Document:

-Note:
January 27, 2017

 

NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. 

 

THIS
NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING
ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM REPRESENTED BY THIS NOTE MAY BE LESS THAN
THE PRINCIPAL SUM AND ACCRUED INTEREST SET FORTH BELOW.

 

10%
CONVERTIBLE PROMISSORY NOTE

 

OF

 

SYLIOS
CORP

 

Issuance
Date: January 27, 2017

Total
Face Value of Note: $55,000

Initial
Consideration: $15,000

Initial
Original Issue Discount: $2,250

Initial
Principal Sum Due: $17,250

 

This
Note is a duly authorized Convertible Promissory
Note of Sylios Corp. a corporation duly organized and existing under the laws of the State of Florida (the
“Company”), designated as the Company’s 10% Convertible Promissory Note in the principal amount of $55,000
(the “Note”). This Note will become effective only upon execution by both parties and delivery of the first
payment of consideration by the Holder (the “Effective Date”).

 

For
Value Received, the Company hereby promises to
pay to the order of Tangiers Investment Group, LLC or its registered assigns or successors-in-interest (the “Holder”)
the Principal Sum of $55,000 (the “Principal Sum”) and to pay “guaranteed” interest on the principal
balance hereof at an amount equivalent to 10% of the Principal Sum, to the extent such Principal Sum and “guaranteed”
interest and any other interest, fees, liquidated damages and/or items due to Holder herein have been repaid or converted into
the Company’s Common Stock (the “Common Stock”), in accordance with the terms hereof. Upon the execution
of this Note the sum of $15,000 shall be remitted and delivered to the Company, and $2,250 shall be retained by the Purchaser
through an original issue discount (the “OID”) for due diligence and legal bills related to this transaction.
The OID is set at 15% of any consideration paid. The Holder may pay additional Consideration to the Company in such amounts and
at such dates (each, an “Additional Consideration Date”) as Holder may choose in its sole discretion. The Principal
Sum due to Holder shall be prorated based on the Consideration actually paid by Holder (plus the “guaranteed” interest
and 15% OID, both which are prorated based on the Consideration actually paid by the Holder, as well as any other interest or
fees) such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded
portion of this Note. The Maturity Date is one year from the Effective Date of each payment (the “Maturity Date”)
and is the date upon which the Principal Sum of this Note, as well as any unpaid interest and other fees, shall be due and payable.

 

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In
addition to the “guaranteed” interest referenced above, and in the Event of Default pursuant to Section 2.00(a), additional
interest will accrue from the date of the Event of Default at the rate equal to the lower of 20% per annum or the highest rate
permitted by law (the “Default Rate”).

 

This
Note will become effective only upon the execution by both parties, including the execution of Exhibits B, C, D and E and the
Irrevocable Transfer Agent Instructions (the “Date of Execution”) and delivery of the initial payment of consideration
by the Holder (the “Effective Date”).

 

This
Note may be prepaid by the Company, in whole or in part, according to the following schedule:

 

	Days
    Since Effective Date	 	Prepayment
    Amount
	Under
    30	 	100%
    of Principal Amount
	31-60	 	110%
    of Principal Amount
	61-90	 	120%
    of Principal Amount
	91-120	 	130%
    of Principal Amount
	121-150	 	140%
    of Principal Amount
	151-180	 	150%
    of Principal Amount

 

After
180 days from the Effective Date this Note may not be prepaid without written consent from Holder, which consent may be withheld,
delayed or denied in Holder’s sole and absolute discretion. Whenever any amount expressed to be due by the terms of this
Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next succeeding day
which is a Business Day. If the Note is in default, per Section 2.00(a) below, the Company may not prepay the Note without written
consent of the Holder.

 

For
purposes hereof the following terms shall have the meanings ascribed to them below:

 

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

 

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“Conversion
Price” shall be equal to lower of: (a) 50% of the lowest trading price of the Company’s common stock during
the 25 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note or (b) 50% of the
lowest trading price of the Company’s common stock during the 25 consecutive Trading Days prior to the Effective Date. For
the purpose of calculating the Conversion Price only, any time after 4:00 pm Eastern Time (the closing time of the Principal Market)
shall be considered to be the beginning of the next Business Day. If the Company is placed on “chilled” status with
the Depository Trust Company (“DTC”), the discount shall be increased by 10%, i.e., from 50%
to 60%, until such chill is remedied. If the Company is not Deposits and Withdrawal at Custodian (“DWAC”) eligible
through their Transfer Agent and DTC’s Fast Automated Securities Transfer (“FAST”) system, the discount
will be increased by 5%, i.e., from 50% to 55%. In the case of both, the discount shall be a cumulative increase
of 15%, i.e., from 50% to 65%. Any default of this Note not remedied within the applicable cure period will result
in a permanent additional 10% increase, i.e., from 50% to 60%, in addition to any other discount, as provided above,
to the Conversion Price discount.

 

“Principal
Amount” shall refer to the sum of (i) the original principal amount of this Note (including the original issue discount,
prorated if the Note has not been funded in full), (ii) any additional payments made by the Holder towards the Principal Sum (iii) all
guaranteed and other accrued but unpaid interest hereunder, (iv) any fees due hereunder, (v) liquidated damages, and (vi) any
default payments owing under the Note, in each case previously paid or added to the Principal Amount.

 

“Principal
Market” shall refer to the primary exchange on which the Company’s common stock is traded or quoted.

 

“Trading
Day” shall mean a day on which there is trading or quoting for any security on the Principal Market.

 

“Underlying
Shares” means the shares of common stock into which the Note is convertible (including interest, fees, liquidated
damages and/or principal payments in common stock as set forth herein) in accordance with the terms hereof.

 

The
following terms and conditions shall apply to this Note:

 

Section
1.00 Conversion.

 

(a)
Conversion Right. Subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have
the right, at the Holder’s sole option, at any time and from time to time to convert in whole or in part the outstanding
and unpaid Principal Amount under this Note into shares of Common Stock as per the Conversion Formula. The date of any conversion
notice (“Conversion Notice”) hereunder shall be referred to herein as the “Conversion Date”.

 

(b)
Stock Certificates or DWAC. The Company will deliver to the Holder, or Holder’s authorized designee, no later than
2 Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends
and trading restrictions if the shares of Common Stock underlying the portion of the Note being converted are eligible under a
resale exemption pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the Securities Act of 1933, as amended) representing
the number of shares of Common Stock being acquired upon the conversion of this Note. In lieu of delivering physical certificates
representing the shares of Common Stock issuable upon conversion of this Note, provided the Company’s transfer agent is
participating in DTC’s FAST program, the Company shall instead use commercially reasonable efforts to cause its transfer
agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee), by crediting the account
of the Holder’s (or such designee’s) broker with DTC through its DWAC program (provided that the same time periods
herein as for stock certificates shall apply).

 

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(c)
Charges and Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall
be made without charge to the Holder for any issuance fee, transfer tax, legal opinion and related charges, postage/mailing charge
or any other expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from
the issuance of the Common Stock to Holder, as well as any and all other fees and charges required by the Transfer Agent as a
condition to effectuate such issuance. Any such fees or charges, as noted in this Section that are paid by the Holder (whether
from the Company’s delays, outright refusal to pay, or otherwise), will be automatically added to the Principal Sum of the
Note and tack back to the Effective Date for purposes of Rule 144.

 

(d)
Delivery Timeline. If the Company fails to deliver to the Holder such certificate or certificates (or shares through the
DWAC program) pursuant to this Section (free of any restrictions on transfer or legends, if eligible) prior to 3 Trading Days
after the Conversion Date, the Company shall pay to the Holder as liquidated damages an amount equal to $2,000 per day, until
such certificate or certificates are delivered. The Company acknowledges that it would be extremely difficult or impracticable
to determine the Holder’s actual damages and costs resulting from a failure to deliver the Common Stock and the inclusion
herein of any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages
and costs. Such liquidated damages will be automatically added to the Principal Sum of the Note and tack back to the Effective
Date for purposes of Rule 144.

 

(e)
Reservation of Underlying Securities. The Company covenants that it will at all times reserve and keep available for Holder,
out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note, free from preemptive
rights or any other actual contingent purchase rights of persons other than the Holder, five times the number of shares
of Common Stock as shall be issuable (taking into account the adjustments under this Section 1.00, but without regard to any ownership
limitations contained herein) upon the conversion of this Note (consisting of the Principal Amount) to Common Stock (the “Required
Reserve”). The Company covenants that all shares of Common Stock that shall be issuable will, upon issue, be duly authorized,
validly issued, fully-paid, non-assessable and freely-tradable (if eligible). If the amount of shares on reserve in Holder’s
name at the Company’s transfer agent for this Note shall drop below the Required Reserve, the Company will, within 2 Trading
Days of notification from Holder, instruct the transfer agent to increase the number of shares so that the Required Reserve is
met. In the event that the Company does not instruct the transfer agent to increase the number of shares so that the Required
Reserve is met, the Holder will be allowed, if applicable, to provide this instruction as per the terms of the Irrevocable Transfer
Agent Instructions attached to this Note. The Company agrees that the maintenance of the Required Reserve is a material term of
this Note and any breach of this Section 1.00(e) will result in a default of the Note.

 

(f)
Conversion Limitation. The Holder will not submit a conversion to the Company that would result in the Holder beneficially
owning more than 9.99% of the then total outstanding shares of the Company (“Restricted Ownership Percentage”).

 

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(g)
Conversion Delays. If the Company fails to deliver shares in accordance with the timeframe stated in Section 1.00(b), the
Holder, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion
attributable to the unsold shares. The rescinded conversion amount will be returned to the Principal Sum with the rescinded conversion
shares returned to the Company, under the expectation that any returned conversion amounts will tack back to the Effective Date.

 

(h)
Shorting and Hedging. Holder may not engage in any “shorting” or “hedging” transaction(s) in the
Common Stock prior to conversion.

 

(i)
Conversion Right Unconditional. If the Holder shall provide a Conversion Notice as provided herein, the Company’s
obligations to deliver Common Stock shall be absolute and unconditional, irrespective of any claim of setoff, counterclaim, recoupment,
or alleged breach by the Holder of any obligation to the Company.

 

Section
2.00 Defaults and Remedies.

 

(a)
Events of Default. An “Event of Default” is: (i) a default in payment of any amount due hereunder which
default continues for more than 5 Trading Days after the due date; (ii) a default in the timely issuance of underlying shares
upon and in accordance with terms of Section 1.00, which default continues for 2 Trading Days after the Company has failed to
issue shares or deliver stock certificates within the 3rd Trading Day following the Conversion Date; (iii) if the Company does
not issue the press release or file the Supplemental Information statement, in each case in accordance with the provisions and
the deadlines referenced Section 4.00(i); (iv) failure by the Company for 3 days after notice has been received by the Company
to comply with any material provision of this Note; (v) failure of the Company to remain compliant with DTC, thus incurring a
“chilled” status with DTC; (vi) any default of any mortgage, indenture or instrument which may be issued, or by which
there may be secured or evidenced any indebtedness, for money borrowed by the Company or for money borrowed the repayment of which
is guaranteed by the Company, whether such indebtedness or guarantee now exists or shall be created hereafter; (vii) if the Company
is subject to any Bankruptcy Event; (viii) any failure of the Company to satisfy its “filing” obligations under the
Securities Exchange Act of 1934, as amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets
News Service, OTCMarkets.com and their affiliates; (ix) failure of the Company to remain in good standing with the State of Florida;
(x) any failure of the Company to provide the Holder with information related to its corporate structure including, but not limited
to, the number of authorized and outstanding shares, public float, etc. within 1 Trading Day of request by Holder; (xi) failure
by the Company to maintain the Required Reserve in accordance with the terms of Section 1.00(e); (xii) failure of Company’s
Common Stock to maintain a closing bid price in its Principal Market for more than 3 consecutive Trading Days; (xiii) any delisting
from a Principal Market for any reason; (xiv) failure by Company to pay any of its Transfer Agent fees in excess of $2,000 or
to maintain a Transfer Agent of record; (xv) failure by Company to notify Holder of a change in Transfer Agent within 24 hours
of such change; (xvi) any trading suspension imposed by the United States Securities and Exchange Commission (the “SEC”)
under Sections 12(j) or 12(k) of the 1934 Act; (xvii) failure by the Company to meet all 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, requirements for XBRL filings, and requirements for disclosure of financial
statements on its website; or (xviii) failure of the Company to abide by the terms of the right of first refusal contained in
Section 4.00(k).

 

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(b)
Remedies. If an Event of Default occurs, the outstanding Principal Amount of this Note owing in respect thereof through the date
of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the “Mandatory
Default Amount”. The Mandatory Default Amount means 150% of the outstanding Principal Amount of this Note, will be automatically
added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144. Commencing 5 days after the
occurrence of any Event of Default that results in the eventual acceleration of this Note, this Note shall accrue additional interest,
in addition to the Note’s “guaranteed” interest, at a rate equal to the lesser of 20% per annum or the maximum
rate permitted under applicable law. Finally, commencing 5 days after the occurrence of any Event of Default that results in the
eventual acceleration of this Note, an additional permanent 10% increase to the Conversion Price discount will go into effect.
In connection with such acceleration described herein, the Holder need not provide, and the Issuer hereby waives, any presentment,
demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by the Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the note until such time, if any, as the Holder receives full payment pursuant to this Section 2.00(b). No such rescission
or annulment shall affect any subsequent event of default or impair any right consequent thereon. Nothing herein shall limit the
Holder’s right to pursue any other remedies available to it at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Issuer’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the Note as required pursuant to the terms hereof.

 

Section
3.00 Representations and Warranties of Holder.

 

Holder
hereby represents and warrants to the Company that:

 

(a)
Holder is an “accredited investor,” as such term is defined in Regulation D of the Securities Act of 1933, as amended
(the “1933 Act”), and will acquire this Note and the Underlying Shares (collectively, the “Securities”)
for its own account and not with a view to a sale or distribution thereof as that term is used in Section 2(a)(11) of the 1933
Act, in a manner which would require registration under the 1933 Act or any state securities laws. Holder has such knowledge and
experience in financial and business matters that such Holder is capable of evaluating the merits and risks of the Securities.
Holder can bear the economic risk of the Securities, has knowledge and experience in financial business matters and is capable
of bearing and managing the risk of investment in the Securities. Holder recognizes that the Securities have not been registered
under the 1933 Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Securities
is registered under the 1933 Act or unless an exemption from registration is available. Holder has carefully considered and has,
to the extent Holder believes such discussion necessary, discussed with its professional, legal, tax and financial advisors, the
suitability of an investment in the Securities for its particular tax and financial situation and its advisers, if such advisors
were deemed necessary, and has determined that the Securities are a suitable investment for it. Holder has not been offered the
Securities by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices
or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar
or meeting where, to Holders’ knowledge, those individuals that have attended have been invited by any such or similar means
of general solicitation or advertising. Holder has had an opportunity to ask questions of and receive satisfactory answers from
the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of the Securities and
the Company, and all such questions have been answered to the full satisfaction of Holder. The Company has not supplied Holder
any information regarding the Securities or an investment in the Securities other than as contained in this Agreement, and Holder
is relying on its own investigation and evaluation of the Company and the Securities and not on any other information.

 

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(b)
The Holder is a limited liability company duly organized, validly existing and in good standing under the laws of the state of
its incorporation and has all requisite corporate power and authority to carry on its business as now conducted. The Holder is
duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have
a material adverse effect on its business or properties.

 

(c)
All corporate action has been taken on the part of the Holder, its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Note. The Holder has taken all corporate action required to make all of the obligations of the
Holder reflected in the provisions of this Note, valid and enforceable obligations.

 

(d)
Each certificate or instrument representing Securities will be endorsed with the following legend (or a substantially similar
legend), unless or until registered under the 1933 Act or exempt from registration:

 

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES,
THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER OF THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

 

Section
4.00 General.

 

(a)
Payment of Expenses. The Company agrees to pay all reasonable charges and expenses, including attorneys’ fees and
expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting any amount due under this
Note.

 

(b)
Assignment, Etc. The Holder may assign or transfer this Note to any transferee at its sole discretion. This Note shall
be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns.

 

(c)
Funding Window. The Company agrees that it will not enter into a convertible debt financing transaction with any party
other than the Holder for a period of 20 Trading Days following the Effective Date and each Additional Consideration Date, as
relevant. The Company agrees that this is a material term of this Note and any breach of this Section 4.00(c) will result in a
default of the Note.

 

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(d)
Piggyback Registration Rights. The Company shall include on the next registration statement that the Company files with
the SEC (or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion
of this Note. Failure to do so will result in liquidated damages of 30% of the outstanding Principal Sum of this Note, but not
less than $20,000, being immediately due and payable to the Holder at its election in the form of a cash payment or an addition
to the Principal Sum of this Note.

 

(e)
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries
of any convertible debt security (whether such debt begins with a convertible feature or such feature is added at a later date)
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 Company shall notify the Holder of such additional or more favorable term
and such term, at the Holder’s option, shall become a part of this Note and its supporting documentation.. The types of
terms contained in the other security that may be more favorable to the holder of such security include, but are not limited to,
terms addressing conversion discounts, conversion look back periods, interest rates, original issue discount percentages and warrant
coverage.

 

(f)
Governing Law; Jurisdiction.

 

(i)
Governing Law. This Note will be governed by and construed in accordance with the laws of the state of California without
regard to any conflicts of laws or provisions thereof that would otherwise require the application of the law of any other jurisdiction.

 

(ii)
Jurisdiction and Venue. Any dispute or claim arising to or in any way related to this Note or the rights and obligations of
each of the parties shall be brought only in the state courts of California or in the federal courts located in San Diego County,
California.

 

(iii)
No Jury Trial. The Company hereto knowingly and voluntarily waives any and all rights it may have to a trial by jury with
respect to any litigation based on, or arising out of, under, or in connection with, this Note.

 

(iv)
Delivery of Process by the Holder to the Company. In the event of an action or proceeding by the Holder against the Company,
and only by the Holder against the Company, service of copies of summons and/or complaint and/or any other process that may be
served in any such action or proceeding may be made by the Holder via U.S. Mail, overnight delivery service such as FedEx or UPS,
email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Company at its last known attorney
as set forth in its most recent SEC filing.

 

(v)
Notices. Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally
served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at
the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited
with the courier service for delivery.

 

(g)
No Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act of 1933,
as amended, on the basis of being a “bad actor” as that term is established in the September 13, 2013 Small Entity
Compliance Guide published by the SEC.

 

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(h)
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates any applicable law
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it will not seek to claim
or take advantage of any law that would prohibit or forgive the Company from paying all or a portion of the principal, fees, liquidated
damages or interest on this Note.

 

(i)
Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. Eastern Time on the Trading Day immediately following
the Date of Execution, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file
a Supplemental Information statement with www.otcmarkets.com disclosing the material terms of the transactions contemplated
hereby. From and after the filing of such press release, the Company represents to the Holder that it shall have publicly disclosed
all material, non-public information delivered to the Holder by the Company, or any of its officers, directors, employees, or
agents in connection with the transactions contemplated by this Note. The Company and the Holder shall consult with each other
in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Holder
shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with
respect to any press release of the Holder, or without the prior consent of the Holder, with respect to any press release of the
Company, none of which consents shall be unreasonably withheld, delayed, denied, or conditioned except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Holder, or include the name
of the Holder in any filing with the SEC or any regulatory agency or Principal Market, without the prior written consent of the
Holder, except to the extent such disclosure is required by law or Principal Market regulations, in which case the Company shall
provide the Holder with prior notice of such disclosure permitted hereunder.

 

The
Company agrees that this is a material term of this Note and any breach of this Section 4.00(i) will result in a default of the
Note.

 

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(j)
Attempted Below-par Issuance. In the event that the Holder delivers a Conversion Notice to the Company and, if as of such
date, (i) the Conversion Price would be less than par value of the Company’s Common Stock and (ii) within three business
days of the delivery of the Conversion Notice, the Company shall not have reduced its par value such that all of the requested
conversion transaction may then be accomplished, then the Company and the Holder shall utilize the following conversion protocol
for Par Value Adjustment. The Holder shall transmit to the Company: (X) a “preliminary” Conversion Notice for the
full number of shares of Common Stock that would be issued at the Conversion Price without regard to any below-par value conversion
issues; followed by (Y) a “par value” Conversion Notice for the number of shares of Common Stock with the Conversion
Price increased from the “preliminary” Conversion Price to a Conversion Price at par value; and, finally, (Z) a “liquidated
damages” Conversion Notice for that number of shares of Common Stock that represents the difference between the “preliminary”
Conversion Notice full number of shares and the “par value” Conversion Notice limited number of shares. The Conversion
Price of such “liquidated damages Common Shares” would be the par value of the Common Stock. Accordingly, through
this protocol, the Company would issue, in two transactions, an amount of shares of its Common Stock equivalent to the full number
of shares of Common Stock that would have been issued in accordance with the “preliminary” Conversion Notice without
regard to any below-par value conversion issues. In the event that the Holder is precluded from exercising any or all of its conversion
rights hereunder as a result of a proposed “below par” conversion, the Company agrees that, in lieu of actual damages
for such failure, liquidated damages may be assessed and recovered by the Holder without being required to present any evidence
of the amount or character of actual damages sustained by reason thereof. The amount of such liquidated damages shall be an amount
equivalent to the trading price utilized in the “preliminary” Conversion Notice multiplied by the number of shares
calculated on the “liquidated damages” Conversion Notice. Such amount shall be assessed and become immediately due
and payable to the Holder (at its election) in the form of a (i) cash payment, (ii) an addition to the Principal Sum of this Note,
or (iii) the immediate issuance of that number of shares of Common Stock as calculated on the “liquidated damages”
Conversion Notice. Such liquidated damages are intended to represent estimated actual damages and are not intended to be a penalty,
but, by virtue of their genesis and subject to the election of the Holder (as set forth in the immediately preceding sentence),
will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144, as
the Company’s failure to maintain the par value of its Common Stock at an amount that would not result in a “below
par” conversion failure is equivalent to a default as of the Issuance Date of the Note.

 

(k)
Right of First Refusal. From and after the date of this Note and at all times hereafter while the Note is outstanding,
the Parties agree that, in the event that the Company receives any written or oral proposal (the “Proposal”)
containing one or more offers to provide additional capital or equity or debt financing (the “Financing Amount”),
the Company agrees that it shall provide a copy of all documents received relating to the Proposal together with a complete and
accurate description of the Proposal to the Holder and all amendments, revisions, and supplements thereto (the “Proposal
Documents”) no later than 3 business days from the receipt of the Proposal Documents. Following receipt of the Proposal
Documents from the Company, the Holder shall have the right (the “Right of First Refusal”), but not the obligation,
for a period of 5 business days thereafter (the “Exercise Period”), to invest, at similar or better terms to
the Company, an amount equal to or greater than the Financing Amount, upon written notice to the Company that the Holder is exercising
the Right of First Refusal provided hereby. In furtherance of the Right of First Refusal, the Company agrees that it will cooperate
and assist the Holder in conducting a due diligence investigation of the Company and its corporate and financial affairs and promptly
provide the Holder with information and documents that the Holder may reasonably request so as to allow the Holder to make an
informed investment decision. However, the Company and the Holder agree that the Holder shall have no more than 5 business days
from and after the expiration of the Exercise Period to exercise its Right of First Refusal hereunder. This Right of First Refusal
shall extend to all purchases of debt held by, or assigned to or from, current stockholders, vendors, or creditors, all transactions
under Sections 3(a)9 and/or 3(a)10 or the Securities Act of 1933, as amended, and all equity line-of-credit transactions.

 

[Signature
Page to Follow.]

 

    	10

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be duly executed on the day and in the year first
above written.

 

	 	SYLIOS
    CORP
	 	 	 
	 	By:	/s/
    Wayne Anderson
	 	Name:	Wayne
    Anderson
	 	Title:
    	President
	 	Email:
    	wa@sylios.com

	 	Address:
    	735
    Arlington Ave N, Suite 308, St Petersburg, FL 33701

 

This
Convertible Promissory Note of January 27, 2017 is accepted this ____ day of __________, 2016 by

 

TANGIERS
INVESTMENT GROUP, LLC

 

	By:	 	 
	Name:	Michael
    Sobeck	 
	Title:	Managing
    Member	 

 

    	11

    	 

    

 

EXHIBIT
A

 

FORM
OF CONVERSION NOTICE

 

(To
be executed by the Holder in order to convert all or part of that certain $55,000 Convertible Promissory Note identified as the
Note)

 

	DATE:	___________________________	 
	FROM:	Tangiers
    Investment Group, LLC (the “Holder”)	 

 

	 	Re:	$55,000
    Convertible Promissory Note (this “Note”) originally issued by Sylios Corp., a Florida corporation, to
    Tangiers Investment Group, LLC on January 27, 2017.

 

The
undersigned on behalf of Tangiers Investment Group, LLC, hereby elects to convert $_______________________ of the
aggregate outstanding Principal Amount (as defined in the Note) indicated below of this Note into shares of Common Stock, $0.001
par value per share, of Sylios Corp. (the “Company”), according to the conditions hereof, as of the date written
below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any. The
undersigned represents as of the date hereof that, after giving effect to the conversion of this Note pursuant to this Conversion
Notice, the undersigned will not exceed the “Restricted Ownership Percentage” contained in this Note.

 

	Conversion
    information:	 
	 	Date
    to Effect Conversion
	 	 
	 	 
	 	Aggregate
    Principal Sum of Note Being Converted
	 	 
	 	 
	 	Aggregate
    Interest/Fees Being Converted
	 	 
	 	 
	 	Remaining
    Principal Balance
	 	 
	 	 
	 	Number
    of Shares of Common Stock to be Issued
	 	 
	 	 
	 	Applicable
    Conversion Price
	 	 
	 	 
	 	Signature
    
	 	 
	 	 
	 	Name
	 	 
	 	 
	 	Address

 

    	12

    	 

    

 

EXHIBIT
B

 

WRITTEN
CONSENT OF THE BOARD OF DIRECTORS OF

 

SYLIOS
CORP

 

The
undersigned, being directors of Sylios Corp., a Florida corporation (the “Company”), acting pursuant to the
Bylaws of the Corporation, do hereby consent to, approve and adopt the following preamble and resolutions:

 

Convertible
Note with Tangiers Investment Group, LLC

 

The
board of directors of the Company has reviewed and authorized the following documents relating to the issuance of a Convertible
Promissory Note in the amount of $55,000 with Tangiers Investment Group, LLC.

 

The
documents agreed to and dated January 24, 2017 are as follows:

 

10%
Convertible Promissory Note of Sylios Corp.

Irrevocable
Transfer Agent Instructions

Notarized
Certificate of Chief Executive Officer

Disbursement
Instructions

Company
Capitalization Table

 

The
board of directors further agree to authorize and approve the issuance of shares to the Holder at Conversion prices that are below
the Company’s then current par value.

 

IN
WITNESS, WHEREOF, the undersign member(s) of the board of the Company executed this unanimous written consent as of January 24,
2017.

 

/s/
Wayne Anderson

 

By:
Wayne Anderson

Its:
President, Chairman

 

    	13

    	 

    

 

EXHIBIT
C

 

NOTARIZED
CERTIFICATE OF CHIEF EXECUTIVE OFFICER OF

 

SYLIOS
CORP

 

(Two
Pages)

 

The
undersigned, _______________________ is the duly elected Chief Executive Officer of Sylios Corp., a Florida corporation
(the “Company”).

 

I
hereby warrant and represent that I have undertaken a complete and thorough review of the Company’s corporate and financial
books and records, including, but not limited to, the Company’s records relating to the following:

 

	 	(A)	The
    issuance of that certain Convertible Promissory Note dated January 27, 2017 (the “Note Issuance Date”)
    issued to Tangiers Investment Group, LLC (the “Holder”) in the stated original principal amount of $55,000
    (the “Note”);
	 	 	 
	 	(B)	The
    Company’s Board of Directors duly approved the issuance of the Note to the Holder; 
	 	 	 
	 	(C)	The
    Company has not received and does not contemplate receiving any new consideration from any persons in connection with any
    later conversion of the Note and the issuance of the Company’s Common Stock upon any said conversion;
	 	 	 
	 	(D)	To
    my best knowledge and after completing the aforementioned review of the Company’s stockholder and corporate records,
    I am able to certify that the Holder (and the persons affiliated with the Holder) are not officers, directors, or directly
    or indirectly, ten percent (10.00%) or more stockholders of the Company and none of said persons has had any such status in
    the one hundred (100) days immediately preceding the date of this Certificate;
	 	 	 
	 	(E)	The
    Company’s Board of Directors have approved duly adopted resolutions approving the Irrevocable Instructions to the Company’s
    Stock Transfer Agent dated January 27, 2017;
	 	 	 
	 	(F)	Mark
    the appropriate selection:
	 	 	 
	 	 	___
    The Company represents that it is not a “shell company,” as that term is defined in Section 12b-2 of the Securities
    Exchange Act of 1934, as amended, and has never been a shell company, as so defined; or
	 	 	 
	 	 	___
    The Company represents that (i) it was a “shell company,” as that term is defined in Section 12b-2 of the Securities
    Exchange Act of 1934, as amended, (ii) since ______, 201__, it has no longer been a shell company, as so defined, and
    (iii) on _______, 201__, it provided Form 10-type information in a filing with the Securities and Exchange Commission.
	 	 	 
	 	(G)	I
    understand the constraints imposed under Rule 144 on those persons who are or may be deemed to be “affiliates,”
    as that term is defined in Rule 144(a)(1) of the Securities Act of 1933, as amended.
	 	 	 
	 	(H)	I
    understand that all of the representations set forth in this Certificate will be relied upon by counsel to Tangiers Investment
    Group, LLC in connection with the preparation of a legal opinion.

 

    	14

    	 

    

 

I
hereby affix my signature to this Notarized Certificate and hereby confirm the accuracy of the statements made herein.

 

	Signed:	_____________________________________	 	Date:	___________________
	 	 	 	 	 
	Name:	_____________________________________	 	Title:
    	___________________ 

 

SUBSCRIBED
AND SWORN TO BEFORE ME ON THIS ________ DAY OF ____________________ 2016.

 

Commission
Expires:______________

____________________________________

Notary
Public

 

    	15

    	 

    

 

EXHIBIT
D

 

	TO:	Tangiers
    Investment Group, LLC
	 	 
	FROM:	Sylios
    Corp
	 	 
	DATE:	January
    24, 2017
	 	 
	RE:	Disbursement
    of Funds

 

Pursuant
to that certain Convertible Promissory Note between the parties listed above and dated January 27, 2017, a disbursement of funds
will take place in the amount and manner described below:

 

	Please
    disburse to:	 
	Amount
    to disburse:	$15,000
	Form
    of distribution	Wire
	Name	 
	Company
    Address	 

         

	Wire
    Instructions:	Bank:

        ABA
        Routing Number:

        Account
        Number:

        SWIFT
        Code:

        Account
        Name:

        Phone:

TOTAL:
$15,000

 

For:
Sylios Corp

 

	By:	/s/
    Wayne Anderson 	 	Dated:	January
    24, 2017
	Name:	Wayne
                                         Anderson

        
	 	 	 
	Its:

        
	President	 	 	 

 

    	16

    	 

    

 

EXHIBIT
E

 

COMPANY
CAPITALIZATION TABLE AS OF JANUARY 27, 2017

 

COMMON
STOCK AND COMMON STOCK EQUIVALENTS

 

ISSUED,
OUTSTANDING AND RESERVED

 

	DESCRIPTION	 	AMOUNT
	Authorized
    Common Stock	 	 
	Authorized
    Capital Stock	 	 
	Authorized
    Common Stock	 	 
	Issued
    Common Stock 	 	 
	Outstanding
    Common Stock	 	 
	Treasury
    Stock	 	 
	*Authorized,
    but unissued	 	 
	 	 	 
	Authorized
    Preferred Stock	 	 
	Issued
    Preferred Stock	 	 
	 	 	 
	Reserved
    for Equity Incentive Plans	 	 
	Reserved
    for Convertible Debt	 	 
	Reserved
    for Options and Warrants	 	 
	Reserved
    for Other Purposes	 	 
	 	 	 
	TOTAL
                                         COMMON STOCK AND COMMON

        

        STOCK
        EQUIVALENTS OUTSTANDING
	 	 

         

        

 

*
This number includes all shares reserved for Convertible Debt

 

Note:
If not applicable, enter “n/a” or “zero” in Column 2.

 

    	17

    	 

    

 

CURRENT
DEBT AND LIABILITIES TABLE

 

CONVERTIBLE
PROMISSORY NOTE BALANCES AND PROMISSORY NOTE BALANCES

 

	DESCRIPTION	 	ISSUANCE
    DATE	 	AMOUNT
	Convertible
    Promissory Note	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Promissory
    Note	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Other
    Debt and Liabilities	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Note:
If not applicable, enter “n/a” or “zero” in Column 2.

 

To
my best knowledge and after completing the aforementioned review of the Company’s stockholder and corporate records, I am
able to certify the accuracy of the statements made herein.

 

SYLIOS
CORP

 

	By:	/s/
    Wayne Anderson	 	Dated:	January
    24, 2017
	Name:	Wayne
    Anderson	 	 	 
	Title:
    	President
    	 	 	 

 

    	18NEITHER
THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount: $7,500	Issue
    Date: January 27, 2017 
	Purchase
    Price: $5,000	 

 

12%
CONVERTIBLE PROMISSORY NOTE

 

FOR
VALUE RECEIVED, SYLIOS CORP., a Florida corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order of DARLING CAPITAL, LLC a New York limited liability company, or registered assigns (the “Holder”)
the sum of Seven Thousand Five Hundred Dollars ($7,500.00) as set forth herein, on November 30, 2017 (the “Maturity Date”),
and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “Interest Rate”)
per annum from January 27, 2017 until the Note plus any and all accrued interest is paid in full. The Holder will have the option
to extend the Maturity Date an additional nine (9) months. The Holder must inform the Borrower, in writing, within thirty (30)
days from the original Maturity Date of its intent to extend the Maturity Date. Interest shall commence accruing on the date that
the Note is fully paid and shall be computed on the basis of a 360-day year and the actual number of days elapsed. Any amount
of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per
annum or the maximum rate permitted under applicable law from the due date thereof until the same is paid (“Default Interest”).
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.

 

    	1

    	 

    

 

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

 

The
following terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1.
Conversion Right. The Holder shall have the right at any time after 180 days from issuance of the note to convert all or
any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined
as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled
to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number
of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion
of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to
which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of
more than 9.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided,
further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder,
not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply
until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number
of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion
date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this
Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof.

 

    	2

    	 

    

 

1.2.
Conversion Price.

 

a)
Calculation of Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable Conversion
Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower
relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The “Variable Conversion Price” shall mean the
20% multiplied by the Market Price (as defined herein) “Market Price” means the lowest closing bid Price (as defined
below) for the Common Stock during the Twenty Five (25) Trading Day period immediately preceding the Conversion Date (the “Look
Back Period”). “Trading Price” means, for any security as of any date, the closing stock price on the Over-the-Counter
Bulletin Board, or applicable trading market (the “OTCPink”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Holder (i.e. Bloomberg); provided that if the Closing Bid Price for the common stock on the
Clearing date (defined below) is lower than the Closing Bid Price, then the purchase price shall be adjusted such that the Discount
shall be taken from the closing bid price on the Clearing Date, and the company shall issue additional shares to Purchaser to
reflect such adjusted Purchase Price. The Note shall have a conversion price floor of $0.0001 per share. For purposes of this
Agreement, the Clearing Date shall be the latest date on which (i) the conversion shares are transferred to and deposited into
the Buyer’s brokerage account by the Company’s representatives or transfer agent and (ii) Buyer’s broker has
confirmed with Buyer that the Buyer may execute trades of the conversion shares. If such events occur after 5:30 PM Eastern Standard
Time, the events shall be deemed to have occurred on the next trading day. Upon the exercise of any conversion, the Holder shall
duly notify the Borrower whether principal or interest is being converted. If the Borrower’s Common stock is chilled for
deposit at DTC, becomes chilled at any point while this Agreement remains outstanding or deposit otherwise additional fees due
to a Yield Sign, Stop Sign or other trading restrictions, an additional 10% discount will be attributed to the Conversion Price
defined hereof. For purposes of this agreement, “Trading Day” shall mean any day on which the Common Stock is tradable
for any period on the OTCPink, or on the principal securities exchange or other securities market on which the Common Stock is
then being traded. The company shall bear any and all miscellaneous expenses that may arise as a result of conversion of the note
and the delivery of shares of common stock thereunder including but not limited to transfer agent fees, rule 144 legal opinion
fees and deposit fees. All accrued conversion expenses paid by the holder shall be added to the amount being converted under the
note. No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable
shall be rounded up or down, as the case may be, to the nearest whole share.

 

b)
The Borrower acknowledges that it will take all reasonable steps necessary or appropriate to issue and deliver the common stock
upon conversion, including providing a board of directors resolution authorizing the issuance of common stock. 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 (3 Trading days)
the Borrower shall pay to the Holder $2,000.00 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver
such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has
accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in
which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance
with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the
terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from
a failure, attempt to frustrate, interfere with such conversion right are difficult if not impossible to qualify. Accordingly
the parties acknowledge that the liquidated damages provision contained in this Section are justified.

 

    	3

    	 

    

 

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

 

1.3.
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued. The Borrower is required at all times to have authorized and reserved
one and one half times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion
Price of the Notes in effect from time to time)(the “Reserved Amount”). The Reserved Amount shall be increased from
time to time in accordance with the Borrower’s obligations. Initially, the Company shall reserve the amount of shares listed
in the “TA General Letter” dated January 9, 2017 in the name of the Holder. The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities
or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall
be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter
there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion
of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates
for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and conditions of this Note. If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note Method
of Conversion.

 

    	4

    	 

    

 

a)
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after 180 days from Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail
or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and
(B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

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

 

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

 

d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (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.

 

    	5

    	 

    

 

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

 

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

 

g)
Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section

 

h)
1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder

 

i)
$2,000.00 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock through willful
acts designed to hinder the delivery of Common Stock to the Holder. Such cash amount shall be paid to Holder by the fifth day
of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by
the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note,
in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall
be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a
valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right
are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1.4(g) are justified.

 

    	6

    	 

    

 

1.4.
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. (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.”

 

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

 

    	7

    	 

    

 

1.5.
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 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.

 

    	8

    	 

    

 

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

 

e)
Protection Period. In the event that the Borrower issues at any time when this Note is issued and outstanding to any person,
group or entity (during the period that there remains an outstanding balance on the note), subsequent convertible securities bearing
a greater conversion discount and / or longer look back period than that which is stated in this note, then the conversion discount
and / or the look back period will be adjusted to equal the conversion discount and / or look back period of the subsequent convertible
securities. Additionally, notwithstanding anything to the contrary contained in this Note, in the event that the borrower issues
any subsequent convertible securities that would allow for conversion that would result in beneficial ownership by the Holder
of the subsequent convertible securities (and / or its affiliates) of up to 9.99% of the outstanding shares of Common Stock, then
this note shall allow for conversion that would result beneficial ownership by the Holder (and its affiliates) of up to 9.99%

 

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 1.5, 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.

 

1.6.
Intentionally left blank.

 

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

 

    	9

    	 

    

 

1.8. Prepayment.
Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the Issue Date
the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of
the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any
notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at
its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the
date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On
the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional
Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower
at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note,
the Borrower shall make payment to the Holder of either an amount in cash (the “Optional Prepayment Amount”)
equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and
unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest,
if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof, or the current total value of the shares had this note been completely converted with all the
discounts and terms included herein and the shares sold on the market, whichever is greater. If the Borrower delivers an
Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note
pursuant to this Section 1.8

 

After
the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

 

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.

 

    	10

    	 

    

 

2.3.
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.

 

2.4.
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation,
including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits
or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the
date hereof, (b) made in the ordinary course of business or (c) not in excess of $25,000.

 

2.5.
Timely reporting obligation So long as the Borrower shall have any obligation under this Note the borrower shall remain
currant in its fillings with the SEC, as required under the Exchange act.

 

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.

 

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

 

    	11

    	 

    

 

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 and such breach continues for a period of ten (10) days after written notice thereof to the
Borrower from the Holder.

 

3.4.
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith, 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.

 

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

 

3.6.
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 $30,000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld

 

3.7.
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower.

 

3.8.
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCPink
or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or
the American Stock Exchange.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	12

    	 

    

 

3.15.
Reserve Increase and Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent,
the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions
in a form as initially delivered pursuant to section 1.3 on the note (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. Additionally,
In the event that the Share Reserve has been depleted and Borrower Fails to cause the increase of the number of shares within
3 business days of the reserve being depleted.

 

3.16.
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after
the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under
this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights
and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement
or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the
Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory
notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this
Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future
debt of Borrower to the Holder.

 

Upon
the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to
pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum
(as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE
SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation
of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8,
3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the
“Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III
(other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the
Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the
“Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or
(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal
amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be
known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity
value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default
Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion
Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of
a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied
by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are
expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder
shall be entitled to exercise all other rights and remedies available at law or in equity.

 

    	13

    	 

    

 

If
the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable,
then the default amount shall be added to the principal balance of the note and the Holder shall have the right at any time, so
long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require
the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of
the Borrower equal to the Default Amount divided by the Conversion Price then in effect. Upon an Event of Default, interest shall
be accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the
highest rate of interest permitted by law.

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

4.2.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: If to the Borrower, to: SYLIOS CORP., PO Box 521 St. Petersburg, FL
33731 Email: If to the Holder: Darling Capital, LLC, 767 3rd Avenue, Suite 25-1A, New York, NY 10017. Email: Yehuda@darlingcapital.net

 

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
as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

    	14

    	 

    

 

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

 

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

 

4.6.
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without
regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction. Any
action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only
in the civil or state courts of New York or in the federal courts located in the State and county of New York. Both parties and
the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts. 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 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 unenforceability
of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations
to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision
in favor of the Holder. This Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without
limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil
Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought. For purposes
of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered
to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s obligations to
Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith or was
executed apart from this Note.

 

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

 

    	15

    	 

    

 

4.8.
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.

 

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

 

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

 

    	16

    	 

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this day of January 27,
2017.

 

	 	SYLIOS
    CORP,
	 	 	 
	 	By:	/s/
    Wayne Anderson
	 	Name:	Wayne
    Anderson
	 	Title:
    	CEO.

 

    	17

    	 

    

 

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

TO:
SYLIOS CORP, 

 

VIA
EMAIL Attn: CFO or President

 

The
undersigned, hereby irrevocably elects to exercise the right, represented by the PROMISSORY NOTE dated as of January 27, 2017
issued by SYLIOS CORP, (the “Note”) to convert $___________ principal plus accrued interest equal to
$____________ into________________ shares (“Conversion Shares”) of the Common Stock, $0.001 par value (“Common
Stock”).

 

Dated:

 

	Holder’s
    Signature:	 
	 	 
	 	 
	By:	 Yehuda Marrus, Director	 

 

Holder’s
Address:

Darling
Capital, LLC

767
Third Avenue,

25th Floor New York,

NY 10017

 

Please
send shares to:

 

TBD

 

    	18

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