Exhibit 4.1


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


Original Issue Date: August 15, 2019


 


Principal Amount: $504,000.00


 


Purchase Price: $420,000.00


 


CONVERTIBLE NOTE


DUE AUGUST 15, 2020


 


THIS CONVERTIBLE NOTE
is one of a series of duly authorized and validly issued Notes of CONVERSION LABS, INC., a Delaware corporation, (the “Borrower”),
having its principal place of business at 800 Third Avenue, Suite 2800, New York, NY 10022, email: justin@jlsventures.com,
due August 15, 2020 (this note, the “Note” and, collectively with the other notes of such series,
the “Notes”).


 


FOR VALUE RECEIVED,
Borrower promises to pay to ______________________, or its registered assigns (the “Holder”), with an address at: _____________________________________________, or shall have paid pursuant to the terms hereunder, the principal sum of Five
Hundred and Four Thousand Dollars ($504,000.00) on August 15, 2020 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest, if any, to
the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof.


 


This Note is subject to the following
additional provisions:


 


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


 


“Alternate Consideration”
shall have the meaning set forth in Section 5(e).


 




    1


     


    

 


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


 


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


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are required by law or other governmental action to close.


 


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


 


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


 


“Closing Price”
means on any particular date (a) the last reported closing bid price per share of Common Stock on such date on the Trading Market
(as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there is no such price on such date, then the closing
bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 p.m. (New York
City time)), or (c) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are
then reported in the “pink sheets” published by OTC Pink Marketplace (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares
of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holder and reasonably acceptable to Borrower, the fees and expenses of which shall be
paid by Borrower.


 




    2


     


    

 


“Conversion”
shall have the meaning ascribed to such term in Section 4.


 


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


 


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


 


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


 


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


 


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


 


“Fundamental Transaction”
shall have the meaning set forth in Section 5(d).


 


“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note divided by the
Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an
Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the
date the Mandatory Default Amount is either (x) demanded (if demand or notice is required to create an Event of Default) or otherwise
due or (y) paid in full, whichever has a higher VWAP, or (ii) 120% of the outstanding principal amount of this Note and (b) all
other amounts, costs, expenses and liquidated damages due in respect of this Note.


 


“New York Courts”
shall have the meaning set forth in Section 9(d).


 


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


 


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


 


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


 


“Other Holders”
means holders of Other Notes.


 


“Other Notes”
means Notes nearly identical to this Note issued to other Holders pursuant to the Purchase Agreement.


 


“Permitted
Indebtedness” means (a) any liabilities for borrowed money or amounts owed not in excess of $100,000 in the aggregate
(other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto) not affecting more than $100,000 in the aggregate, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; (c) the present value of any
lease payments not in excess of $100,000 due under leases required to be capitalized in accordance with GAAP, and (d) any liabilities
for borrowed money that are junior to the Note pursuant to an intercreditor agreement acceptable to Purchasers, and the holders
of which are not granted any security interest, including a credit line of up to $1,000,000 with a financial institution engaged
in providing credit whose business does not generally include equity investing.


 




    3


     


    

 


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


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of August 15, 2019 among Borrower and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


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


 


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


 


“Successor Entity” shall have the meaning set forth in
Section 5(e).


 


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


 


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


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is
then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if any of the Nasdaq
markets or exchanges is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace
maintained by the OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the volume weighted average price of the Common Stock on the first such facility (or a similar organization or
agency succeeding to its functions of reporting prices), or (d) in all other cases, the fair market value of a share of
Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of
the Securities then outstanding and reasonably acceptable to Borrower, the fees and expenses of which shall be paid by
Borrower.


 




    4


     


    

 


Section 2. Interest
and General Provisions.


 


a) Interest.
Interest shall not be payable on this Note prior to the occurrence of an Event of Default but shall be payable in connection with
an Event of Default as described in this Note and as may be further awarded in connection with collection proceedings.


 


b) Payment Grace
Period. The Borrower shall not have any grace period to pay any monetary amounts due under this Note.


 


c) Conversion Privileges.
The Conversion Rights set forth in Section 4 shall remain in full force and effect immediately from the date hereof and until
the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on the Maturity
Date, unless previously converted into Common Stock in accordance with Section 4 hereof.


 


d) Application of
Payments. Interest on this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.
Payments made in connection with this Note shall be applied first to amounts due hereunder other than principal and interest,
thereafter to interest and finally to principal.


 


e) Pari Passu.
Except as otherwise set forth herein, all payments made on this Note and the Other Notes and all actions taken by the Borrower
with respect to this Note and the Other Notes, shall be made and taken pani passu with respect to this Note and the Other
Notes. Notwithstanding anything to the contrary contained herein or in the Transaction Documents, it shall not be considered non-pari
passu for a Holder or Other Holder to elect to receive interest paid in Common Stock or for the Company to actually pay interest
in Common Stock to such electing Holder or Other Holder.


 


f) Manner and Place
of Payment. Principal and interest on this Note and other payments in connection with this Note shall be payable at the Holder’s
offices as designated above in lawful money of the United States of America in immediately available funds without set-off, deduction
or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower shall instead make its payment pursuant to the
assignee’s instructions upon receipt of written notice thereof. Except as set forth herein, this Note may not be prepaid
or mandatorily converted without the consent of the Holder.


 


Section 3. Registration
of Transfers and Exchanges.


 


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


 


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


 


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


 




    5


     


    

 


Section 4. Conversion.


 


a) Voluntary Conversion.
At any time after the Original Issue Date until this Note is no longer outstanding, this Note including interest accrued hereon
shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time
to time (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering
to Borrower a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”),
specifying therein the principal amount of this Note and accrued interest, if any, to be converted and the date on which such
conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions
hereunder, the Holder shall not be required to physically surrender this Note to Borrower unless the entire principal amount of
this Note has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this
Note in an amount equal to the applicable conversion. The Holder and Borrower shall maintain records showing the principal amount(s)
converted and the date of such conversion(s). Borrower may deliver an objection to any Notice of Conversion within one (1) Business
Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling
and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledges and
agrees that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note may be less than the amount stated on the face hereof.


 


b) Conversion Price.
The conversion price for the principal and interest, if any, in connection with voluntary conversions by the Holder shall be $0.23
per share of Common Stock, subject to adjustment herein (the “Conversion Price”). In the event the average
VWAP for the consecutive ten (10) Trading Days preceding but not including either or both of the ninety (90) day and one hundred
and eighty (180) day anniversary of the Original Issue Date of this Note is less than the then Conversion Price in effect either
or both on such ninety (90) day and one hundred and eighty (180) day anniversary, then the Conversion Price with respect to unconverted
Principal and interest on the Note shall be reduced (and only reduced) to eighty percent (80%) of the VWAP for the ten (10) Trading
Days following (but not including) either or both of such ninety (90) day and one hundred and eighty (180) day anniversary date,
subject to further reduction.


 


c) Mechanics of
Conversion.


 


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


 


ii.
Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share
Delivery Date”), Borrower shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing
the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective
Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase
Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note. Borrower shall use its
best efforts to deliver any certificate or certificates required to be delivered by Borrower under this Section 4(c) electronically
through the Depository Trust Company or another established clearing corporation performing similar functions.


 




    6


     


    

 


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


 


iv. Obligation
Absolute; Partial Liquidated Damages. Borrower’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to Borrower or any violation or alleged violation of law by
the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of Borrower
to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall
not operate as a waiver by Borrower of any such action Borrower may have against the Holder. In the event the Holder of this Note
shall elect to convert any or all of the outstanding principal amount hereof, Borrower may not refuse conversion based on any
claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or
for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or
part of this Note shall have been sought and obtained, and Borrower posts a surety bond for the benefit of the Holder in the amount
of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect
until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder
to the extent it obtains judgment. In the absence of such injunction, Borrower shall issue Conversion Shares or, if applicable,
cash, upon a properly noticed conversion. If Borrower fails for any reason to deliver to the Holder such certificate or certificates
pursuant to Section 4(c)(ii) by the Share Delivery Date, Borrower shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day
on the fifth (5th) Trading Day after such liquidated damages being to accrue) for each Trading Day after such Share
Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for Borrower’s failure to deliver
Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise
of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under
applicable law.


 




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v.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if Borrower fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder or Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon
the conversion relating to such Share Delivery Date (a “Buy-In”), then Borrower shall (A) pay in cash to the
Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the
principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if Borrower had timely complied with its delivery requirements
under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, Borrower shall be required to pay the Holder $1,000. The Holder shall provide Borrower written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of Borrower, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure
to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms
hereof.


 


vi. Reservation
of Shares Issuable Upon Conversion. Borrower covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note as herein provided, free from
preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the
Notes), not less than 150% of the aggregate number of shares of the Common Stock as shall (subject to the terms and conditions
set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the
conversion of the then outstanding principal amount of this Note and interest which has accrued and would accrue on such principal
amount assuming such principal amount was not converted through the Maturity Date. Borrower covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 


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


 




    8


     


    

 


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


 


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


 




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Section 5. Certain Adjustments.


 


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


 


b)
Subsequent Equity Sales. In addition to the reductions of the Conversion Price described in Section 4(b), if, at any time
while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells
or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or
other disposition), whether or not contingent on the occurrence of any event or circumstance and whether or not such event, circumstance
or contingency has occurred or in likely to occur, any Common Stock or Common Stock Equivalents entitling any Person to acquire
Common Stock 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”) (if the holder of the
Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive Common Stock at an effective price per share that is lower
than the Conversion Price, whether or not contingent on the occurrence of any event or circumstance and whether or not such event,
circumstance or contingency has occurred or in likely to occur, 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 to equal the Base Conversion
Price, subject to adjustment for reverse and forward stock splits and the like. Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b)
in respect of an Exempt Issuance. 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
conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in writing, no later
than the Trading Day following the sooner of the agreement to or actual issuance of any Common Stock or Common Stock Equivalents
subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion
price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.


 




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c) Subsequent Rights
Offerings. In addition to any adjustments pursuant to Sections 5(a) and (b) above, if at any time Borrower grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would
result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


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


 




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e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) Borrower, directly or indirectly, in one or
more related transactions effects any merger or consolidation of Borrower with or into another Person, (ii) Borrower, directly
or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) Borrower, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) Borrower, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this
Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion
of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of Borrower, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior
to such Fundamental Transaction (without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes
of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction,
and Borrower shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such Fundamental Transaction. Borrower shall cause any successor
entity in a Fundamental Transaction in which Borrower is not the survivor (the “Successor Entity”) to assume
in writing all of the obligations of Borrower under this Note and the other Transaction Documents (as defined in the Purchase
Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably
satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall,
at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental
Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares
of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic
value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the
other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of Borrower and shall assume all of the obligations of Borrower under this Note and the other Transaction
Documents with the same effect as if such Successor Entity had been named as Borrower herein.


 




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


 


g) Notice to the Holder.


 


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


 


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


 


Section 6. Prepayment
and Redemption. This Note may not be prepaid, redeemed or mandatorily converted without the consent of the Holder.


 




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Section 7. Negative Covenants.
As long as any portion of this Note remains outstanding, unless the holders of at least 51% in principal amount of the then outstanding
Notes shall have otherwise given prior written consent, Borrower shall not, and shall not permit any of the Subsidiaries to, directly
or indirectly:


 


a) other than Permitted Indebtedness,
enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but
not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;


 


b) other than Permitted
Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of its property or
assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


c) amend its charter
documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely
affects any rights of the Holder;


 


d) repay, repurchase
or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common
Stock Equivalents other than as to the Conversion Shares as permitted or required under the Transaction Documents;


 


e) redeem, defease,
repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether
by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other
than the Notes if on a pro-rata basis), whether by way of payment in respect of principal of (or premium, if any) or interest
on, such Indebtedness, the foregoing restriction shall also apply to Permitted Indebtedness from and after the occurrence of an
Event of Default;


 


f) declare or make
any dividend or other distribution of its assets or rights to acquire its assets to holders of shares of Common Stock, by way
of return of capital or otherwise including, without limitation, any distribution of cash, stock or other securities, property
or options by way of a dividend, spin off, reclassification, liquidation, distribution, preferential payments in connection with
any securities or debt issuances, corporate rearrangement, scheme of arrangement or other similar transaction;


 


g) issue any Common
Stock or Common Stock Equivalents except as permitted pursuant to the Purchase Agreement;


 


h) enter into any transaction
with any Affiliate of Borrower which would be required to be disclosed in any public filing with the Commission, unless such transaction
is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of Borrower (even if
less than a quorum otherwise required for board approval); or


 


i) enter into any agreement
with respect to any of the foregoing.


 


Section 8. Events of
Default.


 


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


 


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


 




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


 


iii. a default or event
of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under
(A) any of the Transaction Documents, including but not limited to failure to strictly comply with the provisions of the Transaction
Documents, or (B) any other material agreement, lease, document or instrument to which Borrower or any Subsidiary is obligated
(and not covered by clause (vi) below), which in the case of subsection (B) would reasonably be expected to have a Material Adverse
Effect;


 


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


 


v. Borrower or any
Subsidiary shall be subject to a Bankruptcy Event;


 


vi. Borrower or any
Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than
$50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise become due and payable;


 


vii. Borrower shall
be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in excess
of 30% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change
of Control Transaction);


 


viii. Borrower does
not meet the current public information requirements under Rule 144;


 


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


 


x. any Person shall
breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;


 




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xi.
any monetary judgment, writ or similar final process shall be entered or filed against Borrower, any subsidiary or any of their
respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 90 calendar days;


 


xii. any dissolution,
liquidation or winding up by Borrower or a material Subsidiary of a substantial portion of their business;


 


xiii. cessation of
operations by Borrower or a material Subsidiary;


 


xiv. the failure by
Borrower or any material Subsidiary to maintain any material intellectual property rights, personal, real property, equipment,
leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is not cured
with twenty (20) days after written notice to the Borrower from the Holder;


 


xv. an event resulting
in the Common Stock no longer being listed or quoted on a Trading Market, or notification from a Trading Market that the Borrower
is not in compliance with the conditions for such continued quotation and such non-compliance continues for twenty (20) days following
such notification;


 


xvi. a Commission or
judicial stop trade order or suspension from the Borrower’s Principal Trading Market;


 


xvii. the restatement
after the date hereof of any financial statements filed by the Borrower with the Commission for any date or period from two years
prior to the Original Issue Date and until this Note is no longer outstanding, if the result of such restatement would, by comparison
to the unrestated financial statements, have constituted a Material Adverse Effect. For the avoidance of doubt, any restatement
related to new accounting pronouncements shall not constitute a default under this Section;


 


xviii. the Borrower
effectuates a reverse split of its Common Stock without ten (10) days prior written notice to the Holder;


 


xix. a failure by Borrower
to increase the number of authorized shares of Common Stock within one hundred and twenty (120) days of the initial Closing Date;


 


xx. a failure by Borrower
to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms of this Note or any
other Transaction Document;


 


xxi. a default by the
Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties,
or the occurrence of an event of default under any such other agreement to which Borrower and Holder are parties which is not
cured after any required notice and/or cure period;


 


xxii. the occurrence
of an Event of Default under any Other Note; or


 




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xxiii.
any material provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms
thereof) cease to be valid and binding on or enforceable against the Borrower, or the validity or enforceability thereof shall
be contested by Borrower, or a proceeding shall be commenced by Borrower or any governmental authority having jurisdiction over
Borrower or Holder, seeking to establish the invalidity or unenforceability thereof, or Borrower shall deny in writing that it
has any liability or obligation purported to be created under any Transaction Document.


 


In the event
more than one grace, cure or notice period is applicable to an Event of Default, then the shortest grace, cure or notice period
shall be applicable thereto.


 


b) Remedies Upon Event of
Default, Fundamental Transaction and Change of Control Transaction. If any Event of Default or a Fundamental Transaction or
a Change of Control Transaction occurs, the outstanding principal amount of this Note, liquidated damages and other amounts owing
in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable
in cash at the Mandatory Default Amount. Commencing on the Maturity Date and also five (5) days after the occurrence of any Event
of Default interest on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note
to or as directed by Borrower. In connection with such acceleration described herein, the Holder need not provide, and Borrower
hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable
law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have
all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 8(b).
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.


 


Section 9. Miscellaneous.


 


a) 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, facsimile, or electronic mail, 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 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) upon receipt, when sent by electronic mail (provided confirmation
of transmission is electronically generated and keep on file by the sending party), or (c) 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: (i) if to Borrower, to: Conversion Labs, Inc., 800
Third Avenue, Suite 2800, New York, NY 10022, Attn: Justin Schreiber, CEO, email: justin@jlsventures.com, with a copy by fax only
to: Lucosky Brookman, 101 Wood Avenue South, Woodbridge, NJ 08830, Attn: Lawrence Metelitsa, Esq., fax: (732) 395-4401, and (ii)
if to the Holder, to: the address and fax number indicated on the front page of this Note, with an additional copy by fax only
to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, fax:
(212) 697-3575.


 




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


 


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


 


d) Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws
thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding. This Note shall be deemed an unconditional
obligation of Borrower for the payment of money and, without limitation to any other remedies of Holder, may be enforced against
Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute
in the jurisdiction where enforcement is sought. For purposes of such rule or statute, any other document or agreement to which
Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to determine Holder’s
rights hereunder or Borrower’s obligations to Holder are deemed a part of this Note, whether or not such other document
or agreement was delivered together herewith or was executed apart from this Note.


 


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


 




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f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances.


 


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


 


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


 


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


 


j) Amendment.
Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof waived without the
written consent of Borrower and the Holder.


 


k) Facsimile Signature.
In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic signature or other similar
electronic means, such signature shall create a valid and binding obligation of the Borrower with the same force and effect as
if such signature page were an original thereof.


 


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


 


(Signature Pages Follow)


 




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IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by an authorized officer as of the 15 day of Aug. 2019.


 





	 	CONVERSION LABS, INC.
	 	 	 
	 	By: 	/s/ Justin Schreiber
	 	 	Name: Justin Schreiber
	 	 	Title: CEO


 


	WITNESS:	 
	 	 
	/s/ Jennine Mare	 
	Jennine Mare	 


 








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ANNEX
A


 


NOTICE OF CONVERSION


 


The undersigned hereby
elects to convert principal under the Convertible Note Due August 15, 2020 of Conversion Labs, Inc., a Delaware corporation (the
“Company”), into shares of common stock (the “Common Stock”), of Borrower according to the
conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates
and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.


 


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


 


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


 


Conversion calculations:


 


Date to Effect Conversion: __________________________________


 


Principal Amount of Note to
be Converted: $ _____________________


 


Accrued Interest to be Converted,
if any: $ _______________________


 


Conversion Price: $ ____________________________


 


Number of shares of Common Stock
to be issued: _____________________


 


Signature: ____________________________________________________


 


Name: ______________________________________________________


 


Address for Delivery of Common
Stock Certificates: ____________________


____________________________________________________________


____________________________________________________________


 


Or


 


DWAC Instructions: ____________________________________________


 


Broker No: ____________________


 


Account No: ______________________


 





 


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