Document:

andardNEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

Principal Amount: $550,000.00Issue Date:
July 2, 2018 Purchase Price: $550,000.00

 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED,
CLEANSPARK, INC., a Nevada corporation (hereinafter called the “Borrower”
or “Company”), hereby promises to pay to the order of Auctus Fund, LLC, a Delaware limited liability company,
or registered assigns (the “Holder”) the sum of up to US$550,000.00, together with any interest as set forth herein,
and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “Interest Rate”)
per annum from the date hereof (the “Issue Date”) until the same becomes
due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The consideration to the Borrower for
this Note is up to $550,000.00 (the “Consideration”). The Holder shall pay $225,000.00 of the Consideration (the “First
Tranche”) within a reasonable amount of time of the full execution of the transactional documents related to this Note. At
the closing of the First Tranche, the outstanding principal amount under this Note shall be $225,000.00, consisting of the First
Tranche. The Holder may pay, in its sole discretion, such additional amounts of the Consideration
and at such dates as the Holder may choose in its sole discretion. THE PRINCIPAL SUM DUE TO THE HOLDER SHALL BE PRORATED BASED
ON THE CONSIDERATION ACTUALLY PAID BY THE HOLDER, AS WELL AS THE APPLICABLE PORTION OF THE PRINCIPAL, FEES, AND INTEREST. The

maturity date for each
tranche funded shall be six (6) months from the effective date of the payment for the respective tranche (each a “Maturity
Date”), and is the date upon which the principal
sum of each respective tranche, as well as any accrued and unpaid interest and other penalties relating to that respective tranche,
shall be due and payable. In connection with the issuance of this convertible promissory note (the “Note”), the Borrower
shall, on the Issue Date, issue 137,500 shares of common stock (the “Returnable Shares”) to Holder as a commitment
fee, provided, however, the Returnable Shares must be returned to the Borrower’s
treasury if the Note is fully repaid and satisfied prior to the date which is one hundred eighty (180) days following the Issue
Date, subject further to the terms and conditions of this Note.

 

    	 	1	 

    	 

    

 

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 the lesser of (i) twenty-four percent (24%) per annum or (ii) the
maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”). Interest
shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual
number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 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. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the
same shall instead be due on the next succeeding day which is a business day and, in the case
of any interest payment date which is not the date on which this Note is paid in full, the extension of the
due date thereof shall not be taken into account for purposes of determining the amount
of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order
to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that
certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase
Agreement”).

 

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

 

The following terms shall also
apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

		1.1	Conversion Right. The Holder shall
have the right, in its sole and absolute discretion, from time to time, and at any
time on or 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) pursuant to Section 1.6(a) or Article III, each in respect of the
remaining outstanding principal amount of this Note to convert all or any part of the
outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common
Stock shall hereafter be

 

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changed or reclassified
at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided, however,
that in no event shall the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the
ownership of the unconverted portion of the Notes or the
unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the
portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership
by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause
(1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the
Holder (up to a maximum of 9.99%) upon, at the election of the Holder, not less than 61 days’ prior notice to the
Borrower, and the provisions of the conversion limitation shall continue to apply until
such 61st day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the
date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted
by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 11:59
p.m., New York, New York time on such conversion date (the “Conversion Date”).

 

The term “Conversion
Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted
in such conversion, plus (2) at the 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, provided however, that the Borrower shall have the
right to pay any or all interest in cash, 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) any Additional Principal for such Conversions,
plus (5) at the Holder’s option, any amounts owed to the Holder pursuant to any other provision of this Note, all subject
to the 4.99% (or up to 9.99% if increased as provided above) limitation discussed above.

 

		1.2	Conversion Price.

 

(a)      
Calculation of Conversion Price. Subject to the adjustments described herein, the
conversion price (the “Conversion Price”) shall equal the lesser of (i) 70%

 

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multiplied by the lowest
Trading Price (as defined below) (representing a discount rate of 30%) during the previous twenty (20) Trading Day period ending
on the latest complete Trading Day prior to the
date of this Note and (ii) the Alternate Conversion Price (as defined herein)(subject to equitable adjustments for stock
splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The “Alternate Conversion Price” shall
mean 70% multiplied by the Market Price (as defined herein) (representing a discount
rate of 30%). “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 lesser of: (i) the lowest trade price on the OTC
Pink, OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Holder or, if the OTC Market is not the
principal trading market for such security, the trading price of such security
on the principal securities exchange or trading market where such security is listed or traded or, if no trading price of such
security is available in any of the foregoing manners, the average of the trading prices
of any market makers for such security that are listed in the “pink sheets” by the
National Quotation Bureau, Inc., or (ii) the lowest closing bid price on the OTC Market as reported by a Reporting Service
designated by the Holder or, if the OTC Market 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” by the National
Quotation Bureau, Inc. 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
Market or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Borrower
shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

 

(b)         
Adjustment to Conversion Price. At any time after the Issue Date, (i) if in the case
that the Borrower’s Common Stock is not deliverable by DWAC (including if the
Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock specified
in a Notice of Conversion), (ii) if the Borrower ceases to be a reporting company pursuant
or subject to the Exchange Act, (iii) if the Borrower loses a market (including the
OTCBB, OTCQB, OTC Pink or an equivalent replacement exchange) for its Common Stock, (iv) if the
Borrower fails to maintain its status as “DTC Eligible” for any reason, (v) if the Conversion Price is less
than one cent ($0.01), (vi) if the Note cannot be converted

 

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into free
trading shares on or after six months from the Issue Date, (vii) if at any time the Borrower
does not maintain or replenish the Reserved Amount (as defined herein) within
three (3) business days of the request of the Holder, (viii) if the Borrower
fails to maintain the listing of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange,
the Nasdaq National Market, the Nasdaq Small Cap Market, the New York
Stock Exchange, or the NYSE MKT, (ix) if the Borrower fails to comply with the reporting requirements of the Exchange Act;
the reporting requirements necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including but not
limited to the timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, the
requirements for XBRL filings, the requirements for disclosure of financial statements on its website, (x) if the Borrower
effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder, (xi) if OTC
Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’
(Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign),
(xii) any cessation of trading of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange,
the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT, and such cessation of
trading shall continue for a period of five consecutive (5) Trading Days, and/or (xiii) the Borrower loses the
“bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers on the
“Bid” per Level 2), and/or (xiv) if the Holder is notified in writing by the Company or the Company’s
transfer agent that the Company does not have the necessary amount of authorized and issuable shares of Common Stock
available to satisfy the issuance of Shares pursuant to a Conversion Notice, then the Holder shall be entitled to
increase, by 10% for each occurrence, cumulative or otherwise, the discount to the Conversion Price shall apply for all
future conversions under the Note. Under no circumstances shall the Conversion Price be less than 30% multiplied by the
Market Price due to cumulative effect.

 

		(c)	[Intentionally Omitted].

 

		(d)	[Intentionally Omitted].

 

(e)         
Par Value Adjustments. To the extent the Conversion Price of the
Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit the consent
of the stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor all conversions
submitted pending this adjustment.

 

(f)          
Conversion Price During Major Announcements. Notwithstanding anything contained in
the preceding section to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate
or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its
capital stock is unchanged) or sell or transfer all or substantially all of the assets
of the Borrower or (ii) any person, group or entity (including the
Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower's Common Stock (or any other takeover
scheme) (the date of

 

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the announcement referred
to in clause (i) or (ii) is hereinafter referred to as the "Announcement Date"), then the Conversion Price shall, effective
upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to
the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and
(y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the
Conversion Price shall be determined as set forth in this Section. For purposes hereof, "Adjusted Conversion Price Termination
Date" shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement
as contemplated by this Section has been made, the date upon which the Borrower (in the case of clause (i) above) or the person,
group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section 1.2(d) to become operative.

 

		(g)	Pro Rata Conversion; Disputes. In
the event of a dispute as to the number
of shares of Common Stock issuable to the Holder in connection with a conversion of
this Note, the Borrower shall issue to the Holder
the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 4.13.

 

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 (5) times the number
of shares that is actually issuable upon full conversion of the Note (based on the
Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”).
Initially, the Company will instruct the Transfer Agent to reserve 1,269,231 shares of common stock in the name of the Holder
for issuance upon conversion hereof. The Reserved Amount shall be increased from time to time in accordance with the Borrower’s
obligations pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change
to its capital structure which would change the number of shares of Common Stock into
which the Notes shall be convertible at the then
current Conversion Price, the Borrower shall at the same time make proper provision
so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Notes.

 

The Borrower (i)
acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon
conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and
agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock in accordance with the
terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial
Reserved Amount, regardless of any prior conversions, and the Reserved Amount will be increased by a factor of two (2) each time
the Borrower issues a Variable Security (as defined herein).

 

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		1.4	Method of Conversion.

 

(a)      
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the
Holder in whole or in part at any time on or following 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 11:59 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the
Borrower.

 

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

 

(c)              
Book Entry upon Conversion. Notwithstanding anything to the contrary set forth herein,
upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this
Note to the Borrower unless the entire unpaid principal amount of this Note is so converted.
The Holder and the Borrower shall maintain records showing the principal amount so
converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the
Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or
discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note
unless the Holder first physically surrenders this Note to the

 

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Borrower, whereupon the
Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal
amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented
by this Note may be less than the amount stated on the face hereof.

 

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

 

(e)     
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 two (2) 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.

 

(f)        
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a
Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion,
the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion,
and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the
portion of this Note being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have
given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common
Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver
or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the
same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection
with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice
of Conversion is received by the Borrower before 11:59 p.m., New York, New York time, on such date.

 

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(g)        
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 contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
commercially reasonable best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion
to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal At Custodian (“DWAC”)
system.

 

(i)     
Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting
the Holder’s right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered
by the Deadline (other than a failure due to the circumstances described in Section
1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the
Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock until
the Borrower issues and delivers a certificate to the Holder or credit the Holder's balance account with OTC for the number of
shares of Common Stock to which the Holder is entitled upon such Holder's conversion of any Conversion Amount (under Holder's and
Borrower's expectation that any damages will tack back to the Issue Date). 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, and 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(i) are justified.

 

(j)       Rescindment
of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion Date
confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the
Borrower’s Common Stock requested in the Notice of Conversion within two (2) business days from the Conversion Date
specified therein, (iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s Common
Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower’s
standing, (iv) the Holder is unable to deposit the shares of the Borrower’s Common
Stock requested in the Notice of

 

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Conversion for any reason
related to the Borrower’s standing, (v) at any time after a missed Deadline, at the Holder’s sole discretion, (vi)
if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common Stock has a closing
bid which is 5% or lower than that set forth in the Notice of Conversion, or (vii) if OTC Markets changes the Borrower's designation
to ‘Limited Information’ (Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull &
Crossbones), ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign) or other trading restriction
on the day of or any day after the Conversion Date, then the Holder maintains the option
and sole discretion to rescind the applicable Notice of Conversion (“Rescindment”) pursuant to which such Conversion
Shares were issuable with a “Notice of Rescindment.” This Note shall remain convertible before and after the Maturity
Date hereof until this Note is repaid or converted in full.

 

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

 

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

 

    	 	10	 

    	 

    

 

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

 

		1.6	Effect of Certain Events.

 

(a)       
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance
or disposition of all or substantially all of the assets of the Borrower, the effectuation
by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is
disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either:
(i) be deemed to be an Event of Default (as defined in Article

III) pursuant to which the
Borrower shall be required to pay to the Holder upon the consummation of and as a condition
to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b)
hereof. “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust
or other entity or organization.

 

(b)     
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued
and outstanding and prior to conversion of all of the Notes, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common
Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities
of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have
the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon

 

    	 	11	 

    	 

    

 

conversion, such stock,
securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full
immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case
appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the
number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon the conversion hereof. The
Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of
the special meeting of shareholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during
which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower)
assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.

 

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

 

(d)     
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and
outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, in
connection with the issuance of any security convertible or exercisable into shares of Common Stock, except for shares of Common
Stock issued directly to purchasers of the Company’s common stock at $0.80 per share with respect to the ongoing offering,
bona fide employees, officers, directors, or vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors
or suppliers (provided, however, that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such
shares of Common Stock prior to the issuance of such shares), any shares of Common Stock for no consideration or for a consideration
per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith)
less than the Conversion Price in effect on the date of such issuance (or deemed issuance)
of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the
Conversion Price will be reduced
to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

 

    	 	12	 

    	 

    

 

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

 

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

 

(e)      
Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower
issues any convertible securities or rights to purchase stock,

 

    	 	13	 

    	 

    

 

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

 

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

 

		1.7	[Intentionally Omitted].

 

1.8       
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i)
the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s
allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii)
the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right
to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in
equity to such Holder because of a failure by the Borrower to comply with the terms
of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to
the third (3rd) business day after the expiration of the Deadline with respect to a
conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder
of Common Stock by so notifying the Borrower) the Holder shall regain the rights of
a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return
such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of
this Note has not been converted. In all cases, the Holder shall retain all of its
rights and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion
Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section
1.3) for the Borrower’s failure to convert this Note.

 

    	 	14	 

    	 

    

 

 

1.9     
Prepayment. Notwithstanding anything to the contrary contained in this Note, the
Borrower may prepay the amounts outstanding hereunder pursuant to the following terms and conditions:

 

(a)      
At any time during the initial 180 day period following the
funding date of the respective tranche of this Note, the Borrower shall have
the right, exercisable on not less than three (3) Trading Days prior written notice to the
Holder of the Note, to prepay the outstanding amount of the respective tranche
of this Note by making a payment to the Holder of an amount in cash equal to the sum of: (i) the then outstanding principal amount
of the respective tranche of this Note (provided, however, that if the Borrower elects
a partial prepayment, then the minimum principal amount of such partial prepayment shall be at least $45,000.00) plus

(ii) 
accrued and unpaid interest on the unpaid principal amount of the respective tranche of
this Note plus (iii) Default Interest, if any, in accordance with Article III, plus (iv) any Additional Principal,
plus (v) at the Holder’s option, any amounts owed to the Holder pursuant
to any other provision of this Note, plus (vi) $750.00 to reimburse Holder for the fees associated with the Returnable Shares,
plus (vii)

$25,000.00 if the date of
prepayment is on or after September 24, 2018.

 

(b) 
After the expiration of one hundred eighty (180) days following the funding date of the
respective tranche of this Note, the Borrower shall have no right of prepayment with respect to that specific tranche of this Note.

 

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 a specific tranche of this 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 applicable
prepayment amount to or upon the order of the Holder as specified by the Holder in
writing to the Borrower at least three (3) business days prior to the Optional Prepayment
Date.

 

Upon confirmation by Holder
that the prepayment has been received by the Holder and that all amounts outstanding under this Note are paid in full, the Holder
shall return the Returnable Shares back to the Company’s treasury (provided, however, that if the Borrower prepaid only a
portion of the Note pursuant to the terms of the Note, then the pro rata portion of the Returnable Shares shall be returned to
the Company’s treasury on or around the Maturity Date of the First Tranche). If the Borrower delivers an Optional Prepayment
Notice and fails to pay the applicable prepayment amount due to the Holder of the Note within two (2) business days following the
Optional Prepayment Date, then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section
1.9 and the Holder shall no longer be required to return the Returnable Shares to the Borrower under any circumstances.

 

    	 	15	 

    	 

    

 

ARTICLE II. CERTAIN COVENANTS

 

2.1       
Distributions on Capital Stock. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not without
the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether
in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the
form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment
or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors.

 

2.2      
Restriction on Stock Repurchases. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not without
the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other
securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

 

		2.3	[INTENTIONALLY OMITTED].

 

2.4     
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.

 

		2.5	[INTENTIONALLY OMITTED].

 

2.6     
3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not
enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in
part, Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).
In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(l0) Transaction while this
note is outstanding, a liquidated damages charge of 25% of the outstanding principal
balance of this Note, but not less than Fifteen Thousand Dollars ($15,000), will be assessed and will become immediately due and
payable to the Holder at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's
expectation that this amount will tack back to the Issue Date).

 

2.7     
Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of
its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good
standing in each jurisdiction in which the character of the properties owned or leased
by it or in which the transaction of its business makes such qualification necessary.

 

    	 	16	 

    	 

    

 

2.8        
Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will
not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all
the provisions of this Note and take all action as may be required to protect the rights of the
Holder.

 

2.9           
Charter. So long as the Borrower shall have any obligations under this Note, the
Borrower shall not amend its charter documents, including without limitation its certificate of incorporation and bylaws, in any
manner that materially and adversely affects any rights of the Holder.

 

 

ARTICLE III. EVENTS OF DEFAULT

 

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

 

3.1      
Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise. Any amount
of principal on this Note which is not paid when due shall bear interest at the rate of Twenty Four percent (24%) per annum from
the due date thereof until the same is paid (“Default Interest”).

 

3.2        
Conversion and the Shares. The Borrower fails to reserve the
Reserved Amount required for Holder at all times, 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 two (2) 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.

 

    	 	17	 

    	 

    

  

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.

 

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 commence proceedings for its dissolution, 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 for the Borrower or for a substantial part of its property or business without its consent and shall not be discharged
within sixty

(60) days after such appointment.

 

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, or the Borrower admits in writing its inability to pay
its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or
state laws as applicable or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed
against it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.

 

3.7          
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business.

 

3.8        
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits
it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s
ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become
due.

 

3.9      
Maintenance of Assets. The failure by Borrower to maintain any material intellectual
property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

    	 	18	 

    	 

    

 

 

3.10     
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 (as defined herein), 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 (2) the Holder or any other third party, including, without limitation,
promissory notes; provided, however, the term “Other Agreements” shall not include 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.

 

3.11     
Funding Window. The Borrower agrees that it will not enter into a similar type financing
transaction (e.g. convertible promissory note) with or issue a Variable Security to any party other than the Holder for a period
of fifteen (15) Trading Days following the Issue Date without written approval from the Holder. The Borrower agrees that this is
a material term of the Note and any breach of this Section 3.11 will result in an Event of Default.

3.12     
Judgments. Any money judgment, writ or similar process shall be entered or filed
against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld.

 

3.13     
Replacement of Transfer Agent. In the event that the Borrower proposes to replace
its transfer agent and (i) the Borrower fails to obtain written approval from the Holder prior to the effective date of such replacement,
or (ii) 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.

 

3.14      
Bid Price. If the Borrower loses the
“bid” price for its Common Stock ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including
the OTCBB, OTCQB or an equivalent replacement exchange) for its Common Stock.

 

3.15     
Failure To Deliver Returnable Shares. The Borrower fails to deliver the
Returnable Shares to the Holder within three (3) business days of the Issue
Date.

 

		3.16	[INTENTIONALLY OMITTED].

 

    	 	19	 

    	 

    

3.17     
Maximum Conversion. If at any time while this Note is outstanding, and assuming the
beneficial ownership limitations contained in this Note did not apply to this specific calculation, the Holder could convert
the amounts outstanding under Note into more than 4.99% of the outstanding shares of Common Stock of the Company as of the date
of calculation (including any beneficial ownership associated with the Returnable Shares held at the
time of such calculation).

 

		3.18	[Intentionally Omitted].

 

3.19     
OTC Marketplace Segments. If (i) the Common
Stock of the Borrower or the Borrower itself has any notation on the OTC Markets Group website (www.otcmarkets.com)
other than “Current Information,” including but not limited to “Limited Information” (Yield Sign) or “No
Information” (Stop Sign), or if the Common Stock of the
Borrower is shown only as quoted on the “grey markets,” and (ii) by reason thereof, the
Holder is unable to obtain a standard “144 legal opinion” from an attorney reasonably acceptable to The Holder,
its brokerage firm, and the Company’s transfer agent in order to facilitate the Holder’s
conversion of any of the Borrower’s obligations hereunder into shares of the Borrower’s Common Stock and thereupon
deposit such shares into the Holder’s brokerage account.

 

		3.20	[INTENTIONALLY OMITTED].

 

3.21     
Inside Information. Any attempt by the Borrower or its officers, directors, and/or
affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers,
directors, and/or affiliates of material non-public information concerning the Borrower,
to the holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.

 

3.22     
DDQ. If any of the information in the due diligence questionnaire, provided by the
Borrower to the Holder on or around the Issue Date, is false or misleading in any material respect.

 

3.23  
Prior Notes. If, at any time on or after the Issue Date, the Borrower alters the
conversion terms of any promissory note that was issued on or before the day immediately prior to the Issue Date.

 

3.24  
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act (including but not limited to becoming delinquent in its filings); and/or the Borrower
shall cease to be subject to the reporting requirements of the Exchange Act.

Upon
the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 3.15, 3.16, 3.17, 3.18,

3.19, 3.20, 3.21, 3.22, 3.23,
and/or 3.24, the Holder shall no longer be required to return the Returnable Shares to the
Borrower under any circumstances and 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 (i)

 

    	 	20	 

    	 

    

 

150% (EXCEPT WITH
RESPECT TO SECTION 3.2, IN WHICH CASE 150% SHALL

BE REPLACED WITH 200%)
times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment
plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) 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. This requirement by the
Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any
notice or take any other action. Additionally, if this Note is not paid at the Maturity Date, then the outstanding principal due
under this Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).

 

The Holder shall have the
right at any time to convert the Default Amount, in whole or in part, at the Conversion Price in effect at the
time of conversion, subject to the beneficial ownership limitations contained in the Note.

 

If the Holder shall
commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then
if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys' fees and other costs and
expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

If the Holder shall commence
an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the
Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys' fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.

 

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,

 

    	 	21	 

    	 

    

 

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: CleanSpark, Inc.

70 North Main Street, Suite 105

Bountiful, UT 84010

E-mail: info@cleanspark.com
If to the Holder:

Auctus Fund, LLC

545 Boylston Street, 2nd Floor Boston, MA 02116

Attn: Lou Posner

With a copy to (which
copy shall not constitute notice): Legal & Compliance, LLC

330 Clematis Street, Ste. 217 West Palm
Beach, FL 33401 Attn: Chad Friend, Esq., LL.M.

E-mail: CFriend@LegalAndCompliance.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. The Holder may assign or transfer this Note to any transferee at its
sole discretion. 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

 

    	 	22	 

    	 

    

 

investor” (as defined
in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of
this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof. The
Borrower shall not assign any of its rights or obligations under this Note without the signed written consent of the Holder.

 

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

 

4.6     
Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of Nevada without regard to principles of conflicts of laws. The
parties hereby warrant and represent that the selection of Nevada law as governing under this Note (i) has a reasonable
nexus to each of the Parties and to the transactions contemplated by the Note; and
(ii) does not offend any public policy of Nevada, Massachusetts, or of any other state, federal, or other jurisdiction. Any
action brought by either party against the other arising out of or related to this Note, or any other agreements between the parties,
shall be commenced only in the state or federal courts of general jurisdiction located in the Commonwealth of Massachusetts, except
that all such disputes between the parties shall be subject to alternative dispute resolution through binding arbitration at the
Holder’s sole discretion and election (regardless of which party initiates the legal proceedings). 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 parties agree that, in connection
with any such arbitration proceeding, each shall submit or file any claim which would constitute a compulsory counterclaim within
the same proceeding as the claim to which it relates. Any such claim that is not submitted or filed in such proceeding shall be
waived and such party will forever be barred from asserting such a claim. Both parties agree to submit to the jurisdiction of such
courts or to such arbitration panel, as the case may be.

 

If the Holder elects alternative
dispute resolution by arbitration, the arbitration proceedings shall be conducted in the Commonwealth of Massachusetts and administered
by the American Arbitration Association in accordance with its Commercial Arbitration
Rules and Mediation Procedures in effect on the Issue Date, except as modified by this Note. The
Holder’s election to arbitrate shall be made in writing, delivered to the other party, and filed with the American
Arbitration Association. The American Arbitration Association must receive the demand
for arbitration prior to the date when the institution of legal or equitable proceedings would be barred by the
applicable statute of limitations, unless legal or equitable proceedings between the parties have already commenced, and
the receipt by the American Arbitration
Association of a written demand for arbitration

 

    	 	23	 

    	 

    

 

also shall constitute
the institution of legal or equitable proceedings for statute of limitations purposes. The parties shall be entitled to limited
discovery at the discretion of the arbitrator(s) who may, but are not required to, allow depositions. The parties acknowledge that
the arbitrators’ subpoena power is not subject to geographic limitations. The arbitrator(s) shall have the right to award
individual relief which he or she deems proper under the evidence presented and applicable law and consistent with the parties’
rights to, and limitations on, damages and other relief as expressly set forth in this Note. The award and decision of the arbitrator(s)
shall be conclusive and binding on all parties, and judgment upon the award may be entered in any court of competent jurisdiction.
The Holder reserves the right, but shall have no obligation, to advance the Issuer’s share of the costs, fees and expenses
of any arbitration proceeding, including any arbitrator fees, in order for such arbitration proceeding to take place, and by doing
so will not be deemed to have waived or relinquished its right to seek the recovery of those amounts from the arbitrator, who shall
provide for such relief in the final award, in addition to the costs, fees, and expenses that are otherwise recoverable. The foregoing
agreement to arbitrate shall be specifically enforceable under applicable law in any court having jurisdiction thereof.

 

THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

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 or any other related transaction document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this 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.

 

4.7     
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an
amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and
unpaid interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on this
Note may

 

    	 	24	 

    	 

    

 

be difficult to determine
and the amount to be so paid by the Borrower represents stipulated damages and not
a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return
from the sale of shares of Common Stock acquired upon conversion of this Note at a
price in excess of the price paid for such shares pursuant to this Note. The Borrower and the
Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder
from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

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

 

4.9     
Notice of Corporate Events. Except as otherwise provided below, the
Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the
extent that it converts this Note into Common Stock. The Borrower shall provide
the Holder with prior notification of any meeting of the Borrower’s shareholders
(and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record
of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution,
any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization)
any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders
who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower
shall mail a notice to the Holder, at least twenty (20) days prior to the
record date specified therein (or thirty (30) days prior to the consummation
of the transaction or event, whichever is earlier), of the date on which any such record
is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent known at such time. The
Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously
with the notification to the Holder in accordance with the terms of this Section 4.9
including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

 

4.10                  
Usury. If Notwithstanding any provision in this Note or the
related transaction documents to the contrary, the total liability for payments
of interest and payments in the nature of interest, including, without limitation,
all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the
limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total
liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions
or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of
interest, which for any month or

 

    	 	25	 

    	 

    

 

other interest payment
period exceeds the limit imposed by the usury laws of the jurisdiction governing this
Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement
or notice by, between, or to any party hereto, be applied to the reduction of the outstanding
principal balance due hereunder immediately upon receipt of such sums by the Holder
hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the
reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment
of principal; provided, however, that the Holder may, at any time and from time to
time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection
of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal
balance then outstanding. It is the intention of the parties that the Company does
not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Note greater than
the highest non-usurious rate of interest which may be charged under applicable law.

 

4.11                  
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. No provision of this Note shall alter or impair the obligation of the Borrower, which
is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the
form, herein prescribed.

 

4.12                 
Severability. In the event that any provision of this Note is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision
hereof which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.

 

4.13                 
Dispute Resolution. In the case of a
dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum,
Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic calculation
of the Conversion Price or the applicable prepayment amount(s) (as the case may be),
the Borrower or the Holder shall submit
the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the applicable
notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice
gave rise to such dispute, at any time after the Holder learned of the

 

    	 	26	 

    	 

    

 

circumstances giving
rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination or calculation within two (2)
Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or
the Holder, then the Borrower shall, within two

(2) Business Days, submit
via facsimile (a) the disputed determination of the Conversion Price, the
closing bid price, the or fair market value (as the case may be) to an independent,
reputable investment bank selected by the Borrower and approved by the Holder or (b)
the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default
Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the
Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the
determinations or calculations and notify the Borrower and the Holder of the results no later than ten (10) Business Days
from the time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s determination
or calculation shall be binding upon all parties absent demonstrable error.

 

4.14                 
Terms of Future Financings. So long as this Note is outstanding, upon any issuance
by the Borrower or any of its subsidiaries of any security with any term more favorable
to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the transaction
documents with the Holder. The types of terms contained in another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest
rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage.

 

		4.15	[INTENTIONALLY OMITTED].

 

4.16                
Disclosure. Upon receipt or delivery by the
Company of any notice in accordance with the terms of this Note, unless the Company
has in good faith determined that the matters relating to such notice do not constitute material, non-public information relating
to the Company or any of its Subsidiaries, the Company shall within one (1) Trading
Day after any such receipt or delivery, publicly disclose such material, non-public information on a Current Report on Form 8-K
or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in
the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute
material, non-public information relating to the Company or its Subsidiaries.

 

    	 	27	 

    	 

    

 

4.17                     
Right of First Refusal. If at any time while this Note is outstanding, the Borrower
has a bona fide offer of capital or financing from any 3rd party with respect to any convertible security of $100,000.00 or more,
that the Borrower intends to act upon,
then the Borrower must first offer such opportunity to the Holder to provide such capital or financing to the Borrower on the same
terms as each respective 3rd party’s terms. Should the Holder be unwilling or unable to provide such capital or financing
to the Borrower within 5 trading days from Holder’s receipt of written notice of the offer (the “Offer Notice”)
from the Borrower, then the Borrower may obtain such capital or financing from that respective 3rd party upon the exact same terms
and conditions offered by the Borrower to the Holder, which transaction must be completed within 30 days after the date of the
Offer Notice. If the Borrower does not receive the capital or financing from the respective 3rd party within 30 days after the
date of the respective Offer Notice, then the Borrower must again offer the capital or financing opportunity to the Holder as described
above, and the process detailed above shall be repeated. The Offer Notice must be sent via electronic mail to louposner@auctusfundllc.com.

 

 

 

 

 

 

 

 

 

 

[signature page
to follow]

 

    	 	28	 

    	 

    

 

IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer as of the date first above written.

 

 

CLEANSPARK, INC.

 

 

By: /s/
Matthew Schultz

Name: Matthew Schultz Title: Chief Executive
Officer

 

 

    	 	29	 

    	 

    

EXHIBIT A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert $___________principal amount of the Note (defined below) together with $___________of accrued
and unpaid interest thereto, totaling $__________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 CleanSpark, Inc., a Nevada corporation (the “Borrower”),
according to the conditions of the convertible note of the Borrower dated as of July 2, 2018 (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 At Custodian 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:

 

Name: Auctus Fund, LLC

Address: __________________

 

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: _________________

 

 

Accrued and unpaid interest remaining: $_________________

 

Default Amounts & Penalties remaining (if
applicable): $__________________

 

 

Auctus Fund, LLC

 

By:_______________

Name:____________

Title: Principal

Date: ____________

 

    	 	30SECURITIES PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 2, 2018, by and between CleanSpark, Inc.,
a Nevada corporation, with headquarters located at 70 North Main Street, Suite 105, Bountiful, UT 84010 (the “Company”),
and Auctus Fund, LLC, a Delaware limited liability company, with its address at 545 Boylston Street, 2nd Floor, Boston,
MA 02116 (the “Buyer”).

 

WHEREAS:

 

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

 

B.                             
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and
conditions set forth in this Agreement a 12% convertible note of the Company, in the
form attached hereto as Exhibit A, in the aggregate principal amount of up to US$550,000.00 (together with any note(s) issued in
replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”),
convertible into shares of common stock, $0.001 par value per share, of the Company
(the “Common Stock”), upon the terms and subject to the limitations and
conditions set forth in such Note.

 

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

 

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

 

1.                             
PURCHASE AND SALE OF NOTE.

 

a.           
Purchase of Note. On the Closing Date (as defined below), the Company shall issue
and sell to the Buyer and the Buyer agrees to purchase from the Company such principal
amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto, subject to the express terms
of the Note. In connection with the funding of the First Tranche (as defined herein) of the Note, the Company shall issue to Buyer
on the Closing Date, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”), as further
provided in the Note. The Returnable Shares shall be deemed earned in full as of the
Closing Date. In connection with the funding of the First Tranche of the Note, the
Company shall issue 100,000 shares of the Company’s common stock (the “Initial Commitment Shares”) to Buyer as
a commitment fee. If (i) the Second Market Price (as defined below) as calculated on December 30, 2018 (the “Make- Whole
Date”) is lower than the closing price of the Common Stock on July 2, 2018

 

    	 	1	 

    	 

    

 

(the “First
Market Price”) and (ii) the Note has not been repaid in full by September 24, 2018, then the Company shall within two (2)
business days of the Buyer’s request, issue additional shares of its Common Stock to Buyer, equal to 25% of the Aggregate
Value (as defined below) divided by the Second Market Price, minus the number of the Initial
Commitment Shares (the result of which shall be referred to herein as the “Second Commitment Shares”). The Aggregate
Value shall mean 100,000 multiplied by the closing price of the Company’s common stock on the date of this Agreement. The
Second Market Price shall mean the closing price of the Company’s Common Stock on the Make-Whole Date. The Initial Commitment
Shares and the Second Commitment Shares shall collectively, in the aggregate, be referred to herein as the “Commitment Shares”.
The Second Commitment Shares, if required to be issued pursuant to this Agreement, shall be issued as provided in this Agreement,
provided, however, that in no event shall the Buyer be entitled to receive shares of
common stock in excess of the amount that would result in beneficial ownership by the Buyer and its affiliates of 4.99% of the
outstanding shares of common stock at that time (pursuant to the specific calculations of beneficial ownership as provided in the
Note). Accordingly, the Second Shares, if required to be issued pursuant to this Agreement, shall be issued in accordance with
such beneficial ownership limitations, and in successive tranches if required to comply with such beneficial ownership limitations
(each an “Additional Tranche”). The Company shall issue each Additional Tranche within two (2) business days of the
request by Buyer.

 

b.           
Form of Payment. On or around the Closing Date (as defined below), the Buyer shall
pay the purchase price of $225,000.00 (the “Purchase
Price”) for the first tranche of $225,000.00 under the Note (the “First Tranche”), by wire transfer of immediately
available funds, in accordance with the Company’s written wiring instructions,
against delivery of the Note, and (i) the Company shall deliver such duly executed
Note on behalf of the Company, to the Buyer. If the Buyer decides to pay, in their sole discretion, additional amounts (additional
tranches) under the Note, as further described in the Note, then such additional amounts shall be paid in accordance with the Company’s
written wiring instructions as well.

 

c.             
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto
set forth in Section 7 and Section 8 below, the date and time of the
issuance and sale of the First Tranche of the Note pursuant to this Agreement (the “Closing Date”) shall be
12:00 noon, Eastern Standard Time on or about July 2, 2018, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing
Date at such location as may be agreed to by the parties.

 

2.                                 
REPRESENTATIONSANDWARRANTIESOFTHE BUYER. The Buyer represents and
warrants to the Company that:

 

    	 	2	 

    	 

    

 

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

 

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

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

 

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

 

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

 

    	 	3	 

    	 

    

 

f.            
Transfer or Re-sale. The Buyer understands that (i) the
sale or re-sale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be
transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the
Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the
Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities
are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the
Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate
transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may
be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities
under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under
any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the
Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event
that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant
to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion
to the Company, the Company shall pay to the Buyer
liquidated damages of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note,
prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If
the Buyer elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the
Conversion Price (as defined in the Note) at the time of payment.

 

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

 

    	 	4	 

    	 

    

 

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

 

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

144 or Regulation S, at the Deadline, it will be considered
an Event of Default pursuant to Section 3.2 of the Note.

 

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

 

    	 	5	 

    	 

    

 

i.          
Residency. The Buyer is a resident of the jurisdiction set forth in the preamble.

 

3.                                 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Buyer, unless stated to the contrary
in the Company’s SEC Documents, that:

 

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

 

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

 

    	 	6	 

    	 

    

 

c.             
Capitalization. As of the date hereof, the authorized capital stock of the Company,
and shares issued and outstanding, is as set forth in the Company’s
most recent periodic report filed with the SEC. Except as disclosed in the SEC Documents,
no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant
to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,269,231
shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance
will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the shareholders
of the Company or any liens or encumbrances imposed through the actions or failure
to act of the Company. Except as disclosed in the SEC Documents, as of the effective
date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Note, Returnable Shares, or the Conversion
Shares. The Company has filed in its SEC Documents true and correct copies of the
Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the
date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders
thereof in respect thereto. The Company shall provide the Buyer with a written update
of this representation signed by the Company’s Chief Executive on behalf of the
Company as of the Closing Date.

 

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

 

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

 

    	 	7	 

    	 

    

 

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

 

    	 	8	 

    	 

    

 

listing requirements
of the Over-the-Counter Bulletin Board (the “OTCBB”), the OTCQB or any similar quotation system, and does not reasonably
anticipate that the Common Stock will be delisted by the OTCBB, the OTCQB or any similar quotation system, in the foreseeable future
nor are the Company's securities “chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

 

g.            
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the (“SEC Documents”).
The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to March 31, 2018, and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually
or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to
the reporting requirements of the 1934 Act. For the
avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s
Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this
Section 3(g).

 

    	 	9	 

    	 

    

 

h.           
Absence of Certain Changes. Since March 31, 2018, except as reported in the SEC Documents,
there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties,
operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

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

 

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

 

k.               
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries
is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s
officers has or is expected to have a Material Adverse Effect.

 

l.             
Tax Status. The Company and each of its Subsidiaries has made or filed all federal,
state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has set aside

 

    	 	10	 

    	 

    

 

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

 

		m.	[INTENTIONALLY OMITTED].

 

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

 

o.    
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges
and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers
with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions contemplated
hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase
of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation
of the Company and its representatives.

 

p.          
No Integrated Offering. Neither the Company,
nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in
any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act
of the issuance of the Securities to the Buyer. The issuance of the Securities to the
Buyer will not be integrated
with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.

 

    	 	11	 

    	 

    

 

		q.	[INTENTIONALLY OMITTED]

 

r.           
Permits; Compliance. The Company and each of its Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals
and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively,
the “Company Permits”), and there is no action pending or, to the knowledge
of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the
Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since March 31, 2018, neither the
Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations
of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations
would not have a Material Adverse Effect.

 

		s.	Environmental Matters.

 

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

 

    	 	12	 

    	 

    

 

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

 

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

 

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

 

u.           
Internal Accounting Controls. Except as disclosed in the
SEC Documents the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

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

 

		w.	[INTENTIONALLY OMITTED].

 

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

 

    	 	13	 

    	 

    

 

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

 

z.      
Bad Actor. No officer or director of the Company would be disqualified under Rule
506(d) of the Securities Act as amended on the
basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance Guide
published by the SEC.

 

aa.
Shell Status. The Company represents that it is not a “shell” issuer and has never been a “shell”
issuer, or that if it previously has been a “shell” issuer that at least twelve (12) months have passed since the Company
has reported Form 10 type information indicating that it is no longer a “shell” issuer. Further, the Company will instruct
its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of the Returnable Shares and/or Conversion Shares
or (ii) accept such opinion from Holder’s counsel.

 

bb.
No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

cc.
Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or
indirectly, any action designed to cause or to result, or that could reasonably be
expected to cause or result, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed
to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

 

dd. Sarbanes-Oxley
Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the
date hereof.

 

    	 	14	 

    	 

    

ee.
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933
Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company
or any such Subsidiary. To the knowledge of the Company, no executive officer or other
key employee of the Company or any of its Subsidiaries is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer or other key employee (as the case may be) does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

ff.
Due Diligence Questionnaire. The Company hereby represents and warrants to Buyer that all of the information furnished by
the Company to Holder on or around the date hereof, pursuant to the due diligence questionnaire form requested by Holder, is true
and correct in all material respects as of the date hereof.

 

gg.
Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the
representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer
pursuant to this Agreement and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay to
the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock
at the option of the Company, until such breach is cured. If the Company elects to
pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price at the
time of payment.

 

		4.	COVENANTS.

 

a.            
Best Efforts. The parties shall use their commercially reasonable best efforts to
satisfy timely each of the conditions described in Section 7 and 8 of this Agreement.

 

    	 	15	 

    	 

    

 

		b.	[INTENTIONALLY OMITTED].

 

c.            
Use of Proceeds. The Company shall use the proceeds from the sale of the Note for
working capital and other general corporate purposes and shall not, directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership, enterprise or other person (except in connection with its currently existing
direct or indirect Subsidiaries).

 

		d.	[INTENTIONALLY OMITTED].

 

e.             
Expenses. At Closing, the Company’s will reimburse Buyer’s legal expenses
of $4,000.00 which shall be considered a non-refundable, non-accountable sum.

 

f.             Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers,
assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC,
a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10- Q and any Current Reports on Form 8-K; (ii) within
one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii)
contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other
information the Company makes available or gives to such shareholders. For the
avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above
via a recognized wire service shall satisfy the delivery requirements of this
Section 4(f).

 

g.          
Listing. The Company shall promptly secure the
listing of the Returnable Shares and Conversion Shares upon each national securities exchange or automated quotation system,
if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns
any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Returnable
Shares and Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the
Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, OTCQB or any equivalent replacement
exchange, the Nasdaq National Market (“Nasdaq”), the
Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE MKT
and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the
Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The
Company shall promptly provide to the Buyer copies of any material notices it receives from the OTCBB, OTCQB and any other
exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock
for listing on such exchanges and quotation systems. The Company shall pay any and all fees and expenses in connection with satisfying
its obligation under this Section 4(g).

 

    	 	16	 

    	 

    

 

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

 

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

 

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

 

k.          
Trading Activities. Neither the Buyer nor its affiliates has an open short position
(or other hedging or similar transactions) in the common stock of the Company and the Buyer agree that it shall not, and that it
will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the
common stock of the Company.

 

		l.	[INTENTIONALLY OMITTED].

 

m.       
Legal Counsel Opinions. Upon the request of the Buyer from to time to time, the Company
shall be responsible (at the Buyers cost) for promptly supplying to the Company’s transfer agent and the Buyer a customary
legal opinion letter of its counsel (the “Legal Counsel Opinion”) to the effect that the sale of Returnable Shares
and Conversion Shares by the Buyer or its affiliates, successors and assigns is exempt from the
registration requirements of the 1933 Act pursuant to Rule 144 (provided the
requirements of Rule 144 are satisfied and provided the Returnable Shares and Conversion
Shares are not then registered under the 1933 Act for resale pursuant to an effective
registration statement). Should the Company’s legal counsel fail for any reason to issue the Legal Counsel Opinion, the Buyer
may (at the Company’s cost) secure another legal counsel to issue the Legal Counsel Opinion, and the
Company will instruct its transfer agent to accept such opinion.

 

		n.	[Intentionally Omitted].

 

    	 	17	 

    	 

    

 

o.           
Breach of Covenants. The Company agrees that if the Company breaches any of the covenants
set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of Default under Section 3.4 of the Note, the Company shall pay to the Buyer the
Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option of the Buyer, until such breach is
cured, or with respect to Section 4(d) above, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash
or shares of Common Stock, at the option of the Buyer, upon each violation of such
provision. If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be
issued at the Conversion Price at the time of payment.

 

		5.	[Intentionally Omitted].

 

6.                              
Transfer Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent to issue certificates, registered in the name of the Buyer or its
nominee, for the Returnable Shares and Conversion Shares in such amounts as specified from time to time by the Buyer to the
Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).
In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date
of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the
Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Returnable
Shares and Conversion Shares under the 1933 Act or the date on which the Returnable Shares and Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all
such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i)
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section, and stop transfer instructions
to give effect to Section 2(f) hereof (in the case of the Returnable Shares and Conversion
Shares, prior to registration of the Returnable Shares and Conversion Shares under the 1933
Act or the date on which the Returnable Shares and Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold),
will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement and the Note;
(ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate for Returnable Shares and Conversion Shares to be issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will
not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Returnable

 

    	 	18	 

    	 

    

 

Shares and Conversion
Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement.
Nothing in this Section shall affect in any way the Buyer’s obligations and agreement
set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities.
If the Buyer provides the Company, at the cost of the Company, with (i) an opinion
of counsel in form, substance and scope customary for opinions in comparable transactions, to the
effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale
or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Returnable Shares and Conversion Shares, promptly instruct its transfer
agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the
Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this Section,
that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

7.                                 
CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of
the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion:

 

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

 

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

 

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

 

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

 

    	 	19	 

    	 

    

 

8.                                  
CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation
of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction,
at or before the Closing Date of each of the following
conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in
its sole discretion:

 

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

 

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

 

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

 

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

 

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

 

f.           
No event shall have occurred which could reasonably be expected to have a Material Adverse
Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the
Company to be timely in its 1934 Act reporting obligations.

 

    	 	20	 

    	 

    

 

g.          
The Returnable Shares and Conversion Shares shall have been authorized for quotation on
the OTCBB, OTCQB or any similar quotation system and trading in the Common Stock on the OTCBB,
OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTCBB,
OTCQB or any similar quotation system.

 

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

 

i.         
The Buyer shall have received the amount of Returnable Shares, issued as of the Closing
Date.

 

		9.	GOVERNING LAW; MISCELLANEOUS.

 

a.           
Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement, the Note or any other agreement, certificate, instrument or document
contemplated hereby shall be brought only in the state courts or federal courts located
in the Commonwealth of Massachusetts. The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.
Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any
other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

    	 	21	 

    	 

    

 

b.           
Removal of Restrictive Legends. In the event that Purchaser has any shares of the
Company’s Common Stock bearing any restrictive legends, and Purchaser, through its counsel or other representatives,
submits to the Transfer Agent any such shares
for the removal of the restrictive legends thereon in connection with a sale of such shares pursuant to any exemption to the registration
requirements under the Securities Act, and the Company and or its counsel refuses or fails for any reason (except to the extent
that such refusal or failure is based solely on applicable law that would prevent the removal of such restrictive legends) to render
an opinion of counsel or any other documents or certificates required for the removal of the restrictive legends, then the Company
hereby agrees and acknowledges that the Purchaser is hereby irrevocably and expressly authorized to have counsel to the Purchaser
render any and all opinions and other certificates or instruments which may be required for purposes of removing such restrictive
legends, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions
from the Company, issue any such shares without restrictive legends as instructed by the Purchaser, and surrender to a common carrier
for overnight delivery to the address as specified by the Purchaser, certificates, registered in the name of the Purchaser or its
designees, representing the shares of Common Stock to which the Purchaser is entitled, without any restrictive legends and otherwise
freely transferable on the books and records of the Company.

 

c.              
Filing Requirements. From the date of this Agreement until the Notes are no longer
outstanding, the Company will timely and voluntarily comply with all reporting requirements that are applicable to an issuer with
a class of shares registered pursuant to Section 12(g) of the 1934 Act, whether or
not the Company is then subject to such reporting requirements, and comply with all requirements related to any registration statement
filed pursuant to this Agreement. The Company will use reasonable efforts not to take any action or file any document (whether
or not permitted by the 1933 Act or the 1934 Act or the
rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations
under said acts until the Notes are no longer outstanding. The Company will maintain the quotation or listing of its Common Stock
on the OTCBB, OTCQB, and OTC Pink, NYSE, or NASDAQ Stock Market (whichever of the
foregoing is at the time the principal trading exchange or market for the Common Stock (the “Principal Market”),
and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the
Principal Market, as applicable. The Company will provide Purchaser with copies of all notices it receives notifying the Company
of the threatened and actual delisting of the Common Stock from any Principal Market. As of the date of this Agreement and the
Closing Date, the OTC Pink, is the Principal Market. Until the Note is no longer outstanding, the Company will continue the listing
or quotation of the Common Stock on a Principal Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Principal Market.

 

d.             
144 Default. In the event commencing twelve (12) months after the Closing Date and
ending twenty-four (24) months thereafter, the Purchaser is not permitted to resell any of the Conversion Shares without any restrictive
legend or if such sales are permitted but subject to volume limitations or further restrictions on resale as a result of the
unavailability to Subscriber of Rule 144(b)(1)(i) under

 

    	 	22	 

    	 

    

 

the 1933 Act or any
successor rule (a “144 Default”), for any reason except for Purchasers’ status as an Affiliate or “control
person” of the Company, or as a result of a change in current applicable securities laws, then the Company shall pay such
Purchaser as liquidated damages and not as a penalty an amount equal to two percent (2%) of the value of Conversion Shares (based
on the closing sale of the Common Stock) subject to such 144 Default during the pendency
of the 144 Default of each thirty day period thereafter (or portion thereof).

 

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

 

f.      
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall constitute one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.

 

g.           
Construction; Headings. This Agreement shall be deemed to be jointly drafted by the
Company and the Buyer and shall not be construed against any person as the drafter hereof. The headings of this Agreement
are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

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

 

    	 	23	 

    	 

    

 

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

 

j.           
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, email, 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 email or facsimile,
with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:

 

If to the
Company, to:

 

CleanSpark, Inc.

70 North Main Street, Suite 105

Bountiful, UT 84010

E-mail: info@cleanspark.com

If to the Holder:

Auctus Fund, LLC

545 Boylston Street, 2nd Floor Boston, MA 02116

Attn: Lou Posner Facsimile:(617)532-6420

 

    	 	24	 

    	 

    

 

With a copy
to (which copy shall not constitute notice): Legal & Compliance, LLC

330 Clematis Street, Ste. 217

West Palm Beach, FL 33401 Attn: Chad
Friend, Esq., LL.M.

E-mail: CFriend@LegalAndCompliance.com

 

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

 

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

 

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

 

m.             
Survival. The representations and warranties of the
Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder not withstanding
any due diligence investigation conducted by or on behalf of the Buyer. The Company
agrees to indemnify and hold harmless the Buyer and all their officers, directors,
employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any
of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are incurred.

 

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

 

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

 

    	 	25	 

    	 

    

 

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

 

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

 

r.                
Securities Laws Disclosure. The Company shall comply with applicable securities laws
by filing a Current Report on Form 8-K, within four (4) Trading Days following the date hereof, disclosing all the material terms
of the transactions contemplated hereby, if the Company deems the transactions contemplated hereby to constitute material non-
public information.

 

s.         
Indemnification. In consideration of the Buyer’s execution and delivery of
this Agreement and acquiring the Securities hereunder, and in addition to all of the Company’s other obligations under this
Agreement or the Note, the Company shall defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any of the foregoing persons’ agents or other
representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a
result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby,

(b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement or the Note or any other agreement, certificate, instrument
or document contemplated hereby or thereby or (c) any cause of action, suit or claim

 

    	 	26	 

    	 

    

 

brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising
out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities,
or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated
by this Agreement. To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law

 

 

 

 

 

 

 

 

 

 

 

[signature page follows]

 

    	 	27	 

    	 

    

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

 

 

CLEANSPARK, INC.

 

By: /s/
Matthew Schultz

Name: Matthew Schultz

Title: Chief Executive Officer

 

 

Auctus Fund, LLC

 

 

By: /s/
Lou Posner

Name: Lou Posner

Title: Managing
Director 

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	US$550,000.00
	 	 
	Aggregate Purchase Price:	US$550,000.00*

 

 

*The
purchase price of $225,000.00, relating to the first tranche of $225,000.00, shall be paid within a reasonable amount of time after
the full execution of the Note and related transaction documents. Additional tranches may be funded by the Buyer, in Buyer’s
sole discretion, in accordance with the terms of the Note.

 

    	 	28

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