Document:

Exhibit 10.2

 

NEITHER THE ISSUANCE NOR 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: $52,500	Issue Date: June 16, 2015
	Purchase Price: $52,000	 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED,
INERGETICS, INC., a DELAWARE corporation (hereinafter called the “Borrower”), hereby promises to pay to the
order of _______, a _______, or registered assigns (the “Holder”) the sum of Fifty Two Thousand Dollars ($52,500),
on June 16, 2016 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve
percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes
due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, compounded on a monthly basis.  This
Note may not be prepaid in whole or in part except as otherwise explicitly set forth in Section 1.9 hereof. Any amount of principal
or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from
the due date thereof until the same is paid (“Default Interest”).  Interest shall commence accruing on the
Issue Date, shall be computed on the basis of a 365-day year and the actual number of days elapsed.  All payments due
hereunder (to the extent not converted into common stock, (the “Common Stock”) in accordance with the terms hereof)
shall be made in lawful money of the United States of America.  All payments shall be made at such address as the Holder
shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note.  Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date.  As used in this Note, the term “business day” shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by
law or executive order to remain closed.  Each capitalized term used herein, and not otherwise defined, shall have the
meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally
issued (the “Purchase Agreement”).

 

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

 

The following terms
shall apply to this Note:

 

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ARTICLE I. CONVERSION RIGHTS

 

1.1           Conversion
Right.  The Holder shall have the right from time to time, and at any time during the period beginning on the date
of this Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in
Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note
to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the conversion price  (the “Conversion
Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall
the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or
unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations
contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect
to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates
of more than 4.99% of the outstanding shares of Common Stock.  For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such
proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon,
at the election of the Holder, not less than 61 days’ prior notice to the Borrower and the provisions of the conversion limitation
shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in
such notice of waiver).  The number of shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified
in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile (or
by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York
time on such conversion date (the “Conversion Date”).  The term “Conversion Amount” means, with
respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus
(2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date, provided, however, that the Company shall have the right to pay any or all interest in cash
plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof.

 

1.2           Conversion
Price.

 

(a)           Calculation
of Conversion Price.  The conversion price (the “Conversion Price”) shall be the Variable Conversion
Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower
relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events).  The “Variable Conversion Price” shall
mean the lessser of: (i) a 38% discount from the lowest Trading Price in the 10 trading days prior to the day that the Holder requests
conversion, or (ii) a fixed price of $0.07. “Trading Price” means, for any security as of any date, the lowest
trading price on the Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable
reporting service (“Reporting Service”) mutually acceptable to Borrower and Holder (i.e. Bloomberg). If the Trading
Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market
value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the
calculation of the Trading Price is required in order to determine the Conversion Price of such Notes.  “Trading
Day” shall mean any day on which the Common Stock is traded for any period on the OTCQB, or on the principal securities exchange
or other securities market on which the Common Stock is then being traded. If the Issuer’s Common stock is chilled for
deposit at DTC and/or becomes chilled at any point while this Agreement remains outstanding, an additional 8% discount will be
attributed to the Conversion Price defined hereof. If the Borrower is unable to issue any shares under this provision due
to the fact that there is an insufficient number of authorized and unissued shares available, the Holder promises not to force
the Borrower to issue these shares or trigger an Event of Default, provided that Borrower takes immediate steps required to get
the appropriate level of approval from shareholders or the board of directors, where applicable to raise the number of authorized
shares to satisfy the Notice of Conversion.

 

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

 

1.3           Authorized
Shares.  The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from
its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement.  The Borrower is required
at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of
the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”).  The
Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g)
of the Purchase Agreement.  Commencing on the expiration of the first month from the issue date of this Note, the Reserved
Amount shall be recalculated each month based upon the Variable Conversion Price and the Company shall notify the Transfer Agent
and the Holder in writing by the fifth day of the following month of the new Reserved Amount. In the event the Company does not
notify the Transfer Agent of the new Reserved Amount in a timely manner, the Holder shall have the absolute right to notify the
Transfer Agent, without any further action by the Company. Notwithstanding the foregoing, in no event shall the Reserved Amount
be lower than the initial Reserved Amount, regardless of any prior conversions. The Borrower represents that upon issuance, such
shares will be duly and validly issued, fully paid and non-assessable.  In addition, if the Borrower shall issue any
securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes
shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter
there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion
of the outstanding Notes.  The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue
certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall
constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4           Method
of Conversion.

 

(a)           Mechanics
of Conversion.  Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after the Issue Date, by : (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or
other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

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

 

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

 

(d)           Delivery
of Common Stock Upon Conversion.  Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this
Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates
for the Common Stock issuable upon such conversion within three (3) business days after such receipt ( but in any event the fifth
(5th) business day being hereinafter referred to as the “Deadline”) (and, solely in the case of conversion
of the entire unpaid principal amount hereof, surrender of the this Note) in accordance with the terms hereof and the Purchase
Agreement.

 

(e)           Obligation
of Borrower to Deliver Common Stock.  Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be
deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount
of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate
except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion.  If
the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the
certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce
the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action
to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation
to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the
Holder in connection with such conversion.  The Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

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

 

(g)           Failure
to Deliver Common Stock Prior to Deadline.  Without in any way limiting the Holder’s right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon
conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day
beyond the Deadline that the Borrower fails to deliver such Common Stock.  Such cash amount shall be paid to Holder by
the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the
Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of
this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal
amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to
convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion
right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1.4(g) are justified.

 

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

 

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

 

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

 

1.6           Effect
of Certain Events.

 

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

 

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

 

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

 

(d)           Adjustment
Due to Dilutive Issuance.  If, at any time when any Notes are issued and outstanding, the Borrower issues or sells,
or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances
in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be
reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance, but in no event shall
the Conversion Price be above the original Conversion Price.

 

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

 

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

 

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

 

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

 

1.7           Trading
Market Limitations.  Unless permitted by the applicable rules and regulations of the principal securities market
on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant
to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is
then traded (the “Maximum Share Amount”), which shall be 9.99% of the total shares outstanding on the Closing Date
(as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the Common Stock occurring after the date hereof.  Once the Maximum
Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations
of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or
any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in
lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

 

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

 

1.9.1.         Optional
Prepayment Notwithstanding anything to the contrary contained in this Note, so long as the Borrower has not received a Notice
of Conversion from the Holder, then at any time during the period beginning 75 calendar days after the Issue Date and ending on
the Maturity Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice
to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section
1.9. Any notice of prepayment hereunder (an “Alternative Optional Prepayment Notice”) shall be delivered to the Holder
of the Note at its registered address and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2)
the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On
the date fixed for prepayment (the “Alternative Optional Prepayment Date”), the Borrower shall make payment of the
Alternative Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing
to the Borrower at least one (1) business day prior to the Alternative Optional Prepayment Date. If the Borrower exercises its
right to prepay the Note within such time period as defined above, a payment amount equal to 130%, multiplied by the sum of: (w)
the then outstanding principal amount of this Note.. If the Borrower delivers an Alternative Optional Prepayment Notice and fails
to pay the Alternative Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Alternative
Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

For the avoidance of
any doubt, the Borrower shall have the right to prepay the Note without any Prepayment Penalty if such prepayment happens prior
to the 75th calendar day after the Issue Date.

 

1.9.2.         Mandatory
Repayment Upon Qualified Offering. Notwithstanding anything to the contrary provided herein or elsewhere, in the event the
Company consummates a Qualified Offering (as defined below) on any day from the date that is 75 calendar days after the
Issue Date through the date that the Note is repaid in whole, the Company shall on the date of consummation of a Qualified Offering,
repay the Note in cash in an amount equal to the Alternative Option Prepayment Amount. Such amount shall be paid in full in cash
to the Holder from the Company by wire transfer of immediately available funds pursuant to the wire instructions provided by the
Holder to the Company.

 

“Qualified Offering” means (i) the sale by
the Company of its securities in one or a series of related and/or unrelated public offerings and/or private placements exempt
from the registration requirements of the Federal securities laws resulting in the receipt by the Company of $200,000 or more of
gross proceeds, and/or (ii) the entering into any agreement(s) and/or instrument(s) pursuant to which the Company may borrow (regardless
of whether the Company actually borrows funds), in the aggregate principal amount of $200,000 or more.

 

ARTICLE II.  CERTAIN COVENANTS

 

2.1           Negative
Covenants As long as any portion of this Note remains outstanding, unless the holders of all of the outstanding Notes shall have
otherwise given prior written consent, the Borrower shall not, and shall not permit any of its subsidiaries (whether or not a subsidiary
on the Issue Date) to, directly or indirectly:

 

(a)           other
than indebtedness existing as of the Initial Date or incurred in the ordinary course of business for trade expenses (not borrowed
money) (“Permitted Indebtedness”), enter into, create, incur, assume, guarantee or suffer to exist any indebtedness
for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom, which indebtedness shall be senior
is respect to security to this Note;

 

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(b)           other
than Permitted Liens (as defined below), enter into, create, incur, assume or suffer to exist any liens, charges or encumbrances
of any kind or nature (“Liens”), on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom. “Permitted Lien” means the individual and collective reference
to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments
and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves
(in the good faith judgment of the management of the Borrower) have been established in accordance with GAAP; (b) Liens imposed
by law which were incurred in the ordinary course of the Borrower’s business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Borrower’s
business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of the Borrower and its consolidated subsidiaries or (y) are
being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future
the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness
under clauses (a), and (b) thereunder; and (d) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder,
provided that such Liens are not secured by assets of the Borrower or its subsidiaries other than the assets so acquired or leased.

 

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

 

(d)           repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common
Stock equivalents;

 

(e)           repay,
repurchase or offer to repay, repurchase or otherwise acquire any indebtedness, other than the Notes if on a pro-rata basis, other
than regularly scheduled principal and interest payments as such terms are in effect as of the Issue Date, provided that such payments
shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exist or occur;

 

(f)           pay
cash dividends or distributions on any equity securities of the Borrower;

 

(g)           sell,
lease or otherwise dispose of any portion of its assets outside the ordinary course of business, other than de minimis sales. Any
consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition;

 

(h)           so
long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed
on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course
of business or (c) not in excess of $1,000;

 

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

 

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

 

ARTICLE III.  EVENTS OF DEFAULT

 

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

 

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

 

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3.2           Conversion
and the Shares.  The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its
transfer agent in transferring (or issuing( electronically or in certificated form) any certificate for shares of Common Stock
to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to
remove ( or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three
(3) business days after the Holder shall have delivered a Notice of Conversion.

 

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

 

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

 

3.5           Bankruptcy,
Receiver or Trustee.  The Borrower or any subsidiary of the Borrower shall commence, or there shall be commenced
against the Borrower or any subsidiary of the Borrower under any applicable bankruptcy or insolvency laws as now or hereafter in
effect or any successor thereto, or the Borrower or any subsidiary of the Borrower commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether
now or hereafter in effect relating to the Borrower or any subsidiary of the Borrower or there is commenced against the Borrower
or any subsidiary of the Borrower any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of
61 days; or the Borrower or any subsidiary of the Borrower is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Borrower or any subsidiary of the Borrower suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of sixty one (61) days; or the Borrower or any subsidiary of the Borrower makes a general
assignment for the benefit of creditors; or the Borrower or any subsidiary of the Borrower shall fail to pay, or shall state that
it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Borrower or any subsidiary of the
Borrower shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts;
or the Borrower or any subsidiary of the Borrower shall by any act or failure to act expressly indicate its consent to, approval
of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Borrower or any subsidiary of the
Borrower for the purpose of effecting any of the foregoing;

 

3.6           Judgments.  Any
money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $52,500, and shall remain unvacated, unbonded or unstayed for a period of twenty
(20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld;

 

3.7           Indebtedness
Default. The Borrower or any subsidiary of the Borrower shall default in any of its obligations under any other Note or any
mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may
be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing
or factoring arrangement of the Borrower or any subsidiary of the Borrower in an amount exceeding $25,000, whether such indebtedness
now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise become due and payable;

 

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3.8           Delisting
of Common Stock; DTC Chill.  The Borrower shall fail to maintain the listing of the Common Stock on at least one
of the OTCQB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock
Exchange, or the American Stock Exchange or there shall be no bid price for the stock for a period of one business day OR the Depository
Trust Company places a chill on new deposits of Common Stock, which is not removed within ten (10) trading days;

 

3.9           Failure
to Comply with the Exchange Act.  The Borrower shall fail to comply with the reporting requirements of the Exchange
Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

3.16          Failure
to Pay Post-Closing Expenses. The failure by Borrower to pay any and all Post-Closing Expenses as defined in section 4.6.

 

3.17          Delisting.
From and after the initial trading, listing or quotation of the Common Stock on a Principal Market, an event resulting in the Common
Stock no longer being traded, listed or quoted on a Principal Market; failure to comply with the requirements for continued quotation
on a Principal Market; or notification from a Principal Market that the Borrower is not in compliance with the conditions for such
continued quotation and such non-compliance continues for seven (7) trading days following such notification.

 

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

 

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3.19     Consecutive
Late Filings. If the Company files a late notification (NT 10-Q or NT 10-K) for any quarterly or annual report for any two
(2) consecutive periods.

 

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND
THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGTAIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM
(AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified
in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading
Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16,
3.17, 3.18, 3.19, and/or 3.20 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default
Notice”), and upon the occurrence of an Event of Default specified in the remaining sections of Articles III (other than
failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3.1 hereof), the Note shall become
immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount
equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment
Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the
date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default
Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number
of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining
the lowest applicable Conversion Price, unless the Default Event arises as a result of such breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date, multiplied by (b) the highest Closing Price for the
Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due
and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at low or in equity.

 

If the Borrower fails to pay the Default
Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right
at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares),
to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

ARTICLE IV. MISCELLANEOUS

 

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

 

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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 second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:

 

If to the Borrower, to:

INERGETICS, INC.

550 BROAD STREET, SUITE 1212

NEWARK, NJ 07652

Attn: Mr. Michael C. James, CEO

 

If to the Holder:

______________________

______________________

 

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

 

4.4           Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns.  Each transferee of this Note must be an “accredited investor” (as defined in Rule
501(a) of the 1933 Act).  Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.

 

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

 

4.6           Post-Closing
Expenses. The Issuer will bear any and all miscellaneous expenses that may arise as a result of this Agreement post-closing.
These expenses include, but are not limited to, the cost of legal opinion production, transfer agent fees, equity issuance fees,
etc. The failure to pay any and all Post-Closing Expenses will be deemed a default as described in Section 2.6.10 herein.

 

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 principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and
county of New York.  The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non
conveniens.  The Borrower and Holder 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 Note or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified 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.

 

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

 

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

 

4.9           Notice
of Corporate Events.  Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder
of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder
with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information
sent to shareholders).  In the event of any taking by the Borrower of a record of its shareholders for the purpose of
determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for,
purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any
class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are
entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower
or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least
twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or
event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution,
right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event
to the extent known at such time.  The Borrower shall make a public announcement of any event requiring notification
to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section
4.9.

 

4.10         Remedies.  The
Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby.  Accordingly, the Borrower acknowledges that the remedy
at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach
by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing
or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

4.11         Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The
Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive
the Borrower from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Borrower
(to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will
suffer and permit the execution of every such as though no such law has been enacted.

 

(Signature Pages Follow)

 

    	14

    	 

    

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by its duly authorized officer this June 16, 2015.

 

	 	INERGETICS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	 	Michael C. James, CEO	 

 

    	15

    	 

    

 

Exhibit A.

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert
$________________ of the principal amount of the Note (defined below) into Shares of Common Stock of INERGETICS, INC., a(n) DELAWARE
Corporation (the “Borrower”) according to the conditions of the Convertible Note of the Borrower dated as of
June 16, 2015 (the “Note”). No fee will be charged to the Holder or Holder’s Custodian for any conversion,
except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

	 	 ̈	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name of DTC Prime Broker: ___________________________________________
	 	 	 
	 	 	Account Number: ____________________________________________________
	 	 	 
	 	 ̈	The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below:

 

	Date of Conversion:	 	 
	 	 	 
	Conversion Price:  	 	 
	 	 	 
	Shares to Be Delivered:	 	 
	 	 	 
	Remaining Principal Balance Due

After This Conversion:	 	 
	 	 	 
	Signature	 	 
	 	 	 
	Print Name:	 	 

 

    	16Exhibit 10.3

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of July 13, 2015, by and between INERGETICS,
INC., a DELAWARE corporation, with headquarters located at 550 BROAD STREET, SUITE 1212, NEWARK, NJ 07652 (the “Company”),
and _______, a _______, with its address at _______ (the “Buyer”).

 

WHEREAS:

 

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

 

B. Buyer desires to purchase and the Company
desires to issue and sell, upon the terms and conditions set forth in this Agreement an 12% convertible note of the Company, in
the form attached hereto as Exhibit A, in the aggregate principal amount of $_______ (together with any note(s) issued in replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”),
convertible into shares of common stock of the Company (the “Common Stock”), upon the terms and subject to the limitations
and conditions set forth in such Note.

 

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

 

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

 

1. Purchase and Sale of Note.

 

a. Purchase of Note. On the initial Closing
Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal
amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto.

 

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

 

c. Closing Date. Subject to the satisfaction
(or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and
sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on July
13, 2015, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2. Buyer’s Representations and Warranties.
The Buyer represents and warrants to the Company that:

 

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

 

    	 

    	 

    

 

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

 

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

 

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

 

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

 

f. Transfer or Re-sale. The Buyer understands
that (i) the sale or resale of the Securities has not been and is not being registered under the 1933 Act or any applicable state
securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration
statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel
that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion
shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule
144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold
pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation
S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company;
(ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further,
if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending
arrangement.

 

    	 

    	 

    

 

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

 

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

 

The legend set forth above shall be removed
and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless
otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration
statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to
the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with
an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect
that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by
a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.
In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.

 

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

 

i. Residency. The Buyer is a resident
of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.

 

3. Representations and Warranties of the
Company. The Company represents and warrants to the Buyer that:

 

a. Organization and Qualification. The
Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to
own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The
Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every
jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse
Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company
or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to
be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

    	 

    	 

    

 

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

 

c. Capitalization. As of the date hereof,
the authorized capital stock of the Company consists of: (i) shares of Common Stock, of which shares are issued and outstanding;
no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant
to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and a suitable
amount of shares are reserved for issuance upon conversion of the Note (subject to adjustment pursuant to the Company’s covenant
set forth in Section 4(g) below). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable and have been issued in compliance with all federal and state securities laws. No
shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the
Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by
which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct
copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s Bylaws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company
shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of
the Company as of the Closing Date.

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

    	 

    	 

    

 

h. Absence of Certain Changes. Since
the date of the latest financial statements included in the SEC reports: (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant
to generally accepted accounting principles (“GAAP”) or disclosed in filings made with the SEC, (iii) the Company has
not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v)
the Company has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company equity
incentive plans. The Company does not have pending before the SEC any request for confidential treatment of information. Except
for the issuance of the Securities contemplated by this Agreement, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would
be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made
that has not been publicly disclosed at least one trading day prior to the date that this representation is made.

 

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

 

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

 

k. No Materially Adverse Contracts, Etc.
Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have
a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the
judgment of the Company’s officers has or is expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary:
(i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other material
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body or (iii) is or has
been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing
cases as could not have or reasonably be expected to result in a Material Adverse Effect.

 

    	 

    	 

    

 

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

 

m. Certain Transactions. Except for arm’s
length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business
upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and other than the grant
of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party
to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or partner.

 

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

 

o. Acknowledgment Regarding Buyer’
Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s
length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that
no Buyer is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereby and any statement made by any Buyer or any of their respective representatives or agents
in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental
to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to
enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

 

p. No Integrated Offering. Neither the
Company, nor any of its affiliates, nor any person acting on behalf of the Company or such affiliate, will sell, offer for sale,
or solicit offers to buy or otherwise negotiate with respect to any security (as defined in the 1933 Act) which will be integrated
with the sale of the securities in a manner which would require the registration of the securities under the Securities Act of
1933, or require stockholder approval, under the rules and regulations of the trading market for the common stock. The Company
will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for
purposes of the Securities Act of 1933 or the rules and regulations of the trading market, with the issuance of securities contemplated
hereby.

 

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

 

    	 

    	 

    

 

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

 

s. Environmental Matters.

 

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

 

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

 

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

 

t. Title to Property. The Company and
its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect.
Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as would not have a Material Adverse Effect.

 

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

 

    	 

    	 

    

 

v. Internal Accounting Controls. Except
as set forth in the SEC Reports, the Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and
procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures
as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control
over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

 

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

 

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

 

y. Application of Takeover Protections.
The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation
that is or could become applicable to the Buyer as a result of the Buyer and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities
and the Buyer’ ownership of the Securities.

 

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

 

aa. No Disagreements with Accountants and
Lawyers; Outstanding SEC Comments. There are no disagreements of any kind presently existing, or reasonably anticipated by
the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the
Company is or immediately after the Closing Date will be current with respect to any fees owed to its accountants which could affect
the Company’s ability to perform any of its obligations under any of the Transaction Documents. There are no unresolved comments
or inquiries received by the Company or its Affiliates from the SEC which remain unresolved as of the date hereof.

 

    	 

    	 

    

 

bb. Bad Actor Disqualification.

 

(i) No Disqualification Events. With respect to
Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act ("Regulation D Securities"),
none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an "Issuer Covered Person" and, together, "Issuer Covered Persons")
is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company
has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Placement Agent
and the Purchaser a copy of any disclosures provided thereunder.

 

(ii) Other Covered Persons. The Company is not
aware of any person that (i) has been or will be paid (directly or indirectly) remuneration for solicitation of Purchaser in connection
with the sale of the Securities and (ii) who is subject to a Disqualification Event.

 

(iii) Notice of Disqualification Events. The
Company will notify the Purchaser in writing of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any
event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person, prior to any
Closing of this Offering.

 

cc. Breach of Representations and Warranties
by the Company. If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition
to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section
3.4 of the Note.

 

4. COVENANTS.

 

a. Best Efforts. The parties shall use
their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

 

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

 

c. Use of Proceeds. The Company shall
use the proceeds for general working capital purposes.

 

d. Right of First Refusal. Unless it
shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined
herein), written notice describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive
documentation to be entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period
following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated
by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as
the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity
financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing
Date and ending two (two) years following the Closing Date. In the event the terms and conditions of a proposed Future Offering
are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall
deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter
shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share
of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence
shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall
not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding
a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation
or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to
raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The
Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options,
warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or
the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of
the Company.

 

    	 

    	 

    

 

e. Expenses. At the Closing, the Company
shall reimburse Buyer for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance
of this Agreement and the other agreements to be executed in connection herewith (“Documents”), including, without
limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation
services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions in the Documents,
fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents.
When possible, the Company must pay these fees directly, otherwise the Company must make immediate payment for reimbursement to
the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer Notwithstanding
anything herein to the contrary, the Company’s obligation to reimburse Buyer’s expenses shall be $1,500.

 

f. Financial Information. Upon written
request the Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or
sells all of the Securities: (i) within two (2) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its
Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press
releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the
shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders.

 

g. Authorization and Reservation of Shares.
The Company shall at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common
Stock to provide for the full conversion or exercise of the outstanding Note and issuance of the Conversion Shares in connection
therewith (based on the Conversion Price of the Note in effect from time to time) and as otherwise required by the Note. The Company
shall not reduce the number of shares of Common Stock reserved for issuance upon conversion of Note without the consent of the
Buyer. The Company shall at all times maintain the number of shares of Common Stock so reserved for issuance at an amount (“Reserved
Amount”) equal to five times the number that is then actually issuable upon full conversion of the Note and Additional Note
(based on the Conversion Price of the Note in effect from time to time). If at any time the number of shares of Common Stock authorized
and reserved for issuance (“Authorized and Reserved Shares”) is below the Reserved Amount, the Company will promptly
take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling
a special meeting of shareholders to authorize additional shares to meet the Company’s obligations under this Section 4(g),
in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized number
of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure
that the number of authorized shares is sufficient to meet the Reserved Amount. If the Company fails to obtain such shareholder
approval within thirty (30) days following the date on which the number of Reserved Amount exceeds the Authorized and Reserved
Shares, it will be considered an Event of default under Section 3.4 of the Note.

 

    	 

    	 

    

 

h. Listing. The Company shall promptly
secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as any Buyer owns any of the
Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares
from time to time issuable upon conversion of the Note. The Company will obtain and, so long as any Buyer owns any of the Securities,
maintain the listing and trading of its Common Stock on the OTCQB or any equivalent replacement exchange, the Nasdaq National Market
(“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”),
or the American Stock Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges,
as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCQB and any other exchanges
or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing
on such exchanges and quotation systems. If the market price of the Company’s Common Stock shall at any time fall below the
price required to continue to be quoted on the Company’s then principal exchange or automated quotation system, the Company
shall as soon as practicable take all actions necessary to effect a reverse split of the Company’s Common Stock, such that
the price would then be at least fifty percent (50%) above the required price, post-split. If the Company fails to achieve the
required reverse split within thirty (30) days following the date on which the price fell below the required minimum trading price,
it will be considered an Event of default under Section 3.4 of the Note.

 

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

 

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

 

k. Breach of Covenants. If the Company
breaches any of the covenants set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant
to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

 

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

 

m. Trading Activities. Neither the Buyer
nor their affiliates has an open short position in the common stock of the Company and the Buyer agree that they shall not, and
that they will cause their affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock
of the Company.

 

n. Omitted Intentionally.

 

o. Non-Frustration of Purpose. So long
as the Buyer or its affiliates hold any Securities, neither the Company nor any of its affiliates or subsidiaries, nor any of its
or their respective officers, employees, directors, agents or other representatives, will effect, enter into, announce or recommend
to its stockholders any agreement, plan, arrangement or transaction the terms of which would or would reasonably be expected to
(i) have a material adverse effect on the Buyer’s investment in the Note or Conversion Shares or (ii) restrict, delay, conflict
with or impair the ability or right of the Company to timely perform its obligations under this Agreement or the Notes, including,
without limitation, the obligation of the Company to timely deliver shares of Common Stock to the Buyer or its affiliates in
accordance with this Agreement or the Note.

 

    	 

    	 

    

 

p. Restricted Transactions. So long as
any of the Securities being sold to the Buyer in this offering remain outstanding, including Conversion Shares, neither the Company
nor any of its affiliates or subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives,
will, without the prior written consent of the Investor, directly or indirectly, solicit, accept, enter into, announce, or otherwise
cooperate in any way, assist or participate in or facilitate or encourage, any exchange (i) of any security of the Company or any
of its subsidiaries for any other security of the Company or any of its subsidiaries, except to the extent (x) consummated pursuant
to an exchange registered under a registration statement of the Company filed pursuant to the 1933 Act and declared effective by
the SEC or (y) such exchange is exempt from registration pursuant to an exemption provided under the 1933 Act (other than Section
3(a)(10) of the 1933 Act) or (ii) of any indebtedness or other securities of the Company or any of its subsidiaries relying on
the exemption provided by Section 3(a)(10) of the 1933 Act. Notwithstanding the foregoing or anything contained herein to the contrary,
neither the Company nor any of its affiliates or subsidiaries, nor any of its or their respective officers, employees, directors,
agents or other representatives, will, without the prior written consent of the Investor (which consent may be withheld, delayed
or conditioned in the Investor’s sole discretion), directly or indirectly, cooperate in any way, assist or participate in,
facilitate or encourage any effort or attempt by any third party to effect any acquisition of securities of the Company by such
third party from an existing holder of such securities in connection with a proposed exchange of such securities of the Company
(whether pursuant to Section 3(a)(9) or 3(a)(10) of the 1933 Act or otherwise)..

 

q. Prohibition on Variable Rate Transactions.
So long as any of the Securities being sold to the Buyer in this offering remain outstanding and owned by the Buyer, including
Conversion Shares, the Company shall not, directly or indirectly, (i) issue or sell any convertible securities either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of, or quotations
for, the shares of Common Stock at any time after the initial issuance of such convertible securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such convertible securities
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock, or (ii) enter into any agreement (including, without limitation, an “equity line of credit” or
an “at-the-market offering”) whereby the Company or any of its subsidiaries may sell securities at a future determined
price (other than standard and customary “preemptive” or “participation” rights). The Buyer shall be entitled
to obtain injunctive relief against the Company and its subsidiaries to preclude any such issuance, which remedy shall be in addition
to any right to collect damages.

 

r. Non-Public Information. Except with
respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants
and agrees that after the Closing Date neither it, nor any other person acting on its behalf, will provide Buyer or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the
Buyer shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands
and confirms that the Buyer shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
Each Buyer acknowledges that it is aware that the United States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such company, or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities,
and the Buyer agrees not to engage in any unlawful trading in securities of the Company or unlawful misuse or misappropriation
of any such information. Buyer agrees to maintain the confidentiality of and not disclose or use (except for purposes relating
to the transactions contemplated by this Agreement) any confidential, proprietary or non-public information disclosed by the Company
to Buyer.

 

    	 

    	 

    

 

5. Transfer Agent Instructions. The
Company covenants and agrees that it will at all times while any Securities remain outstanding maintain a duly qualified independent
transfer agent. On or prior to the initial Closing Date, the Company shall provide a copy of its agreement with the transfer agent
to the Buyer. If a new transfer agent is appointed at any time, the Company shall provide the Buyer with a copy of the new agreement
within three (3) business days of its execution. The Company shall issue irrevocable instructions to its transfer agent to issue
certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time
to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer
Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common
Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the
Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the
restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof
(in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date
that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise
be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii)
it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically
or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant
to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer
agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw
any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion
of or otherwise pursuant to the Note as and when required by the Note and this Agreement. Nothing in this Section shall affect
in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus
delivery requirements, if any, upon re-sale of the Securities. If a Buyer provides the Company, at the cost of the Buyer, with
(i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a
public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected
or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit
the transfer, and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates,
free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any
breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security
being required.

 

6. Conditions to the Company’s Obligation
to Sell. The obligation of the Company hereunder to issue and sell the Note to a Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion:

 

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

 

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

 

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

 

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

 

7. Conditions to The Buyer’s Obligation
to Purchase. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or
before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit
and may be waived by the Buyer at any time in its sole discretion:

 

    	 

    	 

    

 

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

 

b. The Company shall have delivered to the Buyer
duly executed Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

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

 

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

 

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

 

f. No event shall have occurred which could
reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting
status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations, or in the sole discretion
of Buyer, the transaction’s risk profile, market pricing or implied volatility substantially changes, due diligence concerns
arise, or any other conditions material to the successful closing of the transaction are not acceptable to the Buyer.

 

g. The Conversion Shares shall have been authorized
for quotation on the OTCQB and trading in the Common Stock on the OTCQB or such equivalent exchange and shall not have been suspended
by the SEC or the OTCQB or such equivalent exchange.

 

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

 

i.  The Buyer shall have received
an opinion of counsel for the Company, in form and substance satisfactory to the Buyer.

 

8. Governing Law; Miscellaneous.

 

a. Governing Law. 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 Company and Buyer 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 agreement
or document executed in connection with this transaction (each a “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.

 

    	 

    	 

    

 

IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT
BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE
LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

b. Counterparts; Signatures by Facsimile.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

c. Headings. The headings of this Agreement
are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

d. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed
the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.

 

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

 

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

 

    	 

    	 

    

 

	 	If to the Company, to: 
	 	         INERGETICS, INC.
	 	         550 BROAD STREET, SUITE 1212
	 	         NEWARK, NJ 07652
	 	         Attn: Michael C. James, CEO
	 	 
	 	         If to the Buyer: 

 

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

 

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

 

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

 

i. Survival. The representations and
warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding
any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless each
of the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or related to any
breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this Agreement or
any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

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

 

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

 

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

 

m. Remedies. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of
the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement
and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond
or other security being required.

 

    	 

    	 

    

 

n. Rescission and Withdrawal Right. Notwithstanding
anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents,
whenever Buyer exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform
its related obligations within the periods therein provided, then the Buyer may rescind or withdraw, in its sole discretion from
time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice
to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note,
the Buyer shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.

 

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

 

p. Fees and Expenses. Except as expressly
set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery
and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Buyer.

 

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

 

	INERGETICS, INC.	 
	 	 	 
	By: 	 	 
	 	Michael C. James	 
	 	CEO	 
	 	 	 
	BUYER	 
	 	 	 
	By: 	 	 

 

    	 

    	 

    

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 	 	 
	Aggregate Principal Amount of Note:	 	$		 
	Aggregate Purchase Price:	 	$

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