Document:

EX-4.1

   

  Exhibit 4.1

  FORM OF STOCK PURCHASE AGREEMENT 

  This Stock Purchase Agreement (this “Agreement”) is made as of September 28, 2021 (the “Effective Date”) by and between BioAtla, Inc., a Delaware corporation (the “Company”), and [___________] (“Purchaser”). 

  1. Issuance of Shares. Effective as the Effective Date, the Company agrees to issue and sell to Purchaser [_________] shares (the “Shares”) of the Company’s Common Stock, $0.0001 par value per share (the “Common Stock”). Purchaser will purchase the Shares at a price of $[●] per Share in cash. The total purchase price payable by the Purchaser for the Shares is $[_______] (the “Total Purchase Price”). 

  2. Closing and Delivery.

  (a) Closing. The closing (“Closing”) of the transactions contemplated hereby shall be held at the offices of Orrick, Herrington & Sutcliffe LLP, 1000 Marsh Road, Menlo Park, California 94025 within two Business Days of the date of this Agreement (such date, the “Closing Date”), or at such other time and place as the Company and the Purchaser mutually agree upon. “Business Day” shall mean any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. 

  (b) Delivery. Concurrent with the execution of this Agreement, at the Purchaser’s request, the Company shall deliver to the Purchaser a duly completed and executed Internal Revenue Service Form W-9 or W-8BenE, as applicable. At the Closing, (i) the Company shall cause its transfer agent to transfer the Shares to the Purchaser in book entry form in such name(s) as the Purchaser may designate in writing and (ii) upon delivery by the Company to the Purchaser of the Shares in book entry form free and clear of any liens or other restrictions (other than the restrictions set forth in this Agreement, including the restrictions set forth in Section 5 hereof) and written notice from the Company or its transfer agent evidencing the issuance to the Purchaser of the Shares on and as of the Closing Date, the Purchaser shall pay the Company the applicable Total Purchase Price by wire transfer in immediately available funds to such account(s) as the Company shall designate in writing to the Purchaser. 

  3. Company Representations. The Company represents and warrants to Purchaser and each of Jefferies LLC (“Jefferies”) and J.P. Morgan Securities LLC (“J.P. Morgan”), each solely in its capacity as a co-placement agent for the sale of the Shares, as follows: 

  (a) Organization and Standing. The Company is duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to own and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Company is qualified to do business as a foreign entity in every jurisdiction in which the failure to be so qualified would have, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect upon the business, properties, assets, liabilities, operations, financial condition or results of operations of the Company, or the ability of the Company to perform its obligations under this Agreement (a “Material Adverse Effect”). 

  (b) Power. The Company has all requisite power to execute and deliver this Agreement, to sell and issue the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement. 

  (c) Authorization. The execution, delivery, and performance of this Agreement by the Company has been duly authorized by all requisite action on the part of the Company and its officers, directors and stockholders, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (i) the authorization, execution and delivery of this Agreement, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance and delivery of the Shares.  This Agreement constitutes the legal, valid, and binding obligation of the Company enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 

  (d) Consents and Approvals. Except for any Current Report on Form 8-K or Notice of Exempt Offering of Securities on Form D to be filed by the Company in connection with the transaction contemplated hereby, the Company is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any 

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  government or governmental agency in order to consummate the transaction contemplated by this Agreement. Assuming the accuracy of the representations of the Purchaser in Section 4, no consent, approval, authorization or other order of, or registration, qualification or filing with, any court, regulatory body, administrative agency, self-regulatory organization, stock exchange or market (including The Nasdaq Stock Market), or other governmental body is required for the execution and delivery of this Agreement, or for the valid issuance, sale and delivery of the Shares to be sold pursuant to this Agreement other than such as have been or will be made or obtained, or for any securities filings required to be made, under federal or state securities laws applicable to the offering of the Shares. 

   

  (e) Non-Contravention. The execution and delivery of this Agreement, the issuance, sale and delivery of the Shares to be sold by the Company under this Agreement, the performance by the Company of its obligations under this Agreement and/or the consummation of the transaction contemplated hereby will not (a) conflict with, result in the breach or violation of, or constitute (with or without the giving of notice or the passage of time or both) a violation of, or default under, (i) any bond, debenture, note or other evidence of indebtedness, or under any lease, license, franchise, permit, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company is a party or by which it or its properties may be bound or affected, (ii) the Company’s Amended and Restated Certificate of Incorporation as in effect on the date hereof, the Company’s Amended and Restated Bylaws as in effect on the date hereof, or (iii) any statute or law, judgment, decree, rule, regulation, ordinance or order of any court or governmental or regulatory body (including The Nasdaq Stock Market), governmental agency, arbitration panel or authority applicable to the Company or its properties, except in the case of clauses (i) and (iii), for such conflicts, breaches, violations or defaults that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or (b) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the properties or assets of the Company or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, except for such liens, encumbrances, claims, security interests, restrictions, accelerations of indebtedness that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

  (f) Shares. The Shares are duly authorized and when issued pursuant to the terms of this Agreement will be validly issued, fully paid, and nonassessable, and will be free of any liens or encumbrances with respect to the issuance thereof; provided, however, that the Shares shall be subject to restrictions on transfer under state or federal securities laws as set forth in this Agreement, or as otherwise may be required under state or federal securities laws as set forth in this Agreement at the time a transfer is proposed. The issuance and delivery of the Shares is not subject to preemptive, co-sale, right of first refusal or any other similar rights of the stockholders of the Company or any other person, or any liens or encumbrances or result in the triggering of any anti-dilution or other similar rights under any outstanding securities of the Company. 

  (g) No Registration. Assuming the accuracy of each of the representations and warranties of the Purchaser, the issuance by the Company of the Shares is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). 

  (h) Nasdaq Listing. The Company’s Common Stock is listed on Nasdaq. To the Company’s knowledge, there are no proceedings to revoke or suspend such listing or the listing of the Shares. The Company is in compliance with the requirements of Nasdaq for continued listing of the Common Stock thereon and any other Nasdaq listing and maintenance requirements, and the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby  will not result in any noncompliance by the Company with any such requirements.

  (i) No Integrated Offering. Neither the Company, nor any subsidiary, nor any of the Company’s or any subsidiary’s affiliates or any other person acting on the Company’s or any subsidiary’s behalf, has directly or indirectly engaged in any form of general solicitation or general advertising with respect to the Shares, nor have any of such persons made any offers or sales of any security of the Company, any subsidiary or any of the Company’s or any subsidiary’s affiliates or solicited any offers to buy any security of the Company, any subsidiary or any of the Company’s or any subsidiary’s affiliates under circumstances that would require registration of the Shares under the Securities Act or any other securities laws or cause this offering of Shares to be integrated with any prior offering of securities of the Company or any subsidiary for purposes of the Securities Act in any manner that would affect the validity of the private placement exemption under the Securities Act for the offer and sale of the Shares hereunder.

   

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  (j) SEC Reports; Financial Statements; Shell Company Status.

   

  (i)The Company’s Common Stock is registered under Section 12 of the Exchange Act. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since December 16, 2020 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and, in each case, to the rules promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

   

  (ii)The financial statements and the related notes of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present the consolidated financial position of the Company as of and for the dates thereof and the consolidated results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. There is no transaction, arrangement, or other relationship between the Company or any subsidiary and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Reports and is not so disclosed and would have or reasonably be expected to result in a Material Adverse Effect.

   

  (iii)The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

   

  (k) Other Agreements. The Company has not entered, and shall not enter into any subscription agreement, side letter or other agreement or arrangement in connection with the offering contemplated hereby, other than substantially in the form of this Agreement (the “Other Agreements”), with any other investor that includes terms with respect to the purchase of the Company’s Common Stock that are more favorable to such other investor than the terms of this Agreement. The Other Agreements shall not be amended from the date hereof to provide for terms that are more favorable to any investor party thereto, unless such terms are also offered to Purchaser hereunder.

  (l) No Material Adverse Change.  Since June 30, 2021, except as specifically set forth in a subsequent SEC Filing, there has not been: 

  (i)any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2021, except for changes in the ordinary course of business which have not had and would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; 

  (ii)any declaration or payment by the Company of any dividend, or any authorization or payment by the Company of any distribution, on any of the capital stock of the Company, or any redemption or repurchase by the Company of any securities of the Company; 

  (iii)any material damage, destruction or loss, whether or not covered by insurance, to any assets or properties of the Company; 

  (iv)any waiver, not in the ordinary course of business, by the Company of a material right or of a material debt owed to it; 

   

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  (v)any satisfaction or discharge of a material lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course of business; 

  (vi)any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or termination of or material amendment to any contract of the Company that the Company is required to file with the SEC pursuant to Item 601(b)(10) of Regulation S-K; 

  (vii)any material labor difficulties or labor union organizing activities with respect to employees of the Company; 

  (viii)any material transaction entered into by the Company other than in the ordinary course of business; 

  (ix)the loss of the services of any executive officer (as defined in Rule 405 under the 1933 Act) of the Company; or

  (x)any other event or condition that has had or would reasonably be expected to have a Material Adverse Effect. 

   

  4. Investment Representations. In connection with the receipt of the Shares pursuant to this Agreement, Purchaser represents to the Company and each of Jefferies and J.P. Morgan, each solely in its capacity as a co-placement agent for the sale of the Shares, the following: 

  (a) The execution, delivery and performance by Purchaser of this Agreement does not and will not contravene or constitute a default under, or violation of, or be subject to penalties under, (i) any agreement, including Purchaser’s charter, bylaws or other constituent document or under any law, rule, regulation, agreement or other obligation (or require the consent of any party under any such agreement that has not been made or obtained) to which Purchaser is a party or by which Purchaser is bound, (ii) all investment policies, guidelines and other restrictions applicable to Purchaser, or (iii) any judgment, injunction, order, decree or other instrument binding upon Purchaser. 

  (b)  Purchaser has determined based on Purchaser’s own independent review and such professional advice as Purchaser deems appropriate that Purchaser’s purchase of the Shares (i) is fully consistent with Purchaser’s financial needs, objectives and condition, (ii) has been duly authorized and approved by all necessary action, and (iii) are a fit, proper and suitable investment for Purchaser, notwithstanding the substantial risks inherent in investing in or holding the Shares.

  (b) Purchaser understands the definition of the term “accredited investor” within the meaning of Regulation D, Rule 501(a), as amended, under the Securities Act, and qualifies as an accredited investor. Purchaser is an Institutional Account as defined in FINRA Rule 4512(c) and a sophisticated institutional investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, including Purchaser’s participation in the sale of Shares. Purchaser was not organized solely for the purpose of acquiring the Shares and is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 

  (c) Purchaser has (i) received, reviewed and understood the offering materials made available to the Purchaser in connection with the sale of the Shares, (ii) had the opportunity to ask questions of and receive answers from the Company directly and (iii) conducted and completed Purchaser’s own independent due diligence with respect to the sale of the Shares.  Based on such information as Purchaser has deemed appropriate and without reliance upon either Jefferies or J.P. Morgan, Purchaser has independently made Purchaser’s own analysis and decision to enter into the purchase of the Shares.  Except for the representations, warranties and agreements of the Company expressly set forth in this Agreement, Purchaser is relying exclusively on Purchaser’s own sources of information, investment analysis and due diligence (including professional advice you deem appropriate) with respect to the transaction, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.  

  (d) Purchaser is acquiring the Shares hereunder for its own account for investment purposes only and not with a view to any public distribution thereof or with any intention of selling, distributing or otherwise disposing of the Shares in a manner that would violate the registration requirements of the Securities Act or the securities laws of any other jurisdiction. Purchaser is able to bear the economic risk of holding the Shares for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

   

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  (e) Purchaser understands that the Shares have not been registered under the securities laws of any jurisdiction and have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein. Purchaser understands that the Shares may not be resold or transferred in the United States or otherwise except in compliance with applicable law and the restrictions on transfer set forth in the definitive documentation for this transaction.

  (f) Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. 

  (g) Purchaser acknowledges and agrees that (a) each of Jefferies and J.P. Morgan is acting solely as the Company’s co-placement agent in connection with the sale of Shares and is not acting as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary for the Purchaser, the Company or any other person or entity in connection with the sale of Shares, (b) each of Jefferies and J.P. Morgan has not made and will not make any representation or warranty, whether express or implied, of any kind or character and has not provided any advice or recommendation in connection with the sale of Shares, (c) each of Jefferies and J.P. Morgan will have no responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the transaction or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) or any thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Company or the transaction, and (d) each of Jefferies and J.P. Morgan shall have no liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by the Purchaser, the Company or any other person or entity), whether in contract, tort or otherwise, to the Purchaser, or to any person claiming through the Purchaser, in respect of the sale of Shares.

  (h)  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of Purchaser. 

  (i) Between the time any of the Purchaser’s investment professionals learned about the offering contemplated by this Agreement and the public announcement of the offering, neither the Purchaser nor any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales (as defined below), of the securities of the Company. For purposes of this Agreement, “Person” shall mean an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind and “Short Sales” shall include, without limitation, (i) (A) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and (B) all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and similar arrangements (including on a total return basis) that have an economically similar result to a “short sale” as defined in Rule 200, and (ii) sales and other transactions through non-U.S. broker dealers or foreign regulated brokers that have an economically similar result to a “short sale” as defined in Rule 200.. 

  5. Restrictive Legends and Stop-Transfer Orders. It is understood that, except as provided below, book-entry notations evidencing the Shares may bear the following or any similar legend: 

  (a) “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTIONS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE SECURITIES LAWS OF OTHER STATES AND JURISDICTIONS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT.” 

   

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  [(b) “AS LONG AS THE HOLDER OF THESE SECURITIES IS AN AFFILIATE OF THE ISSUER, THESE SECURITIES MAY NOT BE SOLD, OR OFFERED FOR SALE, IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SALE OF THESE SECURITIES UNDER THE SECURITIES ACT OF 1933, OR THE SALE OTHERWISE BEING EXEMPT FROM REGISTRATION UNDER SUCH ACT. THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.” ]

  [(b)][(c)] If required by the authorities of any state in connection with the issuance of sale of the Shares, the legend required by such state authority. 

  6. Registration Rights.

  (a) The Company shall file a registration statement on Form S-1, or other appropriate form available to the Company, registering the resale of the Shares as promptly as practicable and in any event within 30 days following the Closing Date (the “Filing Deadline”). If a registration statement covering the Shares is not filed with the SEC on or prior to the fifth Business Day following the Filing Deadline, the Company will make payments to the Purchaser, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant to this Agreement by such Purchaser for such Shares then held by such Purchaser for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no registration statement is filed with respect to the Shares.  Such payments shall constitute the Purchasers’ exclusive monetary remedy for such events, but shall not affect the right of the Purchasers to seek injunctive relief.  Such payments shall be made to the Purchaser in cash no later than five (5) Business Days after the end of each 30-day period (the “Payment Date”).  Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Payment Date until such amount is paid in full.  The Company shall use reasonable efforts to cause such registration statement to be declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty (60) calendar days (provided that such period may be extended to 90 calendar days if the SEC notifies the Company that it will “review” the registration statement) following the Closing Date and (ii) the  10th  Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review. If (A) a registration statement covering the Shares is not declared effective by the SEC prior to the earlier of (i) ten (10) Business Days after the SEC informs the Company that no review of such registration statement will be made or that the SEC has no further comments on such registration statement and (ii) the 90th day after the Closing Date (the “Effectiveness Deadline”), or (B) subject to the Company’s obligation to keep such registration statement effective pursuant to Section 6(b) below, after a registration statement has been declared effective by the SEC, sales cannot be made pursuant to such registration statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update such registration statement), or, if the registration statement is on Form S-1, for a period of twenty (20) days following the date on which the Company files a post-effective amendment to incorporate the Company’s Annual Report on Form 10-K (a “Maintenance Failure”), then the Company will make payments to the Purchaser then holding Shares, as liquidated damages and not as a penalty, in an amount equal to 1% of the aggregate amount paid pursuant to this Agreement by such Purchaser for such Shares then held by such Purchaser for each 30-day period or pro rata for any portion thereof following the date by which such registration statement should have been effective (the “Blackout Period”).  Such payments shall constitute the Purchasers’ exclusive monetary remedy for such events, but shall not affect the right of the Purchasers to seek injunctive relief.  The amounts payable as liquidated damages pursuant to this paragraph shall be paid no later than five (5) Business Days after each such 30-day period following the commencement of the Blackout Period until the termination of the Blackout Period (the “Blackout Period Payment Date”).  Such payments shall be made to the Purchaser in cash. Interest shall accrue at the rate of 1% per month on any such liquidated damages payments that shall not be paid by the Blackout Payment Date until such amount is paid in full.  

   

  (b) The Company shall use reasonable efforts to keep such registration statement effective at all times until (1) the Shares may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 under the Securities Act, or (2) the three (3) year anniversary of the Closing Date, whichever is the earliest to occur. Subject to the accuracy of the information provided by the Purchaser to the Company, the Company shall ensure that such registration statement (including any amendments or supplements thereto and prospectuses contained therein) 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 (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading. After the date hereof and during any period in which a prospectus or prospectus supplement relating to any of the Securities subject to registration under this Section 6 is required to be delivered by Purchaser pursuant 

   

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  to the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 of the Securities Act), (i) the Company will notify the Purchaser promptly of the time when any subsequent amendment to such registration statement, other than documents incorporated by reference, has been filed with the SEC or has become effective or any subsequent supplement to the prospectus regarding such Shares or of the Purchasers or any subsequent amendment to the prospectus or any supplement or amendment to the prospectus supplement has been filed with the SEC, after it shall receive any notice or obtain knowledge of, the issuance by the SEC of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for such purpose, of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose,  of any comment letter from the SEC or any request by the SEC for any amendment or supplement to such registration statement, any amendment to the prospectus, any supplement to the prospectus that relates to the Shares subject to such registration statement under this Section or the Purchaser, or any amendment or supplement to the prospectus supplement, provided that no notification  shall provide the Purchaser with any material non-public information regarding the Company other than to the extent that providing notice to Purchaser of the occurrence of the foregoing events constitutes material non-public information and further provided that no notification of the Purchaser shall be required if such amendment, supplement, or comment, or request would not, and would not seek, to limit the rights of the Purchaser, (ii) the Company will prepare and file with the SEC, promptly upon Purchaser’s request, any amendments or supplements to such registration statement, prospectus or prospectus supplement that, in the Company’s reasonable opinion, may be necessary in connection with any resale of the Shares by Purchaser (provided, however, that the failure of such Purchaser to make such request shall not relieve the Company of any obligation or liability hereunder), (iii) the Company will not file any amendment or supplement to a registration statement, prospectus or prospectus supplement, other than documents incorporated by reference, relating to the Shares subject to registration under this Section unless a copy thereof has been submitted or made available to Purchaser within a reasonable period of time before the filing and Purchaser has not reasonably objected in writing thereto (provided, however, that (A) the failure of Purchaser to make such objection shall not relieve the Company of any obligation or liability hereunder, and (B) the Company has no obligation to provide Purchaser any advance copy of such filing or to provide such Purchaser an opportunity to object to such filing if such filing does not name Purchaser or specifically discuss the Shares subject to registration under this Section as contemplated hereby or would have the effect of limiting the rights of the Purchaser with respect to the Shares) and the Company will furnish or make available to Purchaser at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into a registration statement, prospectus or prospectus supplement, except for those documents available via EDGAR, and (iv) the Company will cause each amendment or supplement to the prospectus or prospectus supplement, other than documents incorporated by reference, to be filed with the SEC as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act. All fees and expenses incident to the performance of or compliance with, this Section by the Company shall be borne by the Company whether or not any Shares are sold pursuant to a registration statement. Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name Purchaser or affiliate of Purchaser as an underwriter without the prior written consent of Purchaser. If the SEC informs the Company that all of the Shares cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, then the Company agrees to promptly inform Purchaser thereof and file an amendment to the registration statement as required by the SEC, covering the maximum number of Shares permitted to be registered by the SEC; provided, however, that prior to filing any such amendment, the Company shall use diligent efforts to advocate for registration of all of the Shares in accordance with SEC guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.

   

  (c)  If any of the Shares are included in a registration statement under this Section 6:

   

  (i)To the extent permitted by law, the Company will indemnify and hold harmless the Purchaser, and the partners, members, officers, directors, and stockholders of the Purchaser; legal counsel and accountants for each such Purchaser; any underwriter (as defined in the Securities Act) for the Purchaser; and each person, if any, who controls such Purchaser or underwriter within the meaning of the Securities Act or the Exchange Act, against any damages, and the Company will pay to the Purchaser, underwriter, controlling person, or other aforementioned person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the 

   

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  consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Purchaser, underwriter, controlling person, or other aforementioned person expressly for use in connection with such registration.

   

  (ii)To the extent permitted by law, the Purchaser, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Purchaser selling securities in such registration statement, and any controlling person of any such underwriter or other Purchaser, against any damages, in each case only to the extent that such damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such Purchaser expressly for use in connection with such registration; and the Purchaser will pay to the Company and each other aforementioned person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Purchaser by way of indemnity or contribution under Section 6(b)(ii) and 6(b)(iv) exceed the proceeds from the offering received by such Purchaser (net of any selling expenses paid by such Purchaser), except in the case of fraud or willful misconduct by such Purchaser.

   

  (iii)Promptly after receipt by an indemnified party under this Section 6(b) of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 6(b), give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. 

   

  (iv)To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 6(b) but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 6(b) provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 6(b), then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and 

   

  4128-7834-6801.7

   

  

   

  opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) Purchaser will not be required to contribute any amount in excess of the public offering price of all such Shares offered and sold by such Purchaser pursuant to such registration statement, and (y) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall Purchaser’s liability pursuant to this Section 6(b), when combined with the amounts paid or payable by such Purchaser pursuant to Section 6(b)(ii), exceed the proceeds from the offering received by such Purchaser (net of any selling expenses paid by such Purchaser), except in the case of willful misconduct or fraud by such Purchaser.

   

  (v)Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Purchaser under this Section 6(b) shall survive the completion of any offering of Shares in a registration under this Section 6, and otherwise shall survive the termination of this Agreement or any provision(s) of this Agreement.

   

  7. Furnishing of Information and Legend Removal. In order to enable Purchaser to sell the Shares, including under Rule 144, for so long as the Purchaser holds the Shares, the Company shall use its commercially reasonable efforts to (i) for one year after the Closing, timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act and (ii) following the Purchaser’s request, promptly cause the removal of all restrictive legends from any Shares held by such Purchaser that may be sold by Purchaser (x) pursuant to an effective registration statement or (y) without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions. For the avoidance of doubt, the obligations of the Company set forth in this Section 7 shall include, if requested by the Company’s transfer agent, the provision of legal opinions by the Company’s counsel to the transfer agent in connection with any instructions to effect the legend removal contemplated hereby. All fees and expenses incident thereto shall be borne by the Company.  If a legend removal request is made pursuant to the foregoing, the Company will, no later than three (3) Business Days following the delivery by an Purchaser to the Company or the Company’s transfer agent of a legended certificate representing such Shares (or a request for legend removal, in the case of Shares issued in book-entry form), deliver or cause to be delivered to such Purchaser a certificate representing such Shares that is free from all restrictive legends or an equivalent book-entry position, as requested by the Purchaser. Certificates for Shares free from all restrictive legends may be transmitted by the Company’s transfer agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company (“DTC”) as directed by such Purchaser. The Company warrants that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement. If an Purchaser effects a transfer of the Shares, the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Purchaser to effect such transfer. Such Purchaser hereby agrees that the removal of the restrictive legend pursuant to this Section 7 is predicated upon the Company’s reliance that such Purchaser will sell any such Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom.

   

  8. NASDAQ Listing.  The Company will use best efforts to continue the listing and trading of its Common Stock on NASDAQ and, in accordance therewith, will use best efforts to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable. 

  9. Adjustments in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing, each reference in this Agreement to a number of shares or a price per share shall be deemed to be amended to appropriately account for such event. 

   

  4128-7834-6801.7

   

  

   

  10.Conditions to Closing. 

  (a) Conditions to the Purchaser’s Obligations.  The obligation of the Purchaser to purchase Shares at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by such Purchaser (as to itself only): 

  (i)The representations and warranties made by the Company in Section 3 hereof shall be true and correct in all material respects as of the date hereof and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date.  The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date. 

  (ii)No stop order or suspension of trading shall have been imposed by NASDAQ, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

  (iii)The Company shall have concurrently consummated sales of not less than a total of [__] shares of Common Stock to purchasers (including the sale of the Shares to the Purchaser hereunder).

  (b) Conditions to Obligations of the Company.  The Company’s obligation to sell and issue Shares at the Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company: 

  (i)The representations and warranties made by the Purchaser in Section 4 hereof shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date.  The Purchaser shall have performed in all material respects all obligations and covenants herein required to be performed by such Purchaser on or prior to the Closing Date. 

  (ii)The Purchaser shall have paid in full the Total Purchase Price to the Company. 

  11. Fees and Expenses. Except as set forth in Sections 6 and 7 hereof, each party shall pay its own fees and expenses in connection with the transactions contemplated hereby. 

  12. Miscellaneous.

   (a) This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. 

  (b) This Agreement may be executed in two counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 

  (c) The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company. 

  (d) The Company and the Purchaser each acknowledge that each of Jefferies LLC and J.P. Morgan Securities LLC will rely on the representations and warranties contained in this Agreement and are express third-party beneficiaries to Section 3 and Section 4 of this Agreement.

  (e) The Company shall, by 9:00 am New York City time, on the first (1st) business day immediately following the date of this Agreement, issue one or more press releases or file with the SEC a Current Report on Form 8-K (the “Disclosure Document”) disclosing, to the extent not previously publicly disclosed, all material terms of the transactions contemplated hereby and any other material non-public information that the Company provided to the Purchaser at any time prior to the filing of the Disclosure Document. Upon the issuance of the Disclosure Document, to the Company’s knowledge, Purchaser shall not be in possession of any material, non-public information received from the Company or any of its officers, directors, employees or agents (including Jefferies and J.P. Morgan) and Purchaser shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with the Company, Jefferies, J.P. Morgan or any of their respective affiliates in connection with the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company (i) shall not publicly disclose the name of Purchaser or any of its affiliates or advisers, or include the name of Purchaser or any of its affiliates or advisers in any press release, without the prior 

   

  4128-7834-6801.7

   

  

   

  written consent of Purchaser and (ii) shall not publicly disclose the name of the Purchaser or any of its affiliates or advisers, or include the name of the Purchaser or any of its affiliates or advisers in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of Purchaser, except (A) as required by the federal securities laws, rules or regulations and (B) to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the SEC or regulatory agency or under the regulations of Nasdaq.

  [Signature Pages Follow] 

   

   

  4128-7834-6801.7

   

  

   

  The undersigned has executed this Agreement as of the date first set forth above. 

  			
	 
	 
	 

	THE COMPANY:

	BIOATLA, INC.

	 
	 

	By:
	 
	 

	(Signature)

	Name:
	 
	 

	Title:
	 
	 

	 

	Address:

	11085 Torreyana Road

	San Diego, CA 92121

	Attention: [Chief Financial Officer]

   

   

  4128-7834-6801.7

   

  

   

  The undersigned has executed this Agreement as of the date first set forth above. 

  			
	 
	 
	 

	PURCHASER:

	[____________]

	 

	 

	(Signature)

	Name:
	 
	 

	Title:
	 
	 

	 

	Address:

	c/o

	 

	Attention:

	Facsimile:

	Email:

   

   

  4128-7834-6801.7Exhibit 4.1

 

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

 

THE ISSUE PRICE OF
THIS NOTE IS $244,500.00 

THE ORIGINAL ISSUE DISCOUNT
IS $40,750.00

 

	Principal Amount: $244,500.00	 	Issue
Date: September 21, 2021
	Purchase Price: $203,750.00	 	 

 

CONVERTIBLE PROMISSORY
NOTE

 

FOR VALUE RECEIVED,
GBT TECHNOLOGIES INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the
order of REDSTART HOLDINGS CORP., a New York corporation, or registered assigns (the “Holder”) the sum of $244,500.00
together with any interest as set forth herein, on December 21, 2022 (the “Maturity Date”), and to pay interest on the
unpaid principal balance hereof at the rate of two and one half percent (2.5%) (the “Interest Rate”) per annum from the
date hereof (the “Issue Date”) until the same becomes due and payable,
whether at maturity
or upon acceleration
or by prepayment
or otherwise. This
Note may not
be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this
Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof
until the same is paid (“Default Interest”). Interest shall be computed on the basis of a 365 day
year and the
actual number of
days elapsed. Interest shall commence accruing on the Issue Date but shall not
be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by prepayment).
All payments due
hereunder (to the
extent not converted into
common stock, $1e-05 par
value per share
(the “Common Stock”)
in accordance with
the terms hereof) shall be made
in lawful money of the United States of America. All payments shall be made at such address
as the Holder
shall hereafter give
to the Borrower
by written notice
made in accordance
with the provisions of this Note. Each capitalized term used herein, and not
otherwise defined, shall have the meaning ascribed
thereto in that
certain Securities Purchase
Agreement dated the
date hereof, pursuant to which this
Note was originally issued (the “Purchase Agreement”).

 

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

 

The following terms shall
apply to this Note:

 

    	 

    	 

    

 

Article
I. CONVERSION RIGHTS

 

1.1              
 Conversion Right. The Holder shall have the right from time to time, and at any time
during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and ending on the
later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III), each in respect
of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount
of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares
of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at
the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided,
however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of
this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion
of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion
or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion
of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership
by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause
(1) of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the
Holder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing
the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the
Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by
other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time
on such conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York,
New York time the Conversion Date shall be the next business day. The term “Conversion Amount” means, with respect to
any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2)
at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note
to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4
hereof.

 

1.2              
Conversion Price. The conversion price (the “Conversion
Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments by the Borrower relating
to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 85% multiplied by
the Market Price (as defined herein) (representing a discount rate of 15%). “Market Price”
means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the
latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the
closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”)
as reported by a reliable reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the
OTC is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the
foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink
sheets”. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading
Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes
being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes.
“Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal
securities exchange or other securities market on which the Common Stock is then being traded. 

 

    	2

    	 

    

 

1.3              
Authorized Shares. The Borrower covenants that during the period the conversion right
exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement.
The Borrower is required at all times to have authorized and reserved five times the number of shares that is actually issuable
upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time initially 177,559,912)(the
“Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations
hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees
that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and
conditions of this Note.

 

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

 

1.4              
Method of Conversion.

 

(a)               
Mechanics of Conversion. As set forth in Section 1.1 hereof, from time to time, and
at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this Note and
ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, this Note may be converted by
the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice
of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00
p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower
(upon payment in full of any amounts owed hereunder). 

 

(b)              
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth
herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender
this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. 

 

    	3

    	 

    

 

(c)               
Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of
Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause
to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within
three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt
by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to
reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion
of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein,
the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective
of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the
recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might
otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. 

 

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

 

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

 

    	4

    	 

    

 

1.5              
 Concerning the Shares. The shares of Common Stock issuable upon conversion of this
Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective registration statement under the
Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold
or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule)
(“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower
who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor
(as defined in the Purchase Agreement). 

 

Any
restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and
the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer
agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration
under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of
the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration
statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company
does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to
an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of Default pursuant to Section
3.2 of the Note.

 

1.6              
Effect of Certain Events.

 

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

 

(b)              
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued
and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same
or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case
of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete
liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note,
upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore
issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction
had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set
forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder
of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable
in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but
in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve,
or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

    	5

    	 

    

 

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

 

1.7              
Prepayment. Notwithstanding anything to the contrary contained in this
Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment Periods”)
or as otherwise agreed to between the Borrower and the Holder, the Borrower shall have the right, exercisable on not more than
three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest),
in full, in accordance with this Section 1.7. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall
be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right
to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional
Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment
of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder
in a writing to the Borrower (which shall direction to be sent to Borrower by the Holder at least one (1) business day prior to
the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to
the Holder of an amount in cash equal to the percentage (“Prepayment Percentage”) as set forth in the table immediately
following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any
amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”).

 

	Prepayment
Period	Prepayment
Percentage
	 1.
The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date.	105%
	2.
The period beginning on the date which is thirty-one (31) days following the Issue Date and ending on the date which is sixty
(60) days following the Issue Date.	110%
	3.
The period beginning on the date which is sixty-one (61) days following the Issue Date and ending on the date which is ninety
(90) days following the Issue Date.	115%
	4.
The period beginning on the date that is ninety-one (91) days from the Issue Date and ending one hundred twenty (120) days following
the Issue Date.	120%
	5.
The period beginning on the date that is one hundred twenty-one (121) days from the Issue Date and ending one hundred fifty (150)
days following the Issue Date.	125%
	6.
The period beginning on the date that is one hundred fifty-one (151) days from the Issue Date and ending one hundred eighty (180)
days following the Issue Date.	130%

 

    	6

    	 

    

 

After the expiration of
the Prepayment Periods set forth above, the Borrower may submit an Optional Prepayment Notice to the Holder. Upon receipt by the
Holder of the Optional Prepayment Notice post Prepayment Periods, the prepayment shall be subject to the Holder’s and the Borrower’s
agreement with respect to the applicable Prepayment Percentage.

 

Notwithstanding anything
contained herein to the contrary, the Holder’s conversion rights herein shall not be affected in any way until the Note is fully
paid (funds received by the Holder) pursuant to an Optional Prepayment Notice.

 

Article
II.  CERTAIN COVENANTS

 

2.1              
Sale of Assets. So long as the Borrower shall have any obligation under this Note,
the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its
assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified
use of the proceeds of disposition.

 

Article
III.  EVENTS OF DEFAULT

 

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

 

3.1              
Failure to Pay Principal and Interest. The Borrower fails
to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such
breach continues for a period of five (5) days after written notice from the Holder.

 

3.2              
Conversion and the Shares. The Borrower fails to issue shares
of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise
by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails
to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares
of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the
Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not
to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat
that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any
written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business
days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its
obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered
or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances
any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower
to the Holder within forty-eight (48) hours of a demand from the Holder.

 

    	7

    	 

    

 

3.3              
Breach of Covenants. The Borrower breaches any material covenant or other material
term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such
breach continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

 

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

 

3.5              
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part
of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6              
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted
by or against the Borrower or any subsidiary of the Borrower.

 

3.7              
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common
Stock on at least one of the OTC (which specifically includes the quotation platforms maintained by the OTC Markets Group) or an
equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American
Stock Exchange.

 

3.8              
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the
Exchange Act.

 

3.9              
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business.

 

3.10           
Cessation of Operations.Any cessation of operations by Borrower or Borrower admits
it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s
ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become
due.

 

    	8

    	 

    

 

3.11           
Financial Statement Restatement.The restatement of any financial statements filed
by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the un-restated financial statement, have constituted a
material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.12           
 Replacement of Transfer Agent. In the event that the Borrower proposes
to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not
limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer
agent to Borrower and the Borrower.

 

3.13           
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the
other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained
in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the
Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no
event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason
of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments
between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including,
without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or
companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with
all other existing and future debt of Borrower to the Holder.

 

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein). UPON THE OCCURRENCE
AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE
AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT
AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default
specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note
upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13,
and/or 3.14 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”),
and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the
principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due
and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150%
times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts
referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable
hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in equity.

 

    	9

    	 

    

 

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

 

Article
IV. MISCELLANEOUS

 

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

 

4.2              
Notices. All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently by written notice. Any notice or other communication required
or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: 

 

If to the Borrower,
to:

 

GBT TECHNOLOGIES INC.

2450 Colorado Ave., Suite 100E

Santa Monica, CA 90404

Attn:
Mansour Khatib, Chief Executive Officer

Fax:

Email: mansourkhatib@gmail.com

 

If to the Holder:

 

REDSTART HOLDINGS CORP.

1188 Willis
Avenue

Albertson,
New York 11507

Attn:
Gregg B. Solomon

e-mail: redstartholdingscorp@gmail.com

 

    	10

    	 

    

 

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

 

Naidich Wurman LLP

111 Great Neck
Road, Suite 216

Great Neck,
NY 11021

Attn: Allison
Naidich

facsimile:
516-466-3555

e-mail: allison@nwlaw.com

 

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

 

4.4              
Assignability. This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an
“accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower. 

 

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

 

4.6              
Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Note shall be brought only in the state courts of New York or in the federal
courts located in the Eastern District of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon
forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from
the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered
in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.
Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any
other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection
with this Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

    	11

    	 

    

 

4.7              
Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by
the applicable terms of the Purchase Agreement.

 

4.8              
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly,
the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees,
in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled,
in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer this on September 21, 2021

 

GBT TECHNOLOGIES INC.

 

	By:	 	 
	 	Mansour Khatib	 
	 	Chief Executive
Officer	 

 

    	12

    	 

    

EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert $_________________ principal amount of the Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below,
of GBT TECHNOLOGIES INC., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of
the Borrower dated as of September 21, 2021 (the “Note”), as of the date written below. No fee will be charged to the
Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable
instructions:

 

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

 

	Date of conversion:	 	 	 	 
	Applicable Conversion Price:	 	$	—	 
	Number of shares of common stock to be issued pursuant to conversion of the Notes:	 	 	 	 
	Amount of Principal Balance due remaining under the Note after this conversion:	 	 	 	 

 

	REDSTART HOLDINGS CORP.	 
	 	 	 
	By:	 	 
	Name:	Gregg Solomon	 
	Title:	 	 
	Date:	 	 

 

13

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