Document:

Exhibit 10.2

 

AMENDMENT NO. 1 
 TO CREDIT AGREEMENT

 

This Amendment No. 1 to Credit Agreement (this “Amendment”) is executed as of April 17, 2014 among the Lenders party hereto (which Lenders constitute all of the Lenders as of the date of this Amendment), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders (in that capacity, “Administrative Agent”), and SUPREME INDUSTRIES, INC., a Delaware corporation (“Borrower”); and is acknowledged by the Subsidiary Guarantors.

 

The Lenders, Administrative Agent, and Borrower entered into an Amended and Restated Credit Agreement dated as of April 29, 2013 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “Credit Agreement”).  The Lenders, Administrative Agent, and Borrower now desire to amend certain terms and provisions of the Credit Agreement as set forth in this Amendment.

 

Accordingly, the parties agree as follows:

 

1.             Definitions. Defined terms used but not defined in this Amendment are as defined in the Credit Agreement.

 

2.             Amendments.

 

(a)           Effective as of April 29, 2013 (that effective date, the “CTI Amendment Effective Date”) but subject to subject to satisfaction of the conditions precedent in Section 4 hereof, the definition of Consolidated Total Indebtedness in Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as follows:

 

““Consolidated Total Indebtedness” means, as of any date of determination with respect to the Borrower and its Subsidiaries (other than Supreme Insurance) on a Consolidated basis without duplication, the sum of all Indebtedness of the Borrower and its Subsidiaries (other than any Indebtedness arising in connection with any of the ALLY Loan Agreements (including all ALLY Advances) or in connection with any similar arrangement or transaction between or among any Borrower and/or its Subsidiaries and ALLY, whether such arrangement is a loan, financing, bailment, consignment or other title retention arrangement for financing and/or facilitating the sourcing of motor vehicle chassis by Borrower and its Subsidiaries).”

 

(b)           Effective as of the date of this Amendment but subject to satisfaction of the conditions precedent in Section 4 hereof, Section 9.1(m) of the Credit Agreement is hereby amended to read in its entirety as follows:

 

“(m) outstanding unpaid loans or advances made by ALLY to or for the account of Supreme Indiana under an ALLY Loan Agreement (“ALLY Advances”) to pay for the restricted purchase of Pool Units, but only so long as (i) such ALLY Advances are used solely to pay 100% (and not any lesser portion) of the purchase price of Pool Units and (ii) the aggregate unpaid amount of such Ally Advances does not exceed (a) $75,000,000 

 

1

 

at any time prior to September 30, 2014 and (b) $45,000,000 at any time from and after September 30, 2014;”

 

3.             Representations. To induce Administrative Agent and the Lenders to enter into this Amendment, Borrower hereby represents to Administrative Agent and the Lenders as follows:

 

(1)                                 that Borrower is duly authorized to execute and deliver this Amendment, that Borrower is duly authorized to borrow monies under the Credit Agreement, and that each Credit Party is duly authorized to perform its obligations under the Loan Documents;

 

(2)                                 that the execution and delivery of this Amendment by Borrower and the performance by each Credit Party of its obligations under the Loan Documents do not and will not violate any material provision of law or of their respective articles of incorporation or bylaws, limited partnership agreement, or certificate of formation or operating agreement, as applicable, or of any order, judgment, or decree of any court or other Governmental Authority binding on them;

 

(3)                                 that the Loan Documents (including this Amendment) are a legal, valid, and binding obligation of each Credit Party party thereto, enforceable against such Credit Party in accordance with its terms, except as enforcement is limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally;

 

(4)                                 that, after giving effect to this Amendment, the representation and warranties set forth in Section 7 of the Credit Agreement are true and correct in all material respects (but if any representation or warranty is by its terms qualified by concepts of materiality, that representation or warranty is true and correct in all respects), in each case with the same effect as if such representations and warranties had been made on the Amendment Effective Date, except to the extent that any such representation or warranty expressly relates to an earlier date;

 

(5)                                 that, after giving effect to this Amendment, Borrower has complied with and is in compliance with all of the covenants set forth in the Credit Agreement, including those set forth in Section 8 and Section 9 of the Credit Agreement; and

 

(6)                                 that, as of date hereof and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

 

4.             Conditions. This Amendment will become effective, in the case of Section 2(a) hereof as of the Amendment Effective Date and in the case of Section 2(b) hereof as of the date of this Amendment, when Administrative Agent, the Lenders, Borrower and the Subsidiary Guarantors have delivered a fully executed copy of this Amendment to the Administrative Agent.  Administrative Agent’s delivery to Borrower of a copy of this Amendment executed by all necessary parties described in this Section 4 will be deemed evidence that the conditions to the effectiveness of this Amendment have been met.  The Lenders hereby authorize and direct Administrative Agent to execute this Amendment.

 

5.             Miscellaneous. (a) This Amendment is governed by, and is to be construed in accordance with, the laws of the State of New York.  Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

 

2

 

(b)           This Amendment binds Administrative Agent, the Lenders, and Borrower and their respective successors and assigns, and will inure to the benefit of Administrative Agent, the Lenders, Borrower and the successors and assigns of Administrative Agent and each Lender.

 

(c)           Except as specifically modified by the terms of this Amendment, all other terms and provisions of the Credit Agreement and the other Loan Documents are incorporated by reference in this Amendment and in all respects continue in full force and effect.  Borrower, by execution of this Amendment, and each Subsidiary Guarantor, by acknowledgement of this Amendment, hereby reaffirm, assume, and bind themselves to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Credit Agreement and the other Loan Documents, as applicable.

 

(d)           This Amendment is a Loan Document. Borrower acknowledges that Administrative Agent’s reasonable costs and expenses (including reasonable attorneys’ fees) incurred in drafting this Amendment shall be paid by Borrower and the other Credit Parties in accordance with Section 12.3(a) of the Credit Agreement.

 

(e)           The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

 

[Signature pages and acknowledgment to follow]

 

3

 

The parties are signing this Amendment No. 1 to Credit Agreement as of the date stated in the introductory clause.

 

	
 
    	
SUPREME   INDUSTRIES, INC.,
    
	
 
    	
as   Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Matthew W. Long
    
	
 
    	
Name:
    	
Matthew   W. Long
    
	
 
    	
Title:
    	
Chief   Financial Officer
    

 

4

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   Administrative Agent and a Lender
    
	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David W. O’Neal
    
	
 
    	
Name:
    	
David   W. O’Neal
    
	
 
    	
Title:
    	
Senior   Vice President
    
				

 

5

 

	
 
    	
BMO HARRIS   BANK N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott Dvornik
    
	
 
    	
Name:
    	
Scott   Dvornik
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

6

 

Acknowledged as of April 17, 2014, by the undersigned,
 each of which is a Subsidiary Guarantor:

 

	
SUPREME   CORPORATION,
    	
 
    	
SUPREME   INDIANA OPERATIONS, INC.,
    
	
a   Texas corporation
    	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUPREME CORPORATION OF GEORGIA,
    	
 
    	
SUPREME   CORPORATION OF TEXAS,
    
	
a Texas corporation
    	
 
    	
a   Texas corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUPREME TRUCK BODIES OF CALIFORNIA,
    	
 
    	
SUPREME   MID-ATLANTIC CORPORATION,
    
	
a California corporation
    	
 
    	
a   Texas corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SC TOWER   STRUCTURAL LAMINATING, INC., a Texas corporation
    	
 
    	
SUPREME\MURPHY   TRUCK BODIES, INC., 

a   North Carolina corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUPREME NORTHWEST, L.L.C.,
    	
 
    	
 
    
	
a Texas limited liability company
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
 
    	
 
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
 
    	
 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUPREME   MIDWEST PROPERTIES, INC.,
    	
 
    	
SUPREME SOUTHEAST PROPERTIES, INC.,
    
	
a   Texas corporation
    	
 
    	
a Texas corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    

 

7

 

	
SUPREME SOUTHWEST PROPERTIES, INC.,
    	
 
    	
SUPREME   ARMORED, INC.,
    
	
a Texas corporation
    	
 
    	
a   Texas corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Matthew W. Long
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Matthew   W. Long
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUPREME WEST PROPERTIES, INC.,
    	
 
    	
SUPREME   STB, LLC,
    
	
a Texas corporation
    	
 
    	
a   California limited liability company
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Matthew W. Long
    	
 
    	
By:   
    	
/s/   Herbert M. Gardner
    
	
Name:   
    	
Matthew   W. Long
    	
 
    	
Name:   
    	
Herbert   M. Gardner
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    	
Title:   
    	
Chairman   of the Board
    

 

8EXHIBIT 10.1

 

THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, HYPOTHECATED, SOLD, OR TRANSFERRED, NOR WILL ANY ASSIGNEE
OR TRANSFEREE HEREOF BE RECOGNIZED BY MAKER HEREOF AS HAVING ANY INTEREST IN THIS NOTE.

 

CONVERTIBLE
SECURED TERM NOTE

 

	$5,000,000.00	October
    24, 2014

 

FOR
VALUE RECEIVED, and intending to be legally bound hereby, BONE BIOLOGICS, CORP., a Delaware corporation, with an address of 175
May Street, Suite 400, Edison, NJ 08837 (“Maker”), hereby promises to pay to the order of HANKEY CAPITAL, LLC, a California
limited liability company, with a mailing address of 4751 Wilshire Blvd., Suite 110, Los Angeles, California 90010 (“Payee”),
the principal amount of Five Million and 00/100 Dollars ($5,000,000.00), with interest thereon from the date hereof at the interest
rate or rates stated below, interest and principal to be paid as set forth below. All payments shall be made by Maker to Payee
at the office of Payee indicated above or such other place as Payee may from time to time specify in writing in lawful currency
of the United States of America in immediately available funds, without counterclaim or setoff and free and clear of, and without
any deduction or withholding for, any taxes or other payments.

 

1. Definitions.

 

1.1 For
purposes of this Note, the following terms shall have the meanings ascribed to them below:

 

“Base
Rate” shall mean a rate of interest per annum equal to the greater of (A) the Prime Rate as in effect from time to time,
plus four percent (4.0%) and (B) eight and half percent (8.5%). If and when the Prime Rate changes, the Base Rate may change automatically
without notice to Maker, effective on the date of any such change.

 

“Business
Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are
authorized or required by law or other governmental action to be closed.

 

“Dollar”
and “$” shall mean lawful money of the United States of America.

 

“GAAP”
shall mean generally accepted accounting principles as adopted by the Financial Accounting Standards Board, consistently applied.

 

“Loan”
shall mean the loan made to Maker by Payee pursuant to this Note in the original principal amount of Five Million and 00/100 Dollars
($5,000,000.00).

 

    	 

    	 

    

 

“Loan
Documents” shall mean this Note and all agreements, instruments, documents, exhibits, schedules, amendments, modifications,
supplements, certificates, financing statements, reports, and notices related thereto, including a 3 year warrant, dated the date
hereof, to purchase 3,955,697 shares of common stock of the Maker at a conversion price of $1.58.

 

“LTV
Ratio” shall mean, as of any date of determination, the ratio of (A) the outstanding principal balance of the Loan, together
with all unpaid interest which shall have accrued thereon, to (B) the Securities Collateral Value. 

 

“Maximum
Ratio” shall mean a ratio equal to 50%.

 

“Prime
Rate” shall mean the “prime rate” as quoted in the “Money Rates” section of The Wall Street Journal
or the highest “prime rate” if more than one is published. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate of interest actually charged by Payee to any particular class or category of customers. In the
event The Wall Street Journal no longer publishes such “prime rate”, Payee shall have the right, exercising
reasonable judgment, to substitute a new method for determining a comparable interest rate, and such rate of interest determined
by such method shall constitute the Prime Rate hereunder.

 

“UCC”
shall mean Article 9 of the Uniform Commercial Code, as in effect from time to time in the state of Delaware; provided, however,
that, in the event that, by reason of mandatory provisions of any applicable law, any of the attachment, perfection or priority
Payee’s Security Interest (as defined hereinafter) in any Collateral (as defined hereinafter) is governed by the Uniform
Commercial Code of a jurisdiction other than such state, “UCC” shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes
of the definitions related to or otherwise used in such provisions.

 

“Securities
Collateral” shall mean all shares of common stock of Maker issued and fully registered, free of any restrictive legends,
in the name of Payee as collateral security for the Secured Obligations (as defined hereinafter) pursuant to Section 9.3 of this
Note.

 

“Securities
Collateral Value” shall mean, as of any date of determination, the market value of the Securities Collateral as determined
by Maker and Payee. If the common stock of Maker is listed on any stock exchange or trading publicly, the market value of the
Securities Collateral as of any date of determination shall be conclusively determined by the average daily price for the common
stock of Maker as measured over the course of the sixty (60) day period prior to such date of determination, provided further
that prior to the day upon which the common stock of Maker is listed on any stock exchange or trading publicly the market value
of the Securities Collateral as of any date of determination shall be conclusively determined by using $1.58 as the price for
the common stock of the Maker.

 

1.2 Unless
the context otherwise requires, the following terms have the meanings given to them in the UCC (such meanings to be equally applicable
to both the singular and plural forms of the terms defined): “account”, “accession”, “account debtor”,
“chattel paper”, “commercial tort claim”, “commodity contract”, “deposit account”,
“electronic chattel paper”, “equipment”, “fixture”, “general intangible”, “goods”,
“instruments”, “inventory”, “investment property”, “letter-of-credit right”, “proceeds”,
“record”, “securities account”, “security”, “supporting obligation” and “tangible
chattel paper”.

 

    	-2-

    	 

    

 

2. Interest.

 

2.1 Interest
Rate. Principal amounts outstanding under this Note will bear interest at a fluctuating rate per annum equal to the Base Rate
as in effect from time to time. Any change in the Base Rate resulting from a change in the Prime Rate shall be effective on the
date of such change.

 

2.2 Calculation.
All computations of interest shall be made on the basis of a three hundred sixty (360) day year and the actual number of days
elapsed.

 

2.3 Usury
Limitation. All agreements between Maker and Payee are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed
to be paid to Payee hereunder, exceed the maximum permissible under applicable law. As used herein, the term “applicable
law” shall mean the law in effect as of the date hereof; provided, however, that in the event there is a change in the law
which results in a higher permissible rate of interest, then this Note shall be governed by such new law as of its effective date.
In this regard, it is expressly agreed that it is the intent of Maker and Payee in the execution, delivery and acceptance of this
Note to contract in strict compliance with the laws of the State of Delaware from time to time in effect. If, under or from any
circumstances whatsoever, fulfillment of any provision hereof or of any of the Loan Documents at the time of performance of such
provision shall be due, shall involve transcending the limit of such validity prescribed by applicable law, then the obligation
to be fulfilled shall automatically be reduced to the limits of such validity; and if, under or from any circumstances whatsoever
Payee should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between Maker and Payee.

 

3. Payments.

 

3.1 Interest.
Interest hereon shall be due and payable in arrears on the first day of each calendar month following the date hereof. Each monthly
installment shall include all then accrued and unpaid interest.

 

3.2 Maturity
Date. The entire unpaid principal amount of this Note, together with all accrued and unpaid interest thereon and all other
amounts payable hereunder or under any of the other Loan Documents, shall be due and payable, if not sooner paid, on October 24,
2017 a date which is thirty-six (36) months after the date of this Note, or an earlier date as a result of a maturity, whether
by acceleration or otherwise, pursuant to the terms of the Loan Documents (the “Maturity Date”).

 

    	-3-

    	 

    

 

3.3 Voluntary
Principal Prepayment. The principal amount of the Loan is prepayable in whole or in part at any time, without premium or penalty.
Principal amounts repaid under this Note may not be re-borrowed. Upon any voluntary partial prepayment of principal outstanding
under this Note, Payee shall return Collateral Securities to Maker in the amount necessary, if any, to cause the LTV Ratio as
of the date of such prepayment to be not less than the Maximum Ratio. Upon Maker’s receipt of any such returned Collateral
Securities, Maker shall cause all such Collateral Securities to be cancelled. Upon a full payment of the principal outstanding
under this Note, Payee shall return all Collateral Securities to Maker, and Maker shall cause all returned Collateral Securities
to be cancelled.

 

3.4 Commitment
Fee. Maker shall pay to Payee, on or before the date hereof, a commitment fee in the amount of three percent (3%) of the original
principal amount of the Loan (i.e. One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00)). This fee has been fully
earned by Payee as of the date hereof.

 

3.5 Conversion.
Prior to the Maturity Date, Payee shall have the option to convert all or a portion of the outstanding principal under this Note
into common stock of Maker (each a “Conversion”) at a price per share equal to the greater of (the “Conversion
Price”): (A) One and 58/100 Dollars ($1.58) and (B) seventy percent (70%) of the average daily price for the common stock
of Maker as measured over the course of the sixty (60) day period prior to Payee’s election to make such Conversion; provided
that prior to the date upon which the common stock of the Maker begins trading, the conversion price shall be One and 58/100 Dollars
($1.58) . Upon Payee’s election to make a Conversion, Payee shall credit the principal amount of the Note which is converted
against the outstanding principal balance of the Loan dollar-for-dollar. Upon any Conversion, Payee shall return Collateral Securities
to Maker in the amount necessary, if any, to cause the LTV Ratio as of the date of such Conversion to be not less than the Maximum
Ratio. Upon Maker’s receipt of any such returned Collateral Securities, Maker shall cause all such Collateral Securities
to be cancelled. Maker and Payee acknowledge and agree that any reduction of the outstanding principal under this Note pursuant
to any Conversion shall be a dollar-for-dollar repayment of such principal indebtedness for value given and shall not be a cancellation,
forgiveness, or other termination of such principal indebtedness, in whole or in part.

 

4. Repayment
Terms; Late Fees.

 

4.1 Payments
Due Other Than on a Business Day. If this Note or any payment hereunder becomes due on a day which is not a Business Day,
the due date of this Note or payment shall be extended to the next succeeding Business Day, and such extension of time shall be
included in computing interest and fees in connection with such payment.

 

4.2 Application
of Payments. Any payments received by Payee before 5:00 p.m. (Eastern Time) on any Business Day will be deemed received by
Payee on that Business Day. Any payments received by Payee after 5:00 p.m. (Eastern Time) on any Business Day will be deemed received
by Payee on the next Business Day. If Payee accepts a payment in any form other than immediately available funds, that payment
will not be deemed to have been made until the funds comprising the payment have actually been received by or made available to
Payee. Except as otherwise provided herein, all payments shall be applied first to accrued interest, fees, expenses and other
amounts due to Payee (excluding principal) as Payee determines in its sole discretion, and the balance on account of outstanding
principal; provided, however, that after an Event of Default hereunder, payments will be applied to the obligations of Maker to
Payee in any order as Payee determines in its sole discretion.

 

    	-4-

    	 

    

 

5. Conditions
Precedent. The obligation of Payee to advance the Loan is subject to the following conditions precedent:

 

5.1 Delivery
of Loan Documents. All of the Loan Documents shall have been duly executed and delivered to Payee.

 

5.2 Delivery
of Corporate Documents. Payee shall have received a certificate of the secretary of Maker with certifications of (A) the names,
incumbency and signatures of the parties executing the Loan Documents on behalf of Maker; (B) copies of the articles of incorporation
and bylaws of Maker; (C) a certificate of good standing for Maker issued as of a date contemporaneous with the date of this Note;
and (D) duly adopted resolutions and/or consents of the directors or board of directors of Maker authorizing Maker’s execution,
delivery and performance of the Loan Documents.

 

5.3 Representations
and Warranties. The representations and warranties of Maker contained in the Loan Documents shall be true and correct in all
material respects.

 

5.4 Payment
of Fees and Costs. Maker shall have paid or reimbursed to Payee up to $5,000 for outstanding fees and costs incurred by Payee
in connection with the Loan, including, without limitation, Payee’s attorneys’ fees and costs.

 

6. Representations
and Warranties. Maker represents and warrants to Payee that as long as there is any outstanding amount due under this Note
or any other Loan Document (all of which shall survive the making of this Note and shall be continuing):

 

6.1 Organization
and Authority; Valid and Binding Agreements. Maker is duly organized, validly existing and in good standing under the laws
of, and is fully qualified and authorized to do business in, the state of its organization and is in good standing, and is fully
qualified and authorized to do business in, all other jurisdictions where that authorization or qualification is required. Maker
has full power and authority to engage in all of the transactions contemplated by the Loan Documents and has full power, authority
and legal right to execute and deliver, and to comply with its obligations under the Loan Documents, which documents constitute
the legally binding obligations of Maker enforceable against Maker in accordance with their respective terms. Maker has taken
all necessary action to duly authorize the execution, delivery and performance of the Loan Documents.

 

6.2 No
Conflict. Neither the execution nor delivery of the Loan Documents or any security or collateral relating thereto will
conflict with or result in a breach of any of the provisions of the organizational documents of Maker, or of any applicable law,
judgment, order, writ, injunction, decree, rule or regulation of any court, administrative agency or other governmental authority,
or of any agreement or other instrument to which Maker is a party or by which Maker is bound, or constitute a default under any
of the foregoing.

 

    	-5-

    	 

    

 

6.3 No
Consents. No consent, approval or other authorization of or by any court, administrative agency or other governmental authority
or any other person is required in connection with the execution or delivery by Maker of the Loan Documents or compliance by Maker
with the provisions thereof.

 

6.4 Collateral.
Maker has good and marketable title to, and is the owners of, all collateral given as security to Payee, and all of such collateral
is free and clear of pledges, liens, security interests and other encumbrances, other than those in favor of Payee or expressly
permitted under the Loan Documents.

 

6.5 Pending
Actions. There is no suit, action or proceeding pending or threatened against or affecting Maker or any collateral given as
security to Payee before or by any court, administrative agency or other governmental authority which brings into question the
validity of the transactions contemplated by the Loan Documents or would interfere with the ability of Maker to comply with the
terms thereof.

 

6.6 Prohibited
Persons. Maker is not, and will not be, a person (A) that is listed in the Annex to, or is otherwise subject to the provisions
of, Executive Order 13224 issued on September 24, 2001 (“EO13224”), (B) whose name appears on the United States Treasury
Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National
and Blocked Persons,” (C) who commits, threatens to commit or supports “terrorism,” as defined in EO13224, or
(D) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses (A)
– (B) above are herein referred to as a “Prohibited Person”).

 

6.7 Solvency.
Maker is not insolvent as defined in any applicable state or federal statute, and Maker will not be rendered insolvent by the
execution and delivery of the Loan Documents or completion of the transactions contemplated hereby or thereby (including, without
limitation, the Loan). After the making of the Loan, Maker reasonably expects to (A) be able to pay its debts as they become due,
(B) have funds and capital sufficient to carry on its business and all businesses in which it is about to engage, and (C) own
property having a value at both fair valuation and at fair salable value in the ordinary course of business greater than the amount
required to pay its debts as they become due. Maker is not entering into any Loan Document with any intent to hinder, delay, or
defraud its current or future creditors.

 

6.8. Governmental
Approvals. Maker has all requisite governmental licenses, authorizations, consents and approvals to transact the business
in which it is engaged.

 

7. Affirmative
Covenants. Maker covenants and agrees that, unless Payee otherwise consents in writing:

 

7.1 Use
of Proceeds. Maker shall use all proceeds of the Loan for working capital and general corporate purposes.

 

    	-6-

    	 

    

 

7.2 Accounting
and Taxes. Maker shall maintain a system of accounting and reserves in accordance with GAAP, has filed and shall file each
tax return required of it, and has paid and shall pay when due, unless disputed in good faith by Maker, each tax, assessment,
fee, charge, fine and penalty imposed by any taxing authority upon it or any of its assets, income or franchises, as well as all
amounts owed to mechanics, materialmen, landlords, suppliers and the like in the normal course of business.

 

 7.3 Prohibited
Persons. Maker shall not knowingly (A) conduct any business, nor engage in any transaction or dealing, with any Prohibited
Person, including, but not limited to, the making or receiving of any contribution of funds, goods or services to or for the benefit
of a Prohibited Person, or (B) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224.

 

7.4 Anti-Terrorism
Compliance. Maker shall not use of the proceeds of the Loan in any manner that would violate (A) any regulations promulgated
or administered by the Office of Foreign Assets Control, United States Department of the Treasury, including without limitation,
the Foreign Assets Control Regulations, the Transaction Control Regulations, the Cuban Assets Control Regulations, the Foreign
Funds Control Regulations, the Iranian Assets Control Regulations, the Nicaraguan Trade Control Regulations, the South African
Transaction Regulations, the Iranian Transactions Regulations, the Iraqi Sanctions Regulations, the Soviet Gold Coin Regulations,
the Panamanian Transaction Regulations or the Libyan Sanctions Regulations of the United States Treasury Department, 31 C.F.R.,
Subtitle B, Chapter V, as amended, (B) the Trading with the Enemy Act, as amended, (C) Executive Orders 8389, 9095, 9193, 12543
(Libya), 12544 (Libya), 12722 or 12724 (Iraq), 12775 or 12779 (Haiti), or 12959 (Iran), as amended, of the President of the United
States or (D) any rule, regulation or executive order issued or promulgated pursuant to the laws or regulations described in the
foregoing clauses (A)-(C).

 

8. Negative
Covenants. Unless Payee otherwise consents in writing, Maker covenants and agrees that Maker shall not:

 

8.1 Changes
in Form. (A) Transfer or dispose of all or substantially all of its property or assets, liquidate, windup or dissolve; (B)
acquire all or substantially all of the property or assets of, or the equity interests in, any other person; (C) do business under
or otherwise use any name other than its true name; (D) make any material change in its business, structure, purposes or operations
that might have a material adverse effect on Maker; (E) participate in any merger, consolidation, share exchange, division, conversion,
reclassification or other absorption or reorganization; (F) make, terminate or permit to be revoked any election pursuant to Subchapter
S of the Internal Revenue Code; (G) purchase, redeem, acquire, cancel or retire any equity interest in Maker, except as permitted
by Section 3.3 hereof in connection with a voluntary prepayment of principal outstanding under this Note or Section 3.5 hereof
in connection with a Conversion; (H) create or acquire any subsidiary; (I) change its legal form; (J) change its jurisdiction
of organization or become (or attempt or purport to become) organized in more than one jurisdiction; (K) amend, modify or supplement
its organizational or governing documents; or (L) issue, transfer, sell or otherwise dispose of any equity interest in Maker,
except to Payee.

 

    	-7-

    	 

    

 

8.2 Liens.
Create, incur, assume, permit or suffer to exist any pledges, liens, security interests and other encumbrances of its property
or assets, whether now owned or hereafter owned or acquired, except for those (A) in favor of Payee; (B) securing taxes, assessments
or governmental charges or levies not delinquent or disputed in good faith by Maker; (C) incurred in the ordinary course of business
in connection with workers’ compensation, unemployment insurance, social security and other like laws; and (D) existing
on the date of this Note and shown on Schedule “8.2(D)” attached hereto and made part hereof.

 

8.3 Indebtedness,
Investments, Loans, and Guaranties. (A) Create, incur, assume, permit or suffer to exist any indebtedness, except (i) indebtedness
to Payee; (ii) open account trade debt incurred in the ordinary course of business either not more than ninety (90) days past
due or disputed in good faith; or (iii) indebtedness existing on the date of this Note and shown on Schedule “8.3(A)(iii)”
attached hereto and made part hereof; (B) create, incur, assume, permit or suffer to exist any investment, other than (i) investments
in FDIC insured deposits or United States Treasury obligations of less than one year or in money market or mutual funds administering
such investments; or (ii) investments existing on the date of this Note and shown on Schedule “8.3(B)(ii)” attached
hereto and made part hereof; (C) create, make, assume, permit or suffer to exist any loan, advance or other extension of credit,
except for (i) endorsements of instruments for the payment of money deposited to its deposit accounts for collection in the ordinary
course of business; or (ii) loans, advances or other extensions of credit existing on the date of this Note and shown on Schedule
“8.3(C)(ii)” attached hereto and made part hereof; or (D) become a guarantor, a surety or otherwise liable for the
debts or other obligations of another, whether by guaranty or suretyship agreement, agreement to purchase indebtedness, agreement
for furnishing funds through the purchase of goods, supplies or services (or by way of stock purchase, capital contribution, advance
or loan) for the purpose of paying or discharging indebtedness, or otherwise, except as (i) an endorser of instruments for the
payment of money deposited to its deposit accounts for collection in the ordinary course of business; or (ii) existing on the
date of this Note and shown on Schedule “8.3(C)(ii)” attached hereto and made part hereof.

 

9. Security
Agreement.

 

9.1 Security
Interest. Maker hereby grants to Payee a continuing security interest (the “Security Interest”) in all personal
property and assets of Maker, including the following property and assets, whether now owned or at any time hereafter acquired
by Maker or in which Maker now has or at any time in the future may acquire any right, title or interest, wherever located, and
whether now existing or hereafter acquired or created (collectively referred to as the “Collateral”):

 

A. all
accounts, chattel paper, deposit accounts, cash, cash equivalents, documents (as defined in the UCC), receivables, equipment,
general intangibles, instruments, inventory, investment property, and letter of credit rights;

 

    	-8-

    	 

    

 

B. all
property and assets of Maker held by Payee, including all property and assets of every description, in the custody of or in transit
to Payee for any purpose, including safekeeping, collection or pledge, for the account of Maker or as to which Maker may have
any right or power, including but not limited to cash;

 

C. all
other goods (including but not limited to fixtures) and personal property and assets of Maker, whether tangible or intangible;

 

D. all
supporting obligations thereof and all increases or profits received therefrom, all software, books and records related thereto,
and all parts, accessories, special tools, attachments, additions, accessions, replacements and substitutions thereto or therefor;

 

E. all
Securities Collateral;

 

F. all
License Agreements (as hereinafter defined); and

 

G. all
cash and non-cash proceeds of any of the foregoing in any form.

 

9.2 Obligations
Secured. The Security Interest granted by Maker secures the full payment and performance of all obligations of Maker to Payee
under this Note and the other Loan Documents (collectively, the “Secured Obligations”).

 

9.3 Securities
Collateral and LTV Ratio. As collateral security for the Secured Obligations, Maker shall issue shares of common stock of
Maker in the name of Payee in the amount necessary to cause the LTV Ratio as of the date of this Note to be equal to the Maximum
Ratio. Such shares of common stock of Maker shall contain restrictive legends. The LTV Ratio shall be examined on an annual basis
on November 1 (the “Reconciliation Day) and If the LTV Ratio as of the end of the Reconcilation Day exceeds the Maximum
Ratio, Payee may provide written notice of the same to Maker. Upon receipt of any such written notice, Maker shall, at its option
and election, either (A) voluntarily prepay principal outstanding under this Note in the amount necessary to cause the LTV Ratio
as of the end of the noticed Reconciliation Day, after giving effect such payment, to no longer exceed the Maximum Ratio; or (B)
issue additional shares of common stock of Maker in the name of Payee and with restrictive legends in the amount necessary to
cause the LTV Ratio, as of the end of the noticed Reconciliation Day, after giving effect such issuance, to no longer exceed the
Maximum Ratio. The Maker shall seek to register the Securities Collateral initially delivered on the date of this Note pursuant
to the Registration Rights Agreement between the Payee and the Maker dated the date hereof. Upon the effectiveness of such Registration
Statement, the Maker will remove the restrictive legends from the Securities Collateral so long as the Payee agrees in any event
not to sell any Securities Collateral if Payee is notified that the Registration Statement is no longer effective. Payee may hold
the Securities Collateral any brokerage account of Payee’s choosing, in the name of Payee. Payee shall not transfer, sell
or otherwise dispose of any Securities Collateral, except during the existence of an Event of Default in connection with the exercise
of its rights and remedies as a secured lender.

 

    	-9-

    	 

    

 

9.4 Assignment
of License Agreements. As collateral security for the Secured Obligations, Maker hereby assigns, transfers and pledges to
Payee all of Maker’s right, title and interest in, to and under all licenses in favor of Maker, whether now existing or
hereafter arising, as the same may be amended, supplemented, restated, extended, replaced, supplemented or otherwise modified
from time to time, together with all cash and non-cash proceeds of any of the foregoing and all claims of Maker with respect thereto
and together with all right, title and interest of Maker in and to any and all extensions and renewals of any of the foregoing
(collectively, the “License Agreements”). Until Maker has received written notice from Payee that an Event of Default
has occurred and is continuing and, by reason thereof, Payee has declared the entire unpaid principal amount hereof and all interest
accrued hereon, and all other sums owed under, or secured by, the Loan Documents, to be due and payable, Maker shall have the
exclusive right to exercise all rights in, to and under the License Agreements, and Payee shall not have any right to exercise
such rights hereunder. Upon Maker receipt of such written notice, Payee shall be entitled, at Payee’s option and election,
to exercise all rights in, to and under any or all of the License Agreements, whether or not Payee shall take possession of any
part of the License Agreements. The foregoing assignment shall be fully operative without any further action on the part of either
party.

 

9.5 Authorization.
Payee is hereby authorized to file financing statements and amendments to financing statements without Maker’s signature,
in accordance with the UCC. Maker hereby authorizes Payee to file all such financing statements and amendments to financing statements
describing the Collateral in any filing office as Payee, in its sole discretion may determine, including financing statements
listing “All Assets” in the collateral description therein. Maker agrees to comply with the requests of Payee in order
for Payee to have and maintain a valid and perfected first priority security interest in the Collateral including, without limitation,
executing and causing any other person to execute such documents as Lender may require to obtain control (as defined in the UCC)
over all deposit accounts, letter of credit rights and investment property.

 

9.6 Further
Assurances. Maker shall do anything further that may be reasonably required by Payee to secure Payee and effectuate the intentions
and objects of this Section 9. At Payee’s reasonable request, Maker shall immediately deliver all necessary documents or
forms to reflect, implement or enforce the Security Interest described herein or cause to be delivered to Payee all items for
which Payee must receive possession to obtain a perfected security interest.

 

10. Events
of Default. Each of the following shall constitute an event of default hereunder (an “Event of Default”): (A) the
nonpayment of any principal, interest or other indebtedness under this Note or any other Loan Document when due, which nonpayment
is not cured within five (5) Business Days; (B) Maker’s failure to observe or perform any other covenant or agreement
contained in this Note or any other Loan Document, which failure is not cured within fifteen (15) Business Days of Maker’s
receipt of written notice of the same from Payee; (C) the occurrence of an Event of Default or any default and the lapse
of any applicable notice or cure period under any other Loan Document between Maker and Payee; (D) the filing by or against
Maker of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding
(and, in the case of any such proceeding instituted against Maker, such proceeding is not dismissed or stayed within thirty (30)
days of the commencement thereof); (E) any assignment by Maker for the benefit of creditors, or any levy, garnishment, attachment
or similar proceeding is instituted against any property of Maker held by or deposited with Payee (and, in the case of any such
proceeding instituted against Maker, such proceeding is not dismissed or stayed within thirty (30) days of the commencement thereof);
(F) a default with respect to any other material indebtedness of Maker for borrowed money, if the effect of such default
is to cause or permit the acceleration of such debt; (G) the commencement of any foreclosure or forfeiture proceeding, execution
or attachment against any material Collateral securing the Secured Obligations; (H) the entry of a material judgment against
Maker and the failure of Maker to discharge the judgment within thirty (30) days of the entry thereof; and (I) any representation
or warranty made by Maker to Payee in any Loan Document, or any other documents now or in the future securing the obligations
of Maker to Payee, is false, erroneous or misleading in any material respect.

 

    	-10-

    	 

    

 

11. Remedies.
Upon the occurrence and during the continuance of an Event of Default, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required in the Loan Documents or by law) to or upon Maker or
any other person (all and each of which demands, presentments, protests, advertisements and notices are hereby waived), Payee
may exercise any right, power or remedy permitted by law or as set forth herein or in any of the other Loan Documents and, without
limiting the generality of the foregoing, Payee shall thereupon have the right at its option to declare the entire unpaid principal
amount hereof and all interest accrued hereon, and all other sums owed under, or secured by, the Loan Documents to be, and such
principal, interest and other sums shall thereupon become, forthwith due and payable. The failure by Payee to exercise the acceleration
option shall not constitute a waiver of its right to exercise the acceleration option at any other time so long as that Event
of Default remains outstanding and uncured or to exercise it upon the occurrence of another Event of Default. The entire unpaid
principal amount hereof and all interest accrued hereon, and all other sums owed under, or secured by, the Loan Documents shall
be due and payable automatically upon the occurrence of an Event of Default under Section 10(D) or (E) above.

 

12. Right
of Setoff. Maker hereby grants to Payee, a continuing lien, security interest and right of setoff as security for all liabilities
and obligations to Payee, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property,
now or hereafter in the possession, custody, safekeeping or control of Payee. Upon the occurrence and during the continuance of
an Event of Default, and upon prior written notice to Maker, Payee may set off the same or any part thereof and apply the same
to any liability or obligation of Maker even though unmatured and regardless of the adequacy of any other collateral securing
the Loan. MAKER HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO REQUIRE PAYEE TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS, COLLATERAL OR OTHER PROPERTY OF MAKER.

 

13. Rights
Cumulative. The rights and remedies of Payee as provided herein and in any other Loan Document shall be cumulative and concurrent,
and may be pursued singly, successively or together against Maker or any collateral, at the sole discretion of Payee; and the
failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same. Payee shall not
by any act of omission or commission be deemed to waive any of its rights or remedies under this Note unless such waiver is in
writing and signed by Payee, and then only to the extent specifically set forth therein; and a waiver of one event shall not be
construed as continuing or as a bar to or waiver of such right or remedy upon a subsequent event. Payee shall not be required
to marshal any present or future security for, or guarantees of, the Loan or to resort to any such security or guarantee in any
particular order and Maker waives, to the fullest extent that it lawfully can, (A) any right it might have to require Payee
to pursue any particular remedy before proceeding against Maker and (B) any right to the benefit of, or to direct the application
of the proceeds of any collateral until the Loan is repaid in full.

 

    	-11-

    	 

    

 

14. Limitations
on Conversions and Collateral Securities. Notwithstanding anything to the contrary contained herein, at any time that any
of Maker’s equity securities are registered under Section 12 of the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”), the number of common stock shares that may be acquired by the Payee upon any exercise of any
Conversion, or otherwise in respect hereof, shall be limited to the extent necessary to insure that, following such exercise,
or other acquisition, the total number of common stock shares then beneficially owned by Payee and its Affiliates (as defined
in Section 13(d) of the Exchange Act) and any other persons whose beneficial ownership of the common stock shares would be
aggregated with Payee’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the “5% Maximum
Percentage”) of the total number of issued and outstanding common stock shares (including for such purpose the common stock
shares issuable upon such exercise or other acquisition). For such purposes, beneficial ownership shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Maker shall, instead of issuing
or transferring common stock shares in excess of the limitation referred to herein, suspend its obligation to issue common stock
shares in excess of the foregoing limitation until such time, if any, as such common stock shares may be issued in compliance
with such limitation; provided, that, by written notice to Maker, Payee may waive the provisions of this section or increase
or decrease the 5% Maximum Percentage to any other percentage specified in such notice; provided further that any such waiver
or increase or decrease will not be effective until the 61st day after such notice is received by Maker.

 

15. Jury
Trial Waiver. MAKER AND PAYEE MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY
IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF PAYEE
RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE
ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. MAKER CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF PAYEE HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PAYEE WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR PAYEE TO ACCEPT THIS NOTE AND MAKE THE LOAN.

 

    	-12-

    	 

    

 

16. Payment
of Fees and Expenses. Maker shall pay on demand all expenses of Payee up to $5,000 in connection with the preparation, administration,
default, collection, waiver or amendment of loan terms, or in connection with Payee’s exercise, preservation or enforcement
of any of its rights, remedies or options hereunder, including, without limitation, fees of outside legal counsel or the allocated
costs of in-house legal counsel, accounting, consulting, brokerage or other similar professional fees or expenses, and the amount
of all such expenses shall, until paid, bear interest at the rate applicable to principal hereunder (including the Default Rate),
and shall be secured by the Collateral and the other Loan Documents.

 

17. Construction
of Terms; Headings. The word “Maker” whenever used herein is intended to and shall be construed to mean each of
the persons or entities who have executed this Note and their respective heirs, legal representatives, successors and assigns,
and the liability of each person or entity named as Maker shall be joint and several. The word “Payee” whenever used
herein is intended to and shall be construed to mean Payee. Whenever used, the singular shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders. The headings preceding the text of the paragraphs hereof
are inserted solely for convenience of reference and shall not constitute a part of this Note nor shall they affect its meaning,
construction or effect.

 

18. Integration
Clause. This Note and the other Loan Documents are intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note and the other Loan Documents. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this Note and the other Loan Documents, and no party is
relying on any promise, agreement or understanding not set forth in this Note and the other Loan Documents. This Note and the
other Loan Documents shall be construed as one agreement and shall be interpreted as complementary to each other; provided, that
in the event of any inconsistency, the provisions of this Note shall supersede and control the provisions of the other Loan Documents.
This Note may not be amended or modified except by a written instrument describing such amendment or modification executed by
Maker and Payee.

 

19. Affidavit
of Business Purpose; Use of Proceeds (Regulation U). Maker hereby acknowledges and certifies that the proceeds of the Loan
will be used solely for business purposes. Maker agrees not to use any proceeds of the Loan for any manner or for any purpose
other than the business purposes for which the Loan has been obtained. No portion of the proceeds of the Loan shall be used, in
whole or in part, for the purpose of purchasing or carrying any “margin stock” as such term is defined in Regulation
U of the Board of Governors of the Federal Reserve System.

 

    	-13-

    	 

    

 

20. Replacement
of Promissory Note. Upon receipt of an affidavit of an officer of Payee as to the loss, theft, destruction or mutilation of
this Note or any other security document, Maker will issue in lieu thereof, a replacement note or other security document in the
same principal amount thereof and otherwise of like tenor.

 

21. Choice
of Law and Jurisdiction. This Note and the rights and obligations of the parties hereunder shall be construed and interpreted
in accordance with the laws of the State of Delaware (without regard to the principles of conflicts or choice of law).
Maker hereby irrevocably consents to the jurisdiction of any state or federal court in Los Angeles County in the State
of California in any action arising out of this Note or in connection with the rights or obligations of the parties hereunder,
and Maker irrevocably waives any objection based on the assertion that such court is an inconvenient forum. No provision hereof
shall prevent Payee from bringing any action, enforcing any award or judgment or exercising any rights against Maker or against
any property or asset of Maker in any other county, state or other foreign or domestic jurisdiction.

 

22. Notices.
All notices and other communications under this Note shall be in writing and shall be sent to the party to receive such notice
at its address set forth in the heading of this Note, or to such other address as either party may designate from time to time
by notice to the other in the manner set forth herein. A notice shall, for all purposes, be deemed given and received: (A) if
hand delivered to a party against receipted copy, when the copy of the notice is receipted; (B) if given by a nationally
recognized and reputable overnight delivery service company, the day on which the notice is delivered by the delivery service
company to such party; or (C) if given by certified mail, two (2) Business Days after it is posted with the United States
Postal Service.

 

23. No
Partnership. Nothing contained in this Note shall be construed in a manner to create any relationship between Maker and Payee
other than the relationship of borrower and lender, and Maker and Payee shall not be considered partners or co-venturers for any
purpose on account of this Note.

 

24. Severability.
If any provision of this Note or the application thereof is held by a court of competent jurisdiction to be invalid or unenforceable,
the remaining provisions hereof shall not be affected thereby, and each provision of this Note shall be valid and enforceable
to the fullest extent permitted by law.

 

25. No
Third Party Beneficiaries. No part of the Loan will at any time be subject or liable to attachment or levy at the suit of
any creditor of Maker or of any other interested party. This Note is solely for the benefit of Maker and Payee and no third parties
shall have any right herein or hereunder.

 

26. Patriot
Act Notification. Payee hereby notifies Maker that, pursuant to the requirements of the USA PATRIOT Act, Title III of Pub.
L. 107-56, signed into law October 26, 2001, as amended, modified, codified or reenacted, in whole or in part, and in effect from
time to time (the “Patriot Act”), and Payee’s policies and practices, Payee is required to obtain, verify and
record information that identifies Maker, which information includes the name and address of Maker and other information that
will allow Payee to identify Maker in accordance with the Patriot Act.

 

[SIGNATURE
PAGES FOLLOW]

 

    	-14-

    	 

    

 

WITNESS
the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

 

	WITNESS / ATTEST:	 	BONE BIOLOGICS, CORP.
	 	 	 	 	 
	 	/s/ Marsha A. Jensen	 	By:	/s/
    Michael Schuler
	Print Name: 	Marsha
    A. Jensen	 	Print Name: 	Michael
    Schuler
	Title:	 	 	Title:	Chief
    Executive Officer
	(Include title only if an officer of entity signing to the right)	 	 	 

 

ACCEPTED
AND AGREED TO BY:

 

	WITNESS / ATTEST:	 	HANKEY CAPITAL, LLC
	 	 	 	 	 
	 	/s/ Eugene Leydiker	 	By:	/s/ W.
    Scott Dobbins
	Print Name: 	Eugene
    Leydiker	 	Print Name: 	W.
    Scott Dobbins
	Title:	Director	 	Title:	President

 

    	-15-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}]]