Exhibit 4.1


 


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 MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE
144A, REGULATION S, OR OTHER APPLICABLE EXEMPTION 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.


 


	Principal Amount: $250,000.00	Issue Date: January 8, 2020
	Actual Amount of Purchase Price: $237,500.00	 


 


SENIOR CONVERTIBLE PROMISSORY NOTE


 


FOR VALUE RECEIVED,
CANNAPHARMARX, INC., a Delaware corporation (hereinafter called the “Borrower” or the “Company”)
(Trading Symbol: CPMD), hereby promises to pay to the order of INVESTOR, a Delaware limited liability company, or registered
assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of up to $250,000.00
(the “Principal Amount”) (subject to adjustment herein), with a purchase price of up to $237,500.00 (the “Consideration”)
plus an original issue discount in the amount of up to $12,500.00 (the “OID”), and to pay interest on the Principal
Amount of each tranche under this Note at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date
that the amount of Consideration of the respective tranche is fully funded in accordance with the terms of this Note (each a “Tranche
Funding Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise,
as further provided herein. The Holder shall pay $95,000.00 of the Consideration within a reasonable amount of time after the full
execution of the Note and all related transactional documents related to this Note, and the initial outstanding principal amount
under this Note shall be $100,000.00 (which includes the prorated potion of the OID). The Holder may fund, in Holder’s sole
discretion, such additional amounts of the Consideration and at such dates as the Holder may choose in its sole discretion. The
maturity date for each tranche of this Note funded shall be twelve (12) months from the effective date of the Holder’s payment
of the respective amount of the Consideration for the respective tranche under this Note (each a “Maturity Date”),
and is the date upon which the principal sum of that respective tranche as well as any accrued and unpaid interest and other fees
relating to that respective tranche, shall be due and payable


 


It is further acknowledged
and agreed that the Principal Amount owed by Borrower under this Note shall be increased by the amount of all expenses incurred
by the Holder relating to the conversion of this Note into shares of Common Stock. All such expenses shall be deemed added to the
Principal Amount hereunder to the extent such expenses are paid by the Holder.


 


This Note may not be
prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.


 


This Note shall be
a senior obligation of the Company, with priority over all future Indebtedness (as defined below) of the Company as provided for
herein.





Interest shall commence
accruing on the date that the Note is fully funded and shall be computed on the basis of a 365-day year and the actual number of
days elapsed. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser
of (i) fifteen percent (15%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is
paid (“Default Interest”).


 


All payments due hereunder
(to the extent not converted into shares of common stock, $0.0001 par value per share, of the Borrower (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.


 


 


 






    	 	1	 



     


    

 


Each capitalized term
used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement,
dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). 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. As used herein, the term
“Trading Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market
(as defined in the Purchase Agreement), any tier of the NASDAQ Stock Market, the New York Stock Exchange or the NYSE American.


 


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 apply to this Note:


 


ARTICLE I. CONVERSION RIGHTS


 


1.1 Conversion Right.
The Holder shall have the right, at any time on or after the 180th calendar day after the Issue Date, to convert all
or any portion of the then outstanding and unpaid Principal Amount and interest (including any Default Interest) 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 this Note 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 Conversion Shares 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 then outstanding shares of Common Stock. For purposes of the proviso set forth in 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 “1934 Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso,
provided, however, that the limitations on conversion may be waived (up to 9.99%) by the Holder 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 Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s
transfer agent by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile
or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer
agent before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion
Amount” means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted
in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount
at the Interest Rate to the Conversion Date, 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).


 


 


 






    	 	2	 



     


    

 


1.2 Conversion Price.


 


(a) Calculation
of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default Interest)
under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall be equal
to $1.25 (the “Fixed Conversion Price”), provided, further, that at any time after the 180th calendar
day after the Issue Date, the Conversion Price shall equal the lower of (i) the Fixed Conversion Price or (ii) 75% multiplied by
the lowest closing price of the Common Stock during the twenty (20) consecutive Trading Day period immediately preceding the date
of the respective conversion (the “Alternate Conversion Price”); and provided, further, however, and notwithstanding
the above calculation of the Alternate Conversion Price or any other calculation of Conversion Price pursuant to this Section 1.2,
if the lowest traded price of the Common Stock is less than the Conversion Price on the date following the Conversion Date (the
“Free Trading Share Receipt Date”) on which the Holder actually receives from the Company or its transfer agent Conversion
Shares issuable pursuant to this Section 1 which are immediately upon receipt unrestricted and freely tradable by the Holder either
by way of (A) registration under the 1933 Act or (B) pursuant to Rule 144 under the 1933 Act (or a successor rule) (“Rule
144”), Rule 144A under the 1933 Act (or a successor rule) (“Rule 144A”), Regulation S under the 1933 Act (or
a successor rule) (“Regulation S”), or other applicable exemption, then the Conversion Price shall be deemed to have
been retroactively adjusted, as of the Conversion Date, to a price equal to 75% multiplied by the closing price of the Common Stock
on the Free Trading Shares Receipt Date (the “Free Trading Shares Receipt Date Conversion Price”), and the Company
shall, on the Trading Day following the Free Trading Share Receipt Date, issue to the Holder additional shares of unrestricted,
freely tradable Common Stock equal to the difference between (Y) the number of Conversion Shares receivable upon conversion of
the applicable Conversion Amount at the Conversion Price and (Z) the number of Conversion Shares receivable upon conversion of
the applicable Conversion Amount at the Free Trading Shares Receipt Date Conversion Price (subject to the beneficial ownership
limitations contained in Section 1.1, such that the additional shares shall be issued in tranches if required to comply with such
beneficial ownership limitations); and provided, further, however, and notwithstanding the above calculation of the Conversion
Price, if, prior to the repayment or conversion of this Note, in the event the Borrower consummates a registered or unregistered
primary offering of its securities for capital raising purposes (a “Primary Offering”), the Holder shall have the right,
in its discretion, to (x) demand repayment in full of an amount equal to any outstanding Principal Amount and interest (including
Default Interest) under this Note as of the closing date of the Primary Offering or (y) convert any outstanding Principal Amount
and interest (including any Default Interest) under this Note into Common Stock at the closing of such Primary Offering at a Conversion
Price equal to the lower of (i) the Conversion Price and (ii) a 20% discount to the offering price to investors in the Primary
Offering. The Borrower shall provide the Holder no less than ten (10) business days’ notice of the anticipated closing of
a Primary Offering and an opportunity to exercise its conversion rights in connection therewith. To the extent the Conversion Price
is 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, provided however that the Borrower agrees to honor all conversions submitted
pending this increase. 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 at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for
such conversion and the Conversion Amount for such conversion may 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 adjusted by the Holder to the par value price. In the event the Borrower has a DTC “Chill”
on its shares, an additional discount of 10% shall apply to the Conversion Price while that “Chill” is in effect.


 


(b) Conversion Price
During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to be acquired by, consolidate or merge with any other corporation or entity (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 Common Stock (or any other takeover scheme) (any such transaction referred to in
clause (i) or (ii) being referred to herein as a “Change in Control” and the date of the announcement referred to in
clause (i) or (ii) is being referred to herein 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 and (y) a 25% discount to the Acquisition Price (as defined below). From and after the Adjusted
Conversion Price Termination Date, the Conversion Price shall be determined as set forth in Section 1.2(a). For purposes hereof,
“Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed Change in Control 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 Change in Control which caused this Section 1.2(b) to become operative. For purposes hereof, “Acquisition
Price” shall mean a price per share of Common Stock derived by dividing (x) the total consideration (in cash, equity, earn-out
or similar payments or otherwise) paid or to be paid to the Borrower or its shareholders in the Change in Control transaction by
(y) the number of authorized shares of Common Stock outstanding as of the business day prior to the Announcement Date.


 


 


 






    	 	3	 



     


    

 


1.3 Authorized and
Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, 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 a number of Conversion Shares equal to the greater of: (a) 2,500,000 shares of Common Stock or (b) the sum of (i) the number
of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) as of
any issue date (taking into consideration any adjustments to the Conversion Price pursuant to Section 2 hereof or otherwise) multiplied
by (ii) 1.1 (the “Reserved Amount”). In the event that the Borrower shall be unable to reserve the entirety of
the Reserved Amount (the “Reserve Amount Failure”), the Borrower shall promptly take all actions necessary to increase
its authorized share capital to accommodate the Reserved Amount (the “Authorized Share Increase”), including without
limitation, all board of directors actions and approvals and promptly (but no less than 60 days following the calling and holding
a special meeting of its shareholders no more than 60 days following the Reserve Amount Failure to seek approval of the Authorized
Share Increase via the solicitation of proxies. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than
the initial Reserved Amount, regardless of any prior conversions. The Borrower represents that upon issuance, the Conversion 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 Conversion Shares into which this Note 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 this Note.
The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares
or instructions to have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, 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
or cause the Company to electronically issue shares of Common Stock to execute and issue the necessary certificates for the Conversion
Shares or cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions
of this Note.


 


If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under this Note.


 


1.4 Method of Conversion.


 


(a) Mechanics of
Conversion. This Note may be converted by the Holder in whole or in part, on any Trading Day, at any time on or after the 180th
calendar day after the Issue Date, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New
York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have been delivered
and received on the next Trading Day.


 


(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 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.


 


 


 






    	 	4	 



     


    

 


(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 Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) within
one (1) Trading Day after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid
Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company shall fail
for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion Shares
or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or to credit
the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled
upon the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available
to the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure
an amount equal to 2.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to
the Deadline and to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately
preceding the last possible date which the Company could have issued such Conversion Shares to the Holder without violating this
Section 1.4(d); and (ii) the Holder, upon written notice to the Company, may void its Notice of Conversion with respect to, and
retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Notice of Conversion;
provided that the voiding of an Notice of Conversion shall not affect the Company’s obligations to make any payments which
have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail
to issue and deliver a certificate to the Holder and register such Conversion Shares on the Company’s share register or credit
the Holder’s balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s
exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below, and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company, then
the Company shall, within two (2) Trading Days after the Holder’s request and in the Holder’s discretion, either (i)
pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other
reasonable and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”),
at which point the Company’s obligation to deliver such certificate (and to issue such Conversion Shares) or credit such
Holder’s balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates representing such Conversion Shares or credit such Holder’s balance account with
DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the
Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required
pursuant to the terms hereof.


 


(e) Obligation of
Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or Borrower’s
transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion, the
outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under 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 the Conversion Shares (or cause the
electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) 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 sent to the Borrower or Borrower’s
transfer agent before 11:59 p.m., New York, New York time, on such date.


 


(f)
Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion
Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs,
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 best efforts to cause its transfer agent to electronically transmit the Conversion Shares issuable upon conversion
hereof to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission
system.


 


 


 






    	 	5	 



     


    

 


1.5 Concerning the
Shares. The Conversion Shares 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 1933 Act or (ii) the Borrower or its transfer agent shall have been
furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement))
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, Rule 144A, Regulation S, or other applicable exemption, 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 Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation
S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be
immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:


 


“NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE
PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
TO RULE 144, RULE 144A, REGULATION S, OR OTHER APPLICABLE EXEMPTION 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 Company shall issue to the Holder a certificate for the applicable Conversion Shares without such
legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by
crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws:
(a) such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise
may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number
of securities as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel
Opinion (as contemplated by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or
transfer of such Conversion Shares may be made without registration under the 1933 Act, which opinion shall be accepted by the
Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer agent and all DTC
fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event
that the Company does not accept the opinion of counsel provided by the Holder with respect to the transfer of Conversion Shares
pursuant to an exemption from registration, such as Rule 144, Rule 144A or Regulation S, at the Deadline, notwithstanding that
the conditions of Rule 144, Rule 144A, Regulation S, or other applicable exemption, as applicable, have been met, it will be considered
an Event of Default under this 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, 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 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 (defined in Section 3.25) 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.


 


 


 






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(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 this
Note, 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 effectuate any transaction described in this Section 1.6(b) unless
(a) it first gives, to the extent practicable, at least 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) Purchase Rights.
If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible securities
or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record
holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares
of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record
is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.


 


(e) Dilutive Issuance.
If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or grants (or has issued,
sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants any right to reprice, or otherwise
disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant or any option to purchase or other
disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise entitle any person or entity
the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Note, and any convertible
notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective price per share that is lower
than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive
Issuance”) (it being agreed that if the holder of the Common Stock or other securities so issued shall at any time, whether
by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of
Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred
for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the option
of the Holder, to a price equal the Base Conversion Price. If the Company enters into a Variable Rate Transaction, despite the
prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents
at the lowest possible price per share at which such securities could be issued in connection with such Variable Rate Transaction.
Such adjustment shall be made whenever such Common Stock or other securities are issued. Notwithstanding the foregoing, no adjustment
will be made under this Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance of securities involving multiple
tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued
at the initial closing.


 


 


 






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An “Exempt Issuance”
shall mean the issuance of (a) shares of Common Stock or other securities to officers or directors of the Company pursuant to any
stock or option or similar equity incentive plan duly adopted for such purpose, by a majority of the non-employee members of the
Company’s Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose
in a manner which is consistent with the Company’s prior business practices; (b) securities issued pursuant to a merger,
consolidation, acquisition or similar business combination approved by a majority of the disinterested directors of the Company,
provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall
provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which
the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities; (c) securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or
debt financing from a bank or similar financial institution approved by a majority of the disinterested directors of the Company;
or (d) securities issued with respect to which the Holder waives its rights in writing under this Section 1.6(e).


 


(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 Adjustments to
Conversion Price. At any time after the Issue Date, (i) 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), (ii) if the Borrower ceases to be a reporting company pursuant or subject to
the Exchange Act, (iii) if the Borrower loses a market (including the OTC Pink, OTCQB or an equivalent replacement exchange) for
its Common Stock, (iv) if the Borrower fails to maintain its status as “DTC Eligible” for any reason, (v) if the Conversion
Price is less than one cent ($0.01), (vi) if the Note cannot be converted into free trading shares on or after six months from
the Issue Date, (vii) if at any time the Borrower does not maintain or replenish the Reserved Amount (as defined herein) within
three (3) business days of the request of the Holder, (viii) if the Borrower fails to maintain the listing of the Common Stock
on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market,
the New York Stock Exchange, or the NYSE MKT, (ix) if the Borrower fails to comply with the reporting requirements of the Exchange
Act; the reporting requirements necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including but not
limited to the timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, the requirements
for XBRL filings, the requirements for disclosure of financial statements on its website, (x) if the Borrower effectuates a reverse
split of its Common Stock without twenty (20) days prior written notice to the Holder, (xi) if 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), (xii) 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, (xiii) any cessation
of trading of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market,
the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT, and such cessation of trading shall continue for a period
of five consecutive (5) Trading Days, and/or (xiv) the Borrower loses the “bid” price for its Common Stock ($0.0001
on the “Ask” with zero market makers on the “Bid” per Level 2), and/or (xv) if the Holder is notified in
writing by the Company or the Company’s transfer agent that the Company does not have the necessary amount of authorized
and issuable shares of Common Stock available to satisfy the issuance of Shares pursuant to a Conversion Notice, then in addition
to all other remedies under this Note (including but not limited the default provisions provided in this Note), the Holder shall
be entitled to increase, by 15% for each occurrence, cumulative or otherwise, the discount to the Conversion Price shall apply
for all future conversions under the Note. The Holder maintains the option and sole discretion to increase by Ten Thousand and
No/100 United States Dollars ($10,000) per each occurrence described above (under Holder’s and Borrower’s expectation
that any principal amount increase will tack back to the Issue Date) the principal amount of the Note instead of applying further
discounts to the Conversion Price. 


 


 


 






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1.8 Status as Shareholder.
Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other than the Conversion 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 for the Borrower’s failure to convert this Note.


 


1.9       Prepayment.
Notwithstanding anything to the contrary contained in this Note, at any time prior to the earlier of the (i) the first Conversion
Date of the respective tranche under this Note and (ii) the Maturity Date of the respective tranche under this Note, the Borrower
shall have the right, exercisable on not less than one (1) Trading Days prior written notice to the Holder of the Note, to prepay
the outstanding Principal Amount and interest (including any Default Interest) then due under the respective tranche under this
Note, in whole or in part, in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to the Holder of the Note at its registered addresses 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 amounts designated below to or upon the order of the Holder as specified by the Holder in
writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right
to prepay the respective tranche under this Note in accordance with this Section 1.9, the Borrower shall make payment to the Holder
of an amount in cash equal to the sum of: (w) 110% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid
interest on the Principal Amount to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to
in clauses (w) and (x), with respect to the tranche being prepaid. Upon delivery of the Optional Prepayment Notice to the Holder,
the Holder may not convert the Note, in whole or in part, during the period beginning on the date that the Optional Prepayment
Notice is provided to Holder and continuing until 5:00 PM EST on the respective Optional Prepayment Date. If the Borrower delivers
an Optional Prepayment Notice to the Holder and fails to pay the required amount to Holder on or before 5:00 PM EST on the respective
Optional Prepayment Date, then the Borrower shall forever lose its right to prepay this Note.


 


1.10 Repayment from
Proceeds. While any portion of the outstanding Principal Amount and interest (including Default Interest) under this Note are
due and owing, if the Company 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 Principal Amount and interest (including any Default Interest) then due 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 II. RANKING AND CERTAIN COVENANTS


 


2.1 Ranking and Security.
The obligations of the Borrower under this Note shall rank senior with respect to any and all Indebtedness incurred as of or following
the Issue Date. Notwithstanding the foregoing, nothing in this Section 2.1 shall prevent a subsidiary to obtain a mortgage secured
by real estate, either as a permanent mortgage or a construction loan, that may be senior to this Note.


 


2.2 Other Indebtedness.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly through any Subsidiary
or affiliate) incur or suffer to exist or guarantee any Indebtedness that is senior to or pari passu with (in priority of payment
and performance) the Borrower’s obligations hereunder. As used in this Section 2.2, the term “Borrower” means
the Borrower and any Subsidiary of the Borrower. As used herein, the term “Indebtedness” means (a) all indebtedness
of the Borrower for borrowed money or for the deferred purchase price of property or services, including any type of letters of
credit, but not including deferred purchase price obligations in place as of the Issue Date and as disclosed in the SEC Documents
or obligations to trade creditors incurred in the ordinary course of business, (b) all obligations of the Borrower evidenced by
notes, bonds, debentures or other similar instruments, (c) purchase money indebtedness hereafter incurred by the Borrower to finance
the purchase of fixed or capital assets, including all capital lease obligations of the Borrower which do not exceed the purchase
price of the assets funded, (d) all guarantee obligations of the Borrower in respect of obligations of the kind referred to in
clauses (a) through (c) above that the Borrower would not be permitted to incur or enter into, and (e) all obligations of the kind
referred to in clauses (a) through (d) above that the Borrower is not permitted to incur or enter into that are secured and/or
unsecured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured and/or unsecured
by) any lien or encumbrance on property (including accounts and contract rights) owned by the Borrower, whether or not the Borrower
has assumed or become liable for the payment of such obligation. Notwithstanding the foregoing, nothing in this Section 2.2 shall
prevent a subsidiary to obtain a mortgage secured by real estate, either as a permanent mortgage or a construction loan, that may
be senior to this Note.


 


 


 






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2.3 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.


 


2.4 Restriction on
Stock Repurchases and Debt Repayments. 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, or repay any pari passu or subordinated indebtedness
of Borrower outside the ordinary course of business.


 


2.5 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 may be conditioned on a specified use of the proceeds of disposition, but otherwise such consent
shall not be unreasonably withheld, conditioned, or delayed.


 


2.6 Advances and Loans;
Affiliate Transactions. 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, make advances to or enter into any transaction with 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 Issue Date and which the Borrower has informed
Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary
course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, repay any
affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such party
outside the ordinary course of business.


 


2.7 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 Twenty Five Thousand Dollars ($25,000), will be assessed and will become immediately due and payable to the Holder
at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's expectation that
this amount will tack back to the Issue Date).


 


2.8 Preservation of
Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, (a) change the nature of its business; (b) sell, divest, change the structure of any material
assets other than in the ordinary course of business; or (c) enter into any variable rate transactions or Merchant Cash Advance
transactions. In addition, so long as the Borrower shall have any obligation under this Note, 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. Furthermore, so long as the Borrower shall have any obligation under this Note,
the Borrower shall not, without the Holder’s written consent, solicit any offers for, respond to any unsolicited offers for,
or conduct any negotiations with, any other person or entity with respect to any Variable Rate Transaction or investment.


 


2.9 Noncircumvention.
The Company hereby covenants and agrees that the Company 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.


 


 


 






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2.10 Lost, Stolen
or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note.


 


ARTICLE III. EVENTS OF DEFAULT


 


It shall be considered
an event of default if any of the following events listed in this Article III (each, an “Event of Default”) shall occur:


 


3.1 Failure to Pay
Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this Note, whether
at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.


 


3.2 Conversion and
the Shares. The Borrower (i) fails to issue Conversion Shares 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 the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, (iii) reserve the Reserved Amount at all times, or (iii) the Borrower 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 the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note, or 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 Conversion Shares 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 two (2) Trading Days after the Holder shall have delivered a Notice
of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an Event
of Default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower
to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in
order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of
a demand from the Holder.


 


3.3 Breach of Agreements
and Covenants. The Borrower breaches any material agreement, covenant or other material term or condition contained in the
Purchase Agreement, this Note, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given
in writing pursuant hereto or in connection herewith or therewith.


 


3.4 Breach of Representations
and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this Note, the Irrevocable Transfer
Agent Instructions or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or
therewith 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.


 


3.5 Receiver or Trustee.
The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, 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.


 


3.6 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 $100,000, 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.


 


3.7 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.


 


 


 






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3.8 Delisting of Common
Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the Over the Counter Bulletin
Board, the OTCQB Market, any level of the OTC Markets, or any level of the Nasdaq Stock Market or the New York Stock Exchange (including
the NYSE American).


 


3.9 Failure to Comply
with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements of the
1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act. It shall be an Event of Default
under this Section 3.9 if the Borrower shall file any Notification of Late Filing on Form 12b-25 with the SEC.


 


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


 


3.11 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.


 


3.12 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).


 


3.13 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.


 


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


 


3.15 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.


 


3.16 DTC “Chill”.
The DTC places a “chill” (i.e. a restriction placed by DTC on one or more of DTC’s services, such as limiting
a DTC participant’s ability to make a deposit or withdrawal of the security at DTC) on any of the Borrower’s securities.


 


3.17 Illegality.
Any court of competent jurisdiction issues an order declaring this Note, the Purchase Agreement or any provision hereunder or thereunder
to be illegal.


 


3.18.
DWAC Eligibility. In addition to the Event of Default in Section 3.16, the Common Stock is otherwise not eligible for trading
through the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at
Custodian programs.


 


3.19 Cross-Default.
The declaration of an event of default by any lender or other extender of credit to the Company under any notes, loans, agreements
or other instruments of the Company evidencing any Indebtedness of the Company (including those filed as exhibits to or described
in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.


 


3.20 Variable Rate
Transactions; Dilutive Issuances. The Borrower (i) issues shares of Common Stock (or convertible securities or Purchase Rights)
pursuant to an equity line of credit of the Company or otherwise in connection with a Variable Rate Transaction (whether now existing
or entered into in the future), (ii) adjusts downward the “floor price” at which shares of Common Stock (or convertible
securities or Purchase Rights) may be issued under an equity line of credit or otherwise in connection with a Variable Rate Transaction
(whether now existing or entered into in the future), or (iii) a Dilutive Issuance is triggered as provided in this Note.


 


 


 






    	 	12	 



     


    

 


3.21 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 marketplace or
exchange).


 


3.22 Inside Information.
Any attempt by the Borrower or its officers, directors, and/or affiliates to intentionally 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


 


3.23 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, except due to the Holder’s
actions or inactions, 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/or (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


3.24 Delisting or
Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock (i) is
suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level of the
OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American.


 


3.25 Rights and Remedies
Upon an Event of Default. Upon the occurrence and during the continuation of any Event of Default specified in this Article
III, this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount (the “Default Amount”) equal to the Principal Amount then outstanding plus accrued interest (including
any Default Interest) through the date of full repayment multiplied by 150%. Holder may, in its sole discretion, determine to accept
payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion formula set forth in Section
1.2 shall apply. Upon an uncured Event of Default, all amounts payable hereunder shall immediately become due and payable, all
without demand, presentment or notice, all of which hereby are expressly waived by the Borrower, 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, including, without limitation, those set forth in Section 3.26 below. Further, if a breach of Sections
3.2, 3.9, and/or 3.23 occurs or is continuing after the six (6) month anniversary of the Issue Date, then the Holder shall be entitled
to use the lowest closing bid price during the delinquency period as a base price for any conversion hereunder (for example, if
the lowest closing bid price during the delinquency period is $0.50 per share and the conversion discount is 50%, the Holder may
elect to convert future conversions at $0.25 per share).


 


 


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 of the Holder existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.


 


4.2 Notices. All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-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 e-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:


 


 


 






    	 	13	 



     


    

 


If to the Borrower, to:


 


CANNAPHARMARX, INC.


3600 888-3rd St. SW


Calgary, Alberta, Canada T2P5C5


Attention: Dominic Colvin


e-mail: info@cannapharmarx.com


 


With a copy by e-mail only to (which copy shall not
constitute notice):


 


Brinen & Associates, LLC


90 Broad Street, Tenth Floor


New York, New York 10004


 


Attn:     Joshua D. Brinen, Esq.


 


Telephone (212) 330-8151


Facsimile (212) 227-0201


 


service@brinenlaw.com


 


If to the Holder:


INVESTOR


 


With a copy by e-mail only to (which copy shall not
constitute notice):


 


INVESTOR ATTORNEY


 


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


 


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


 


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


 


4.6 Governing Law;
Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State
of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning
the transactions contemplated by this Note or any other agreement, certificate, instrument or document contemplated hereby shall
be brought only in the state courts located in the state of New York or federal courts located in the state of New York. The Borrower
hereby irrevocably waives 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, 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 TRANSACTIONS CONTEMPLATED HEREBY. 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 Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party in any action
or dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated hereby
or thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.


 


 


 






    	 	14	 



     


    

 


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.
The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement and the documents entered into in connection
herewith and therewith.


 


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 Change
in Control 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.


 


4.10 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.


 


4.11 Construction;
Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 


4.12 Usury. 
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any
time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any
right or remedy under this Note.  Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed
and provided that the total liability of the Company under this Note for payments which under the applicable law are in the nature
of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other
sums which under the applicable law in the nature of interest that the Company may be obligated to pay under this Note exceed such
Maximum Rate.  It is agreed that if the maximum contract rate of interest allowed by applicable law and applicable to this
Note is increased or decreased by statute or any official governmental action subsequent to the Issue Date, the new maximum contract
rate of interest allowed by law will be the Maximum Rate applicable to this Note from the effective date thereof forward, unless
such application is precluded by applicable law.  If under any circumstances whatsoever, interest in excess of the Maximum
Rate is paid by the Company to the Holder with respect to indebtedness evidenced by this the Note, such excess shall be applied
by the Holder to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such
excess to be at the Holder’s election.


 


 


 






    	 	15	 



     


    

 


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


 


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, or amendment to a security that was originally issued before the Issue Date, with any term that the Holder reasonably
believes is more favorable to the holder of such security or with a term in favor of the holder of such security that the Holder
reasonably believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify the Holder of such
additional or more favorable term within one (1) business day of the issuance and/or amendment (as applicable) of the respective
security, and (ii) such term, at Holder’s option, shall become a part of the transaction documents with the Holder (regardless
of whether the Borrower complied with the notification provision of this Section 4.14). 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, and original issue discounts. If Holder elects to have
the term become a part of the transaction documents with the Holder, then the Borrower shall immediately deliver acknowledgment
of such adjustment in form and substance reasonably satisfactory to the Holder (the “Acknowledgment”) within one (1)
business day of Borrower’s receipt of request from Holder (the “Adjustment Deadline”), provided that Borrower’s
failure to timely provide the Acknowledgement shall not affect the automatic amendments contemplated hereby. If the Acknowledgement
is not delivered by the Adjustment Deadline, then $1,000.00 per day shall be added to the balance of the Note for each day beyond
the Adjustment Deadline that the Borrower fails to deliver such Acknowledgement. In addition, the Holder shall have the right,
at any time until the Note is satisfied in its entirety, and upon written notice to the Borrower, to purchase an additional convertible
promissory note from the Borrower, with the exact same terms and conditions as provided in this Note (with the understanding that
the Borrower shall execute the form of this Note and all related transaction documents with updated dates within three (3) business
days after the Holder exercises such right).


 


4.15 Dispute Resolution.
In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount,
Issue, 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 one (1) Trading Day 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 one (1) Trading Day 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 one (1) Trading Day, submit (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, 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 one (1) Trading
Day 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.


 


 


[signature page follows]


 


 


 


 






    	 	16	 



     


    

 


IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by its duly authorized officer on January 8, 2020.


 


CANNAPHARMARX, INC.


 


 


	By:	 	 
	 	Name: Dominic Colvin	 
	 	Title:   Chief Executive Officer	 


 


 


 


 


 


 






    	 	17	 



     


    

 


EXHIBIT A -- NOTICE OF CONVERSION


 


The undersigned hereby
elects to convert $______________ principal amount of the Note (defined below) 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 CANNAPHARMARX, INC., a
Delaware corporation (the “Borrower”), according to the conditions of the Senior Convertible Promissory Note of the
Borrower dated as of January 8, 2020 (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 Agent Commission 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:
	 	 	 
	 	 	
        INVESTOR

         

         



 


	 	 	Date of Conversion:	                                           
	 	 	Applicable Conversion Price:	$
	 	 	Costs Incurred by the Undersigned to Convert the Note into Shares of Common Stock:	
         

        $ _________________

	 	 	Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:	
         

                                                   

	 	 	Amount of Principal Balance Due remaining Under the Note after this conversion:	
         

                                                   

	 	 	 	 


 


	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Date:	 	 


 


 


 


 


 






    	 	18	 



     


    

 


EXHIBIT B


 


(see attached)


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	19