NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. 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.


 


Issue Date: February
4, 2019


Principal Amount: US$75,000.00





Purchase Price: US$75,000.00


 


CONVERTIBLE PROMISSORY NOTE


 


FOR
VALUE RECEIVED, HEMP NATURALS, INC., a Delaware corporation (hereinafter called the “Borrower”) (Trading
Symbol: HPMM), hereby promises to pay to the order of AUCTUS FUND, LLC, a Delaware limited liability company, or registered
assigns (the “Holder”) the sum of US$75,000.00 together with any interest as set forth herein, on November 4, 2019
(the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%)
(the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part
except as otherwise explicitly set forth herein with the written consent of the Holder which may be withheld for any reason or
for no reason. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of the
lesser of (i) twenty four percent (24%) per annum or (ii) the maximum amount allowed by law from the due date thereof until the
same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and
shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder (to the extent
not converted into common stock, $0.0001 par value per share (the “Common Stock”) in accordance with the terms hereof)
shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding
day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full,
the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on
such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day
on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).


 




    	 		 



    	 



    




 


This Note is
free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.


 


The following terms shall also apply to this Note:


 


ARTICLE I. CONVERSION RIGHTS


 


1.1
Conversion Right. The Holder shall have the right from time to time, and at any time on or following the Issue Date and
ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant
to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or
any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein
(a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion
of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through
the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower
subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is
being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares
of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however,
that the limitations on conversion may be waived by the Holder (up to a maximum of 9.99%) upon, at the election of the Holder,
not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply
until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number
of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower before 11:59 p.m., New York, New York time on such conversion
date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all interest
in cash plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof.


 




    	 	2	 



    	 



    




 


		1.2	Conversion Price.



 


Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal the lesser of (i) the lowest Trading Price (as defined below) during the previous twenty-five (25) Trading Day period
ending on the latest complete Trading Day prior to the date of this Note and (ii) the Variable Conversion Price (as defined herein)
(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The “Variable Conversion Price” shall mean 50% multiplied by the Market Price (as
defined herein) (representing a discount rate of 50%). “Market Price” means the lowest Trading Price for the Common
Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB or applicable
trading market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the
OTC Pink is not the principal trading market for such security, the trading price of such security on the principal securities
exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any
of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink
sheets” by the National Quotation Bureau, Inc., or (ii) the lowest closing bid price on the OTC Pink, OTCQB or applicable
trading market as reported by a Reporting Service designated by the Holder or, if the OTC Pink is not the principal trading market
for such security, the closing bid price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the
closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation
Bureau, Inc. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the
Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible
under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may
be adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common
Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If
the shares of the Borrower’s Common Stock have not been delivered within three (3) business days to the Borrower,
the Notice of Conversion may be rescinded. At any time after the Closing Date, if in the case that the Borrower’s Common
Stock is not deliverable by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery
of shares of the Borrower’s Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for
all future


 




    	 	3	 



    	 



    

 


conversions under all Notes.
If in the case that the Borrower’s Common Stock is “chilled” for
deposit into the DTC system and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions
under all Notes while the “chill” is in effect. If in the case of both of the above, an additional cumulative 25% discount
shall apply. Additionally, if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted
into free trading shares after one hundred eighty-one (181) days from the Issue Date,
an additional 15% discount will be attributed to the Conversion Price. If the Trading
Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market
value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the
calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day”
shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or on the principal securities exchange
or other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its
transfer agent and all DTC fees associated with any such issuance. Holder shall be entitled to deduct $500.00 from the conversion
amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion.





While
this Note is outstanding, each time any 3rd party has the right to convert
monies owed to that 3rd party (or receive shares pursuant to a settlement
or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount to market greater than the
Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the H1older, in Holder’s
sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this Note) until this Note
is no longer outstanding. While this Note is outstanding, each time any 3rd party
has a look back period greater than the look back period in effect under the Note at that time, including but not limited to under
Section 3(a)(9) and Section 3(a)(10), then the Holder, in Holder’s sole discretion, may utilize such greater number of look
back days until this Note is no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business
day of becoming aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding
sentences.


 


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


 




    	 	4	 



    	 



    




 


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


 


(c)    
If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common
Stock, then the Conversion Price hereunder shall equal such par value for such conversion and the Conversion Amount for such
conversion shall be increased to include Additional Principal, where “Additional Principal” means such additional
amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon
such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been
subject to the minimum price set forth in this Section 1.2(c).


 


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


 


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


 




    	 	5	 



    	 



    




 


		1.4	Method of Conversion.



 


(a)  
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time on or after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail
or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time)
and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.


 


(b)  
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this
Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower
unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records
showing the principal amount so converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such
conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be
controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is
converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the
Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note,
acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note,
the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the
face hereof.


 


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


 


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


 




    	 	6	 



    	 



    




 


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


 


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


 


(g)    
DTC Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any
reason, or, if the Conversion Price is less than $0.01 at any time after the Issue Date, the principal amount of the Note
shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s
expectation that any principal amount increase will tack back to the Issue Date). In addition, the Variable Conversion Price
shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this
Note.


 


(h)  
Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to
pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances
described in Section 1.3 above, which failure shall be governed by such Section)


 




    	 	7	 



    	 



    

 


the Borrower shall pay to
the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock until
the Borrower issues and delivers a certificate to the Holder or credit the Holder's balance account with OTC for the number of
shares of Common Stock to which the Holder is entitled upon such Holder's conversion of any Conversion Amount (under Holder's and
Borrower's expectation that any damages will tack back to the Issue Date).. Such cash amount shall be paid to Holder by the fifth
day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower
by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall
be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a
valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right
are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1.4(h) are justified.


 


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


 


1.5
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions
of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor
rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal
provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered
under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that
has not been so included in an
effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:


 




    	 	8	 



    	 



    




 


“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The legend set
forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend
if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without
registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is effected
or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does not
accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration,
such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.


 


		1.6	Effect of Certain Events.



 


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


 




    	 	9	 



    	 



    

 


(b)  
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to
conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall
be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower
or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than
in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the
right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the
Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such
transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or
assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this
Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event
at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if
there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note)
and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of
this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or
share exchanges.


 


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


 


(d)  
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or
sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock
issued directly to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers
(provided, however, that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of
Common Stock prior to the issuance of such shares), any shares of Common Stock for
no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts
or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance)
of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion
Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.


 



    	 	10	 



    	 



    

 











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


 


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


 


(e)  
Purchase Rights. If, at any time when any Notes are issued and outstanding,
the Borrower issues any convertible securities or rights to purchase stock, warrants,


 




    	 	11	 



    	 



    

 


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


 


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


 


		1.7	[Intentionally Omitted].



 


1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder
of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure
by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion
of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common
Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted
portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note
has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the
Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default
Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default
and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3)
for the Borrower’s failure to convert this Note.


 


1.9
Prepayment. Subject to the terms of this Note, and provided that an Event of Default has not occurred under this Note, the
Borrower may prepay the amounts outstanding hereunder pursuant to the following terms and conditions:


 




    	 	12	 



    	 



    




(a)  
At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the
Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to
the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the
Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if
any.


 


		(b)	At any time during the period beginning the day which is ninety one



(91) days following the Issue Date
and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of:
(w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount
of this Note plus (y) Default Interest, if any.


 


(c)  
After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of
prepayment.


 


1.10  
Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be
delivered to the Holder of the Note at its registered addresses by physical mail and shall state: (1) that the Borrower is exercising
its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date
of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower
shall make payment of the applicable prepayment amount to or upon the order of the Holder as specified by the Holder in writing
to the Borrower. If the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to
the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit
its right to prepay the Note pursuant to Section 1.9.


 


ARTICLE II. CERTAIN COVENANTS


 


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


 


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


 




    	 	13	 



    	 



    

 





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


 


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


 


2.5
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including,
without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances
(a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof,
(b) made in the ordinary course of business or (c) not in excess of $100,000.


 


2.6
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction
or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9)
of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).
In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder
at its election in the form of cash payment or addition to the balance of this Note.


 


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


 


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


 




    	 	14	 



    	 



    




 


2.9  
Repayment from Proceeds. While any portion of this Note is outstanding, if the Borrower receives cash proceeds from any
source or series of related or unrelated sources, including but not limited to, from payments from customers, the issuance of
equity or debt, the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line
of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business day of Borrower’s receipt
of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in its sole
discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of
the outstanding amounts owed under this Note. Failure of the Borrower to comply with this provision shall constitute an Event
of Default. In the event that such proceeds are received by the Holder prior to
the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.


 


ARTICLE III. EVENTS OF DEFAULT


 


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


 


3.1      
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof
or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.


 


3.2      
Conversion and the Shares. The Borrower (i) fails to issue shares of Common Stock to
the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of
the conversion rights of the Holder in accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent
to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this Note, (iii) directs its transfer agent not to transfer
or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any
certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note, (iv) fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations
described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not
to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a
Notice of Conversion, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note
is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within
forty eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower’s transfer agent


 




    	 	15	 



    	 



    

 


in order to process a conversion,
(viii) fails to reserve sufficient amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails to
provide a Rule 144 opinion letter from the Borrower’s legal counsel to the Holder, covering the Holder’s resale into
the public market of the respective conversion shares under this Note, within two (2) business days of the Holder’s submission
of a Notice of Conversion to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that
Holder submits the respective Notice of Conversion and the date of the respective Notice of Conversion must be on or after the
date which is six (6) months after the date that the Holder funded the Purchase Price under this Note), and/or (x) an exemption
under Rule 144 is unavailable for the Holder’s deposit into Holder’s brokerage account and resale into the public market
of any of the conversion shares under this Note at any time after the date which is six (6) months after the date that the Holder
funded the Purchase Price under this Note.


 


3.3      
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction
Expense Amount (as defined in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.


 


3.4      
Breach of Covenants. The Borrower breaches any material covenant or other material
term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such
breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.


 


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


 


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


 


3.7      
Judgments. Any money judgment, writ or similar process shall be entered or filed against
the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty


(20) days unless otherwise consented
to by the Holder, which consent will not be unreasonably withheld.


 


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


 




    	 	16	 



    	 



    




 


3.9      
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common
Stock on at least one of the OTC Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT,
or an equivalent replacement exchange


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




    	 	17	 



    	 



    




 


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


 


3.19                       
Bid Price. The Borrower shall lose the “bid” price for its Common Stock
($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2) and/or a market (including the
OTC Pink, OTCQB or an equivalent replacement exchange).


 


3.20                       
OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘No
Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’
or ‘Grey Market’ (Exclamation Mark Sign).


 


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


 


		3.22	Unavailability of Rule 144. If,
at any time on or after the date which is six



(6) months after the Issue Date,
the Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to
the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order
to facilitate the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common
Stock pursuant to Rule 144, and (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


UPON THE
OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2 AND/OR 3.22 OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY DUE
AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO:
(Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence of any Event of Default specified in
Sections 3.1, 3.3, 3.4, 3.5,


 




    	 	18	 



    	 



    

 


3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
3.16. 3.17, 3.18, 3.19, 3.20, and/or 3.21,


exercisable through the delivery
of written notice to the Borrower by such Holders (the “Default Notice”), the Note shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to (i) 150%
times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts
referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) at the option of
the Holder, the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of
shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining
the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Trading Price for the
Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due
and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or 3.19 occurs or is continuing after the six (6)
month anniversary of this Note, then the principal amount of the Note shall increase by Fifteen Thousand and No/100 United States
Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the
Issue Date) and the Holder shall be entitled to use the lowest Trading Price during the delinquency period as a base price for
the conversion with the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price
(at the option of the Holder), subject to adjustment as provided in this Note. For example, if the lowest Trading Price during
the delinquency period is $0.50 per share and the conversion discount is 50%, then the Holder may elect to convert future conversions
at $0.25 per share. If this Note is not paid at Maturity Date, then the outstanding
principal due under this Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).


 


The Holder shall have the
right at any time, to require the Borrower to immediately issue, in lieu of the Default Amount and/or Default Sum, the number of
shares of Common Stock of the Borrower equal to the Default Amount and/or Default Sum divided by the Conversion Price then in effect,
subject to the terms of this Note (including but not limited to any beneficial ownership limitations contained herein). This requirement
by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any
notice or take any other action. Holder shall be reimbursed by the Borrower for its
attorneys' fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 







    	 	19	 



    	 



    




 


ARTICLE IV. MISCELLANEOUS


 


4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.


 


4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, electronic mail, or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by electronic mail or
facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b)
on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:


 


If to the Borrower,
to: 


Hemp Naturals, Inc.





16950 North Bay Road, Suite 18033 Sunny Isles
Beach, FL 33160


Attn: Levi Jacobson


E-mail: info@hempofnaturals.com
If to the Holder:


Auctus Fund, LLC


545 Boylston Street, 2nd Floor Boston, MA 02116


Attn: Lou Posner Facsimile: (617) 532-6420


 


With a copy to (which copy shall not constitute notice):


 


Chad Friend, Esq., LL.M. Anthony L.G., PLLC


625 N. Flagler Drive, Suite 600 West Palm Beach,
FL 33401


E-mail: CFriend@AnthonyPLLC.com


 





    	 	20	 



    	 



    




 


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


 


4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder
to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or
to any of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding
anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the
amount stated on the face hereof.


 


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


 


4.6
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard
to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state courts of Massachusetts or in the federal courts located in the Commonwealth of
Massachusetts. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing
party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified


 




    	 	21	 



    	 



    

 


to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a
copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law.


 


4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such
interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note
may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and
is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale
of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant
to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to
the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of
Common Stock.


 


4.8
Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase
Agreement.


 


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


 




    	 	22	 



    	 



    

 


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


 


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


 


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


 


4.13   
Dispute Resolution. In the case of a dispute as to the determination of the
Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum, Closing or Maturity Date, the
closing bid price, or fair market value (as the case may be) or the arithmetic calculation of the Conversion Price or the
applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit the disputed determinations or
arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise
to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such
determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation (as the
case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Business Days, submit via
facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the
case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the
disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default
Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower
shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify the
Borrower and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable
error.


 




    	 	23	 



    	 



    




 


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


 


4.15  
Piggyback Registration Rights. The Borrower shall include on the next registration
statement the Borrower files with SEC (or on the subsequent registration statement if such registration statement is withdrawn)
all shares issuable upon conversion of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding
principal balance of this Note, but not less than Fifteen Thousand and No/100 United States Dollars ($15,000), being immediately
due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.


 


4.16   
Future Raises; Repayment from Proceeds. The Borrower shall not consummate any capital raising transactions (including but
not limited to from the issuance of debt and/or equity securities) during the initial thirty (30) days after the Issue Date.
Until the Note is satisfied in full, if the Borrower receives cash proceeds from any source or series of related or unrelated
sources, including but not limited to, from the issuance of equity and/or debt securities, the conversion of outstanding
warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of
assets, the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder of
such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to
immediately apply all or any portion of such proceeds to repay all or any portion of this Note. Failure of the Borrower to
comply with this provision shall constitute an Event of Default under Section 3.4 of the Note. In the event that such
proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of
Section 1.9 herein.





 


[signature page follows]


 




    	 	24	 



    	 



    

 


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


 


 


HEMP NATURALS, INC.


 


 


By: /s/ Levi Jacobson


Name: Levi Jacobson


Title: Chief Executive Officer


 




    	 	25	 



    	 



    

 


EXHIBIT A


NOTICE OF CONVERSION


 


The undersigned hereby elects
to convert $ ___________ principal amount of the Note (defined below) together
with $ ___________ of accrued and unpaid interest thereto, totaling
$___________ into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common
Stock”) as set forth below, of Hemp Naturals, Inc., a Delaware corporation (the “Borrower”), according to
the conditions of the convertible note of the Borrower dated as of February 4, 2019 (the “Note”), as of the date
written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.


 


Box Checked as to applicable instructions:


 


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


 


Name of DTC Prime Broker:


Account Number:


 


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


 


Name: [NAME]


Address: [ADDRESS]


 


Date
of Conversion: ___________ 


Applicable Conversion Price:$___________ 


Number
of Shares of Common Stock to be Issued


Pursuant to Conversion of the Notes: ___________ 


Amount of Principal Balance Due remaining


Under the Note after this conversion: ___________ 


Accrued and unpaid interest remaining:___________ 


 


[HOLDER]





 


By: ___________ 


Name: [NAME]


Title: [TITLE]



Date: [DATE]


 






    	 	26