/or
Investments beneficially own any Securities, (i) the Company shall timely file, prior to or on the date when due, all reports that
would be required to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if the Company had securities registered
under Section 12(b) or 12(g) of the Exchange Act; (ii) the Company shall not be operated as, or report, to the SEC or any other
Person, that the Company is a “shell company” or indicate to the contrary to the SEC or any other Person; (iii) the
Company shall take all other action under its control necessary to ensure the availability of Rule 144 under the 1933 Act for the
sale of Shares by the Buyer at the earliest possible date; and (iv) the Company shall at all times while any Securities are outstanding
maintain its engagement of an independent registered public accounting firm. Except as otherwise set forth in Transaction Documents,
the Company shall take all action under its control necessary to obtain and to continue the listing and trading of its Common Stock
(including, without limitation, all Registrable Securities) on the OTC Markets, Inc., OTC Pink, OTCQB, OTCQX, Nasdaq Capital Markets,
NYSE, or any other exchange (the “Principal Market”) and will comply in all material respects with the Company’s
reporting, filing and other obligations under the by-laws or rules of the Financial Industry Regulatory Authority (“FINRA”).
If, so long as the Buyer and/or Investments beneficially own any of the Securities, the Company receives any written notice from
the Principal Market, FINRA, or the SEC with respect to either any alleged deficiency in the Company’s compliance with applicable
rules and regulations (including without limitation any comments from the SEC on any of the Company’s documents filed (or
the failure to have made any such filing) under the 1933 Act or the Exchange Act) (each, a “Regulatory Notice”), then
the Company shall promptly, and in any event within two (2) business days, provide copies of the Regulatory Notice to the Buyer,
and shall promptly, and in any event within five (5) business days of receipt of the Regulatory Notice (a “Regulatory Response”),
respond in writing to the Principal Market, FIRNA and/or SEC (as the case may be), setting forth the Company’s explanation
and/or response to the issues raised in the Regulatory Notice, with a view towards maintaining and/or regaining full compliance
with the applicable rules and regulations of the Principal Market, FIRNA and/or SEC and maintaining or regaining good standing
of the Company with the Principal Market, FINRA and/or SEC, as the case may be, the intent being to ensure that the Company maintain
its reporting company status with the SEC and that its Common Stock be and remain available for trading on the Principal Market.
Further, at all times while any Securities are outstanding, the Common Stock shall be DWAC Operational, and the Common Stock shall
not be subject to any DTC “chill” designation or similar restriction on the clearing of the Common Stock through DTC.


 


f.       
Use of Proceeds. The Company shall use the proceeds from the sale of the Debentures
for working capital purposes only subject to customary restrictions. Absent the prior written approval of a majority of the principal
amount of the Debentures then outstanding, the Company shall not use any portion of the proceeds of the sale of the Debentures
to (i) repay any indebtedness or other obligation of the Company incurred prior to the date of this Agreement outside the normal course
of business, (ii) pay any dividends or redemption amount on any of the Company’s equity or equity equivalents, (iii) pay
any amounts, whether on account of debt obligations of the Company or otherwise, except for compensation, to any officer, director
or other related party of the Company or (iv) pay deferred compensation or any compensation to any of the directors or officers
of the Company in excess of the rate or amount paid or accrued during the fiscal year ended August, 2019 (as base compensation
and excluding any discretionary amounts), other than modest increases consistent with prior practice that are approved by the Company’s
Board of Directors.


 




    	 	14	 



    	 



    




 


g.      
Available Shares. Commencing on the date of execution and delivery of this Agreement,
the Company shall have and maintain authorized and reserved for issuance, free from preemptive rights, that number of shares equal
to Seven Hundred percent (700%) of the number of shares of Common Stock (1) issuable based upon the conversion of the then- outstanding
Debentures (including accrued interest thereon) as may be required to satisfy the conversion rights of the Buyer pursuant to the
terms and conditions of the Debenture (for the avoidance of doubt, this shall be calculated based on the applicable conversion
price that would result after the date that is 180 calendar days after the issuance date of the respective Debenture(s) regardless
of the date of calculation) (without giving effect to the 4.99% limitation on ownership as set forth in the Debentures), provided,
however that for purposes of the foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately
convertible and (2) issuable to the Buyer on future Closing Dates, based upon the lowest closing bid price per share of the Common
Stock on the date before the most recent Closing Date (as reported by Bloomberg LP) (collectively in the aggregate the “Required
Reserve Amount”). The Company shall monitor its compliance with the foregoing requirements on an ongoing basis. If at any
time the Company does not have available an amount of authorized and non-issued Shares required to be reserved pursuant to this
Section, then the Company shall, without notice or demand by the Buyer, call within thirty (30) days of such occurrence and hold
within sixty (60) days of such occurrence a special meeting of shareholders, for the sole purpose of increasing the
number of shares authorized. Management of the Company shall recommend to shareholders to vote in favor of increasing the
number of Common Stock authorized at the meeting. Members of the Company’s management shall also vote all of their own shares
in favor of increasing the number of Common Stock authorized at the meeting. If the increase in authorized shares is approved by
the stockholders at the meeting, the Company shall implement the increase in authorized shares within one (1) business day following
approval at such meeting. Alternatively, to the extent permitted by applicable law, in lieu of calling and holding a meeting as
described above, the Company may, within thirty (30) days of the date when the Company does not have available an amount of authorized
and non-issued Shares required to be reserved as described above, procure the written consent of stockholders to increase the number
of shares authorized, and provide the stockholders with notice thereof as may be required under applicable law (including without
limitation Section 14(c) of the Exchange Act and Regulation 14C thereunder). Upon obtaining stockholder approval as aforesaid,
the Company shall cause the appropriate increase in its authorized shares of Common Stock within one (1) business day (or as soon
thereafter as permitted by applicable law). Company’s failure to comply with these provisions will be an Event of Default
(as defined in the Debentures).


 




    	 	15	 



    	 



    

 


h.      
Reimbursement. If (i) Buyer and/or Investments becomes a party defendant in any capacity
in any action or proceeding brought by any stockholder of the Company, in connection with or as a result of the consummation of
the transactions contemplated by the Transaction Documents, or if the Buyer and/or Investments is impleaded in any such action,
proceeding or investigation by any Person, or (ii) the Buyer and/or Investments, other than by reason of its own gross negligence,
willful misconduct or breach of law (as adjudicated by a court of law having proper jurisdiction and such adjudication is not subject
to appeal), becomes a party defendant in any capacity in any action or proceeding brought by the SEC against or involving the Company
or in connection with or as a result of the consummation of the transactions contemplated by the Transaction Documents, or if the
Buyer or Investments is impleaded in any such action, proceeding or investigation by any Person, then in any such case, the Company
shall promptly reimburse the Buyer and/or Investments for its or their reasonable legal and other expenses (including the cost
of any investigation and preparation) incurred in connection therewith. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions
to any affiliates of the Buyer and/or Investments who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling Persons (if any), as the case may be, of the Buyer, Investments and any such Affiliate,
and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company,
the Buyer, Investments and any such Affiliate and any such Person. Except as otherwise set forth in the Transaction Documents,
the Company also agrees that neither any Buyer, Investments nor any such Affiliate, partners, directors, agents, employees or controlling
Persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company in connection
with or as a result of the consummation of the Transaction Documents.


 


i.       
The Company shall provide the Transfer Agent and/or the Buyer, Investments or their respective
brokerage and/or clearing firm with all relevant legal opinions and other documentation requested by the Buyer or Investments in
connection with the issuance of the Conversion Shares or the Restricted Stock, or the sale thereof, to confirm the share issuance(s)
such that the Conversion Shares and/or Restricted Stock may be deposited with the applicable brokerage and/or clearing firm.


 


j.       
No Payments to Affiliates or Related Parties. So long as any of the Debentures remain
outstanding, if the Debentures are in default, the Company shall not, absent the prior written consent of the holders of all Debentures
then outstanding, make any payments to any of the Company’s or the Subsidiaries’ respective affiliates or related parties,
including without limitation payments or prepayments of principal or interest accrued on any indebtedness or obligation in favor
of affiliates or related parties. Notwithstanding anything to the contrary contained herein, the provisions of this Section 4(j)
shall not apply to payments to the Subsidiaries, or other businesses in which affiliates have an interest, made in the ordinary
course of business and consistent with past practice as disclosed in the SEC Documents.


 


k.      
Notice of Material Adverse Effect. The Company shall notify the Buyer (and any subsequent
holder of the Debentures), as soon as practicable and in no event later than three (3) business days of the Company’s knowledge
of any Material Adverse Effect on the Company.For purposes of the foregoing, “knowledge”
means the earlier of the Company’s actual knowledge or the Company’s constructive knowledge upon due inquiry.


 




    	 	16	 



    	 



    




 


l.       
Public Disclosure. Except to the extent required by applicable law, absent the Buyer’s
prior written consent, the Company shall not reference the name of the Buyer in any press release, securities disclosure, business
plan, marketing or funding proposal.


 


m.    
Nature of Transaction; Savings Clause. It is the parties’ express understanding
and agreement that the transactions contemplated by the Transaction Documents constitute an investment and not a loan. If nonetheless
such transactions are deemed to be a loan (as adjudicated by a court of law having proper jurisdiction and such adjudication is
not subject to appeal), the Company shall not be obligated or required to pay interest at a rate that could subject Buyer to either
civil or criminal liability as a result of such rate exceeding the maximum rate that the Buyer is permitted to charge under applicable
law, and the Company’s obligations under the Transaction Documents shall not be void or voidable on the basis of the Buyer’s
lack of any license or registration as a lender with any governmental authority. It is expressly understood and agreed by the parties
that neither the amounts payable pursuant to Section 12, any redemption premium, remedy upon an Event of Default (as defined in
the Debentures) or any Acceleration Amount (as defined in the Debentures), original issue discount nor any investment returns of
the Buyer on the sale of the Debentures or the sale of any Conversion Shares (whether unrealized or realized) shall be construed
as interest. If, by the terms of the Debentures, any other Transaction Document or any other instrument, Company is at any time
required or obligated to pay interest at a rate exceeding such maximum rate, interest payable under the Debenture and/or such other
Transaction Documents or other instrument shall be computed (or recomputed) at such maximum rate, and the portion of all prior
interest payments (if any) exceeding such maximum shall be applied to payment of the outstanding principal of the Debentures.


 


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


 


o.      
Corporate Existence. The Company will, so long as the Buyer beneficially owns any of
the Securities, maintain its corporate existence and shall not sell all or substantially all of the Company’s assets.


 


		5.	TRANSFER AGENT INSTRUCTIONS.



 


a.      
Transfer Agent Instruction Letter. On or before the Signing Closing Date, the Company
shall irrevocably instruct its Transfer Agent in writing using the letter substantially in the form of Exhibit B annexed
hereto, with only such modifications as the Buyer agrees to, executed by the Company, the Buyer and the Transfer Agent (the “Transfer
Agent Instruction Letter”), to (i) reserve that number of shares of Common Stock as is required under Section 4(g) hereof,
and (ii) issue Common Stock from time to time upon conversion of the Debentures in


 




    	 	17	 



    	 



    

 


such amounts as specified
from time to time by the Buyer to the Transfer Agent in a Notice of Conversion, in such denominations to be specified by the Buyer
in connection with each conversion of the Debentures. The Transfer Agent shall not be restricted from issuing shares from only
the allotment reserved hereunder for the Conversion Amount (as defined in the Debentures), but instead may, to the extent necessary
to satisfy the amount of shares issuable upon conversion, issue shares above and beyond the amount reserved on account of the Conversion
Amount, without any additional instructions or authorization from the Company, and the Company shall not provide the Transfer Agent
with any instructions or documentation contrary to the foregoing. As of the date of this Agreement, the Transfer Agent is Corporate
Stock Transfer, Inc.. The Company shall at all times while any Debentures are outstanding engage a Transfer Agent which is a party
to the Transfer Agent Instruction Letter. If for any reason the Company’s Transfer Agent is not a signatory of the Transfer
Agent Instruction Letter while any Debentures or Restricted Stock are outstanding and held by the Buyer, then such Transfer Agent
shall nonetheless be deemed bound by the Transfer Agent Instruction Letter, and the Company shall neither (i) permit the Transfer
Agent to disclaim, disregard or refuse to abide by the Transfer Agent’s obligations, terms and agreements set forth in the
Transfer Agent Instruction Letter, nor (ii) issue any instructions to the Transfer Agent contrary to the obligations, terms and
agreements set forth in the Transfer Agent Instruction Letter . The Company shall not terminate the Transfer Agent or otherwise
change Transfer Agents without at least fifteen (15) days prior written notice to the Buyer and with the Buyer’s prior written
consent to such change, which the Buyer may grant or withhold in its sole discretion. The Company shall continuously monitor its
compliance with the share reservation requirements and, if and to the extent necessary to increase the number of reserved shares
to remain and be at least the Required Reserve Amount to account for any decrease in the Market Price of the Common Stock, the
Company shall immediately (and in any event within one (1) business day) notify the Transfer Agent in writing of the reservation
of such additional shares, provided that in the event that the number of shares reserved for conversion of the Debentures
is less than the Required Reserve Amount, the Buyer may also directly instruct the Transfer Agent to increase the reserved shares
as necessary to satisfy the minimum reserved share requirement, and the Transfer Agent shall act accordingly, provided, further,
that the Company shall within one (1) business day provide any written confirmation, assent or documentation thereof as the
Transfer Agent may request to act upon a share increase instruction delivered by the Buyer. The Company shall provide the Buyer
with a copy of all written instructions to the Company’s Transfer Agent with respect to the reservation of shares simultaneously
with the issuance of such instructions to the Transfer Agent. The Company covenants
that no instruction other than such instructions referred to in this Section 5 and stop transfer instructions to give effect to
Section 4(a) hereof prior to registration and sale of the Conversion Shares under the 1933 Act will be given by the Company to
the Transfer Agent and that the Conversion Shares shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and applicable law. If the Buyer provides the Company and/or the Transfer Agent
with an opinion of counsel reasonably satisfactory to the Company that registration of a resale by the Buyer of any of the Securities
in accordance with clause (1)(B) of Section 4(a) of this Agreement is not required under the 1933 Act, the Company shall (except
as provided in clause (2) of Section 4(a) of this Agreement) permit the de-legending or transfer of the Securities and, in the
case of the Conversion Shares, instruct the Company’s Transfer Agent to issue one or more certificates for Common Stock without legend in such name and
in such denominations as specified by the Buyer.


 




    	 	18	 



    	 



    




 


b.      
Conversion. (i) The Company shall permit the Buyer to exercise the right to convert
the Debentures by faxing, emailing or delivering overnight an executed and completed Notice of Conversion to the Company or the
Transfer Agent. If so requested by the Buyer or the Transfer Agent, the Company shall within one (1) business day respond with
its endorsement so as to confirm the outstanding principal amount of any Debenture submitted for conversion or shall reconcile
any difference with the Buyer promptly after receiving such Notice of Conversion.


 


(ii)                                   
The term “Conversion Date” means, with respect to any conversion elected by the
holder of the Debentures, the date specified in the Notice of Conversion, provided the copy of the Notice of Conversion is given
either via mail or facsimile to or otherwise delivered to the Transfer Agent and/or the Company in accordance with the provisions
hereof so that it is received by the Transfer Agent and/or the Company on or before such specified date.


 


(iii)                                
The Company shall deliver (or will cause the Transfer Agent to deliver) the Conversion Shares
issuable upon conversion as follows: (1) if the Company is then DWAC Operational, via DWAC, (2) if the Common Stock is then eligible
for the Depository Trust Company’s Direct Registration System (“DRS”), if so requested by the Buyer, or (3) if
the Company is not then DWAC Operational or the Common Stock is not then eligible for DRS, in certificated form, to the Buyer at
the address specified in the Notice of Conversion (which may be the Buyer’s address for notices as contemplated by Section
10 hereof or a different address) via express courier, in each case within two (2) business days (the “Delivery Date”)
after (A) the business day on which the Company or the Transfer Agent has received the Notice of Conversion (by facsimile, email
or other delivery) or (B) the date on which payment of interest and principal on the Debentures, which the Company has elected
to pay by the issuance of Common Stock, as contemplated by the Debentures, was due, as the case may be.


 


c.      
Failure to Timely Issue Conversion Shares or De-Legended Shares. The Company’s
failure to issue and deliver Conversion Shares to the Buyer (either by DWAC, DRS or in certificated form, as required by Section
5(b)) on or before the Delivery Date shall be considered an Event of Default, which shall entitle the Buyer to certain remedies
set forth in the Debentures and provided by applicable law. Similarly, the Company’s failure to issue and deliver
Common Stock in unrestricted form without a restrictive legend when required under the Transaction Documents shall entitle the
Buyer to damages for the diminution in value (if any) of the relevant shares between the date delivery was due versus the date
ultimately delivered in unrestricted form. The Company acknowledges that its failure to timely honor a Notice of Conversion (or
the occurrence of any other Event of Default) shall cause definable financial hardship on the Buyer(s) and that the remedies set
forth herein and in the Debentures are reasonable and appropriate.


 


d.     
Duties of Company; Authorization. The Company shall inform the Transfer Agent of the
reservation of shares contemplated by Section 4(g) and this Section 5, and shall keep current in its payment obligations to the
Transfer Agent such that the Transfer Agent will continue to process share transfers and the initial issuance of shares of Common
Stock upon the conversion of Debentures. The Company hereby authorizes and agrees to authorize the Transfer


 




    	 	19	 



    	 



    

 


Agent to correspond and otherwise
communicate with the Buyer or their representatives in connection with the foregoing and other matters related to the Common Stock.
Further, the Company hereby authorizes the Buyer or its representative to provide instructions to the Transfer Agent that are consistent
with the foregoing and instructs the Transfer Agent to honor any such instructions. Should the Company fail for any reason to keep
current in its payment obligations to the Transfer Agent, the Buyer and/or Investments may pay such amounts as are necessary to
compensate the Transfer Agent for performing its duties with respect to share reservation, issuance of Conversion Shares and/or
de-legending certificates representing Restricted Stock, and all amounts so paid shall be promptly reimbursed by the Company. If
not so reimbursed within thirty (30) days, such amounts shall, at the option of the Buyer and without prior notice to or consent
of the Company, be added to the principal amount due under the Debenture(s) held by the Buyer, whereupon interest will begin to
accrue on such amounts at the rate specified in the Debentures.


 


e.       Effect
of Bankruptcy. The Buyer shall be entitled to exercise its conversion privilege with respect to the Debentures
notwithstanding the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In
the event the Company is a debtor under the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any
rights to relief it may have under 11 U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company
hereby waives, to the fullest extent permitted, any rights to relief it may have under 11 U.S.C. §362 in
respect of the conversion of the Debentures. The Company agrees, without cost or expense to the Buyer, to take or to consent
to any and all action necessary to effectuate relief under 11 U.S.C. §362.


 


		6.	CLOSINGS.



 


a.       Signing
Closing. Promptly upon the execution and delivery of this Agreement, the Signing Debenture, Warrant, and all conditions
in Sections 7 and 8 herein are met (the “Signing Closing Date”), (A) the Company shall deliver to the Buyer the
following: (i) the Signing Debenture and Warrant; (ii) the Transfer Agent Instruction Letter; (iii) duly executed
counterparts of the Transaction Documents; and (iv) an officer’s certificate of the Company confirming the accuracy of
the Company’s representations and warranties contained herein, and (B) the Buyer shall deliver to the Company
the following: (i) the Signing Purchase Price and (ii) duly executed counterparts of the Transaction Documents (as
applicable). The Company shall immediately pay the fees due under Section 12 of this Agreement upon receipt of the Signing
Purchase Price if Buyer does not withhold such amounts from the Signing Purchase Price pursuant to Section 12.


 


b.      
Second Closing. At any time after forty-five (45) days following the Signing Closing
Date, subject to the mutual agreement of the Buyer and the Company, for the “Second Closing Date” and subject to satisfaction
of the conditions set forth in Sections 7 and 8, (A) the Company shall deliver to
the Buyer the following: (i) the Second Debenture; (ii) an amendment to the Transfer Agent Instruction Letter instructing the
Transfer Agent to reserve that number of shares of Common Stock as is required under Section 4(g) hereof, if necessary; and (iii)
an officer’s certificate of the Company confirming, as of the Second Closing Date, the accuracy of the Company’s representations
and warranties contained herein and updating Schedules 3(b), 3(c) and 3(k) as of the Second Closing Date, and (B)
the Buyer shall deliver to the Company the Second Purchase Price.


 




    	 	20	 



    	 



    




 


		c.	[Intentionally Omitted].



 


d.     
Location and Time of Closings. Each Closing shall be deemed to occur on the related
Closing Date at the office of the Buyer’s counsel and shall take place no later than 5:00 P.M., east coast time, on such
day or such other time as is mutually agreed upon by the Company and the Buyer.


 


		7.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.



 


The Company’s obligation
to sell the Debentures to the Buyer pursuant to this Agreement on each Closing Date is conditioned upon:


 


a.      
Purchase Price. Delivery to the Company of good funds as payment in full of the respective
Purchase Price for the Debentures at each Closing in accordance with this Agreement;


 


b.      
Representations and Warranties; Covenants. The accuracy on the Closing Date of the
representations and warranties of the Buyer contained in this Agreement, each as if made on such date, and the performance by the
Buyer on or before such date of all covenants and agreements of the Buyer required to be performed on or before such date; and


 


c.      
Laws and Regulations; Consents and Approvals. There shall not be in effect any law,
rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring any consent or approval which
shall not have been obtained.


 


		8.	CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.



 


The Buyer’s obligation to purchase the Debentures
at each Closing is conditioned upon:


 


		a.	Transaction Documents. The execution and delivery of this Agreement
by



the Company;


 


b.      
Debenture(s). Delivery by the Company to the Buyer of the Debentures to be purchased
in accordance with this Agreement;


 


c.      
Section 4(a)(2) Exemption. The Debentures and the Conversion Shares shall be exempt
from registration under the Securities Act of 1933 (as amended), pursuant to Section 4(a)(2) thereof;


 


		d.	DWAC Status. The Common Stock shall be DWAC Operational;



 


e.      
Representations and Warranties; Covenants. The accuracy in all material respects on
the Closing Date of the representations and warranties of the Company contained in this Agreement, each as if made on such date,
and the performance by the Company on or before such date of all covenants and agreements of the Company
required to be performed on or before such date;


 




    	 	21	 



    	 



    




 


f.       
Good-faith Opinion. It should be Buyer’s reasonable belief that (i) no Event
of Default under the terms of any outstanding indebtedness of the Company shall have occurred or would likely occur with the passage
of time and (ii) no material adverse change in the financial condition or business operations of the Company shall have occurred;


 


g.      
Legal Proceedings. There shall be no litigation, criminal or civil, regulatory impairment
or other legal and/or administrative proceedings challenging or seeking to limit the Company’s ability to issue the Securities
or the Common Stock;


 


		h.	[Reserved];



 


i.       
Corporate Resolutions. Delivery by the Company to the Buyer a copy of resolutions of
the Company’s board of directors, approving and authorizing the execution, delivery and performance of the Transaction Documents
and the transactions contemplated thereby in the form attached hereto as Exhibit C (the “Irrevocable Resolutions”);


 


j.       
Officer’s Certificate. Delivery by the Company to the Buyer of a certificate
of the Chief Executive Officer of the Company in the form attached hereto as Exhibit D;


 


k.      
Search Results. Delivery by the Company to the Buyer of copies of UCC search reports,
issued by the Secretary of State of the state of incorporation of the Company and each Subsidiary, dated such a date as is reasonably
acceptable to Buyer, listing all effective financing statements which name the Company or Subsidiary (as applicable), under its
present name and any previous names, as debtor, together with copies of such financing statements;


 


l.       
Certificate of Good Standing. Delivery by the Company to the Buyer of a copy of a certificate
of good standing with respect to the Company, issued by the Secretary of State of the state of incorporation of the Company, dated
such a date as is reasonably acceptable to Buyer, evidencing the good standing thereof;


 


m.    
Laws and Regulations; Consents and Approvals. There shall not be in effect any law,
rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring any consent or approval which
shall not have been obtained; and


 


n.      
Adverse Changes. From and after the date hereof to and including each Closing Date,
(i) the trading of the Common Stock shall not have been suspended by the SEC, FINRA, or any other governmental or self-regulatory
organization, and trading in securities generally on the Principal Market shall not have been suspended or limited, nor shall minimum
prices been established for securities traded on the Principal Market; (ii) there shall not have occurred any outbreak or escalation
of hostilities involving the United States or any material adverse change in any financial market that in either case in the reasonable
judgment of the Buyer makes it impracticable or inadvisable to purchase the Debentures.


 




    	 	22	 



    	 



    

 


 


		9.	GOVERNING LAW; MISCELLANEOUS.



 


a.      
MANDATORY FORUM SELECTION. ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION
WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (WHETHER OR NOT SUCH CLAIM IS
BASED UPON BREACH OF CONTRACT OR TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE COURTS LOCATED IN
MIAMI-DADE COUNTY, FLORIDA AND/OR FEDERAL COURTS LOCATED IN MIAMI-DADE COUNTY, FLORIDA. THIS PROVISION IS INTENDED TO BE A “MANDATORY”
FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENTLY WITH FLORIDA LAW.


 


b.      
Governing Law. Except in the case of the Mandatory Forum Selection clause above, this
Agreement shall be delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of
the State of Nevada, and for all purposes shall be construed in accordance with the laws of the State of Nevada, without giving
effect to the choice of law provisions. To the extent determined by the applicable court described above, the Company shall reimburse
the Buyer for any reasonable legal fees and disbursements incurred by the Buyer in enforcement of or protection of any of its rights
under any of the Transaction Documents.


 


c.      
Waivers. Failure of any party to exercise any right or remedy under this Agreement
or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.


 


d.     
Successors and Assigns. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto.


 


e.      
Construction. All pronouns and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the context may require.


 


f.       
Facsimiles; E-mails. A facsimile or email transmission of this signed Agreement or
a Notice of Conversion under the Debentures shall be legal and binding on all parties hereto. Such electronic signatures shall
be the equivalent of original signatures.


 


g.      
Counterparts. This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original.


 


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


 


i.       
Enforceability. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this
Agreement or the validity or enforceability of this Agreement in any other jurisdiction.


 




    	 	23	 



    	 



    

 





j.       
Amendment. This Agreement may be amended only by the written consent of a majority
in interest of the holders of the Debentures and an instrument in writing signed by the Company.


 


k.      
Entire Agreement. This Agreement, together with the other Transaction Documents, supersedes
all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.


 


l.       
No Strict Construction. This Agreement shall be construed as if both Parties had equal
say in its drafting, and thus shall not be construed against the drafter.


 


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


 


		10.	NOTICES.



 


Any notice required or permitted
hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of:


 


a.      
the date delivered, if delivered by personal delivery as against written receipt therefor
or by facsimile or email transmission,


 


b.      
the third (3rd) business
day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or


 


c.      
the first (1st) business
day after deposit with a recognized courier service (e.g. FedEx, UPS, DHL, US Postal Service) for delivery by next-day express
courier, with delivery costs and fees prepaid,


 


in each case, addressed to each
of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten
(10) days’ advance written notice similarly given to each of the other parties hereto):


 





	 	COMPANY:	AB International Group Corp.
	 	 	1st Floor, Union Industrial Building, 116 Wai Yip
        Street
	 	 	Kwun Tong, Kowloon, Hong Kong
	 	 	Attention: Chiyuan Deng, Chief Executive
        Officer
	 	 	Email: corp@abqqs.com



 


 



    	 



    	 



    

 


 





	 		With copies to (which shall not constitute notice):



 


	 	 	 		 
	 	 	 		 
	 	 	 		 
	 	 	Attention:	 	 
	 	 	Email:	 	 



 


 


	 	BUYER:	Peak One Opportunity Fund, L.P. 
	 	 	333 South
        Hibiscus Drive
	 	 	Miami Beach, FL 33139
	 	 	Attention: Jason Goldstein
	 	 	Email: jgoldstein@peakoneinvestments.com
	 	 	 
	 	 	 
	 	 	With copies to (which shall not constitute notice):
	 	 	 
	 	 	Anthony L.G., PLLC
	 	 	625 N. Flagler Drive, Suite 600 
	 	 	West Palm Beach,
        FL 33401
	 	 	Attention: Chad Friend, Esq., LL.M.
	 	 	Email: CFriend@AnthonyPLLC.com







 


11.  
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company’s representations and
warranties herein shall survive for so long as any Debentures are outstanding, and shall inure to the benefit of the Buyer, its
successors and assigns.


 


		12.	FEES; EXPENSES.



 


a.      
Commitment Fee. A non-accountable fee (the “Commitment Fee”) of (i) Five
Thousand and 00/100 Dollars ($5,000.00) on the Signing Closing Date (with respect to the Signing Debenture) as well as Five Thousand
and 00/100 Dollars ($5,000.00) on the Second Closing Date (with respect to the Second Debenture), shall be withheld from the purchase
price of the respective debenture to cover the Buyer’s accounting fees, legal fees, and other transactional costs incurred
in connection with the transactions contemplated by this Agreement. The Commitment Fee shall be paid on the respective closing
dates if Buyer does not withhold such amounts from the respective purchase price pursuant to Section 12(b). In addition, at the
time of Buyer’s funding of each Debenture, the Company shall issue to Investments as a commitment fee, a common stock purchase
warrant to purchase 10,000 shares of the Company’s common stock pursuant to the terms of the Warrant (all common stock purchase
warrants issuable hereunder, including now and in the future, shall be referred to, in the aggregate, as the “Warrant”).


 


b.      
Disbursements. In furtherance of the foregoing, the Company hereby authorizes the Buyer
to deduct the cash portion of the Commitment Fee from the purchase price of each Debenture and transmit same to the respective
payee.


 




    	 	24	 



    	 



    

 


[Signature Page Follows]


 


 


 


 




    	 	25	 



    	 



    

 


IN
WITNESS WHEREOF, this Agreement has been duly executed by the Buyer and the Company as of the date first set forth above.


 





	 	COMPANY:
	 	 
	 	AB INTERNATIONAL GROUP CORP.



 





	 	By:	/s/ Chiyuan Deng
	 	Name:	Chiyuan Deng
	 	Title:	Chief Executive Officer



 





 


	 	BUYER:
	 	 
	 	PEAK ONE OPPORTUNITY FUND, L.P.



 





	 	By:	Peak One Investments, LLC,
	 		General Partner
	 	 	 
	 	 	 
	 	By:	/s/ Jason Goldstein
	 	Name:	Jason Goldstein
	 	Title:	Managing Member




 


 





 


[Signature Page to Securities
Purchase Agreement]


 




    	 	26	 



    	 



    

 


SCHEDULE 3(b)


 


 


 


COMPANY ORGANIZATION
CHART


 


 


 


	Subsidiary / Affiliate Name and Relationship	Jurisdiction of Incorporation	Percentage of Ownership
	
        App Board Limited

        —subsidiary
	Hong Kong	100
	
        AB International Group Corp

        —subsidiary
	Hong Kong	100
	 	 	 
	 	 	 



 



    	 	27	 



    	 



    




 


SCHEDULE 3(c)


 


 


COMPANY CAPITALIZATION
TABLE


 


COMMON STOCK AND COMMON
STOCK EQUIVALENTS ISSUED, OUTSTANDING AND RESERVED


 


	DESCRIPTION	AMOUNT
	Authorized Capital Stock	1000000000
	Authorized Common Stock	1000000000
	Issued Common Stock	4822016
	Outstanding Common Stock	4822016
	Treasury Stock	0
	Common Stock Previously Reserved	0
	Authorized, but unissued	35000
	 	 
	Authorized Preferred Stock	0
	Issued Preferred Stock	0
	 	 
	Reserved for Equity Incentive Plans	0
	Reserved for Convertible Debt	55000
	Reserved for Options and Warrants	0
	Reserved for Other Purposes	0
	 	 
	TOTAL COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING	4822016



 


 



    	 	28	 



    	 



    

 


EXHIBITS


 





	 	Exhibit A	 	FORM OF DEBENTURE
	 	 	 	 
	 	Exhibit B	 	FORM OF TRANSFER AGENT INSTRUCTION
LETTER
	 	 	 	 
	 	Exhibit C	 	FORM OF RESOLUTIONS OF THE BOARD OF DIRECTORS
	 	 	 	 
	 	Exhibit D	 	FORM OF OFFICER’S CERTIFICATE



 













    	 	29	 



    	 



    

 


EXHIBIT A


FORM OF DEBENTURE


 


(see attached)


 




    	 	30	 



    	 



    

 


EXHIBIT B


 


AB INTERNATIONAL GROUP
CORP. IRREVOCABLE TRANSFER AGENT INSTRUCTION LETTER


(see attached)


 






    	 	31	 



    	 



    

 


EXHIBIT C


 


 


IRREVOCABLE CORPORATE
RESOLUTIONS OF THE


BOARD OF DIRECTORS OF


AB INTERNATIONAL GROUP CORP.


 


(see attached)


 




    	 	32	 



    	 



    

 


EXHIBIT D


 


OFFICER'S CERTIFICATE


 


(see attached)


 




    	 	33	 



    	 



    

 


EXHIBIT I


 


ARTICLES OF INCORPORATION


 


(see attached)


 




    	 	34	 



    	 



    

 


EXHIBIT II


 


BYLAWS


 


(see attached)


 




    	 	35	 



    	 



    

 


EXHIBIT III


 


RESOLUTIONS OF THE BOARD
OF DIRECTORS


 


(see attached)


 








    	 	36