SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of August 30, 2019, by and between PROPANC BIOPHARMA,
INC., a Delaware corporation, with headquarters located at 302, 6 Butler Street, Camberwell, VIC 3124 Australia (the “Company”),
and AUCTUS FUND, LLC, a Delaware limited liability company, with its address at 545 Boylston Street, 2nd Floor, Boston,
MA 02116 (the “Buyer”).


 


WHEREAS:


 


A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);


 


B.
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
the 10% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$550,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company
(the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.


 


C.
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set
forth immediately below its name on the signature pages hereto; and


 


NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:


 


1.
PURCHASE AND SALE OF NOTE.


 


a.
Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees
to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature
pages hereto. In connection with the issuance of the Note, the Company shall issue a common stock purchase warrant to Buyer to
purchase 450,000 shares of the Company’s common stock (the “First Warrant”) as a commitment fee upon the terms
and subject to the limitations and conditions set forth in such First Warrant. In connection with the issuance of the Note, the
Company shall issue a common stock purchase warrant to Buyer to purchase 300,000 shares of the Company’s common stock (the
“Second Warrant”) as a commitment fee upon the terms and subject to the limitations and conditions set forth in such
Second Warrant. In connection with the issuance of the Note, the Company shall issue a common stock purchase warrant to Buyer
to purchase 225,000 shares of the Company’s common stock (the “Third Warrant”) as a commitment fee upon the
terms and subject to the limitations and conditions set forth in such Third Warrant (the First Warrant, Second Warrant, and Third
Warrant shall collectively be referred to herein as the “Warrants”).


 




    	 



    	 



    

 


b.
Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be
issued and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available
funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the
principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto,
and (ii) the Company shall deliver such duly executed Note and Warrant on behalf of the Company, to the Buyer, against delivery
of such Purchase Price.


 


c.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 7 and Section
8 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall
be 12:00 noon, Eastern Standard Time on or about August 30, 2019, or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may
be agreed to by the parties.


 


2.
REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:


 


a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any,
as are issuable (i) on account of interest on the Note (ii) as a result of the events described in Sections 1.3 and 1.4(g) of
the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement,
such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with
the Note, Warrants, and shares of Common Stock issuable upon exercise of the Warrants, the “Securities”) for its own
account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted
from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does
not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.


 


b.
Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D (an “Accredited Investor”).


 




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


 


d.
Information. The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue
to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any,
have been, and for so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the
Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will
not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section
3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware
of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.


 


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


 


f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the
Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to
the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions
of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred
to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”))
of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of
the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only
in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement. In the event that the Company does not accept the opinion of counsel
provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144
or Regulation S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer
liquidated damages of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the
Note, prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”).
If the Buyer elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at
the Conversion Price (as defined in the Note) at the time of payment.


 




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g.
Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the
1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates for such Securities):


 


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


 


The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security 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 Buyer agrees to sell all Securities,
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 Buyer with
respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline,
it will be considered an Event of Default pursuant to Section 3.2 of the Note.


 


h.
Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.


 


i.
Residency. The Buyer is a resident of the jurisdiction set forth in the preamble.


 




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3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:


 


a.
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.


 


b.
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this
Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance
and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized
by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Agreement and the other
documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.


 




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c.
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 100,000,000 shares
of Common Stock, of which approximately 1,008,541 shares are issued and outstanding; and (ii) 1,500,005 shares of preferred stock,
of which 500,001 are issued and outstanding. Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant
to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the Note and
any other convertible promissory note issued to the Buyer) exercisable for, or convertible into or exchangeable for shares of
Common Stock and 3,928,571 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital
stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock
of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in the SEC Documents, as of the
effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries,
or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution
or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents
true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate
of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms
of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof
in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s
Chief Executive on behalf of the Company as of the Closing Date.


 


d.
Issuance of Shares. The issuance of the Note is duly authorized and, upon issuance in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. The Conversion Shares are duly authorized and reserved for issuance
and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable,
and 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 Company and will not impose personal liability upon the holder thereof.


 


e.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to
issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.


 




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f.
No Conflicts. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation
for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset
of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time
or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any,
are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or
stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the
Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue
the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company
is not in violation of the listing requirements of the OTC Pink (the “OTC Pink”), the OTCQB or any similar quotation
system, and does not reasonably anticipate that the Common Stock will be delisted by the OTC Pink, the OTCQB or any similar quotation
system, in the foreseeable future nor are the Company’s securities “chilled” by DTC. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.


 




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g.
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies
of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in
the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to March 31, 2019, and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting principles to be reflected in such financial statements,
which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The
Company is subject to the reporting requirements of the 1934 Act. For the avoidance of doubt, filing of the documents required
in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall
satisfy all delivery requirements of this Section 3(g).


 


h.
Absence of Certain Changes. Since March 31, 2019, there has been no material adverse change and no material adverse development
in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act
reporting status of the Company or any of its Subsidiaries.


 


i.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 




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j.
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to
use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated in the future). Except as disclosed in the SEC Documents,
there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it
to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s
knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe
on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of their Intellectual Property.


 


k.
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.


 


l.
Tax Status. Other than with respect to the disclosures provided on Schedule 3(l): The Company and each of its Subsidiaries
has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment
or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited
by any taxing authority.


 


m.
Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could
obtain from third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction
with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property
to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company,
any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.


 




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n.
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby
is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event
or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties,
prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the
1933 Act).


 


o.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting
solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of
its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice
or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to
the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of
the Company and its representatives.


 


p.
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.


 


q.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 




    	 	10	 



    	 	 	 



    

 


r.
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and
operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of
the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of
the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since March 31, 2019, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.


 


s.
Environmental Matters.


 


(i)
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the
Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common
law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of
1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice
with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection
with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


(ii)
Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during
the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the
Company’s or any of its Subsidiaries’ business.


 




    	 	11	 



    	 	 	 



    

 


(iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


t.
Title to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would
not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 


u.
Internal Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.


 


v.
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee
or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the
Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or
employee.


 


w.
Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e.,
its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as
they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that
the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it
intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as
such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year
end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon
which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure
of the Borrower’s ability to continue as a “going concern” shall not, by itself, be a violation of this Section
3(w).


 




    	 	12	 



    	 	 	 



    

 


x.
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.


 


y.
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written
request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’
liability coverage, errors and omissions coverage, and commercial general liability coverage.


 


z.
Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended
on the basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance
Guide published by the SEC.


 


aa.
Shell Status. The Company represents that it is not a “shell” issuer and has never been a “shell”
issuer, or that if it previously has been a “shell” issuer, that at least twelve (12) months have passed since the
Company has reported Form 10 type information indicating that it is no longer a “shell” issuer. Further, the Company
will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of the Conversion Shares or (ii)
accept such opinion from Holder’s counsel.


 


bb.
No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 




    	 	13	 



    	 	 	 



    

 


cc.
Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or
indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other securities of the Company.


 


dd.
Sarbanes-Oxley Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder
that are effective as of the date hereof.


 


ee.
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company
or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. To the knowledge
of the Company, no executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to
be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions
of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.


 


ff.
Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations
or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement
and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay to the Buyer the Standard Liquidated
Damages Amount in cash or in shares of Common Stock at the option of the Company, until such breach is cured. If the Company elects
to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price
at the time of payment.


 


4.
COVENANTS.


 


a.
Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions
described in Section 7 and 8 of this Agreement.


 




    	 	14	 



    	 	 	 



    

 

b. Form D; Blue Sky
Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy
thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this
Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.


 


c. Use of Proceeds.
The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes and shall
not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise
or other person (except in connection with its currently existing direct or indirect Subsidiaries).


 


d. [intentionally omitted]


 


e. Expenses. The
Company shall reimburse Buyer for any and all expenses incurred by them in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees
for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions
in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated
by the Documents. When possible, the Company must pay these fees directly, including, but not limited to, any and all wire fees,
otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written
notice by the Buyer or the submission of an invoice by the Buyer. At Closing, the Company’s initial obligation with respect
to this transaction is to reimburse Buyer’s legal expenses shall be $5,000.00 plus the cost of wire fees.


 


f. Financial Information.
The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued
by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders
of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the avoidance
of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized
wire service shall satisfy the delivery requirements of this Section 4(f).


 




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g. Listing. The
Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the
Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing
of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC Pink, OTCQB or any equivalent replacement
exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New
York Stock Exchange (“NYSE”), or the NYSE American and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from
the OTC Pink, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued
eligibility of the Common Stock for listing on such exchanges and quotation systems. The Company shall pay any and all fees and
expenses in connection with satisfying its obligation under this Section 4(g).


 


h. Corporate Existence.
So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence and shall not sell all or substantially
all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the
Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations
hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on the OTC Pink, OTCQB, Nasdaq, NasdaqSmallCap, NYSE or AMEX.


 


i. No Integration.
The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be
integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.


 


j. Failure to Comply
with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements
of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.


 


k. [Intentionally Omitted].






l. Restriction on Activities.
Commencing as of the date first above written, and until the sooner of the six month anniversary of the date first written above
or payment of the Note in full, or full conversion of the Note, the Company shall not, directly or indirectly, without the Buyer’s
prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business; or (b) sell, divest,
acquire, change the structure of any material assets other than in the ordinary course of business.


 




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m. Legal Counsel Opinions.
Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for promptly supplying to the
Company’s transfer agent and the Buyer a customary legal opinion letter of counsel (the “Legal Counsel Opinion”)
to the effect that the sale of Conversion Shares by the Buyer or its affiliates, successors and assigns is exempt from the registration
requirements of the 1933 Act pursuant to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Conversion
Shares are not then registered under the 1933 Act for resale pursuant to an effective registration statement). Should the Company’s
legal counsel fail for any reason to issue the Legal Counsel Opinion, the Buyer may (at the Company’s cost) secure another
legal counsel to issue the Legal Counsel Opinion, and the Company will instruct its transfer agent to accept such opinion.


 


n. Par Value.
If the closing bid price at any time the Note is outstanding falls below $0.001, the Company shall cause the par value of its Common
Stock to be reduced to $0.00001 or less.


 


o. Breach of Covenants.
The Company agrees that if the Company breaches any of the covenants set forth in this Section 4, and in addition to any other
remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under Section 3.4 of the
Note, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option
of the Buyer, until such breach is cured, or with respect to Section 4(d) above, the Company shall pay to the Buyer the Standard
Liquidated Damages Amount in cash or shares of Common Stock, at the option of the Buyer, upon each violation of such provision.
If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at
the Conversion Price at the time of payment.


 


5. Transaction Expense
Amount. Upon Closing, the Company shall pay Forty Thousand and 00/100 United States Dollars (US$40,000.00) to Auctus Fund Management,
LLC (“Auctus Management”) to cover the Holder’s due diligence, monitoring, and other transaction costs incurred
for services rendered in connection herewith (the “Transaction Expense Amount”). The Transaction Expense Amount shall
be offset against the proceeds of the Note and shall be paid to Auctus Management upon the execution hereof.


 




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6. Transfer Agent Instructions.
The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the name of the Buyer
or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion
of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that
the Borrower proposes to replace its transfer agent, the Borrower shall 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. Prior to registration of the Conversion Shares under the 1933 Act or the date on which
the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular
date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in
this Section, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior
to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to
Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will
be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to
transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form)
any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when
required by the Note and this Agreement; and (iii) it will not fail 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 Buyer upon conversion of or otherwise pursuant to
the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s
obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any,
upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in
form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such
Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.


 




    	 	18	 



    	 	 	 



    

 


7. CONDITIONS PRECEDENT
TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to the Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:


 


a. The Buyer shall have
executed this Agreement and delivered the same to the Company.


 


b. The Buyer shall have
delivered the Purchase Price in accordance with Section 1(b) above.


 


c. The representations
and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date
as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.


 


d. No litigation, statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


8. CONDITIONS PRECEDENT
TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject
to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for
the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:


 


a. The Company shall have
executed this Agreement and delivered the same to the Buyer.


 


b. The Company shall have
delivered to the Buyer the duly executed Note and Warrants and in accordance with this Agreement.


 


c. The Irrevocable Transfer
Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by
the Company’s Transfer Agent.


 




    	 	19	 



    	 	 	 



    

 


d. The representations
and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing
Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received
a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with
respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’ resolutions relating to the
transactions contemplated hereby.


 


e. No litigation, statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


f. No event shall have
occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change
in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.


 


g. The Conversion Shares
shall have been authorized for quotation on the OTC Pink, OTCQB or any similar quotation system and trading in the Common Stock
on the OTC Pink, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTC Pink, OTCQB or any similar
quotation system.


 


h. The Buyer shall have
received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.


 




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9. GOVERNING
LAW; MISCELLANEOUS.


 


a. Governing Law.
This Agreement 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 Agreement,
the Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only in the state courts
located in the Commonwealth of Massachusetts or in the federal courts located in the Commonwealth of Massachusetts. The parties
to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER
ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.


 


b. Counterparts; Signatures
by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party
and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.


 


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


 


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


 


e. Entire Agreement;
Amendments. This Agreement, the Note and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.


 




    	 	21	 



    	 	 	 



    

 


f. 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, email, 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 email or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:


 


If to the Company,
to:


 


Propanc Biopharma, Inc.


302, 6 Butler Street


Camberwell, VIC 3124 Australia


Attn: James
Nathanielsz


E-mail: info@propanc.com


 


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


 


Lucosky Brookman LLP


101 Wood Avenue South


Woodbridge, NJ 08830


Attn: Joseph
Lucosky, Esq.


E-mail: jlucosky@lucbro.com


 


If to the Buyer:


 


Auctus Fund,
LLC


545 Boylston
Street, 2nd Floor


Boston, MA 02116


Attn: Lou Posner


Facsimile:
(617) 532-6420


 




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


 


Chad Friend,
Esq., LL.M.


Anthony L.G.,
PLLC


625 N. Flagler
Drive, Suite 600


West Palm Beach,
FL 33401


E-mail: CFriend@AnthonyPLLC.com


 


Each party shall provide
notice to the other party of any change in address.


 


g. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company
nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases
Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the
1934 Act, without the consent of the Company.


 


h. Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


i. Survival. The
representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing
hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify
and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.


 


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


 


k. No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party.


 


l. Remedies. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Agreement, that the Buyer 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 Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic
loss and without any bond or other security being required.


 




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m. Publicity. The
Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCQB
or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCQB (or other
applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations
(although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall
be provided with a copy thereof and be given an opportunity to comment thereon).


 


n. Indemnification.
In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder, and in addition
to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect, indemnify
and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect investors
and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a
result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising
out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of the Buyer or holder
of the Securities as an investor in the Company pursuant to the transactions contemplated by this Agreement. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law


 


[signature page follows]


 




    	 	24	 



    	 	 	 



    

 


IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


  


	PROPANC BIOPHARMA, INC.	 
	 	 	 
	By:	/s/ James Nathanielsz	 
	Name:	James Nathanielsz	 
	Title:	Chief Executive Officer	 


 


	AUCTUS FUND, LLC	 
	 	 	 
	By:	/s/ Lou Posner	 
	Name:	Lou Posner	 
	Title:	Managing Director	 


 


AGGREGATE SUBSCRIPTION AMOUNT:


 


	Aggregate Principal Amount of Note:	US$550,000.00
	 	 
	Aggregate Purchase Price:	US$550,000.00


 




    	 	25	 



    	 	 	 



    

 


SCHEDULE 3(I)


 


NONE


 




    	 	26	 



    	 	 	 



    

 


SCHEDULE 3(L)


 


Nothing in this Disclosure Schedule is intended
to broaden the scope of any representation or warranty contained in the Agreement or to create any covenant. Inclusion of any item
in this Disclosure Schedule (1) does not represent a determination that such item is material or establish a standard of materiality,
(2) does not represent a determination that such item did not arise in the ordinary course of business, (3) does not represent
a determination that the transactions contemplated by the Agreement require the consent of third parties, and (4) shall not constitute,
or be deemed to be, an admission to any third party concerning such item.


 


As part of its requirement for having a foreign
operating subsidiary, the Company is required to file an informational Form 5471 to the Internal Revenue Service (the “IRS”),
which is a form that explains the nature of the relationship between the foreign subsidiary and the parent company. From 2012 through
the 2014 the Company did not file this form in a timely manner. As a result of the non-timely filings, the Company has incurred
a penalty from the IRS in the amount of $10,000 per year, or $30,000, subject to additional interest penalties. As of January 18,
2018, an aggregate of $37,824.77 was due. The Company has initiated discussions with the IRS to coordinate payment of such penalties.
The IRS has filed a lien against the Company’s assets pending repayment or settlement of these penalties.


 






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