Document:

EXHIBIT 10.2

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION
AGREEMENT (this “Agreement”), dated as of November 6, 2014, by and among Aethlon Medical, Inc., a Nevada
corporation (the “Company”), and the subscribers identified on Schedule 1 hereto (each a “Subscriber”
and collectively “Subscribers”).

 

WHEREAS,
the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration
afforded by the provisions of Section 4(a)(2), Section 4(a)(6) and/or Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933,
as amended (the “1933 Act”).

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and such Subscriber shall purchase for an aggregate $450,000 (the “Purchase Price”)
(i) $500,000 principal amount (“Principal Amount”) of promissory notes of the Company (“Note”
or “Notes”), a form of which is annexed hereto as Exhibit A, convertible into shares of the Company’s
Common Stock, $0.001 par value (the “Common Stock”), at a per share conversion price set forth in the Notes
(“Conversion Price”); and (ii) share purchase warrants (the “Warrants”), in the form attached
hereto as Exhibit B, to purchase shares of the Company’s Common Stock (the “Warrant Shares”) (the
“Offering”). The Notes, shares of Common Stock issuable upon conversion of the Notes (the “Conversion
Shares”), the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”;

 

WHEREAS,
the aggregate proceeds of the sale of the Notes and the Warrants contemplated hereby shall be held in escrow by Grushko & Mittman,
P.C., 515 Rockaway Avenue, Valley Stream, New York 11581 (the “Escrow Agent”) pursuant to the terms of an Escrow
Agreement to be executed by the parties substantially in the form attached hereto as Exhibit C (the “Escrow Agreement”).

 

NOW, THEREFORE,
in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Subscriber hereby
agree as follows:

 

1.     Closing Date.
The “Closing Date” shall be the date that the Purchase Price is transmitted by wire transfer or otherwise credited
to or for the benefit of the Company. The consummation of the transactions contemplated herein shall take place at the office of
Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, upon the satisfaction or waiver of all conditions
to closing set forth in this Agreement.

 

2.     Notes. Subject
to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, each Subscriber shall purchase
and the Company, and the Company shall sell to each Subscriber a Note in the Principal Amount designated on Schedule 1 hereto
for each such Subscriber’s Purchase Price indicated thereon.

 

3.     Warrants.
On the Closing Date, the Company will issue and deliver the Warrants to the Subscribers. One Class A Warrant will be issued for
each two (2) Shares of Common Stock which will be issuable on the Closing Date assuming the complete conversion of the Notes on
the Closing Date at the Conversion Price. The exercise price to acquire a Warrant Share upon exercise of a Class A Warrant shall
be equal to $0.168, subject to reduction as described in the Class A Warrant. The Warrants shall be exercisable until five years
after the issue date of the Warrants.

 

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4.     Subscriber's Representations
and Warranties. Such Subscriber hereby represents and warrants to and agrees with the Company that:

 

(a)     Organization and Standing of
the Subscriber. Subscriber, to the extent applicable, is a corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation.

 

(b)     Authorization and
Power. Subscriber has the requisite power and authority to enter into and perform this Agreement and the other Transaction
Documents [as defined in Section 5(c)] and to purchase the Notes and Warrants being sold to it hereunder. The execution, delivery
and performance of this Agreement and the other Transaction Documents by Subscriber and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action, and no further consent or authorization
of Subscriber or its Board of Directors or stockholders, if applicable, is required. This Agreement and the other Transaction Documents
have been duly authorized, executed and delivered by Subscriber and constitute, or shall constitute when executed and delivered,
a valid and binding obligation of Subscriber, enforceable against Subscriber in accordance with the terms thereof.

 

(c)     No Conflicts. The execution,
delivery and performance of this Agreement and the other Transaction Documents and the consummation by Subscriber of the transactions
contemplated hereby and thereby or relating hereto do not and will not (i) result in a violation of Subscriber’s charter
documents, bylaws or other organizational documents, if applicable, (ii) conflict with nor constitute a default (or an event which
with notice or lapse of time or both would become a default) under any agreement to which Subscriber is a party, nor (iii) result
in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable
to Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate,
have a material adverse effect on Subscriber). Subscriber is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement and the other Transaction Documents nor to purchase the Securities in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence, Subscriber is assuming and relying upon the accuracy
of the representations and agreements of the Company herein.

 

(d)     Information on
Company. Such Subscriber has been furnished with or has had access at the EDGAR Website of the Commission to the Company's
Form 10-K filed on July 15, 2014 for the fiscal year ended March 31, 2014, and the financial statements included therein, together
with all subsequent filings made with the Commission available at the EDGAR website (hereinafter referred to collectively as the
"Reports"). In addition, such Subscriber may have received in writing from the Company such other information concerning
its operations, financial condition and other matters as such Subscriber has requested in writing, identified thereon as OTHER
WRITTEN INFORMATION (such other information is collectively, the "Other Written Information"), and considered all factors
such Subscriber deems material in deciding on the advisability of investing in the Securities.

 

(e)     Information on
Subscriber. Subscriber is, and will be at the time of the conversion of the Notes and exercise of the Warrants, an "accredited
investor", as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments
and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned
companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax
and other business matters as to enable Subscriber to utilize the information made available by the Company to evaluate the merits
and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative
investment. Subscriber has the authority and is duly and legally qualified to purchase and own the Securities. Subscriber is able
to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information set forth on
Schedule 1 hereto regarding Subscriber is accurate.

 

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(f)     Purchase of Notes
and Warrants. On the Closing Date, Subscriber will purchase its Note and Warrants as principal for its own account for investment
only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof.

 

(g)     Compliance with
Securities Act. Subscriber understands and agrees that the Securities have not been registered under the 1933 Act or any applicable
state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based
in part on the accuracy of the representations and warranties of the Subscriber contained herein), and that such Securities must
be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or
is exempt from such registration. In any event, and subject to compliance with applicable securities laws, the Subscriber may enter
into lawful hedging transactions in the course of hedging the position they assume and the Subscriber may also enter into lawful
short positions or other derivative transactions relating to the Securities, or interests in the Securities, and deliver the Securities,
or interests in the Securities, to close out their short or other positions or otherwise settle other transactions, or loan or
pledge the Securities, or interests in the Securities, to third parties who in turn may dispose of these Securities.

 

(h)     Conversion Shares
and Warrant Shares Legend. The Conversion Shares and Warrant Shares shall bear the following or similar legend:

 

“THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR 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.”

 

(i)     Notes and Warrants
Legend. The Notes and Warrants shall bear the following legend:

 

“NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE AND/OR 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.”

 

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(j)     Communication
of Offer. The offer to sell the Securities was directly communicated to Subscriber by the Company. At no time was Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form
of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with
such communicated offer.

 

(k)     Restricted Securities.
Subscriber understands that the Securities have not been registered under the 1933 Act and Subscriber will not sell, offer to sell,
assign, pledge, hypothecate or otherwise transfer any of the Securities unless pursuant to an effective registration statement
under the 1933 Act, or unless an exemption from registration is available. Notwithstanding anything to the contrary contained in
this Agreement, Subscriber may transfer (without restriction and without the need for an opinion of counsel) the Securities to
its Affiliates (as defined below) provided that each such Affiliate is an “accredited investor” under Regulation D
and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate”
of any person or entity means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect
common control with such person or entity. Affiliate includes each Subsidiary of the Company. For purposes of this definition,
“control” means the power to direct the management and policies of such person or firm, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.

 

(l)     No Governmental
Review. Subscriber understands that no United States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities nor have
such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(m)     Correctness of
Representations. Subscriber represents that the foregoing representations and warranties are true and correct as of the date
hereof and, unless Subscriber otherwise notifies the Company prior to the Closing Date, shall be true and correct as of the Closing
Date.

 

(n)     Survival. The
foregoing representations and warranties shall survive the Closing Date.

 

5.     Company
Representations and Warranties. The Company represents and warrants to and agrees with each Subscriber that:

 

(a)     Due Incorporation.
The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to carry on its business as presently conducted.
The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature
of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect. For purposes of this Agreement, a “Material Adverse Effect”
shall mean a material adverse effect on the financial condition, results of operations, prospects, properties or business of the
Company and its Subsidiaries taken as a whole. For purposes of this Agreement, “Subsidiary” means, with respect
to any entity at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which more than 30% of (i) the outstanding capital stock having (in the absence
of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in
the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such
trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such entity. As of the Closing Date, all of the Company’s Subsidiaries and the Company’s
ownership interest therein is set forth on Schedule 5(a).

 

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(b)     Outstanding
Stock. All issued and outstanding shares of capital stock and equity interests in the Company have been duly authorized and
validly issued and are fully paid and non-assessable.

 

(c)     Authority;
Enforceability. This Agreement, the Notes, the Conversion Shares, the Warrants, the Escrow Agreement, and any other agreements
delivered together with this Agreement or in connection herewith (collectively “Transaction Documents”) have
been duly authorized, executed and delivered by the Company and are valid and binding agreements of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company
has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations
thereunder.

 

(d)     Capitalization
and Additional Issuances. The authorized and outstanding capital stock of the Company and Subsidiaries on a fully diluted basis
as of the date of this Agreement and the Closing Date (not including the Securities) are set forth on Schedule 5(d). Except
as set forth on Schedule 5(d), there are no options, warrants, or rights to subscribe to, securities, rights, understandings
or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock or other equity
interest of the Company or any of the Subsidiaries. The only officer, director, employee and consultant stock option or stock incentive
plans or similar plans currently in effect or contemplated by the Company are described on Schedule 5(d).There are no outstanding
agreements or pre-emptive or similar rights affecting the Company's Common Stock.

 

(e)     Consents.
No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its Affiliates, the OTC Bulletin Board (the “Bulletin Board”) or the Company's shareholders
is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities. The Transaction
Documents and the Company’s performance of its obligations thereunder have been unanimously approved by the Company’s
Board of Directors. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority in the world, including without limitation, the United States, or elsewhere is required
by the Company or any Affiliate of the Company in connection with the consummation of the transactions contemplated by this Agreement,
except as would not otherwise have a Material Adverse Effect on the consummation of any of the other agreements, covenants or commitments
of the Company or any Subsidiary contemplated by the other Transaction Documents. Any such qualifications and filings will, in
the case of qualifications, be effective on the Closing and will, in the case of filings, be made within the time prescribed by
law.

 

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(f)     No Violation
or Conflict. Assuming the representations and warranties of the Subscriber in Section 4 are true and correct, neither the issuance
and sale of the Securities nor the performance of the Company’s obligations under this Agreement and all other agreements
entered into by the Company relating thereto by the Company will:

 

(i)     violate,
conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time
or both would be reasonably likely to constitute a default) under (A) the articles or certificate of incorporation, charter or
bylaws of the Company, (B) to the Company's knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or arbitrator having jurisdiction over the Company or over
the properties or assets of the Company or any of its Affiliates, (C) the terms of any bond, debenture, note or any other evidence
of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument
to which the Company or any of its Affiliates is a party, by which the Company or any of its Affiliates is bound, or to which any
of the properties of the Company or any of its Affiliates is subject, or (D) the terms of any "lock-up" or similar provision
of any underwriting or similar agreement to which the Company, or any of its Affiliates is a party except the violation, conflict,
breach, or default of which would not have a Material Adverse Effect; or

 

(ii)     result in
the creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of
its Affiliates except in favor of Subscribers as described herein; or

 

(iii)     except
as set forth in Schedule 5(f) and which the Company specifically acknowledges as outstanding and subject to reset, result
in the activation of any anti-dilution rights or a reset or repricing of any debt, equity or security instrument of any creditor
or equity holder of the Company, or the holder of the right to receive any debt, equity or security instrument of the Company except
for the Subscriber, nor result in the acceleration of the due date of any obligation of the Company; or

 

(iv)     result in
the triggering of any piggy-back or other registration rights of any person or entity holding securities of the Company or having
the right to receive securities of the Company.

 

(g)     The
Securities. The Securities upon issuance:

 

(i)     are, or will
be, free and clear of any security interests, liens, claims or other encumbrances, subject only to restrictions upon transfer under
the 1933 Act and any applicable state securities laws;

 

(ii)     have been, or will
be, duly and validly authorized and on the dates of issuance of the Conversion Shares upon conversion of the Notes, and the Warrant
Shares upon exercise of the Warrants, such Conversion Shares and Warrant Shares will be duly and validly issued, fully paid and
non-assessable and if registered pursuant to the 1933 Act and resold pursuant to an effective registration statement or if such
resale is exempt from registration under Rule 144 will be free trading, unrestricted and unlegended;

 

(iii)     will not
have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company
or rights to acquire securities of the Company;

 

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(iv)     will not
subject the holders thereof to personal liability by reason of being such holders; and

 

(v)     assuming
the representations and warranties of the Subscribers as set forth in Section 4 hereof are true and correct, will not result in
a violation of Section 5 under the 1933 Act.

 

(h)     Litigation.
There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates that would affect the
execution by the Company or the complete and timely performance by the Company of its obligations under the Transaction Documents.
Except as disclosed in the Reports, there is no pending or, to the best knowledge of the Company, basis for or threatened action,
suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates which litigation if adversely determined would have a Material Adverse Effect.

 

(i)     No Market
Manipulation. The Company and its Affiliates have not taken, and will not take, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of the Securities or affect the price at which the Securities may be issued or resold.

 

(j)     Information
Concerning Company. The Reports and Other Written Information contain all material information relating to the Company and
its operations and financial condition as of their respective dates as of which information is required to be disclosed therein.
Since June 30, 2014 and except as modified in the Reports and Other Written Information or in the Schedules hereto, there has been
no Material Adverse Event relating to the Company's business, financial condition or affairs. The Reports and Other Written Information
including the financial statements included therein do not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, taken as a whole, not misleading in light of the
circumstances and when made.

 

(k)     Solvency.
Based on the financial condition of the Company as of the Closing Date, (i) the Company’s fair saleable value of its assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements
and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on
or in respect of its debt).

 

(l)     Defaults.
The Company is not in violation of its articles of incorporation or bylaws. Except as set forth in Schedule 5(l), the Company
is (i) not in default under or in violation of any other material agreement or instrument to which it is a party or by which it
or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, (ii) not in default
with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental
authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint
of trade, unfair competition or similar matters, or (iii) not in violation of any statute, rule or regulation of any governmental
authority which violation would have a Material Adverse Effect.

 

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(m)     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 of any security of the Company nor solicited any offers to buy any security of the Company under circumstances
that would cause the offer of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and
regulations of the Bulletin Board. No prior offering will impair the exemptions relied upon in this Offering or the Company’s
ability to timely comply with its obligations hereunder. Neither the Company nor any of its Affiliates will take any action or
steps that would cause the offer or issuance of the Securities to be integrated with other offerings which would impair the exemptions
relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder. The Company will not
conduct any offering other than the transactions contemplated hereby that may be integrated with the offer or issuance of the Securities
that would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations
hereunder.

 

(n)     No General
Solicitation. Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act)
in connection with the offer or sale of the Securities.

 

(o)     No Undisclosed
Liabilities. Since June 30, 2014, except as disclosed in the Reports, the Company has no liabilities or obligations which are
material, individually or in the aggregate, other than those incurred in the ordinary course of the Company businesses since June
30, 2014 and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

(p)     No Undisclosed
Events or Circumstances. Since June 30, 2014, except as disclosed in the Reports and except as set forth in Schedule 5(p),
no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed in the Reports.

 

(q)     Banking.
Schedule 5(q) contains a list of all financial institutions at which the Company and Subsidiaries maintain deposit,
checking and other accounts. The list includes the accurate addresses of such financial institutions and account numbers of such
accounts.

 

(r)     Dilution.
The Company's executive officers and directors understand the nature of the Securities being sold hereby and recognize that the
issuance of the Securities will have a potential dilutive effect on the equity holdings of other holders of the Company’s
equity or rights to receive equity of the Company. The board of directors of the Company has concluded, in its good faith business
judgment, that the issuance of the Securities is in the best interests of the Company. The Company specifically acknowledges that
its obligation to issue the Conversion Shares upon conversion of the Notes and the Warrant Shares upon exercise of the Warrants
is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other
shareholders of the Company or parties entitled to receive equity of the Company.

 

(s)     No Disagreements
with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise between the Company and the accountants and lawyers previously and presently employed by the Company, including
but not limited to disputes or conflicts over payment owed to such accountants and lawyers, nor have there been any such disagreements
during the two years prior to the Closing Date.

 

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(t)     Investment Company.
Neither the Company nor any Affiliate of the Company is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

(u)     Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company,
has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees
or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution
made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or
(iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(v)     Reporting Company/Shell
Company. The Company is a publicly-held company subject to reporting obligations pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and has a class of Common Stock registered pursuant to Section 12(g)
of the 1934 Act. Pursuant to the provisions of the 1934 Act, the Company has timely filed all reports and other materials required
to be filed thereunder with the Commission during the preceding twelve months. As of the Closing Date, the Company is not a “shell
company” nor a “former shell company” as those terms are employed in Rule 144 under the 1933 Act.

 

(w)     Listing. The
Company's Common Stock is quoted on the Bulletin Board under the symbol AEMD. The Company has not received any pending oral or
written notice that its Common Stock is not eligible nor will become ineligible for quotation on the Bulletin Board nor that its
Common Stock does not meet all requirements for the continuation of such quotation and the Company satisfies all the requirements
for the continued quotation of its Common Stock on the Bulletin Board.

 

(x)     DTC Status.
The Company’s transfer agent is a participant in, and the Common Stock is eligible for transfer pursuant to, the Depository
Trust Company Automated Securities Transfer Program. The name, address, telephone number, fax number, contact person and email
address of the Company transfer agent is set forth on Schedule 5(x) hereto.

 

(y)     Company Predecessor
and Subsidiaries. Except as set forth in Schedule 5(a), the Company makes each of the representations contained in Sections
5(a), (b), (c), (d), (e), (f), (h), (j), (l), (o), (p), (q), (s), (t) and (u) of this Agreement, as same relate or could be applicable
to each Subsidiary. All representations made by or relating to the Company of a historical or prospective nature and all undertakings
described in Sections 9(g) through 9(l) shall relate, apply and refer to the Company and its predecessors. Except as set forth
on Schedule 5(a), the Company represents that it owns all of the equity of the Subsidiaries and rights to receive equity
of the Subsidiaries identified on Schedule 5(a), free and clear of all liens, encumbrances and claims. Except as set forth
on Schedule 5(a), no person or entity other than the Company has the right to receive any equity interest in the Subsidiaries.
The Company further represents that the Subsidiaries have not been known by any other name for the prior five years.

 

(z)    Correctness of
Representations. The Company represents that the foregoing representations and warranties are true and correct as of the date
hereof in all material respects, and, unless the Company otherwise notifies the Subscribers prior to the Closing Date, shall be
true and correct in all material respects as of the Closing Date; provided, that, if such representation or warranty is made as
of a different date, in which case such representation or warranty shall be true as of such date.

 

(AA)     Survival.
The foregoing representations and warranties shall survive the Closing Date.

 

    	9

    	 

    

 

6.     Regulation
D Offering/Legal Opinion. The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption
from the registration provisions of the 1933 Act afforded by Section 4(a)(2) or Section 4(a)(6) of the 1933 Act and/or Rule 506
of Regulation D promulgated thereunder. On the Closing Date, the Company will provide an opinion reasonably acceptable to the
Subscribers from the Company's legal counsel opining on the availability of an exemption from registration under the 1933 Act
as it relates to the offer and issuance of the Securities and other matters reasonably requested by Subscribers. A form of the
legal opinion is annexed hereto as Exhibit D. The Company will provide, at the Company's expense, to the Subscriber such
other legal opinions, if any, as are reasonably necessary in each Subscriber’s and such counsel’s opinion for the
issuance and resale of the Conversion Shares and Warrant Shares pursuant to an effective registration statement, Rule 144 under
the 1933 Act or an exemption from registration.

 

7.1.     Conversion of Notes.

 

(a)     Upon the conversion
of a Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering
an opinion of counsel, to assure that the Company's transfer agent shall issue stock certificates in the name of a Subscriber (or
its permitted nominee) or such other persons as designated by Subscriber and in such denominations to be specified at conversion
representing the number of shares of Common Stock issuable upon such conversion. The Company warrants that no instructions other
than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that the certificates
representing such shares shall contain no legend other than the legend set forth in Section 4(h). If and when a Subscriber sells
the Conversion Shares, assuming (i) a registration statement including such Conversion Shares for registration has been filed with
the Commission, is effective and the prospectus, as supplemented or amended, contained therein is current and (ii) Subscriber or
its agent confirms in writing to the transfer agent that Subscriber has complied with the prospectus delivery requirements, the
Company will reissue the Conversion Shares without restrictive legend and the Conversion Shares will be free-trading, and freely
transferable. In the event that the Conversion Shares are sold in a manner that complies with an exemption from registration, the
Company will promptly instruct its counsel to issue to the transfer agent an opinion permitting removal of the legend indefinitely,
if pursuant to Rule 144(b)(1)(i) of the 1933 Act, provided that Subscriber delivers all reasonably requested representations in
support of such opinion.

 

(b)     Each Subscriber will
give notice of its decision to exercise its right to convert its Note, interest, or part thereof by telecopying or otherwise delivering
a completed Notice of Conversion (a form of which is annexed as Exhibit A to the Note) to the Company via confirmed telecopier
transmission or otherwise pursuant to Section 13(a) of this Agreement. Subscriber will not be required to surrender the Note until
the Note has been fully converted or satisfied. Each date on which a Notice of Conversion is telecopied to the Company in accordance
with the provisions hereof by 6 PM Eastern Time (“ET”) (or if received by the Company after 6 PM ET, then the next
business day) shall be deemed a “Conversion Date.” The Company will itself or cause the Company’s transfer
agent to transmit the Company's Common Stock certificates representing the Conversion Shares issuable upon conversion of the Note
to Subscriber via express courier for receipt by Subscriber within five (5) business days after the Conversion Date (such fifth
day being the "Delivery Date"). In the event the Conversion Shares are electronically transferable, then delivery
of the Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Subscriber.
A Note representing the balance of the Note not so converted will be provided by the Company to Subscriber if requested by Subscriber,
provided Subscriber delivers the original Note to the Company.

 

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(c)     The Company understands
that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 7.1 hereof later than the Delivery
Date could result in economic loss to the Subscribers. As compensation to Subscribers for such loss, the Company agrees to pay
(as liquidated damages and not as a penalty) to each applicable Subscriber for late issuance of Conversion Shares in the form required
pursuant to Section 7.1 hereof upon Conversion of the Note, the amount of $100 per business day after the Delivery Date for each
$10,000 of Note principal amount and interest (and proportionately for other amounts) being converted of the corresponding Conversion
Shares which are not timely delivered. The Company shall pay any payments incurred under this Section upon demand. Furthermore,
in addition to any other remedies which may be available to the Subscribers, in the event that the Company fails for any reason
to effect delivery of the Conversion Shares within seven (7) business days after the Delivery Date, the relevant Subscriber will
be entitled to revoke all or part of the relevant Notice of Conversion by delivery of a notice to such effect to the Company whereupon
the Company and Subscriber shall each be restored to their respective positions immediately prior to the delivery of such notice,
except that the damages payable in connection with the Company’s default shall be payable through the date notice of revocation
or rescission is given to the Company.

 

7.2.     Mandatory
Redemption at Subscriber’s Election. Upon the occurrence of (i) an Event of Default (as defined in the Note or in this
Agreement), that continues for more than twenty (20) business days, (ii) a Change in Control (as defined below), or (iii) the liquidation,
dissolution or winding up of the Company, then at the Subscriber's election, the Company must pay to each Subscriber thirty (30)
business days after request by each Subscriber (“Calculation Period”), a sum of money determined by multiplying
up to the outstanding principal amount of the Note designated by each such Subscriber by 120%, plus accrued but unpaid interest
("Mandatory Redemption Payment"). The Mandatory Redemption Payment must be received by each Subscriber not later
than thirty (30) business days after request ("Mandatory Redemption Payment Date"). Upon receipt of the Mandatory
Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. For purposes of
this Section 7.2, “Change in Control” shall mean (i) the Company no longer having a class of shares publicly
traded or listed on a Principal Market (as defined in Section 9(b)), (ii) the Company becoming a Subsidiary of another entity (other
than a corporation formed by the Company for purposes of reincorporation in another U.S. jurisdiction), (iii) a majority of the
board of directors of the Company as of the Closing Date no longer serving as directors of the Company except due to natural causes,
and (iv) the sale, lease or transfer of substantially all the assets of the Company or Subsidiaries.

 

7.3.      Maximum
Conversion. A Subscriber shall not be entitled to convert on a Conversion Date that amount of a Note nor may the Company make
any payment including principal, interest, or liquidated or other damages by delivery of Conversion Shares in connection with
that number of Conversion Shares which would be in excess of the sum of (i) the number of shares of Common Stock beneficially
owned by such Subscriber and its Affiliates on a Conversion Date or payment date, and (ii) the number of Conversion Shares issuable
upon the conversion of the Note with respect to which the determination of this provision is being made on a calculation date,
which would result in beneficial ownership by Subscriber and its Affiliates of more than 4.99% of the outstanding shares of Common
Stock of the Company on such Conversion Date. For the purposes of the immediately preceding sentence, beneficial ownership shall
be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder.
Subject to the foregoing, the Subscriber shall not be limited to aggregate conversions of only 4.99% and aggregate conversions
by the Subscriber may exceed 4.99%. The Subscriber may increase the permitted beneficial ownership amount up to 9.99% upon and
effective after 61 days prior written notice to the Company. Subscriber may allocate which of the equity of the Company deemed
beneficially owned by Subscriber shall be included in the 4.99% amount described above and which shall be allocated to the excess
above 4.99%.

 

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7.4.     Injunction Posting of Bond. In the event a Subscriber shall elect to convert a Note or part thereof,
or exercise a Warrant, the Company may not refuse conversion or exercise based on any claim that Subscriber or anyone associated
or affiliated with Subscriber has been engaged in any violation of law, or for any other reason, unless, a final non-appealable
injunction from a court made on notice to Subscriber, restraining and or enjoining conversion of all or part of such Note or exercise
of such Warrant shall have been sought and obtained by the Company or the Company has posted a surety bond for the benefit of
Subscriber in the amount of 120% of the greater of the outstanding principal and accrued but unpaid interest of the Note, or aggregate
purchase price of the Conversion Shares, or 120% of the aggregate exercise price of the Warrants which are sought to be subject
to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds
of which shall be payable to Subscriber to the extent the judgment or decision is in Subscriber’s favor.

 

7.5.     RESERVED.

 

7.6.     Adjustments.
The Conversion Price, Warrant exercise price and amount of Conversion Shares and Warrant Shares shall be equitably adjusted and
as otherwise described in this Agreement, the Notes and Warrants.

 

7.7.     Redemption.
The Note shall not be redeemable or callable by the Company, except as described in the Note.

 

8.     Fees.

 

(a)     Commission.
The Company on the one hand, and each Subscriber (for himself only) on the other hand, agree to indemnify the other against and
hold the other harmless from any and all liabilities to any persons claiming brokerage commissions or finder’s fees on account
of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby or in connection with any investment in the Company at any time, whether or not such investment was consummated
and arising out of such party’s actions. The Company represents that there are no parties entitled to receive fees, commissions,
or similar payments in connection with the Offering except for a due diligence fee described on Schedule 8(a) hereto which
the Company agrees will be paid by the Company on the Closing Date (“Due Diligence Fee”). The Due Diligence
Fee recipient may participate in this Offering and may utilize its Note in lieu of a cash payment for such Due Diligence Fee recipient’s
Purchase Price.

 

(b)     Subscriber’s Legal Fees. The Company shall pay to Grushko & Mittman, P.C., a cash fee of
$15,000 (“Subscriber’s Legal Fees”) as reimbursement for services rendered to the Subscribers in connection
with this Agreement and the purchase and sale of the Notes and Warrants (the “Offering”). The Subscriber’s
Legal Fees and expenses will be payable out of funds held pursuant to the Escrow Agreement.

 

9.     Covenants of the
Company. The Company covenants and agrees with the Subscribers as follows:

 

(a)     Stop Orders.
Subject to the prior notice requirement described in Section 9(n), the Company will advise the Subscribers, within twenty-four
hours after it receives notice of issuance by the Commission, any state securities commission or any other regulatory authority
of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension
of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding
for any such purpose. The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of
any of the Securities, except as may be required by any applicable federal or state securities laws and unless contemporaneous
notice of such instruction is given to the Subscribers.

 

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(b)     Listing/Quotation.
The Company shall promptly secure the quotation or listing of the Conversion Shares and Warrant Shares upon each national securities
exchange, or automated quotation system upon which the Company’s Common Stock is quoted or listed and upon which such Conversion
Shares and Warrant Shares are or become eligible for quotation or listing (subject to official notice of issuance) and shall maintain
same so long as any Notes and Warrants are outstanding. The Company will maintain the quotation or listing of its Common Stock
on the American Stock Exchange, Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global Select Market, Bulletin Board, or New
York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock (the
“Principal Market”), and will comply in all respects with the Company's reporting, filing and other obligations
under the bylaws or rules of the Principal Market, as applicable. The Company will provide Subscribers with copies of all notices
it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market. As of the
date of this Agreement and the Closing Date, the Bulletin Board is and will be the Principal Market.

 

(c)     Market Regulations.
If required, the Company shall notify the Commission, the Principal Market and applicable state authorities, in accordance with
their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to
the Subscribers and promptly provide copies thereof to the Subscribers.

 

(d)     Filing Requirements.
From the date of this Agreement and until the last to occur of (i) all the Conversion Shares have been resold or transferred by
the Subscribers pursuant to a registration statement or pursuant to Rule 144(b)(1)(i), or (ii) the Notes and Warrants are no longer
outstanding (the date of such latest occurrence being the “End Date”), the Company will (A) cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the 1934 Act, (B) comply in all respects with its reporting
and filing obligations under the 1934 Act, (C) voluntarily comply with all reporting requirements that are applicable to an issuer
with a class of shares registered pursuant to Section 12(g) of the 1934 Act, if the Company is not subject to such reporting requirements,
and (D) comply with all requirements related to any registration statement filed pursuant to this Agreement. The Company will use
its best efforts not to take any action or file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said
acts until the End Date. Until the End Date, the Company will continue the listing or quotation of the Common Stock on a Principal
Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Principal Market. The Company agrees to timely file a Form D with respect to the Securities if required under Regulation
D and to provide a copy thereof to Subscribers promptly after such filing.

 

(e)     Use of Proceeds.
The proceeds of the Offering will be employed by the Company specifically for the purposes as disclosed on Schedule 9(e).
Except as disclosed on Schedule 9(e), the Purchase Price may not and will not be used for accrued and unpaid officer and
director salaries, payment of financing related debt, redemption of outstanding notes or equity instruments of the Company nor
non-trade obligations outstanding on the Closing Date. For so long as any Note is outstanding, the Company will not prepay any
financing related debt obligations, except equipment payments, nor redeem any equity instruments of the Company without the prior
consent of the Subscribers.

 

(f)     Reservation.
Prior to the Closing Date, the Company undertakes to reserve on behalf of Subscribers from its authorized but unissued Common Stock,
a number of shares of Common Stock equal to 150% of the amount of Common Stock necessary to allow Subscribers to be able to convert
the entire Notes and 100% of the amount of Warrant Shares issuable upon exercise of the Warrants (“Required Reservation”).
Failure to have sufficient shares reserved pursuant to this Section 9(f) at any time shall be a material default of the Company’s
obligations under this Agreement and an Event of Default under the Notes. If at any time Notes and Warrants are outstanding the
Company has insufficient Common Stock reserved on behalf of the Subscribers in an amount less than 125% of the amount necessary
for full conversion of the outstanding Notes principal and interest at the conversion price that would be in effect on every such
date and 100% of the Warrant Shares (“Minimum Required Reservation”), the Company will promptly reserve the
Minimum Required Reservation, or if there are insufficient authorized and available shares of Common Stock to do so, the Company
will take all action necessary to increase its authorized capital to be able to fully satisfy its reservation requirements hereunder,
including the filing of a preliminary proxy with the Commission not later than fifteen business days after the first day the Company
has less than the Minimum Required Reservation. The Company agrees to provide notice to the Subscribers not later than three days
after the date the Company has less than the Minimum Required Reservation reserved on behalf of the Subscriber.

 

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(g)     DTC Program.
At all times that Notes or Warrants are outstanding, the Company will employ as the transfer agent for the Common Stock, Conversion
Shares and Warrant Shares a participant in the Depository Trust Company Automated Securities Transfer Program.

 

(h)     Taxes.
From the date of this Agreement and until the End Date, the Company will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property
or business of the Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof
shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies
forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefore.

 

(i)     Insurance.
From the date of this Agreement and until the End Date, the Company will keep its assets which are of an insurable character insured
by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against
by companies in the Company’s line of business and location, in amounts and to the extent and in the manner customary for
companies in similar businesses similarly situated and located and to the extent available on commercially reasonable terms.

 

(j)     Books and
Records. From the date of this Agreement and until the End Date, the Company will keep true records and books of account in
which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance
with generally accepted accounting principles applied on a consistent basis.

 

(k)     Governmental
Authorities. From the date of this Agreement and until the End Date, the Company shall duly observe and conform in all material
respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or
assets.

 

(l)     Intellectual
Property. From the date of this Agreement and until the End Date, the Company shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use intellectual property owned or possessed by it and reasonably
deemed to be necessary to the conduct of its business, unless it is sold for value.

 

(m)     Properties.
From the date of this Agreement and until the End Date, the Company will keep its properties in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto; and the Company will at all times comply with each provision of all leases and claims to which
it is a party or under which it occupies or has rights to property if the breach of such provision could reasonably be expected
to have a Material Adverse Effect. The Company will not abandon any of its assets except for those assets which have negligible
or marginal value or for which it is prudent to do so under the circumstances.

 

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(n)     Confidentiality/Public
Announcement. From the date of this Agreement and until the End Date, the Company agrees that except in connection with a Form
8-K, Form 10-Q, Form 10-K and the registration statement or statements regarding the Subscribers’ Securities or in correspondence
with the Commission regarding same, it will not disclose publicly or privately the identity of the Subscribers unless expressly
agreed to in writing by Subscribers or only to the extent required by law and then only upon not less than three days prior notice
to Subscribers. In any event and subject to the foregoing, the Company undertakes to file a Form 8-K describing the Offering not
later than the fourth (4th) business day after the Closing Date; provided, however, that the Company may instead disclose
the Offering in a Quarterly Report on Form 10-Q so long as such report is filed no later than the fourth (4th) business
day after the Closing Date. Prior to the filing date of such Form 8-K (or 10-Q, as applicable), a draft in the final form (or a
draft of the description to be included in the 10-Q, if no 8-K will be filed to disclose the Offering) will be provided to Subscribers
for Subscribers’ review and approval. In the Form 8-K, if filed, the Company will specifically disclose the amount of Common
Stock outstanding immediately after the Closing. Upon  delivery by the Company to the Subscribers after the Closing Date
of any notice or information, in writing, electronically or otherwise, and while a Note, Conversion Shares or Warrants are held
by Subscribers, unless the  Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or Subsidiaries, the Company  shall within one business day after any such
delivery publicly disclose such  material,  non-public  information on a Report on Form 8-K. 
In the event that the Company believes that a notice or communication to Subscribers contains
material, non-public information relating to the Company or Subsidiaries, the Company shall so indicate to Subscribers prior to
delivery of such notice or information. Subscribers will be granted sufficient time to notify the Company that Subscribers elects
not to receive such information. In such case, the Company will not deliver such information to Subscribers. In the absence of
any such indication, Subscribers shall be allowed to presume that all matters relating to such notice and information do not
constitute material, non-public information relating to the Company or Subsidiaries.

 

(o)     Non-Public
Information. The Company covenants and agrees that except for the Reports, Other Written Information and schedules and exhibits
to this Agreement and the Transaction Documents, which information the Company undertakes to publicly disclose on the Form 8-K
described in Section 9(n) above, neither it nor any other person acting on its behalf will at any time provide Subscribers or its
agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto
Subscribers shall have agreed in writing to accept such information. The Company understands and confirms that Subscribers shall
be relying on the foregoing representations in effecting transactions in securities of the Company.

 

(p)     Negative Covenants.
So long as a Note is outstanding, without the consent of the Subscribers, the Company will not and will not permit any of its Subsidiaries
to directly or indirectly:

 

(i)     create,
incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest,
security title, mortgage, security deed or deed of trust, easement or encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Uniform Commercial Code or comparable law of any jurisdiction) (each, a “Lien”)
upon any of its property, whether now owned or hereafter acquired except for: (A) the Excepted Issuances (as defined in Section
12(a) hereof), and (B) (a) Liens imposed by law for taxes that are not yet due or are being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted accounting principles; (b) carriers’, warehousemen’s,
mechanics’, material men’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith and by
appropriate proceedings; (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation,
unemployment insurance and other social security laws or regulations; (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case
in the ordinary course of business; (e) Liens created with respect to the financing of the purchase of new property in the ordinary
course of the Company’s business up to the amount of the purchase price of such property; and (f) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not
secure any monetary obligations and do not materially detract from the value of the affected property (each of (a) through (f),
a “Permitted Lien”);

 

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(ii)     amend its certificate of incorporation, bylaws or its charter documents so as to
materially and adversely affect any rights of the Subscribers (an increase in the amount of authorized shares and an increase
in the number of directors will not be deemed adverse to the rights of the Subscribers);

 

(iii)     repay, repurchase
or offer to repay, repurchase or otherwise acquire or make any dividend or distribution in respect of any of its Common Stock,
preferred stock, or other equity securities other than to the extent permitted or required under the Transaction Documents;

 

(iv)     prepay or redeem
any financing related debt or past due obligations or securities outstanding as of the Closing Date, or past due obligations (except
with respect to vendor obligations, or any such obligations which in management’s good faith, reasonable judgment must be
repaid to avoid disruption of the Company’s businesses);

 

(q)     Seniority.
Except for Permitted Liens, until the Notes are fully satisfied or converted, the Company shall not grant nor allow any security
interest to be taken in any assets of the Company or any Subsidiary or any Subsidiary’s assets; nor issue any debt, equity
or other instrument which would give the holder thereof directly or indirectly, a right in any assets of the Company or any Subsidiary
or any right to payment equal to or superior to any right of the Subscribers as holders of the Notes in or to such assets or payment,
nor issue or incur any debt not in the ordinary course of business.

 

(r)     Notices.
For so long as the Subscribers hold any Securities, the Company will maintain a United States address and United States fax number
for notice purposes under the Transaction Documents.

 

10.     Covenants
of the Company Regarding Indemnification.

 

(a)     Indemnification.
The Company agrees to indemnify, hold harmless, reimburse and defend the Subscribers, the Subscribers’ officers, directors,
agents, counsel, Affiliates, members, managers, control persons, and principal shareholders, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Subscribers
or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or breach of any
representation or warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto in any Transaction Document,
or other agreement delivered pursuant hereto or in connection herewith, now or after the date hereof; or (ii) after any applicable
notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed
by the Company hereunder, or any other agreement entered into by the Company and Subscribers relating hereto.

 

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(b)     Indemnification
Procedures. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party
in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 10(b) and shall only relieve it from any liability which it may have to
such indemnified party under this Section 10(b), except and only if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume
and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not
be liable to such indemnified party under this Section 10(b) for any legal expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying
party shall have reasonably concluded that there may be reasonable defenses available to indemnified party which are different
from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be
deemed to conflict with the interests of the indemnifying party, the indemnified parties, as a group, shall have the right to select
one separate counsel, reasonably satisfactory to the indemnified and indemnifying party, and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying party as incurred.

 

11.     Additional Post-Closing
Obligations.

 

11.1.     Delivery
of Unlegended Shares.

 

(a)     Within three
(3) business days (such third business day being the “Unlegended Shares Delivery Date”) after the business day
on which the Company has received (i) a notice that Conversion Shares, or any other Common Stock held by Subscriber has been sold
pursuant to a registration statement or Rule 144 under the 1933 Act, (ii) a representation that the prospectus delivery requirements,
or the requirements of Rule 144, as applicable and if required, have been satisfied, (iii) the original share certificates representing
the shares of Common Stock that have been sold, and (iv) in the case of sales under Rule 144, customary representation letters
of the Subscriber and, if required, Subscriber’s broker regarding compliance with the requirements of Rule 144, the Company
at its expense, (y) shall deliver, and shall cause legal counsel selected by the Company to deliver to its transfer agent (with
copies to Subscriber) an appropriate instruction and opinion of such counsel, directing the delivery of shares of Common Stock
without any legends including the legend set forth in Section 4(h) above (the “Unlegended Shares”); and (z)
cause the transmission of the certificates representing the Unlegended Shares together with a legended certificate representing
the balance of the submitted Common Stock certificate, if any, to the Subscriber at the address specified in the notice of sale,
via express courier, by electronic transfer or otherwise on or before the Unlegended Shares Delivery Date.

 

(b)     In lieu of
delivering physical certificates representing the Unlegended Shares, upon request of Subscriber, so long as the certificates therefor
do not bear a legend and the Subscriber is not obligated to return such certificate for the placement of a legend thereon, the
Company shall cause its transfer agent to electronically transmit the Unlegended Shares by crediting the account of Subscriber’s
prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission system, if such transfer agent participates
in such DWAC system. Such delivery must be made on or before the Unlegended Shares Delivery Date.

 

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(c)     The Company understands
that a delay in the delivery of the Unlegended Shares pursuant to Section 11 hereof later than the Unlegended Shares Delivery Date
could result in economic loss to a Subscriber. As compensation to a Subscriber for such loss, the Company agrees to pay late payment
fees (as liquidated damages and not as a penalty) to the Subscriber for late delivery of Unlegended Shares in the amount of $100
per business day after the Delivery Date for each $10,000 of purchase price of the Unlegended Shares subject to the delivery default.
If during any 360 day period, the Company fails to deliver Unlegended Shares as required by this Section 11.1 for an aggregate
of thirty days, then each Subscriber or assignee holding Securities subject to such default may, at its option, require the Company
to redeem all or any portion of the Shares subject to such default at a price per share equal to the greater of (i) 120%, or (ii)
a fraction in which the numerator is the highest closing price of the Common Stock during the aforedescribed thirty day period
and the denominator of which is the lowest conversion price during such thirty day period, multiplied by the price paid by Subscriber
for such Common Stock (“Unlegended Redemption Amount”). The Company shall pay any payments incurred under this
Section in immediately available funds upon demand.

 

(d)     In the event
a Subscriber shall request delivery of Unlegended Shares as described in Section 11.1 and the Company is required to deliver such
Unlegended Shares pursuant to Section 11.1, the Company may not refuse to deliver Unlegended Shares based on any claim that such
Subscriber or anyone associated or affiliated with such Subscriber has been engaged in any violation of law, or for any other reason,
unless, an injunction or temporary restraining order from a court, on notice, restraining and or enjoining delivery of such Unlegended
Shares shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Subscriber
in the amount of 120% of the amount of the aggregate purchase price of the Common Stock which are subject to the injunction or
temporary restraining order, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and
the proceeds of which shall be payable to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s favor.

 

(e)     In addition
to any other rights available to Subscriber, if the Company fails to deliver to a Subscriber Unlegended Shares by the Unlegended
Shares Delivery Date as required pursuant to this Agreement and if after the Unlegended Shares Delivery Date, Subscriber or a broker
on Subscriber’s behalf purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction
of a sale by Subscriber of the shares of Common Stock which the Subscriber was entitled to receive from the Company (a "Buy-In"),
then the Company shall pay in cash to the Subscriber (in addition to any remedies available to or elected by the Subscriber) the
amount by which (A) the Subscriber's total purchase price (including brokerage commissions, if any) for the shares of common stock
so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company for reissuance as
Unlegended Shares together with interest thereon at a rate of 15% per annum accruing until such amount and any accrued interest
thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Subscriber purchases
shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase price of
shares of Common Stock delivered to the Company for reissuance as Unlegended Shares, the Company shall be required to pay the Subscriber
$1,000, plus interest. The Subscriber shall provide the Company written notice and evidence reasonably acceptable to the Company
indicating the amounts payable to the Subscriber in respect of the Buy-In.

 

11.2.     144 Default. In the event
commencing six months after the Closing Date and ending twenty-four months thereafter, the Subscriber is not permitted to resell
any of the Conversion Shares without any restrictive legend or if such sales are permitted but subject to volume limitations or
further restrictions on resale as a result of the unavailability to Subscriber of Rule 144(b)(1)(i) under the 1933 Act or any successor
rule, or such Shares are not registered on an effective registration statement under the Act (a “144 Default”),
for any reason except for Subscriber’s status as an Affiliate or “control person” of the Company, or as a result
of a change in current applicable securities laws, then the Company shall pay such Subscriber as liquidated damages and not as
a penalty an amount equal to two percent (2%) for each thirty days (or such lesser pro-rata amount for any period less than thirty
days) thereafter of the purchase price of the Conversion Shares subject to such 144 Default during the pendency of the 144 Default.
Liquidated Damages shall not be payable pursuant to this Section 11.2 in connection with Shares for such times as such Shares may
be sold by the holder thereof without volume or other restrictions pursuant to Section 144(b)(1)(i) of the 1933 Act or pursuant
to an effective registration statement.

 

    	18

    	 

    

 

12.     [Reserved]

 

13.     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, 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 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: (i) if to the Company, to: Aethlon Medical, Inc., 9635 Granite Ridge Drive, Suite 100, San Diego,
CA 92123, Attn: James A. Joyce, CEO, facsimile: (858) 272-2738, with a copy by telecopier only to: Post Law Group, PC. 5900 Wilshire
Boulevard, Suite 620, Los Angeles, CA 90036, Attn: Jennifer A. Post, Esq., facsimile: (800) 783–2983, and (ii) if to the
Subscribers, to: the addresses and fax numbers indicated on Schedule 1 hereto, with an additional copy by fax only to: Grushko
& Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

(b)     Entire Agreement;
Assignment. This Agreement and other documents delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties. Neither
the Company nor the Subscribers have relied on any representations not contained or referred to in this Agreement and the documents
delivered herewith. No right or obligation of the Company shall be assigned without prior notice to and the written consent of
the Subscribers.

 

(c)     Counterparts/Execution.
This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same
instrument. This Agreement may be executed by facsimile signature and delivered by facsimile transmission.

 

(d)     Law Governing
this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county
of New York. 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. The
parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company
agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. 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.

 

    	19

    	 

    

 

(e)     Specific
Enforcement, Consent to Jurisdiction. The Company and Subscribers acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent or cure breaches
of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or equity. Subject to Section 13(d) hereof, the Company hereby irrevocably
waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
in New York of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Nothing in this Section shall affect or limit any right to serve process in any other manner
permitted by law.

 

(f)     Damages.
In the event the Subscriber is entitled to receive any liquidated damages pursuant to the Transactions Documents, the Subscriber
may elect to receive the greater of actual damages or such liquidated damages.

 

(g)     Maximum
Payments. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.
In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted
by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Subscribers and
thus refunded to the Company.

 

(h)     Calendar
Days. All references to “days” in the Transaction Documents shall mean calendar days unless otherwise stated. The
terms “business days” and “trading days” shall mean days that the New York Stock Exchange is open for trading
for three or more hours. Time periods shall be determined as if the relevant action, calculation or time period were occurring
in New York City. Any deadline that falls on a non-business day in any of the Transaction Documents shall be automatically extended
to the next business day and interest, if any, shall be calculated and payable through such extended period.

 

(i)     Captions:
Certain Definitions. The captions of the various sections and paragraphs of this Agreement have been inserted only for the
purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Agreement. As used in this Agreement the term “person” shall
mean and include an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

 

    	20

    	 

    

 

(j)     Consent.
As used in this Agreement and the Transaction Documents and any other agreement delivered in connection herewith, “consent
of the Subscribers” or similar language means the consent of holders of not less than 70% of the outstanding principal amount
of the Notes on the date consent is requested (such amount being a “Majority in Interest”). A Majority in Interest
may consent to take or forebear from any action permitted under or in connection with the Transaction Documents, modify any Transaction
Documents or waive any default or requirement applicable to the Company, Subsidiaries or Subscribers under the Transaction Documents
provided the effect of such action does not waive any accrued interest or damages and further provided that the relative rights
of the Subscribers to each other remains unchanged.

 

(k)     Severability.
In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or
otherwise affect the validity, legality or enforceability: (i) by or before that authority of the remaining terms and provisions
of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

 

(l)     Successor
Laws. References in the Transaction Documents to laws, rules, regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms. A successor rule to Rule 144(b)(1)(i) shall include any rule
that would be available to a non-Affiliate of the Company for the sale of Common Stock not subject to volume restrictions and after
a six month holding period.

 

(m)     Allocation
of Purchase Price. The Purchase Price will be allocated at Subscriber’s election, among the components of the Securities
so that each component of the Securities will be fully paid and non-assessable.

 

(n)     Maximum
Liability. In no event shall the liability of the Subscribers or permitted successor hereunder or under any Transaction Document
or other agreement delivered in connection herewith be greater in amount than the dollar amount of the net proceeds actually received
by such Subscriber or successor upon the sale of Conversion shares (as defined herein).

 

(o)     Independent
Nature of Subscribers.     The Company acknowledges that the obligations of each Subscriber under the Transaction
Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any
way for the performance of the obligations of any other Subscriber under the Transaction Documents. The Company acknowledges that
each Subscriber has represented that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently
of any other Subscriber and independently of any information, materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may
have been made or given by any other Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of
its agents or employees shall have any liability to any other Subscriber (or any other person) relating to or arising from any
such information, materials, statements or opinions.  The Company acknowledges that nothing contained in any Transaction Document,
and no action taken by any Subscriber pursuant hereto or thereto shall be deemed to constitute the Subscribers as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting
in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. 
The Company acknowledges that it has elected to provide all Subscribers with the same terms and Transaction Documents for the convenience
of the Company and not because Company was required or requested to do so by the Subscribers.  The Company acknowledges that
such procedure with respect to the Transaction Documents in no way creates a presumption that the Subscribers are in any way acting
in concert or as a group with respect to the Transaction Documents or the transactions contemplated thereby.

 

    	21

    	 

    

 

(p)     Equal Treatment.
No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered and paid to all the Subscribers and their permitted successors
and assigns.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	22

    	 

    

 

OMNIBUS INVESTOR SIGNATURE PAGE TO

AETHLON MEDICAL, INC.

SUBSCRIPTION AGREEMENT

 

The undersigned, in its
capacity as an Investor, hereby executes and delivers the Subscription Agreement to which this signature page is attached and agrees
to be bound by the Subscription Agreement on the date set forth on the first page of the Subscription Agreement. This counterpart
signature page, together with all counterparts of the Subscription Agreement and signature pages of the other parties named therein,
shall constitute one and the same instrument in accordance with the terms of the Subscription Agreement.

 

AETHLON MEDICAL, INC.

A Nevada corporation

 

By: __________________________________

        Name:

        Title:

 

Dated: November 6, 2014

 

 

	
         

        __________________________________________

        [Print Name of Investor]
	
        Purchase Price: $____________

         

         

	
         

         

        __________________________________________

        [Signature]
	Principal Amount of Note: $____________
	 	 
	Name: _____________________________________	Class A Warrants: _____________
	 	 
	Title: ______________________________________	 
	 	 

 

 

Address:

__________________________________________

__________________________________________

__________________________________________

Email: ______________________________________

 

Taxpayer ID# (if applicable): _____________________

 

    	23EXHIBIT 10.3

 

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

 

	Principal Amount: $___________	Issue Date: November 6, 2014

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, AETHLON
MEDICAL, INC., a Nevada corporation (hereinafter called “Borrower”), hereby promises to pay to the order of
, , Fax:  (the “Holder”), without demand, the sum of ______________________________
($_____________) (“Principal Amount”), with interest accruing thereon, on April 1, 2016 (the “Maturity
Date”), if not sooner paid.

 

This Note has been entered
into pursuant to the terms of a subscription agreement between the Borrower, the Holder and the other signatories thereto (“Other
Holders”) dated at or about the date hereof (the “Subscription Agreement”), who have been issued Notes
pursuant to the Subscription Agreement (“Other Notes”) and shall be governed by the terms of such Subscription
Agreement. Unless otherwise separately defined herein, all capitalized terms used in this Note shall have the same meaning as is
set forth in the Subscription Agreement. The following terms shall apply to this Note:

 

ARTICLE I

 

GENERAL PROVISIONS

 

1.1     Interest Rate.
Cash interest payable on this Note shall compound annually and accrue at the annual rate of ten percent (10%) from the Issue Date
through the Maturity Date. Interest shall be payable in arrears on the Maturity Date, accelerated or otherwise, when the principal
and remaining accrued but unpaid interest shall be due and payable, or sooner as described below. Interest will be payable in
cash or at the election of the Holder, may be converted to Common Stock pursuant to Article II.

 

1.2     Payment
Grace Period. The Borrower shall not have any grace period to pay any monetary amounts due under this Note. During the pendency
of an Event of Default (as described in Article III), a default interest rate of eighteen percent (18%) per annum shall be in
effect.

 

1.3     Conversion Privileges. The
Conversion Rights set forth in Article II 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 Article II hereof.

 

    	1

    	 

    

 

ARTICLE II

 

CONVERSION RIGHTS

 

The Holder shall have the
right to convert the principal and any interest due under this Note into Shares of the Borrower's Common Stock, $.001 par value
per share (“Common Stock”) as set forth below.

 

2.1.     Conversion into the Borrower's
Common Stock.

 

(a)     The Holder shall have
the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any
outstanding and unpaid principal portion of this Note, and/or accrued interest, at the election of the Holder (the date of giving
of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock
as such stock exists on the date of issuance of this Note, or any shares of capital stock of Borrower into which such Common Stock
shall hereafter be changed or reclassified, at the conversion price as defined in Section 2.1(b) hereof (the "Conversion
Price"), determined as provided herein. Upon delivery to the Borrower of a completed Notice of Conversion, a form of which
is annexed hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the “Delivery Date”) that number of shares of Common Stock for the portion
of the Note converted in accordance with the foregoing. At the election of the Holder, the Borrower will deliver accrued but unpaid
interest on the Note, if any, through the Conversion Date directly to the Holder on or before the Delivery Date. The number of
shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal
of the Note and interest, if any, to be converted, by the Conversion Price.

 

(b)     Subject
to adjustment as provided in Section 2.1(c) hereof, the conversion price per share shall be equal to $0.112, subject to
adjustment as described herein.

 

(c)     The
Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section
2.1(a), shall be subject to adjustment from time to time upon the happening of certain events while this conversion right
remains outstanding, as follows:

 

A.     Merger,
Sale of Assets, etc. If (A) the Borrower effects any merger or consolidation of the Borrower with or into another entity,
(B) the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any
tender offer or exchange offer (whether by the Borrower or another entity) is completed pursuant to which holders of Common Stock
are permitted to tender or exchange their shares for other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50%
of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making
or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement
or other business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934
Act), directly or indirectly, of 50% of the aggregate Common Stock of the Borrower, or (F) the Borrower effects any reclassification
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 (in any such case, a "Fundamental Transaction"),this Note, as to the unpaid
principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such
number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental
Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.
The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor
or purchaser. Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such
securities of such successor or purchaser after any such Fundamental Transaction.

 

    	2

    	 

    

 

B.     Reclassification,
etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different
number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion
thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such
securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately
prior to such reclassification or other change.

 

C.     Stock Splits,
Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares
of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately
reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to
the total number of shares of Common Stock outstanding immediately prior to such event.

 

(d)     Whenever the Conversion
Price is adjusted pursuant to Section 2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting forth
the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

 

(e)     During the period
the conversion right exists, Borrower will reserve from its authorized and unissued Common Stock not less than an amount of Common
Stock equal to 150% of the amount of shares of Common Stock issuable upon the full conversion of this Note. Borrower represents
that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. Borrower agrees that its issuance
of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of
this Note.

 

2.2     Method of Conversion.
This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Subscription
Agreement. Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the
request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall
not have been converted or paid.

 

2.3.     Maximum
Conversion. The Holder shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that
number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially
owned by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock issuable in connection with the unconverted
portion of the Note, and (iii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which
the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Borrower on such Conversion Date. For the
purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
shall not be limited to aggregate conversions of 4.99%. The Holder shall have the authority and obligation to determine whether
the restriction contained in this Section 2.3 will limit any conversion hereunder and to the extent that the Holder determines
that the limitation contained in this Section applies, the determination of which portion of the Notes are convertible shall be
the responsibility and obligation of the Holder. The Holder may waive the conversion limitation described in this Section 2.3,
in whole or in part, upon and effective after 61 days prior written notice to the Borrower to increase such percentage to up to
9.99%.

 

    	3

    	 

    

 

2.4     Borrower’s Obligations. Upon the conversion of this Note or part thereof,
the Borrower shall, at its own cost and expense, take all necessary action, including obtaining and delivering an opinion of counsel
to assure that the Borrower’s transfer agent shall issue stock certificates in the name of a Holder (or its permitted nominee)
or such other persons as designated by Holder and in such denominations to be specified at conversion representing the number
of shares of Common Stock issuable upon such conversion. The Borrower warrants that no instructions other than these instructions
have been or will be given to the Borrower’s transfer agent and that the certificates representing such shares shall contain
no legend other than the legend set forth in Section 4(h) of the Subscription Agreement. If and when a Holder sells the Conversion
Shares, assuming (i) a registration statement including such Conversion Shares for registration has been filed with the Commission,
is effective and the prospectus, as supplemented or amended, contained therein is current and (ii) Holder or its agent confirms
in writing to the transfer agent that Holder has complied with the prospectus delivery requirements, the Borrower will reissue
the Conversion Shares without restrictive legend. In the event that the Conversion Shares are sold in a manner that complies with
an exemption from registration, the Borrower will promptly instruct its counsel to issue to the transfer agent an opinion permitting
removal of the legend, provided that Holder delivers reasonably requested representations in support of such opinion.

 

2.5     Late Delivery. The Borrower
understands that a delay in the delivery of the Conversion Shares in the form required pursuant to Section 2.4 hereof later than
the Delivery Date (as defined in the Subscription Agreement) could result in economic loss to the Holder. As compensation to Holder
for such loss, the Borrower agrees to pay (as liquidated damages and not as a penalty) to Holder for late issuance of Conversion
Shares in the form required pursuant to this Note upon Conversion of the Note, the amount of $100 per Trading Day (increasing to
$200 per Trading Day after ten (10) Trading Days) after the Delivery Date for each $10,000 of Note principal amount and interest
(and proportionately for other amounts) being converted of the corresponding Conversion Shares which are not timely delivered.
The Borrower shall pay any payments incurred under this Section upon demand. Furthermore, in addition to any other remedies which
may be available to the Holder, in the event that the Borrower fails for any reason to effect delivery of the Conversion Shares
on or before the Delivery Date, the Holder will be entitled to revoke all or part of the relevant Notice of Holder by delivery
of a notice to such effect to the Borrower whereupon the Borrower and Holder shall each be restored to their respective positions
immediately prior to the delivery of such notice, except that the damages payable in connection with the Borrower’s default
shall be payable through the date notice of revocation or rescission is given to the Borrower.

 

2.6     Buy-In. In
addition to any other rights available to Holders, if the Borrower fails to deliver to a Holder Conversion Shares by the Delivery
Date as required pursuant to this Note and the Subscription Agreement and if after the Delivery Date, Holder or a broker on Holder’s
behalf purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by Holder
of the Common Stock which the Holder was entitled to receive from the Company upon such conversion (a “Buy-In”),
then the Borrower shall pay in cash to each Holder (in addition to any remedies available to or elected by the Holder) the amount
by which (A) Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased
exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion request was not timely honored
together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid
in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of Note principal
and/or interest, the Borrower shall be required to pay Holder $1,000 plus interest. Holder shall provide the Borrower written notice
and evidence reasonably acceptable to the Borrower indicating the amounts payable to Holder in respect of the Buy-In.

 

    	4

    	 

    

 

ARTICLE III

 

EVENT OF DEFAULT

 

The occurrence of any of
the following events of default ("Event of Default") shall, at the option of the Holder hereof, make all sums
of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon
demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth below:

 

3.1     Failure to Pay
Principal or Interest. The Borrower fails to pay any installment of principal, interest or other sum due under this Note when
due.

 

3.2    Breach of Covenant.
The Borrower breaches any material covenant or other term or condition of the Subscription Agreement, Transaction Documents or
this Note in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written
notice to the Borrower from the Holder.

 

3.3     Breach of Representations
and Warranties. Any material representation or warranty of the Borrower made herein, in the Subscription Agreement, Transaction
Documents, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false
or misleading in any material respect as of the date made and the Closing Date.

 

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

 

3.5     Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts
as such debts become due.

 

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

 

3.7     Receiver or Trustee.
The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee
shall otherwise be appointed.

 

3.8     Judgments.
Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets
for more than $100,000, unless stayed vacated or satisfied within forty-five (45) days.

 

3.9     Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any
law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the
Borrower or any Subsidiary of Borrower.

 

    	5

    	 

    

 

3.10     Delisting. Delisting of the Common Stock from any Principal Market; failure
to comply with the requirements for continued listing on a Principal Market for a period of ten (10) consecutive trading days.

 

3.11     Non-Payment.
Other than defaults disclosed on Schedule 5(l) to the Subscription Agreement, a default by the Borrower under any one or more obligations
in an aggregate monetary amount in excess of $100,000 for more than twenty (20) days after the due date, unless the Borrower is
contesting the validity of such obligation in good faith.

 

3.12     Stop Trade.
An SEC or judicial stop trade order or Principal Market trading suspension that lasts for five or more consecutive trading days.

 

3.13     Failure to Deliver
Common Stock or Replacement Note. Borrower's failures to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note and Sections 7 and 11 of the Subscription Agreement, or, if required, a replacement Note.

 

3.14     Reservation
Default. Failure by the Borrower to have reserved for issuance upon conversion of the Note or upon exercise of the Warrants
issued in connection with the Subscription Agreement, the number of shares of Common Stock as required in the Subscription Agreement,
this Note and the Warrants.

 

3.15     Financial Statement
Restatement. The restatement after the date hereof of any financial statements filed by the Borrower with the Securities and
Exchange Commission for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the unrestated financial statements, have constituted a
Material Adverse Effect.

 

3.16     Other Note Default.
The occurrence of any Event of Default under any Other Note.

 

3.17     Event
Described in Subscription Agreement. The occurrence of an Event of Default as described in the Subscription Agreement that,
if susceptible to cure, is not cured during any designated cure period.

 

3.18     Cross Default. 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 a material 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.

 

ARTICLE IV

 

MISCELLANEOUS

 

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

 

    	6

    	 

    

 

4.2     Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, 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 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 first 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 the Borrower to: Aethlon Medical, Inc., 9635 Granite Ridge Drive, Suite 100, San Diego,
CA 92123, Attn: James A. Joyce, CEO, facsimile: (858) 272-2738, with a copy by telecopier only to: Post Law Group, PC., 5900 Wilshire
Boulevard, Suite 620, Los Angeles, CA 90036, Attn: Jennifer A. Post, Esq., facsimile: (800) 783–2983, and (ii) if to the
Holder, to the name, address and facsimile number set forth on the front page of this Note, with a copy by fax only to Grushko
& Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

4.3     Amendment
Provision. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4     Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns. The Borrower may not assign its obligations under this Note.

 

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

 

4.6     Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts
of laws principles that would result in the application of the substantive laws of another jurisdiction. Any action brought by
either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or
state courts of New York or in the federal courts located in the State and county of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. The prevailing party shall
be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note
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 unenforceability of any other provision
of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal
action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral
or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder. 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.

 

    	7

    	 

    

 

4.7     Maximum
Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges
in excess of the maximum rate permitted by applicable law. In the event that the rate of interest required to be paid or other
charges hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such maximum rate shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

4.8     Non-Business
Days. Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of
the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such payment,
such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

4.9     Redemption.
This Note may not be prepaid, redeemed or called without the consent of the Holder.

 

4.10     Shareholder
Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note.
However, the Holder will have the rights of a shareholder of the Borrower with respect to the Shares of Common Stock to be received
after delivery by the Holder of a Conversion Notice to the Borrower.

 

 

[THIS SPACE INTENTIONALLY
LEFT BLANK]

 

    	8

    	 

    

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by an authorized officer as of the 6th day of November, 2014.

 

AETHLON MEDICAL, Inc.

 

 

By:_____________________________________

        Name:

        Title:

 

WITNESS:

 

 

 

______________________________________

 

 

 

 

 

 

 

 

 

 

 

    	9

    	 

    

 

NOTICE
OF CONVERSION

 

(To be executed by the Registered Holder in order to convert the
Note)

 

 

The undersigned hereby elects to convert $_________
of the principal and $_________ of the interest due on the Note issued by AETHLON MEDICAL, INC. on November 6, 2014 into Shares
of Common Stock of AETHLON MEDICAL, INC.(the “Borrower”) according to the conditions set forth in such Note, as of
the date written below.

 

 

 

Date of Conversion:__________________________________________________________

 

 

Conversion Price:____________________________________________________________

 

 

Number of Shares of Common Stock Beneficially
Owned on the Conversion Date: Less than 5% of the outstanding Common Stock of AETHLON MEDICAL, INC.

 

 

Shares To Be Delivered:_______________________________________________________

 

 

Signature:__________________________________________________________________

 

 

Print Name:_________________________________________________________________

 

 

Address:___________________________________________________________________

 

___________________________________________________________________

 

 

    	10

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