Document:

REGISTRATION RIGHTS AGREEMENT 

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of March 31, 2014, by and among Cytomedix, Inc., a Delaware corporation (the “Company”), and those lenders
set forth on Schedule 1 to the Facility Agreement (as defined below) (each individually, a “Lender” and together, the
“Lenders”).

 

WHEREAS: 

 

A. In connection with the Facility Agreement by and among the
parties hereto of even date herewith (the “Facility Agreement”), the Company has agreed, upon the terms and subject
to the conditions contained therein, (i) to issue and sell to the Lenders Warrants (as defined below) in the amount described in
the Facility Agreement, where each of the Warrants is exercisable into shares of the Company’s common stock, $0.0001 par
value per share (the “Common Stock”), each upon the terms and conditions and subject to the limitations and conditions
set forth in the Warrants, and (ii) to issue to the Lenders Convertible Notes (as defined below) in the amounts described in the
Facility Agreement, where each of the Convertible Notes is convertible into shares of Common Stock, each upon the terms and conditions
and subject to the limitations and conditions set forth in the Convertible Notes; and

 

B. To induce the Lenders to execute and deliver the Facility
Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable
state securities laws,

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Lenders hereby agree as follows:

 

1. DEFINITIONS. 

 

a. As used in this Agreement, the following terms shall have
the following meanings:

 

(i) “Additional Filing Deadline” means, with respect
to any Registration Statements that may be required pursuant to Section 2(a)(ii), (a) the first date or time that such Registrable
Securities may then be included in a Registration Statement if such Registration Statement is required because the SEC shall have
notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration
Statement, or (b) if such additional Registration Statement is required for a reason other than as described in (a) above, the
twentieth (20th) day following the date on which the Company first knows, or reasonably should have known, that such
additional Registration Statement is required.

 

(ii) “Additional Registration Deadline” means, with
respect to any additional Registration Statement(s) that may be required to be filed pursuant to Section 2(a)(ii), the thirtieth
(30th) day following (a) the first date or time that such Registrable Securities may then be included in a Registration
Statement if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable
Securities were not eligible for inclusion on a previously filed Registration Statement, or (b) if such additional Registration
Statement is required for a reason other than as described in (a) above, the fortieth (40th) day following the date
on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required.

 

(iii) “Buyer” means any Lender and any transferee
or assignee who agrees to become bound by the provisions of this Agreement in accordance with Section 10 hereof.

 

(iv) “Convertible Notes” means the convertible promissory
notes issued by the Company pursuant to the Facility Agreement.

 

(v) “Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder, and any successor statute.

 

    	 

    	 

    

 

(vi) “Filing Deadline,” for each Registration Statement
required to be filed hereunder other than Section 2(a)(ii), shall mean a date that is fifteen (15) calendar days following the
later of (i) the applicable Issuance Date and (ii) the Share Authorization Date, and in the case of Section 2(a)(ii), shall mean
the Additional Filing Deadline.

 

(vii) “Person” means and includes any natural person,
partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated
organization, government entity or any political subdivision or agency thereof, or any other entity.

 

(viii) “Register,” “Registered,” and
“Registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance
with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities
on a continuous basis, and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities
and Exchange Commission (the “SEC”).

 

(ix) “Registrable Securities,” for a given Registration,
means (a) any shares of Common Stock (the “Warrant Shares”) issued or issuable upon exercise of or otherwise pursuant
to the Warrants (without giving effect to any limitations on exercise set forth in the Warrants), (b) any shares of Common Stock
(the “Conversion Shares”) issued or issuable upon conversion of the Convertible Notes (without giving effect to any
limitations on exercise set forth in the Convertible Notes), (c) any shares of capital stock issued or issuable as a dividend on
or in exchange for or otherwise with respect to any of the foregoing, (d) any additional shares of Common Stock issuable in connection
with any anti-dilution provisions in the Warrants or the Convertible Notes, (e) any other warrants or shares of Common Stock issuable
pursuant to the terms of the Facility Agreement (other than pursuant to Section 2.9 thereof), the Warrants, the Convertible Notes
or this Registration Rights Agreement, and (f) any securities issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing.

 

(x) “Registration Deadline” shall mean, other than
for purposes of the Registration Statements required under Section 2(a)(ii), the earlier of (i) the date that is forty-five (45)
days after the date that the applicable Registration Statement is actually filed or (ii) the date that is forty-five (45) days
after the applicable Filing Deadline and, with respect to any Registration Statements required to be filed under Section 2(a)(ii),
the Additional Registration Deadline.

 

(xi) “Registration Statement(s)” means a registration
statement(s) of the Company under the Securities Act required to be filed hereunder that includes all Registrable Securities required
to be included pursuant to the terms hereof.

 

(xii) “Share Authorization Date” shall mean the
first date on which the number of shares of Common Stock duly authorized for issuance under the Company’s Certificate of
Incorporation are sufficient to cover the issuance of all shares issuable upon a “Cash Exercise” of all Warrants issued
pursuant to the Facility Agreement on the Issuance Date and the full conversion of all principal amounts outstanding under all
Notes issued under the Facility Agreement on the Issuance Date (regardless of whether or not such exercises or conversions actually
occur).

 

(xiii) “Warrant(s)” means the warrants issued by
the Company pursuant to the Facility Agreement.

 

2. REGISTRATION. 

 

a. MANDATORY REGISTRATION. (i) Following the date on
which any Warrants or Convertible Notes are issued pursuant to the Facility Agreement (each, an “Issuance Date”), the
Company shall prepare, and, on or prior to the applicable Filing Deadline (as defined above) file with the SEC a Registration Statement
(the “Mandatory Registration Statement”) on Form S-1 (or, if Fom S-3 is then available, on Form S-3) covering the resale
of the Registrable Securities issued on the applicable Issuance Date, which Registration Statement, to the extent allowable under
the Securities Act and the rules and regulations promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable (i) upon exercise of
or otherwise pursuant to the Warrants or (ii) upon conversion or otherwise pursuant to the Convertible Notes, to prevent dilution
resulting from stock splits, stock dividends, stock issuances or similar transactions. The number of shares of Common Stock included
in such Registration Statement shall be no less than the aggregate number of (i) Warrant Shares that are then issuable upon exercise
of or otherwise pursuant to the Warrants issued on the Issuance Date, without regard to any limitation on the Buyers’ ability
to exercise the Warrants, and (ii) Conversion Shares that are then issuable upon conversion of or otherwise pursuant to the Convertible
Notes issued on the Issuance Date. Each Registration Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided to (and subject to the approval of) the Buyers and their counsel prior
to its filing or other submission. The Company may seek to register for resale in the Registration Statement up to an additional
11,730,384 shares of Common Stock in the aggregate purchased by investors on the date of this Agreement and issuable upon exercise
of certain warrants issued to such investors on the date hereof as well as upon the exercise of certain placement warrants issued
on the date hereof (the “Other Shares”), but shall otherwise not include any additional securities other than the Registrable
Securities.

 

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(ii) Without derogating or diminishing the Company’s obligations
pursuant to Sections 2(a)(i) or 3(a) or any remedies under the terms of the Warrants or the Convertible Notes, if for any reason
the SEC does not permit all of the Registrable Securities to be included in the Registration Statement filed pursuant to Section
2(a)(i) above, or for any other reason any Registrable Securities are not then included in a Registration Statement filed under
this Agreement, then the Company shall prepare, and, as soon as practicable but in no event later than the Additional Filing Deadline,
file with the SEC an additional Registration Statement covering the resale of all Registrable Securities not already covered by
an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Without
derogating or diminishing the Company’s obligations under this Agreement or any remedies under the terms of the Warrants
or the Convertible Notes, if the SEC imposes a limitation on the number of shares permitted to be registered on a Registration
Statement, the number of shares to be registered on such Registration Statement or additional Registration Statement, as applicable,
shall be reduced in the following order of priority: (i) Other Shares, and (ii) all Registrable Securities on a pro rata basis
based on the number of Registrable Securities registered for each Buyer.

 

3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall have the following obligations:

 

a. The Company shall prepare promptly, and file with the SEC,
no later than the Filing Deadline, a Registration Statement with respect to the number of Registrable Securities provided in Section
2(a), and thereafter shall cause each such Registration Statement relating to Registrable Securities to become effective no later
than the Registration Deadline, and shall keep the Registration Statement current and effective pursuant to Rule 415 at all times
until such date as is the earlier of (i) the date on which all of the Registrable Securities for such Registration Statement have
been sold and (ii) the date on which all of the Registrable Securities for such Registration Statement (in the opinion of counsel
to the Buyers) may be immediately sold to the public without registration or restriction (including without limitation as to volume
by each holder thereof) under the Securities Act (the “Registration Period”), which Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein), except for information provided by a Buyer or any transferee
of a Buyer pursuant to Section 4(a), shall not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not misleading.

 

b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with
each Registration Statement as may be necessary to keep each Registration Statement current and effective at all times during the
Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by each Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set
forth in each Registration Statement. In the event that on any Trading Day (as defined below) (the “Registration Trigger
Date”) the number of shares available under the Registration Statements filed pursuant to this Agreement is insufficient
to cover all of the Registrable Securities issued or issuable upon exercise of or otherwise pursuant to the Warrants or the Convertible
Notes, including, without limitation, any additional shares of Common Stock issued in connection with any anti-dilution provisions
contained in the Warrants or Convertible Notes, without giving effect to any limitations on the Buyers’ ability to exercise
the Warrants or convert the Convertible Notes, the Company shall amend the Registration Statements, or file a new Registration
Statement (on the short form available therefore, if applicable), or both, so as to cover the total number of Registrable Securities
so issued or issuable (without giving effect to any limitations on exercise contained in the Warrants or limitations on conversion
contained in the Convertible Notes) as of the Registration Trigger Date as soon as practicable, but in any event within twenty
(20) days after the Registration Trigger Date (based on the Exercise Price (as defined in the Warrants) of the Warrants, and other
relevant factors on which the Company reasonably elects to rely). The Company shall cause such amendment and/or new Registration
Statement to become effective within sixty (60) days of the Registration Trigger Date or as promptly as practicable in the event
the Company is required to increase its authorized shares. “Trading Day” shall mean any day on which the Common Stock
is traded for any period on the OTC Bulletin Board, or on the principal securities exchange or other securities market on which
the Common Stock is then being traded.

 

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c. The Company shall furnish to each Buyer and its legal counsel
(i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of each
Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto,
and, in the case of a Registration Statement referred to in Section 2(a), each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to
such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought
confidential treatment), and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments
and supplements thereto and such other documents as a Buyer may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Buyer. The Company will immediately notify the Buyers by facsimile of the effectiveness of
each Registration Statement or any post-effective amendment. The Company will promptly respond to any and all comments received
from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the
SEC as soon as practicable and shall file an acceleration request as soon as practicable, but no later than three (3) business
days, following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such
Registration Statement or any amendment thereto will not be subject to review.

 

d. The Company shall use its best efforts to (i) register and
qualify, in any jurisdiction where registration and/or qualification is required, the Registrable Securities covered by the Registration
Statements under such other securities or “blue sky” laws of such jurisdictions in the United States as the Buyers
shall reasonably request, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times
during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions.

 

e. As promptly as practicable after becoming aware of such event,
the Company shall notify each Buyer of the happening of any event, of which the Company has knowledge, as a result of which the
prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and use its
best efforts promptly to prepare a supplement or amendment to any Registration Statement to correct such untrue statement or omission,
and deliver such number of copies of such supplement or amendment to each Buyer as such Buyer may reasonably request.

 

f. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of any Registration Statement, and, if such an order is issued, to obtain
the withdrawal of such order at the earliest possible moment and to notify each Buyer who holds Registrable Securities being sold
(or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

 

g. The Company shall permit a single firm of counsel designated
by the Buyers to review such Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration
or effectiveness thereof), at Buyers’ own cost, a reasonable period of time prior to their filing with the SEC (not less
than five (5) business days but not more than eight (8) business days) and not file any documents in a form to which such counsel
reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel.

 

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h. The Company shall hold in confidence and not make any disclosure
of information concerning a Buyer provided to the Company unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other
than by disclosure in violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure
of such information concerning such Buyer is sought in or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Buyer prior to making such disclosure, and allow such Buyer, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

i. The Company shall cause all the Registrable Securities covered
by each Registration Statement to be listed on each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such
exchange, and, if listed on a national exchange, to arrange for market makers to register with the Financial Industry Regulatory
Authority, Inc. (“FINRA”) as such with respect to such Registrable Securities.

 

j. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the effective date of the initial Registration Statement.

 

k. The Company shall cooperate with each Buyer who holds Registrable
Securities being offered and the managing underwriter or underwriters with respect to an applicable Registration Statement, if
any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to such Registration Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the managing underwriter or underwriters, if any, or the Buyer may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Buyer may request, and, within three (3) business days after
a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies
to each Buyer) an appropriate instruction and an opinion of such counsel in the form required by the transfer agent in order to
issue the Registrable Securities free of restrictive legends.

 

l. At the request of a Buyer, the Company shall prepare and
file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and any prospectus
used in connection with the Registration Statement as may be necessary in order to change the plan of distribution set forth in
such Registration Statement.

 

m. The Company shall not, and shall not agree to, allow the
holders of any securities of the Company to include any of their securities in any Registration Statement under Section 2(a) hereof
or any amendment or supplement thereto under Section 3(b) hereof without the consent of the Buyers. In addition, the Company shall
not offer any securities for its own account or the account of others in any Registration Statement under Section 2(a) hereof or
any amendment or supplement thereto under Section 3(b) hereof without the consent of the Buyers.

 

n. The Company shall take all other reasonable actions necessary
to expedite and facilitate disposition by the Buyers of Registrable Securities pursuant to a Registration Statement.

 

o. The Company shall comply with all applicable laws related
to a Registration Statement and offering and sale of securities and all applicable rules and regulations of governmental authorities
in connection therewith (including, without limitation, the Securities Act and the Exchange Act and the rules and regulations promulgated
by the SEC).

 

p. If required by the Financial Industry Regulatory Authority,
Inc. Corporate Financing Department, the Company shall promptly effect a filing with FINRA pursuant to FINRA Rule 5110 with respect
to the public offering contemplated by resales of securities under the Registration Statement (an “Issuer Filing”),
and pay the filing fee required by such Issuer Filing. The Company shall use commercially reasonable efforts to pursue the Issuer
Filing until FINRA issues a letter confirming that it does not object to the terms of the offering contemplated by the Registration
Statement.

 

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4. OBLIGATIONS OF THE BUYER. In connection with the registration
of the Registrable Securities, each Buyer shall have the following obligations:

 

a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a Buyer that such
Buyer shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration as the Company may reasonably request. At least
five (5) business days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Buyer
of the information the Company requires from such Buyer. Any such information shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading.

 

b. Each Buyer, by such Buyer’s acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and
filing of a Registration Statement hereunder, unless such Buyer has notified the Company in writing of the Buyer’s election
to exclude all of the Buyer’s Registrable Securities from such Registration Statement.

 

c. [RESERVED]

 

d. Each Buyer agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(e) or 3(f), the Buyer will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Buyer’s receipt
of the copies of the supplemented or amended prospectus contemplated by Section 3(e) or 3(f) and, if so directed by the Company,
the Buyer shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Buyer’s possession, of the prospectus covering such Registrable Securities current at the
time of receipt of such notice.

 

5. Registration
Failure. In the event of a Registration Failure (as defined in the Warrants and the Convertible Notes), the Buyers shall
be entitled to Failure Payments (as defined in the Warrants) and such other rights as set forth in the Warrants and the Convertible
Notes.

 

6. EXPENSES OF REGISTRATION. All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant
to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees,
and the fees and disbursements of counsel for the Company shall be borne by the Company.

 

7. INDEMNIFICATION. In the event any Registrable Securities
are included in a Registration Statement under this Agreement:

 

a. The Company will indemnify, hold harmless and defend (i)
each Buyer, (ii) the directors, officers, partners, managers, members, employees, agents and each Person who controls any Buyer
within the meaning of the Securities Act or the Exchange Act, if any, (iii) any underwriter (as defined in the Securities Act)
for each Buyer in connection with an underwritten offering pursuant to Section 2(b) hereof, and (iv) the directors, officers, partners,
employees and each Person who controls any such underwriter within the meaning of the Securities Act or the Exchange Act, if any
(each, an “Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened,
in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or the omission or alleged
omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii)
any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made,
not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of
the Registrable Securities (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”).
The Company shall reimburse the Indemnified Person, promptly as such expenses are incurred and are due and payable, for any reasonable
legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 7(a) shall not apply to a Claim
arising out of or based upon a Violation to the extent that such Violation occurs in reliance upon and in conformity with information
furnished in writing to the Company by any Indemnified Person for use in connection with the preparation of such Registration Statement
or any such amendment thereof or supplement thereto. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Buyer pursuant
to Section 10.

 

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b. Promptly after receipt by an Indemnified Person under this
Section 7 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a
Claim in respect thereof is to be made against the Company under this Section 7, deliver to the Company a written notice of the
commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume
control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnified Person, as the case may be.

 

PROVIDED, HOWEVER, that an Indemnified Person shall have
the right to retain its own counsel with the reasonable fees and expenses to be paid by the Company, if, in the reasonable opinion
of counsel for the Buyer, the representation by such counsel of the Indemnified Person and the Company would be inappropriate due
to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such
proceeding. The Company shall pay for only one separate legal counsel for the Indemnified Persons, and such legal counsel shall
be selected by Buyers. The failure to deliver written notice to the Company within a reasonable time of the commencement of any
such action shall not relieve the Company of any liability to the Indemnified Person under this Section 7, except to the extent
that the Company is actually prejudiced in its ability to defend such action. The indemnification required by this Section 7 shall
be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage
or liability is incurred and is due and payable.

 

c. Each Buyer will indemnify, hold harmless and defend (i) the
Company, and (ii) the directors, officers, partners, managers, members, employees, or agents of the Company, if any (each,
a “Company Indemnified Person”), against any joint or several losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened,
in respect thereof, “Indemnity Claims”) to which any of them may become subject insofar as such Claims arise out of
or are based upon any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable
Securities, which occurs due to the inclusion by the Company in a Registration Statement of false or misleading information about
a Buyer, where such information was furnished in writing to the Company by such Buyer for the purpose of inclusion in such Registration
Statement. Notwithstanding anything herein to the contrary, the indemnity agreement contained in this Section 7(c) shall not
apply to amounts paid in settlement of any Indemnity Claim if such settlement is effected without the prior written consent of
the Buyers which consent shall not be unreasonably withheld or delayed; and provided, further, however, that a Buyer shall
be liable under this Section 7(c) for only that amount of an Indemnity Claim as does not exceed the net amount of proceeds
received by such Buyer as a result of the sale of Registrable Securities pursuant to such Registration Statement.

 

d. Promptly after receipt by a Company Indemnified Person under
this Section 7 of notice of the commencement of any action (including any governmental action), such Company Indemnified Person
shall, if an Indemnity Claim in respect thereof is to be made against a Buyer under this Section 7, deliver to such Buyer
a written notice of the commencement thereof, and such Buyer shall have the right to participate in, and, to the extent such Buyer
so desires, to assume control of the defense thereof with counsel mutually satisfactory to such Buyer and the Company Indemnified
Person, as the case may be.

 

8. CONTRIBUTION. To the extent any
indemnification by the Company is prohibited or limited by law, the Company agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 7 to the fullest extent permitted by law, based upon a comparative
fault standard.

 

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9. REPORTS UNDER THE 1934 ACT. With
a view to making available to the Buyers the benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the SEC that may at any time permit the Buyers to sell securities of the Company to the public without registration
the Company agrees to:

 

a. make and keep public information available,
as those terms are understood and defined in Rule 144;

 

b. file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144;
and

 

c. so long as the Buyers own Registrable Securities,
promptly upon request, furnish to the Buyers (i) a written statement by the Company that it has complied with the reporting requirements
of the Securities Act and the Exchange Act as required for applicable provisions of Rule 144, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Buyers to sell such securities pursuant to Rule 144 without registration.

 

10. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable by each Buyer to any transferee of all or any portion of
the Registrable Securities if: (i) the Buyer agrees in writing with the transferee or assignee to assign such rights, and
a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned,
and (iii) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein. In the event that
a Buyer transfers all or any portion of its Registrable Securities pursuant to this Section, the Company shall have at least ten
(10) days to file any amendments or supplements necessary to keep a Registration Statement current and effective pursuant to Rule 415,
and the commencement date of any Event of Failure (as defined in the Warrants) or Event of Default (as defined in the Warrants
and the Convertible Notes) under the Warrants or the Convertible Notes caused thereby will be extended by ten (10) days.

 

11. AMENDMENT OF REGISTRATION RIGHTS. Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and the holders of a majority in interest of then-outstanding
Registrable Securities. Any amendment or waiver effected in accordance with this Section 11 shall be binding upon each of
the Buyers and the Company.

 

12. MISCELLANEOUS.

 

a. A Person is deemed to be a holder of Registrable
Securities whenever such Person owns of record or beneficially through a “street name” holder such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such
Registrable Securities.

  

    	8

    	 

    

 

b. Any notices required or permitted to be
given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or
by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed
in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

 

If to the Company:

 

Cytomedix, Inc.

209 Perry Parkway, Suite 7

Gaithersburg, MD 20877

Fax: (240) 499-2690 

Attn: Steven A. Shallcross, Executive VP, CFO

 

With copy to:

 

Schiff Hardin LLP

901 K Street NW

Suite 700

Washington, DC 20001

Fax: (202) 778-6460

Attn: Alec Orudjev, Esq.

 

If to a Buyer:

 

c/o Deerfield Mgmt, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

Fax: (212) 599-1248

Attn: James E. Flynn

 

With a copy to:

 

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Fax: (212) 940-8776

Attn: Mark I. Fisher, Esq.

Elliot Press, Esq.

 

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

 

c. Failure of any party to exercise any right
or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver
thereof.

 

d. Governing Law. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated
by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees
or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this 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. The parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

 

    	9

    	 

    

 

e. This Agreement, the Warrants, the Convertible
Notes and the Facility Agreement (including all schedules and exhibits thereto) constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement, the Warrants, the Convertible Notes and the Facility
Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof
and thereof.

 

f. Subject to the requirements of Section 10
hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto,
and the provisions of Sections 7 and 8 hereof shall inure to the benefit of, and be enforceable by, each Indemnified Person and
Company Indemnified Person (as applicable).

 

g. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

h. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This
Agreement, once executed by a party, may be delivered to the other party hereto by facsimile or other electronic transmission of
a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

i. 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.

 

j. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyers by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for breach of its obligations hereunder will
be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions hereunder, that
the Buyers shall be entitled, in addition to all other available remedies in law or in equity, to an injunction or injunctions
to prevent or cure breaches of the provisions 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.

 

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

 

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

 

m. In the event a Buyer shall sell or otherwise
transfer any of such holder’s Registrable Securities, each transferee shall be allocated a pro rata portion of the number
of Registrable Securities included in a Registration Statement for such transferor.

 

n. There shall be no oral modifications or
amendments to this Agreement. This Agreement may be modified or amended only in writing.

 

[Remainder of page left intentionally
blank]

 

[Signature page follows]

 

    	10

    	 

    

 

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

  

	COMPANY:	 	BUYERS:
	 	 	 	 
	CYTOMEDIX, INC.	 	DEEFIELD PRIVATE DESIGN FUND II, L.P.
	 	 	 	By: Deerfield Mgmt., L.P. its General Partner
	By:	/s/ Martin Rosendale	 	By: J.E. Flynn Capital, LLC, its General Partner
	Name:	/s/ Martin Rosendale 	 	 	 
	Title:	Chief Executive Officer 	 	By:	/s/ David J. Clark 
	 	 	 	Name:	David J. Clark 
	 	 	 	Title:	General Counsel & Authorized Signatory 

 

	 	DEEFIELD PRIVATE DESIGN INTERNATIONAL II, L.P.
	 	By: Deerfield Mgmt., L.P. its General Partner
	 	By: J.E. Flynn Capital, LLC, its General Partner
	 	 	 
	 	By:	/s/ David J. Clark 
	 	Name:	David J. Clark 
	 	Title:	General Counsel & Authorized Signatory 
	 	 	 
	 	DEEFIELD SPECIAL SITUATIONS FUND, L.P.
	 	By: Deerfield Mgmt., L.P. its General Partner
	 	By: J.E. Flynn Capital, LLC, its General Partner
	 	 	 
	 	By:	/s/ David J. Clark 
	 	Name:	David J. Clark 
	 	Title:	General Counsel & Authorized Signatory 
	 	 	 
	 	DEEFIELD SPECIAL SITUATIONS INTERNATIONAL MASTER FUND, L.P.
	 	By: Deerfield Mgmt., L.P. its General Partner
	 	By: J.E. Flynn Capital, LLC, its General Partner
	 	 	 
	 	By:	/s/ David J. Clark 
	 	Name:	David J. Clark 
	 	Title:	General Counsel & Authorized Signatory 

  

 [Signature Page to Registration Rights Agreement]PARAGON
COMMERCIAL BANK

3535
Glenwood Avenue, Raleigh, North Carolina 27612

 

	Loan
    # 9930000823	 COMMERCIAL
    NOTE	 

 

	 	Loan
    Officer 	CWB	/s/ Charles
    W. Bartz
	 	 	 	Charles W. Bartz, Senior Vice President

 

	Date:
    April 11, 2013	 Borrower:
    Chanticleer Holdings, Inc.	 

 

	Loan
    Amount: $500,000.00 	x 
    Revolving Line of Credit	 

 

FOR VALUE RECEIVED, the undersigned, jointly and severally,
promise(s) to pay to PARAGON COMMERCIAL BANK (“Bank”), or order, the sum of Five Hundred Thousand and 00/100 Dollars
($500,000.00) or so much as shall have been disbursed from time to time and remains unpaid, including or together with interest
at the rate and payable in the manner hereinafter stated. Principal and interest shall be payable at Bank at the address indicated
above, or such other place as the holder of this Note may designate.

 

 

INTEREST RATE

All payments made on this Note will be applied first to accrued
interest and then to principal. Interest will accrue on the unpaid principal balance at the rate set forth below until maturity
and will accrue on any unpaid past due interest before maturity and on any unpaid balance after maturity as set forth on the reverse
side of this Note. 

 

Interest payable on this Note will be at the per annum rate
of:

 

		x	Wall
                                         Street Journal Prime Rate + 1.00%, with a floor rate of 5.00%

 

As used in this Note “Wall Street Journal
Prime” shall mean the prime rate most recently published in the “Money Rates” section specified in the
Eastern Edition of the Wall Street Journal; provided that if more than one such “Prime Rate” is published,
the higher of such rate shall be applicable.

 

Interest will be calculated on the basis of:  x
Actual days/360 day year

 

All rates except the “Fixed” rate will be subject
to change without prior notice at the sole option of Bank and will be effective:

 

		x	As
                                         of the date the base rate (Wall Street Journal Prime Rate) changes

 

Effect of Variable Rate: A change in the interest rate
will have the following effect on the payments:

 

		x	The
                                         amount of each scheduled payment and the final payment will change.

 

 

PRINCIPAL PAYMENT TERMS

Principal (and interest if indicated under Interest Payment
Terms below) shall be payable as follows:

 

		x	Payable
                                         in one single payment on April 10, 2014 (herein referred to as “Maturity”).

 

 

INTEREST PAYMENT TERMS

Interest shall be payable in arrears, as follows:

 

		x	Payable
                                         monthly beginning May 10, 2013 and consecutively on the same calendar day of each such
                                         calendar period thereafter.

 

 

LATE CHARGE

If any scheduled payment is in default 15 days or more (unless
interest on this Note is payable in advance, in which case such period shall be 30 days or more), Obligors agree to pay a late
charge equal to 6.00% of the amount of the payment that is in default, but not more than maximum amount allowed by applicable
law.

 

 

PREPAYMENT

		x	This
                                         Note may be prepaid in whole or in part any time without premium.

 

For partial prepayments, the Bank may, in its sole discretion,
apply the prepayment to principal and recalculate the installment payment amount so that equal payments of principal and interest
will cause this Promissory Note to be paid in full with the same Maturity date (set forth above). If the Bank decides not to recalculate
the installment payment amount, then such prepayment will be applied to the most remote installment then unpaid and shall not
otherwise reduce the installment payments coming due prior thereto.

 

 

COLLATERAL

		x	SECURED.
                                         This Note is secured by collateral described in the following security instruments:

 

Cross Collateralized
and Cross Defaulted with Paragon Commercial Loan #9930000455 to Borrower secured by:

 

		x	Security
                                         agreement(s) dated July 15, 2009 evidenced by UCC-1 filing with North Carolina Secretary
                                         of State for a blanket first priority lien on all furnishings, equipment, inventory and
                                         other items and types of personal property now owned or hereafter acquired, all the Borrower's
                                         general intangibles, instruments and or investment documents and accounts receivable,
                                         whether presently existing or arising in the future, and all the proceeds and products
                                         from the foregoing (including insurance proceeds). In addition to the foregoing, the
                                         collateral shall also include the Borrower's 11.5% interest in Chanticleer Investors,
                                         LLC sole asset: a Convertible Secured Promissory Note dated May 24, 2006 between Robert
                                         H. Brooks and any and all amendments thereto ("Security Agreement").

 

		1)	At
                                         maturity of this Note, or upon default, Bank is authorized and empowered to apply to
                                         the payment hereof, any and all money deposited in Bank in the name of or to the credit
                                         of each party, without advance notice, and is authorized to offset any obligation of
                                         Bank to any party to the payment hereof.

 

		2)	Collateral
                                         securing other loans of each party with Bank may also secure this loan and this loan
                                         may also be supported by separate Guaranty Agreement(s).

 

 

 

    	1

    	 

    

 

SIGNATURES

The undersigned parties are jointly and severally liable for
the payment of this Note and have subscribed their names hereto. The provisions printed below are a part of this Note. The provisions
of this Note are binding on the heirs, executors, administrators, successors and assigns of each and every party and shall inure
to the benefit of the holder, its successors and assigns. This Note is executed under the seal of each of the parties and of the
endorsers, if any.

  

	 	CHANTICLEER HOLDINGS, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ Michael D. Pruitt	(SEAL)
	 	 	Michael D. Pruitt, President/CEO/CFO	 

 

 

 

 

Additional Terms and Provisions of Note

 

DEFAULT. Any of the following shall constitute an
event of default: (1) the failure to make when due any payment described herein, whether of principal, interest, or
otherwise; (2) the failure of any party hereto to perform any of the terms and conditions written into, the Loan Agreement or
security instrument(s) securing this Note or any guaranty agreement or security instrument(s) securing such guaranty
agreement which apply  to this Note; (3) the death, dissolution, merger, consolidation or termination of existence of any
party; or if any party is a corporation with thirty-five (35) or fewer shareholders, the aggregate transfer(s) of voting
shares in such party whereby persons or entities not owning on the date hereof, singly or in the aggregate, 50% or more of
the voting shares of such party, become the owner(s), singly or in the aggregate, of 50% or more of such voting shares, or if
such party is a limited or general partnership, any change in general partnership interest(s) in such party; (4) the
application for the appointment of a receiver for any party or the filing of a petition under any provisions of the
Bankruptcy Code or Act by or against any party or any assignment for the benefit of creditors by or against any party; (5)
the failure of any party to furnish from time to time, at Bank's request, financial information requested with respect to
such party without undue delay; (6) a determination by Bank that it deems itself insecure or that an adverse change in the
financial condition of any party has occurred since the date hereof; (7) the failure of any party to perform any other
obligation to Bank; (8) the termination of any guaranty agreement which applies to this Note; (9) default by Borrower or any
guarantor under the terms of any agreement or instrument pursuant to which Borrower or any guarantor has borrowed money from
any person; (10) default by Borrower under terms of any instrument or other agreement to which this Agreement or any of
the other loan documents are subordinate or which is subordinate to this Agreement or any of the other loan documents.(11)
default by Borrower or any guarantor in keeping, performing or observing any term, covenant, agreement or condition of any
Commitment upon which all or any portion of any indebtedness evidenced by the NOTE was predicated.

LATE CHARGES, EXPENSES AND ACCELERATION. Each party
agrees to pay any late charges permitted by applicable law that Bank may, in its discretion, charge for late payments. If this
Note is not paid in full whenever it becomes due and payable, each party agrees to pay all costs and expenses of collection, including
a reasonable attorney's fee up to the amount of fifteen (15) percent of the then outstanding balance. Upon the occurrence of an
event of default, the entire unpaid balance of this Note shall, at the option of Bank, become immediately due and payable, without
notice or demand. Failure to exercise the option to accelerate shall not constitute a waiver of the right to exercise same in
the event of any subsequent default.

INTEREST. Upon the nonpayment of any payment of interest
described herein, the Bank, at its option and without accelerating this Note, may accrue interest on such unpaid interest at the
rate(s) applicable hereunder from lime to time until maturity of this Note. After maturity of this Note, whether by acceleration
or otherwise, interest will accrue on the unpaid principal of this Note and any accrued but unpaid interest shall bear interest
at the lesser of (i) the highest contract rate, if any, permitted by applicable law (ii) a rate equal to 18% per annum. Such interest
rate shall apply both before and after any judgment hereon.

WAIVER. Each party waives presentment, demand, protest
and notice of dishonor, waives any rights which they may have to require Bank to proceed against any other person or property,
agrees that without notice to any party and without affecting any party's liability, Bank, at any time or times, may grant extensions
of the time for payment or other indulgences to any party or permit the renewal, amendment or modification of this Note, the Loan
Agreement or any security instrument(s), or permit the substitution, exchange or release of any security for this Note and may
add or release any party primarily or secondarily liable, and agrees that Bank may apply all moneys made available to it from
any part of the proceeds from the disposition of any security for this Note either to this Note or to any other obligation of
any of the parties to Bank, as Bank may elect from time to time.

PARTIES. Each signatory of this Note is herein sometimes
referred to as "Party" or collectively as "Parties" and each agrees to be liable hereunder jointly and severally.
This Note shall apply to and bind each party's heirs, personal representatives, successors and assigns. All references in this
Note to Bank shall include the holder hereof and this Note shall inure to the benefit of any holder, its successors and assigns.

PARTIES' DUE DILIGENCE. The undersigned acknowledge
and represent that they have relied upon their own due diligence in making their own independent evaluations of the purposes for
which the proceeds of this Note will be used and of the business affairs and financial condition of all parties hereto. and they
will continue to be responsible for making their own appraisals of such matters. The undersigned have not relied upon and will
not hereafter rely upon Bank for such information for such appraisal or other assessment or review and, further, will not rely
upon any such information which may now or hereafter be prepared by Bank.

CREDIT INVESTIGATION. The Bank is authorized to investigate
from time to time the credit of each party and to answer questions relating to the Bank's credit experience with each party.

 

    	2

    	 

    

 

PARAGON COMMERCIAL BANK

COMMERCIAL LOAN AGREEMENT

 

THIS COMMERCIAL LOAN AGREEMENT (the "AGREEMENT")
is made this 11th day of April, 2013, between Chanticleer Holdings, Inc. ("BORROWER") whose address is
11220 Elm Lane Suite 203 Charlotte, NC 28277 and Paragon Commercial Bank ("BANK").

 

RECITAL

 

BORROWER wishes to acknowledge total borrowings as of the
date of this Commercial Loan Agreement from BANK in the principal sum of up to Seven Hundred Thirty Four Thousand One
Hundred Thirty and 43/100 DOLLARS ($734,130.43), and BANK is and or has been willing to lend such sum to BORROWER on the
terms and conditions herein contained and as may have been contained in any and all previous commitment letters issued by
BANK (the "COMMITMENT(s)"), which COMMITMENT(s) also may require or have required one or more guarantors (each a
"GUARANTOR") to agree to certain terms and conditions contained therein and in a separate guaranty agreements.

 

NOW THEREFORE, BANK and BORROWER agree to the premises herein
contained as follows:

 

ARTICLE I – LOAN

 

		x	Subject to the terms and conditions set forth herein,
BANK agrees or has previously agreed to make a loan to BORROWER in the original principal sum of $250,000.00, with a current principal
balance of $234,130.43 (#9930000455).

 

		x	Subject to the terms and conditions set forth herein,
BANK agrees or has previously agreed to provide an open end line of credit to BORROWER; amounts repaid may be re-borrowed , provided
that the aggregate principal amount outstanding at any one time does not exceed $500,000.00.

 

The indebtedness to be provided pursuant to this AGREEMENT
is hereinafter sometimes referred to as the "LOAN".

 

SECTION 1.1. NOTE. The LOAN shall be evidenced by BORROWER's
Commercial Note dated the same date as this AGREEMENT substantially in the form of Exhibit A attached hereto ("NOTE"),
all terms of which are incorporated herein by this reference.

SECTION 1.2. LOAN DOCUMENTS. The loan documents shall
include this AGREEMENT, the NOTE, deed of trust, guaranty agreement, any collateral assignments, and any and all other documents
which BORROWER, GUARANTOR or any other party or parties have executed and delivered, or may hereafter execute and deliver to evidence,
secure or guarantee the obligations, or any part thereof, as the same may from time to time be extended, amended, restated, supplemented
or otherwise modified. The loan documents constitute the entire understanding and agreement between BORROWER and BANK with respect
to the transactions arising in connection with the LOAN, and supersede all prior written or oral understandings and agreements
between BORROWER and BANK with respect to the matters addressed in the loan documents. In particular, and without limitation,
the terms of any commitment by BANK to make the LOAN are merged into the loan documents. Except as incorporated in writing into
the loan documents, there are no representations, understandings, stipulations, agreements or promises, oral or written, with
respect to the matters addressed in the loan documents. If there is any conflict between the terms, conditions and provisions
of this AGREEMENT and those of any other instrument or agreement, including any other loan document, the terms, conditions and
provisions of this AGREEMENT shall prevail.

SECTION 1.3. PREPAYMENT. BORROWER may prepay principal
on the indebtedness arising under this AGREEMENT only in accordance with the terms of the NOTE.

SECTION 1.4. PURPOSE. The proceeds of the LOAN shall
be used as identified in each loan approval.

SECTION 1.5. SECURITY. As security for all indebtedness
to BANK, BORROWER grants to BANK a security interest in BORROWER's collateral as identified in each set of loan documents.

SECTION 1.6. SUCCESSORS AND ASSIGNS.

(a) Each and every one of the
covenants, terms, provisions and conditions of this AGREEMENT and the LOAN documents shall apply to, bind and inure to the
benefit of BORROWER, its successors and those assigns of BORROWER consented to in writing by BANK, and shall apply to, bind
and inure to the benefit of BANK and the endorsees, transferees, successors and assigns of BANK, and all persons claiming
under or through any of them.

(b) BORROWER agrees not to transfer, assign, pledge or hypothecate
any right or interest in any payment or advance due pursuant to this AGREEMENT, or any of the other benefits of this AGREEMENT,
without the prior written consent of BANK, which consent may be withheld by BANK in its sole and absolute discretion. Any such
transfer, assignment, pledge or hypothecation made or attempted by BORROWER without the prior written consent of BANK shall be
void and of no effect. No consent by BANK to an assignment shall be deemed to be a waiver of the requirement of prior written
consent by BANK with respect to each and every further assignment and as a condition precedent to the effectiveness of such assignment.

(c) BANK may sell or offer to sell the LOAN or interests therein
to one or more assignees or participants. BORROWER shall execute, acknowledge and deliver any and all instruments reasonably requested
by BANK in connection therewith, and to the extent, if any, specified in any such assignment or participation, such assignee(s)
or participant(s) shall have the same rights and benefits with respect to the LOAN Documents as such person(s) would have if such
person(s) were BANK hereunder. BANK may disseminate any information it now has or hereafter obtains pertaining to the LOAN, including
any security for the LOAN, any credit or other information on the BORROWER's property (including environmental reports and assessments),
BORROWER, any of Borrower's principals or any GUARANTOR, to any actual or prospective assignee or participant, to BANK's affiliates,
to any regulatory body having jurisdiction over BANK, to any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to BORROWER and the LOAN, or to any other party as necessary or appropriate in BANK's reasonable
judgment.

SECTION 1.7. CREDIT LINE PAYOUT. At a time of BORROWER's
choosing, but prior to the maturity date of the NOTE, the principal balance of the NOTE for any line of credit must be fully repaid
by BORROWER and must remain paid out for NA consecutive days.

 

ARTICLE II- REPRESENTATIONS AND WARRANTIES

 

BORROWER makes the following representations and warranties
to BANK, which representations and warranties shall survive the execution of this AGREEMENT and the closing and shall be affirmed
upon each draw request and any advances of the LOAN.

SECTION 2.1. LEGAL STATUS. BORROWER is a business entity
duly organized and existing under the laws of the State of North Carolina, and is qualified to do business in all jurisdictions
in which it conducts its business.

 

    	1

    	 

    

 

SECTION 2.2. NO VIOLATION. The making and performance
by BORROWER of this AGREEMENT does not violate any provision of law, and does not result in a breach of or constitute a default
under any agreement, indenture or other instrument to which BORROWER is a party or by which BORROWER may be bound.

SECTION 2.3. AUTHORIZATION. This AGREEMENT has been
duly authorized, executed and delivered, and is a valid and binding agreement of BORROWER; and the NOTE to be issued hereunder
by BORROWER, upon its execution and delivery in accordance with the provisions of this AGREEMENT, will be a valid and binding
obligation of BORROWER in accordance with its terms.

SECTION 2.4. LITIGATION. There are no pending or threatened
actions or proceedings before any court or administrative agency which may adversely affect the financial condition, results of
operations, business or properties of BORROWER other than those heretofore disclosed by BORROWER to BANK in writing.

SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENTS.
The financial statements dated December 31, 2012, heretofore delivered by BORROWER to BANK present fairly the financial
condition of BORROWER, and prepared in accordance with sound accounting principles applicable to entities such as the
BORROWER, consistently applies as approved by LENDER. As of the date of such financial statements, and since such date, there
has been no material adverse change in the condition or operations of BORROWER, nor has BORROWER mortgaged, pledged or
granted a security interest in or encumbered any of BORROWER's assets or properties since such date.

SECTION 2.6. TAXES. BORROWER has filed or caused
to be filed all tax returns, reports, estimates and declarations which are required to be filed, and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on BORROWER or any of its property by any governmental authority (other than those the amount or
validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in
conformity with and prepared in accordance with sound accounting principles applicable to entities such as the BORROWER,
consistently applies as approved by LENDER have been established; and no liens have been filed and no claims are being
asserted with respect to any such taxes, fees or other charges and no event exists, or will exist at closing which with the
giving notice or the lapse of time, or both, would give rise to a lien. Federal tax returns of BORROWER have been audited
through BORROWER's tax year ended 2012, and BORROWER has no knowledge of any pending assessments or adjustments of its income
tax payable with respect to any year subsequent to that date.

SECTION 2.7. NO SUBORDINATION. The obligations of BORROWER
under this AGREEMENT or the NOTE are not subordinated in right of payment to any other obligation of BORROWER to any other lender
or other person, including without limitation any member, manager, shareholder, principal, partner, director, officer, employee
or agent of BORROWER.

SECTION 2.8. PERMITS, FRANCHISES. The BORROWER possesses,
and will hereafter possess, all permits, memberships, franchises, contracts, and licenses required and all trademark rights ,
trade names, trade name rights, patents, patent rights, and fictitious name rights necessary to enable it to conduct the business
in which it is now engaged without conflict with the rights of others.

SECTION 2.9 NO DEFAULT—  CONTRACTUAL OBLIGATIONS. BORROWER
is not in default under or with respect to any contractual obligation (including any indebtness) in any respect which could be
materially adverse to its businesses, operations, properties, financial or other conditions, or which could materially adversely
affect its ability to perform its obligations under the loan documents, and no event exists, or will exist at closing which, with
the giving of notice or the lapse of time, or both, would give rise to such a default. To the best of its knowledge, all of the
material contractual obligations of BORROWER are valid, binding, and enforceable obligations of all of the parties thereto, in
accordance with their respective terms, and, to the best of its knowledge, there are no material disputes between BORROWER and
the other parties to such material contractual obligations with respect to such contractual obligations and BORROWER, after taking
the LOAN into account, will be able to continue performing its obligations under such contractual obligations.

SECTION 2.10 NO DEFAULT —  LOAN DOCUMENTS. No
default conditions or EVENT OF DEFAULT shall exist at closing and, to the best of BORROWER's knowledge, after due and
diligent inquiry, no event exists, or will exist at closing which with the giving of notice or the lapse of time, or both,
would give rise to a default condition.

SECTION 2.11 OWNERSHIP OF PROPERTY; LIENS; ETC. BORROWER
has good and marketable title in fee simple in and to all of the collateral (including without limitation, the Borrowing Base,
as defined in SECTION 3.4(t), if applicable) free and clear of any and all liens, security interests, claims, demands, off-sets,
contingencies or other outstanding interests, whether legal or equitable, except for liens and interests, if any, approved by
BANK.

SECTION 2.12 DISCLOSURE. Neither this AGREEMENT, the
other loan documents, nor any representation , certificate, statement or other documents furnished to BANK prior to or contemporaneous
with the execution and delivery of this AGREEMENT by BORROWER contains any untrue statement of any material fact or omits disclosure
of any material fact necessary to make the statement contained herein misleading. There is no material fact known to BORROWER
which has not been disclosed to BANK in writing which affects in a materially adverse manner the property, business, prospects,
profits or condition (financial or otherwise) of BORROWER, or the ability of BORROWER to fully perform this AGREEMENT and the
other loan documents to which it is a party, and any all other transactions contemplated herein.

SECTION 2.13 COLLATERAL AND COMPLIANCE. All of the collateral
and all other property that is necessary for the full use and enjoyment of the collateral is in material compliance with all governmental
and regulatory orders, directives, rules and regulations, including zoning, subdivision, and environmental rules and regulations,
and will be operated in such manner to remain in material compliance with such laws until the LOAN is paid and satisfied in full.

SECTION 2.14 NO MATERIALLY ADVERSE CONTRACTS ETC.
BORROWER is not subject to any charter or corporate restriction or legal restrictions, or any judgment, decree, order, rule,
regulations or any other requirement of law which has or is expected in the future to have a material adverse effect on the
business, assets, or financial condition or prospects of BORROWER. BORROWER is not a party to any contract or agreement which
has or is expected to have any material adverse effect on the business, assets, financial conditions or prospects of any of
them.

SECTION 2.15 NAME. BORROWER operates its business and
owns its assets only under its name used herein.

SECTION 2.16 ENVIRONMENTAL COMPLIANCE. BORROWER has
not conducted any activity on any real property owned or leased by it, or otherwise in its possession or control, involving the
generation, treatment, storage or disposal of hazardous waste, other than activities in the normal course of its business (and
as to such activities in the normal course of business, it is in compliance in all material respects with all requirements of
law), nor has any previous owner conducted any such activities. BORROWER's records do not now, nor to its best knowledge, have
they ever revealed any discharge, spill, or disposal of any hazardous substances, hazardous waste or oil at, on or under any of
the aforementioned real property. There has not been any notice or violation, administrative penalty, civil or criminal action,
claim, lien or any administrative or legal action or notice of same by any person whatsoever (including any governmental authority)
against BORROWER of any of the aforementioned real property relating to any hazardous substances, hazardous waste, oil, or any
other environmental matters. The soil, surface water and ground water on, under or about said real property are free from hazardous
substances, hazardous waste and oil.

 

ARTICLE III
—CONDITIONS PRECEDENT

 

The obligation of BANK to
make any advance hereunder is subject to the fulfillment of the following conditions:

SECTION 3.1. APPROVAL OF BANK COUNSEL. All legal matters
incidental to each advance hereunder shall be satisfactory to BANK counsel.

 

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SECTION 3.2. REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by BORROWER which are contained herein and/or in any certificate. document. or financial or other statement
furnished at any time under or in connection herewith. shall be correct and as of closing, as if made on and as of such date, and
on and as of the date of each advance or disbursement of LOAN proceeds.

SECTION 3.3 NO DEFAULT OR EVENT OF DEFAULT. No default
condition or EVENT OF DEFAULT shall have occurred and be continuing as of closing or after giving effect to the LOAN to be made
at closing, nor shall a default condition or EVENT OF DEFAULT exist as of the date of any disbursement or advance of LOAN proceeds.

SECTION 3.4. DOCUMENTATION. BORROWER shall have delivered
to BANK in form and substance satisfactory to BANK the following described documents:

(a) Loan Documents. BANK shall have received fully executed
and, if necessary, recorded or filed, originals of the loan documents required by the COMMITMENT, this AGREEMENT and/or as may
be otherwise required by BANK to evidence the LOAN and to create and perfect the lien and security interest in the collateral
required herein.

(b) Supporting Documentation. All of the
conditions listed in this SECTION 3.3, in the COMMITMENT and elsewhere in this AGREEMENT shall have been completed and/or
satisfied, including, without limitation, perfection in favor of BANK of the lien and security interest in all of the
collateral as required herein.

(c) UCC-11 Search Results. BANK shall have received
current UCC-11 search results from such local and state filing offices verifying any judgments, liens or pending cases as BANK
may request, each showing no liens or encumbrances against any of the collateral.

(d) Taxes. BORROWER shall have delivered to BANK evidence
that the ad valorem taxes on any real property that is a part of the collateral have been paid through the most recent calendar
year and information as to tax parcel identification numbers, tax rates, estimated tax values and the identities of the taxing
authorities.

(e) Licensee and Permits. BORROWER shall have received
copies of all material licenses and permits respecting BORROWER's business that are necessary for the conduct thereof.

(f) Insurance. BORROWER shall have delivered to BANK
evidence that BORROWER and such other persons as required by BANK have obtained each of the insurance policies required under
this AGREEMENT together with satisfactory evidence of premium payments.

(g) Current Financial Statements. BORROWER shall have
delivered to BANK complete and current financial statements, all as required by and in form satisfactory to BANK.

(h) Taxpayer Identification Number. BORROWER shall have
supplied to BANK its federal taxpayer identification numbers and/or social security numbers.

(i) Authority Documents. BANK shall have received from
BORROWER and from such other persons as BANK may request, documents evidencing their respective authority to enter into this LOAN
and loan documents, as applicable, together with certificates of authority and/or good standing and borrowing certifications
as BANK and its counsel deem appropriate.

(j) Opinion of BORROWER's Counsel. BANK shall have received
from BORROWER's counsel a written legal opinion regarding, as applicable, the organization and operation of BORROWER, the enforceability
of the loan documents and such other matters as BANK may reasonably request, such opinion to be in form and substance satisfactory
to BANK.

(k) Borrowing Base Report. NA

SECTION 3.5 ORIGINATION FEE AND OTHER FEES. BORROWER
shall have paid to BANK the origination fee or commitment fee as may be required in the COMMITMENT and all other fees and costs
and expenses to be paid by BORROWER at or before closing, as provided in the COMMITMENT.

SECTION 3.6 BANK ACCOUNTS. As a condition of the LOAN,
BORROWER or a related entity agrees to establish and maintain their primary depository account with BANK. BORROWER or such related
entity agrees to maintain deposits with BANK based on this relationship and during the term of the LOAN.

SECTION 3.7 ADDITIONAL MATTERS. All other documents
and legal matters in connection with the transactions contemplated by this AGREEMENT shall be received by BANK in form and substance
satisfactory to BANK and its counsel and such counsel shall have received all information and such counterpart originals, or certified
or other such copies of such documents, as such counsel may reasonably request.

SECTION 3.8 GENERAL. Without imposing any obligation
or undertaking by BANK or its counsel and without acknowledging compliance with the representations and warranties or waiving
strict compliance by BORROWER with all of the terms and conditions of the AGREEMENT and the materiality of all of the representations
and warranties of BORROWER, BANK or BANK's counsel shall retain the right to be satisfied that all matters required to be performed
in connection with this transaction have been performed in such a manner that the LOAN funds can be advanced, the lien and security
position of BANK perfected in the collateral and that no event exists which will jeopardize the LOAN or the prospect of payment
of the LOAN or the payment or performance of any of BORROWER's obligations in this AGREEMENT or any other loan documents.

 

ARTICLE IV
—  AFFIRMATIVE COVENANTS

 

BORROWER covenants that
so long as BORROWER is indebted to BANK under this AGREEMENT, and until the payment in full of the NOTE issued hereunder, BORROWER
will:

SECTION 4.1 . PUNCTUAL PAYMENT. Punctually pay the interest
and principal of the NOTE at the times and place in the manner specified in the NOTE.

SECTION 4.2 PRIORITY PAYMENTS. Make payments of principal
and interest due under this AGREEMENT and the NOTE before making any payments of (a) principal and interest to any non-related
party creditor and (b) principal and interest to any shareholder, partner, member or other related party of BORROWER.

SECTION 4.3. ACCOUNTING RECORDS. Maintain adequate books
and accounts in accordance with sound accounting principles applicable to entities such as the Borrower, consistently applied
as approved by Lender. BORROWER shall permit any representative of BANK, at any reasonable time, to inspect, audit and examine
such books and inspect the properties of BORROWER.

SECTION 4.4. FINANCIAL STATEMENTS. Furnish BANK: From
time to time such other information as BANK may reasonably request.

SECTION 4.5. EXISTENCE. Preserve and maintain its existence
and all of its rights, privileges and franchises; conduct its business in an orderly, efficient, and regular manner; and comply
with the requirements of all applicable laws, rules, regulations and orders of a governmental authority.

SECTION 4.6. INSURANCE. Maintain and keep in force insurance
of the types and in amounts customarily carried in lines of business similar to BORROWER's, including but not limited to fire,
public liability. Property damage, flood , contents coverage and workers' compensation. carried in companies and in amounts satisfactory
to BANK; and BORROWER shall deliver to BANK from time to time at BANK's request schedules setting forth all insurance then in
effect.

SECTION 4.7. FACILITIES. Keep all BORROWER's properties
useful or necessary to BORROWER's business in good repair and condition, and from time to time make necessary repairs . renewals
and replacements thereto so that BORROWER's property shall be fully and efficiently preserved and maintained.

SECTION 4.8. TAXES AND OTHER LIABILITIES. Pay and discharge
when due any and all indebtedness, obligations, assessments, taxes, including federal and state income taxes and real and personal
property taxes. except such as BORROWER may in good faith contest or as to which a bona fide dispute may arise; provided provision
is made to the satisfaction of BANK for eventual payment thereof in the even that it is found that the same is an obligation of
BORROWER.

 

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SECTION 4.9. LITIGATION. Promptly give notice in writing
to BANK of any litigation pending or threatened in excess of $10,000.00.

SECTION 4.10. FINANCIAL CONDITION. Maintain BORROWER’s
financial condition according to the following schedules: NA

SECTION 4.11 CROSS COLLATERAL. BORROWER Agrees, and
GUARANTOR will agree, that any collateral securing the LOAN will also secure any other indebtedness of BORROWER or GUARANTOR to
BANK and that any other collateral pledged as security for any other obligation of BORROWER or GUARANTOR to BANK will also secure
their respective obligations under this AGREEMENT.

SECTION 4.12. DOCUMENTARY STAMP TAXES. Payor reimburse
BANK on demand for all present and future documentary stamp taxes , if any, required by any jurisdiction as a condition of filing
a financing statement, deed of trust or other agreement covering collateral which is the subject of this AGREEMENT.

SECTION 4.13. NOTICE TO BANK. Promptly give notice in
writing to BANK of (1) the occurrence of any EVENT OF DEFAULT: (2) any change in the location of any collateral for the LOAN,
name of BORROWER, and in the case of an organization, any change in name, identity or corporate structure; or (3) any uninsured
or partially uninsured loss through fire, theft, liability or property damage in excess of an aggregate of $25,000.00.

SECTION 4.14. WAIVER OF TRIAL BY JURY. To the extent
permitted by law, it is mutually agreed by and between the BORROWER and BANK that the respective parties waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties against the other or any matter whatsoever arising of
or in any way connected with this AGREEMENT.

SECTION 4.15. DEATH OF THE GUARANTOR. Notwithstanding
anything to the contrary in the body of any of the loan documents, it is understood that the death of any natural person who is
a GUARANTOR shall constitute an EVENT OF DEFAULT, provided however, that the BORROWER and any parties offer and consummate an
alternative guaranty structure acceptable to the BANK, which shall consist of the execution of the same unconditional guaranty
agreement as initially executed by the deceased GUARANTOR by an individual, individuals, entity or entities, or with any changes
to the guaranty agreement as may be required by law and satisfactory to the BANK. The BANK reserves the right to require documentation
evidencing the authority of the substitute or alternative GUARANTOR or GUARANTORs including, without limitation, trust agreements,
partnership agreements, corporate resolutions and operating agreements, and to require an opinion of counsel acceptable to the
BANK that the guaranty or guaranties have been duly authorized, executed and delivered and are valid and enforceable in accordance
with their terms if the alternative GUARANTOR is not an individual or natural person. The party’s or the parties’ failure to deliver
and execute such alternative guaranty agreement or agreements shall entitle the BANK, at its option and in BANK’s sole discretion,
to call the LOAN due and payable in full, such failure being an EVENT OF DEFAULT under the NOTE and the LOAN documents.

 

ARTICLE V
—  NEGATIVE COVENANTS

 

BORROWER further covenants
that so long as BORROWER is indebted to BANK under this AGREEMENT, and until payment in full of the NOTE issued hereunder,
BORROWER shall not, without prior written consent of BANK:

SECTION 5.1. USE OF FUNDS. Use any of the proceeds
of the NOTE except for the purpose(s) stated in SECTION 1.4.

SECTION 5.2. CAPITAL EXPENDITURE LIMITATION. Make any
additional investment in fixed assets in anyone fiscal year in excess of an aggregate of NA.

SECTION 5.3. LEASE EXPENDITURES; MAXIMUM LEASES. During
the term of the LOAN, BORROWER will not enter into any lease agreement which would cause or require the total amount of annual
lease expenditures incurred by the BORROWER on all leases to exceed NA per fiscal year, without the prior written approval of
BANK.

SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume,
guaranty, become contingently liable for, or permit to exist any other liabilities or other indebtedness resulting from borrowings,
loans or advances, whether secured or unsecured, except short-term borrowings from BANK and the liabilities of BORROWER to BANK
for money borrowed hereunder, nor shall BORROWER knowingly grant or permit liens on or security interests in any of BORROWER’s
assets.

SECTION 5.5. MERGER, CONSOLIDATION, SALE OF ASSETS.
Merge into or consolidate with any corporation or other entity, or acquire all or substantially all of the assets of any other
corporation or entity; or sell, lease, assign, transfer or otherwise dispose of all or substantially all of its assets.

SECTION 5.6. GUARANTEES. Guarantee or become liable
in any way as surety, endorser (other than as endorser of negotiable instruments in the ordinary course of business) or accommodation
endorser or otherwise for the debt or obligations of any other person or entity.

SECTION 5.7. LOANS, ADVANCES, INVESTMENTS. Make any
loans or advances to, or investments in, any person or entity, including officers, directors, stockholders, managers, members,
partners or employees of BORROWER.

SECTION 5.8. DIVIDENDS, DISTRIBUTIONS. Declare or pay
any dividend either in cash, stock or other property; or redeem , retire, purchase or otherwise acquire any shares of any class
of BORROWER’s stock or any other equity interest in BORROWER now or hereafter outstanding. During the term of the LOAN, BORROWER
may not purchase or redeem any shares of its capital stock, declare or pay any dividends, or make any other distribution, loan
or payment to any stockholder, member, partner, officer or employee in excess of NA in any fiscal year, other than normal salaries
and amounts needed to pay actual income taxes paid by the individual owners resulting from the BORROWER’s income reported on their
personal tax returns.

SECTION 5.9. OFFICER AND DIRECTOR COMPENSATION. Pay
any compensation to any past, present or future shareholder, director, officer, manager, member, partner or employee, whether
through salary, bonus, or otherwise, in excess of NA. During the term of the LOAN, the sum of all salaries, bonuses, fringe benefits
or other compensation paid by BORROWER to all officers shall not exceed $ NA without the prior written consent of BANK.

SECTION 5.10 CHANGE IN FISCAL YEAR. Change its fiscal
year without the consent of the BANK.

SECTION 5.11 CHANGE OF CONTROL. Make or suffer a change
of ownership or change in management that effectively changes control of BORROWER from the current ownership or management.

 

ARTICLE VI
— DEFAULT

 

SECTION 6.1. EVENTS OF DEFAULT. The following shall
constitute EVENTS OF DEFAULT:

(a) Default by BORROWER in any payment of principal or interest
under the NOTE subject to any applicable grace or cure periods stated in the NOTE.

(b) Any representation or warranty made by BORROWER hereunder
shall prove to be at any time incorrect in any material respect.

(c) Default by BORROWER in the performance of any other non-payment
covenant or agreement contained herein.

(d) Default by BORROWER or GUARANTOR under the terms of any
agreement or instrument pursuant to which BORROWER or GUARANTOR has borrowed money from any person.

(e) The entry of any judgment or levy of any attachment, execution
or other process against the assets of BORROWER, and such judgment be not satisfied, or such levy or other process be not removed
within twenty (20) days after the entry or levy thereof, or at least five (5) days prior to the time of any proposed sale
under any such judgment or levy.

(f) BORROWER or any GUARANTOR shall be adjudicated as
bankrupt or insolvent, or shall consent to or apply for the appointment or a receiver, trustee or liquidator of itself or any
of its property, or shall admit in writing its inability to pay its debts generally as they become due, or shall make a
general assignment for the benefit of creditors, or shall file a voluntary petition in bankruptcy or a voluntary petition or
an answer seeking reorganization or arrangement in a proceeding under any bankruptcy law, or BORROWER or its directors,
majority stockholders, partners, managers or members shall take action looking into the dissolution or liquidation of
BORROWER.

 

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(g) BORROWER’s breach of or default under any of or default
under any of the terms, conditions or covenants contained in this AGREEMENT.

(h) The actual or threatened demolition, injury or waste
to the collateral, or any part thereof, which, in the sole opinion of BANK, may impair its value, or the actual or threatened
decline in value of the collateral or any part thereof;

(i) The insolvency of BORROWER, or any party comprising BORROWER,
GUARANTOR, or any person obligated for payment of the LOAN.

(j) BORROWER’s default under terms of any instrument or other
agreement to which this AGREEMENT or any of the other loan documents are subordinate or which is subordinate to this AGREEMENT
or any of the other loan documents.

(k) Default by BORROWER or GUARANTOR in keeping, performing
or observing any term, covenant, agreement or condition of any COMMITMENT upon which all or any portion of any indebtedness evidenced
by the NOTE was predicated.

(l) Any false statement, misrepresentation or withholding
of facts by BORROWER, and/or by any GUARANTOR, any principal, shareholder, partner, member, manager, director, officer,
employee or any other person in any loan application or other document provided by BORROWER and/or any other person to BANK
or its agents, including any misrepresentation made in this AGREEMENT, or in any representation or statement made by BORROWER
and/or any other person to BANK or its agents, as to any matter relied upon by BANK in evaluating whether to extend credit
and financing to BORROWER.

(m) A determination by BANK that the prospect of payment
or performance by BORROWER, GUARANTOR, and/or any other person under all or any of the loan documents is insecure or that a
material adverse change in the financial condition of BORROWER, GUARANTOR, and/or any person obligated for payment of the
LOAN has occurred since the date of this AGREEMENT.

(n) The death, dissolution, merger, consolidation or termination
of existence of any BORROWER, GUARANTOR, and/or any person obligated for payment of the LOAN; or if any BORROWER, GUARANTOR, and/or
any person obligated for payment of the LOAN is a corporation with thirty-five (35) or fewer shareholders, the aggregate transfer(s)
of voting shares in such BORROWER, GUARANTOR, and/or any person obligated for payment of the LOAN whereby persons or entities
not owning on the date hereof, singly or in the aggregate, 50% or more of the voting shares of such BORROWER, GUARANTOR,
and/or any person obligated for payment of the LOAN, become the owner(s), singly or in the aggregate, 50% or more of the
voting shares of such BORROWER, GUARANTOR, and/or any person obligated for payment of the LOAN, or if such party is a limited
or general partnership, any change in general partnership interest(s) in such BORROWER, GUARANTOR, and/or any person obligated
for payment of the LOAN.

SECTION 6.2. REMEDIES UPON DEFAULT. Upon the occurrence
of any EVENT OF DEFAULT, with respect to any personal property, collateral or fixtures, BANK shall have all of the rights and
remedies of a secured party under the North Carolina Uniform Commercial Code. Without in any way limiting the generality of the
foregoing, BANK shall also have the following specific rights and remedies:

(a) Any indebtedness of BORROWER under this AGREEMENT or
the NOTE, any of the NOTE to the contrary notwithstanding, shall, at BANK's option and without notice, become immediately due
and payable without presentment, notice or demand, all of which are hereby expressly waived by BORROWER; and the obligation,
if any, of the BANK to permit further borrowings hereunder shall immediately cease and terminate.

(b) To take immediate possession of all equipment,
inventory, fixtures, and any or all other collateral securing the LOAN, whether now owned or hereafter acquired, without
notice, demand, presentment, or resort to legal process, and, for these purposes, to enter any premises where any of the
collateral is located and remove the collateral therefrom or render it unusable.

(c) To require BORROWER to assemble and make the collateral
available to BANK at a place to be designated by BANK which is also reasonably convenient to BORROWER.

(d) To retain the collateral in satisfaction of any
unpaid principal or interest on the LOAN or sell the collateral at public or private sale after giving such notice, as the
BANK deems necessary, of the time and place of the sale and with or without having the collateral physically present at the
place of the sale.

(e) To make any repairs to the collateral which BANK deems
necessary or desirable for the purposes of sale.

(f) To exercise any and all rights of set-off which BANK
may have against any account, fund, or property of any kind, tangible or intangible, belonging to BORROWER which shall be in
BANK’s possession or under its control.

(g) BANK shall have the right to collect receivables, endorse checks, collect
rents, issues, profits and revenues assigned to BANK as collateral for the LOAN, to appoint a receiver or other third party
to inspect the books and records of BORROWER and to evaluate collateral, at BORROWER’s expense, and to contact all account
parties and direct them to pay BANK directly.

(h) BANK shall have the right to the appointment of a
receiver to collect the rents and profits from the property and collateral assigned to BANK to secure LOAN, without
consideration of the value thereof or the solvency of any person liable for the payment of the amounts then owing. BANK, at
its option, in lieu of an appointment of a receiver, shall have the right to do all those things the receiver could have
done. If such receiver should be appointed, or if there should be a sale of the property and collateral by foreclosure, the
BORROWER or any person in possession of the property and collateral, as tenant or otherwise, shall become a tenant at will of
the receiver or of the purchaser and may be removed by a writ of ejectment, summary ejectment or other lawful remedy.

(i) The exercise by the BANK of any right or remedy granted
to the BANK or to any receiver or trustee in law or equity, or by this or any other document shall not be deemed an irrevocable
election of remedies thereby precluding the BANK or any receiver or trustee from exercising or pursuing any other right or remedy
granted to the receiver, the trustee or BANK under this or any other document or at law or in equity. All remedies contained herein
or in any other separate agreement executed contemporaneously with the execution of this AGREEMENT, including without limitation
any assignment, security agreement, mortgage, deed of trust, or other security instrument, are intended to be cumulative.

 

ARTICLE VII
— MISCELLANEOUS

 

SECTION 7.1. WAIVER. No delay or failure of BANK,
or any holder of the NOTE, in exercising any right, power or privilege hereunder shall affect such right, power or privilege;
nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power
or privilege. The rights and remedies of BANK hereunder are cumulative and not exclusive. Any waiver, permit, consent or
approval of any kind by BANK, or any holder of the NOTE, of any breach or default hereunder, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in writing.

 

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SECTION 7.2. NOTICES. All notices. requests and demands
given to or made upon the respective parties shall be deemed to have been given or made when deposited in the mail, postage prepaid,
and addressed as follows:

 

		BORROWER:	Chanticleer
                                         Holdings. Inc.

11220
Elm Lane Suite 203

Charlotte, NC 28277

 

		BANK:	Paragon Commercial
                                         Bank

3535
Glenwood Avenue

Raleigh, North Carolina 27612

 

SECTION 7.3. ATTORNEY’S FEES. BORROWER will
reimburse BANK for all costs, expenses and reasonable attorneys’ fees expended or incurred by BANK in administering and
enforcing this AGREEMENT, in actions for declaratory relief in any way related to this AGREEMENT, or in collecting any sum
which becomes due the BANK on the NOTE.

SECTION 7.4. NORTH CAROLINA LAW APPLICABLE. This
AGREEMENT and the NOTE shall be construed in accordance with the laws of the State of North Carolina. BORROWER and any member,
manager, general partner, or GUARANTOR of BORROWER each irrevocably consents to the jurisdiction of any Federal or State court
within the State of North Carolina, and submits to venue in the State of North Carolina, and each also consents to service of
process by any means authorized by Federal law or the law of the State of North Carolina. Without limiting the generality of the
foregoing, each of BORROWER, or any member, manager, general partner and GUARANTOR of BORROWER hereby waives and agrees not to
assert by way of motion, defense, or otherwise in such suit, action, or proceeding, any claim that (i) BORROWER or any such member,
manager, general partner and GUARANTOR is not subject to the jurisdiction of the courts of the State of North Carolina or the
United States District Court for North Carolina; or (ii) such suit, action, or proceeding is brought in an inconvenient forum;
or (iii) the venue of such suit, action, or proceeding is improper.

SECTION 7.5. FURTHER ASSURANCES; POWER OF ATTORNEY.
At any time, and from time to time, upon request by BANK, BORROWER will, at BORROWER's expense: (a) correct any defect, error
or omission which may be discovered in the form or content of any of the loan documents; (b) make such further assurances as may
be required by BANK; and (c) make, execute, deliver and record , or cause to be made, executed, delivered and recorded, any and
all further instruments, certificates and other documents as may, in the opinion of BANK, be necessary or desirable in order to
complete, perfect or continue and preserve the lien and security position of the BANK. Upon any failure by BORROWER to do so,
BANK may make, execute and record any and all such instruments, certificates and other documents for and in the name of Borrower,
all at the sole expense of Borrower, and BORROWER hereby irrevocably appoints the BANK as its attorney-in-fact, this power of
attorney being coupled with an interest, in order that BANK may administer the LOAN and exercise the rights and remedies contained
in this AGREEMENT and in any related loan documents and assignments by BORROWER at any time, including without limitation after
the occurrence of an EVENT OF DEFAULT under this AGREEMENT or other loan documents as may be prescribed by BANK under SECTION
3.3 of this AGREEMENT or otherwise required by BANK.

SECTION 7.6 ARBITRATION AND DISPUTE RESOLUTION. (a)
Arbitration. Except to the extent expressly provided below, any dispute under this AGREEMENT or other loan document shall,
upon the request of either party, be determined by binding arbitration in accordance with the Federal Arbitration Act, Title 9,
United States Code (or if not applicable, the applicable state law), the then-current rules for arbitration of financial services
disputes of the American Arbitration Association (“AAA”), and the other terms and conditions set forth in this SECTION
7.6 below. In the event of any inconsistency with AAA rules, the terms and conditions of this AGREEMENT shall control. The filing
of a court action is not intended to constitute a waiver of the right of BORROWER or BANK, including the suing party, thereafter
to require submittal of the dispute to arbitration. Any party to this AGREEMENT may bring an action, including a summary or expedited
proceeding, to compel arbitration of any dispute in any court having jurisdiction over such action. The arbitration shall
be administered by AAA, who will appoint a single arbitrator. If AAA is unwilling or unable to administer the arbitration, or
if AAA is unwilling or unable to enforce or legally precluded from enforcing any and all provisions of this AGREEMENT, then any
party to this Agreement may substitute another arbitration organization that has similar procedures to AAA and that will observe
and enforce any and all provisions of this AGREEMENT. All arbitration hearings will be commenced within ninety (90) days of the
demand for arbitration and completed within ninety (90) days from the date of commencement; provided, however, that upon a showing
of good cause, the arbitrator shall be permitted to extend the commencement of such hearing for up to an additional sixty (60)
days. The judgment and the award, if any, of the arbitrator shall be issued within thirty (30) days of the close of the hearing.
The arbitrator shall provide a concise written statement setting forth the reasons for the judgment and for the award, if any.
The arbitration award, if any, may be submitted to any court having jurisdiction to be confirmed and enforced, and such confirmation
and enforcement shall not be subject to arbitration. Any dispute concerning this arbitration provision, including any such dispute
as to the validity or enforceability of this provision, or whether a Dispute is arbitrable, shall be determined by the arbitrator;
provided, however, that the arbitrator shall not be permitted to vary the express provisions of these terms and conditions
or the reservation of rights set forth in subsection (b). The arbitrator shall have the power to award legal fees and costs pursuant
to the terms of this AGREEMENT.

 

(b) Reservations of Rights. Nothing in this AGREEMENT
shall be deemed to (i) limit the applicability of any otherwise applicable statutes of limitation and any waivers contained in
this AGREEMENT, or (ii) apply to or limit the right of BANK (A) to exercise self help remedies such as (but not limited to) setoff,
or (B) to foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial
power of sale rights, (C) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief,
writ of possession, prejudgment attachment, or the appointment of a receiver, or (D) to pursue rights against a party to this
AGREEMENT in a third-party proceeding in any action brought against BANK in a state, federal or international court, tribunal
or hearing body (including actions in specialty courts, such as bankruptcy and patent courts). BANK may exercise the rights set
forth in clauses (A) through (D), inclusive, before, during or after the pendency of any arbitration proceeding brought pursuant
to this AGREEMENT. Neither the exercise of self help remedies nor the institution or maintenance of an action for foreclosure
or provisional or ancillary remedies shall constitute a waiver of the right of any party, including the claimant in any such action,
to arbitrate the merits of the dispute occasioning resort to such remedies. No provision in the loan documents regarding submission
to jurisdiction and/or venue in any court is intended or shall be construed to be in derogation of the provisions in any
loan document for arbitration of a dispute.

 

IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT
to be executed under seal the day and year first hereinabove written.

 

	PARAGON COMMERCIAL
    BANK	 	 
	 	 	 	 
	 	 	 	 
	By:	 /s/ Charles
    W. Bartz	(SEAL)	 
	 	Charles W. Bartz, Senior Vice President 	 	 

 

    	6

    	 

    

 

	 	CHANTICLEER HOLDINGS, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Michael D. Pruitt	(SEAL)
	 	 	Michael D. Pruitt, President/CEO/CFO	 

 

 

	 	Guarantors:	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Michael D. Pruitt	(SEAL)
	 	 	Michael D. Pruitt, an individual	

 

    	7

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