Document:

Exhibit 10.1

  

MASTER PURCHASE
ORDER ASSIGNMENT AGREEMENT

 

Dated as of September
1, 2015

 

by and between

 

[______]
(CONTRACTOR)

 

and

 

[______]
(CONTRACTOR)

 

and

 

INERGETICS,
INC. (DISTRIBUTOR)

 

     

     

    

 

MASTER PURCHASE
ORDER ASSIGNMENT AGREEMENT

 

THIS
AGREEMENT (this “Agreement”) is dated as of September 1, 2015, by and among ______
(the “______”),______
(“______” and together with ______ collectively,
the “Contractors” and each a “Contractors”) and INERGETICS, INC., a Delaware
corporation (the “Distributor”) and, together with the Contractors, collectively, the “Parties”
with each being a “Party”), as follows:

 

RECITALS

 

		A.	The Distributor is a distributor of nutritional supplements which are manufactured by third-party
manufacturers (each a “Manufacturer”, and, collectively, the “Manufacturers”).

 

		B.	The Parties desire to enter into this Agreement to set forth the terms and conditions of a purchase
order assignment program between the Distributor and the Contractors pursuant to which, among other related items (i) the
Distributor will assign customer purchase orders to the Contractors, (ii) request the Contractors to pay directly to the Manufacturers
the Manufacturer’s cost and expenses to manufacturer, package and ship to the Distributor, or at the Distributor’s
option, the customer, the finished goods set forth in the customer purchase orders, (iii) the Contractors shall retain the
Distributor to, among other items, warehouse, process, and ship ordered goods to its customers, or arrange for the delivery of
goods to the customers, as the case may be, and (iv)  fees will be paid to the Distributor for such servicing following payment
to the Contractors for the goods.

 

THEREFORE,
in consideration of the payments to be made, and the obligations to be assumed as set forth in this Agreement, and such other consideration,
the receipt and sufficiency at which is hereby acknowledged the Parties agree as follows:

 

1.             DEFINITIONS.
In this Agreement, the following terms are defined as set forth in this this Paragraph 1:

 

(a) The
“CERTIFICATE” means the Purchase Order Package Certificate required to be delivered with each written
request by the Distributor to the Contractor for an assignment of a purchase order. The form of Certificate is attached to this
Agreement as Exhibit “A” and made part hereof.

 

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(b) With
respect to each purchase order submitted for assignment to the Contractors hereunder, the Certificate will define (i) the “PRODUCT”
(the end product) to be delivered to the Customer, (ii) the “CUSTOMER” (the business entity/person
which issues the purchase order to the Distributor), (iii) the “MANUFACTURER” (the person/entity who
will manufacture the Product), (iv) the “Manufacturer’s
PREMISES” (the address of the facility or such other facility identified in the Certificate where the Product
will be manufactured by the Manufacturer), (v)  the “MANUFACTURER’S PRICE” (the dollar amount
confirmed by the Distributor in writing to the Manufacturer, setting forth the aggregate manufacturer’s price to manufacture,
package and ship the Product in accordance with the specifications and in the amounts set for the in the Accepted P.O., including,
but not limited to, the Manufacturer’s costs and expenses to purchase all materials and packaging necessary to produce the
final Product and have such Product delivered to the Distributor’s Facility (or to the Customer, if so requested by the Distributor),
(vi) the “P.O. PRICE” (the purchase price to be paid by the Customer for the Products), (vii) the
“P.O. DELIVERY DATE” (the date on which Products are to be delivered to the Customer), (viii) the “DISTRIBUTOR’S
PREMISES” (the Distributor’s warehouse facilities where the Products will be delivered, held, processed and
shipped by the Distributor to the Customer (unless such product is being shipped directly to the Customer, in which event such
shall be set forth in the Certificate)) and (ix) the “PRODUCT DELIVERY DATE” (the date on which the Products
are to be delivered to the Customer). The term “MANUFACTURER’S SHIPPING NOTICE” shall mean the
written notice delivered by the Manufacturer to the Distributor (who shall immediately forward the same to the Contractor or the
Contractors, indicating that the Products for a particular Accepted P.O. are completed and ready to be shipped to the Distributor
or the Customer, as the case may be. The Distributor is not engaged in the manufacturing business but is engaged in the development,
sale, warehousing, processing and distribution of Products.

 

(c) A
purchase order delivered to the Distributor in the ordinary course of its business from a Customer is referred to as a “P.O.”
and a P.O. that (x)  meets all of the requirements of Section 3 below and (y) is accepted by the Contractors,
is an “ACCEPTED P.O.” The date on which the Contractors deliver written notice to the Distributor of
acceptance of the assignment of a P.O. is referred to as the “ACCEPTANCE DATE”. When an Accepted P.O.
is made null and void pursuant to this Agreement, it is referred to as a “CANCELED P.O.” Under certain
circumstances, when a P.O. is not assignable to the Contractors, the Contractors may accept an assignment of the proceeds of the
P.O. and in such cases, the terms P.O. and Accepted P.O. will mean the proceeds of such P.O. or Accepted P.O. as the case may be.
The inventory of Products produced by a Manufacturer for satisfaction of a P.O. is referred to as the “P.O. INVENTORY”;
the invoice rendered by the Distributor to the Customer upon delivery of Products pursuant to a P.O. is referred to as a “P.O.
INVOICE”; and payments received on account of P.O. Invoices (whether paid by the Customer, the Distributor and/or
anyone else), are referred to as the “P.O. PROCEEDS”.

 

(d) “INDEBTEDNESS”
of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including (without limitation) “capital leases” in accordance
with GAAP (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations
with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property,
assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or
sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP,
consistently applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (i) through (vii) above.

 

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(e) “CONTINGENT
OBLIGATION” means, as to any person, any direct or indirect liability, contingent or otherwise, of that Person with
respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the person
incurring such liability, or the primary effect thereof, is to provide assurance to the oblige of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto.

 

(f)The
Distributor may (and in certain circumstances shall be required to) repurchase an Accepted P.O. pursuant to Paragraph 8(b)
of this Agreement. In absence of such repurchase, an Accepted P.O. becomes a “DELINQUENT P.O.” if the
P.O. Price is not paid to the Contractors by the earlier of (i) the due date for payment of the P.O. Invoice, (ii) one
hundred and twenty (120) days following the Funding Date, or (iii) the date on which the Accepted P.O. is canceled.

 

(g) “CONTRACTORS’
BANK ACCOUNT” is the bank account or similar account established by the Contractors where all funds required to be
sent to the Contractors and/or deposited in an account of the Contractors by the Distributor and/or any other person whether pursuant
to this Agreement and/or any other Transaction Document, whether for Contractors to keep, and/or distribute as provided elsewhere
herein and/or in any other Transaction Document; and “CONTRACTORS’ BANK” means the bank (or other
institution), where the Contractors establish the Contractors’ Bank Account. The Contractors shall inform the Distributor
in writing of the name and certain other information regarding the Contractors’ Bank Account and Contractors’ Bank
so that all funds required to be deposited into the Contractors’ Bank Account can so be deposited. Such information is set
forth on Addendum I attached hereto (or will be provided subsequently to the Distributor). The Contractors at their sole
option may, at any time and from time to time, change the Contractors’ Bank and the Contractors’ Bank Account and provide
the substantially identical information as set forth in Addendum I to the Distributor as to any new Contractors’ Bank
Account and Contractors’ Bank.

 

(h) The
“FUNDING DATE” is the earliest to occur of the date on which the Contractors make their first (x) payment
to the Manufacturer of the designated Products in connection with an Accepted P.O., and (y)  advance of funds in connection
with and/or related to an Accepted P.O. (whether to the Distributor or any other person. The “CLEARANCE DATE”
is the date on which the Contractors (or the Contractors’ Bank) have received full payment of the P.O. Price in connection
with an Accepted P.O. in immediately available funds in U.S. dollars.

 

(i) The
Distributor will perform its obligations in accordance with the “DISTRIBUTOR’S SPECIFICATIONS”
which are set forth on Exhibit “B” attached hereto and will be paid a “DISTRIBUTOR’S FEE”,
computed in accordance with Section 7(c). The Distributor’s obligations are secured pursuant to and in accordance
with the terms of a “SECURITY AGREEMENT” described in Section 10 below.

 

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(j) The Contractors
will be paid (i) “COMMITMENT FEE” (computed and paid pursuant to Paragraph 6 below), the (ii)
“CONTRACTORS’ DEAL FEES” (computed and paid pursuant to Paragraph 7 below), and (iii) “CONTRACTORS’
EXPENSES” (computed and paid pursuant to Paragraph 9 below).

 

(k) “PRIOR
NOTES” shall mean the following notes issued by the Distributor: the (i) ____%
$______ aggregate principal amount Convertible Promissory Note, Issue
Date: ______; issued to ______;
(ii) ____% $______
aggregate principal amount Convertible Promissory Note, Issue Date: ______;
issued to ______; (iii) ____%
$______ aggregate principal amount Convertible Promissory Note, Issue
Date: ______; issued to ______;
(iv) ____% $______
aggregate principal amount Convertible Promissory Note, Issue Date: ______;
issued to ______, (v) ____%
$______ aggregate principal amount Convertible Promissory Note, Issue
Date: ______; issued to ______;
and (vi) ____% $______
aggregate principal amount Convertible Promissory Note, Issue Date: ______;
issued to ______.

 

(l) The
“DISTRIBUTOR’S NOTES” means the form of 12% senior subordinated convertible promissory notes of
the Company in the form annexed hereto as Exhibit C, with such modifications and changes as agreed to by the Distributor
and the party receiving any such notes as reflected in the final executed note of the Distributor.

 

(m) The
“EXCHANGE NOTES” shall mean the $______ aggregate principal amount of the Senior Secured Convertible
Notes of the Distributor issued to the holders of the Prior Notes in exchange for the Prior Notes, the economics of which Exchange
Notes shall be substantially the same as the economics received by the Contractors from the Distributor in connection with an Accepted
P.O., but each such Exchange Note shall, among other terms and conditions, be convertible into shares of common stock, par value
$0.001 per share, of the Distributor (the “Common Stock”) and contain such other terms and conditions
as agreed to by the holders of the Prior Notes and the Distributor, as evidenced by the Exchange Notes so issued by the Distributor
to the holders of the Prior Notes in exchange for the Prior Notes. The aggregate principal amount of each Exchange Note shall equal
the sum of (i) the aggregate principal amount of the Prior Notes being exchanged for such Exchange Note, and (ii) all
accrued but unpaid interest and other sums, if any, owed to the holder of the Prior Note being exchanged for an Exchange Note,
through and including the date of such exchange, which shall occur substantially simultaneously with the execution of this Agreement
by the Parties herein.

 

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(n) “TRANSACTION
DOCUMENTS” shall mean collectively, this Agreement, any blocked account agreement, the Letter from the Distributor
to its transfer agent, dated on or about the date hereof related to the shares of Common Stock of the Distributor to be reserved
for issuance upon conversion of any Notes owned by either of the Contractors and/or their respective Affiliates including, but
not limited to, _____, including, but not limited to, the Distributor’s Notes, the Exchange Notes, the Prior Notes (the “TA
Letter”), all financing statements (or comparable documents now or hereafter filed in accordance with the Uniform
Commercial Code or other comparable or similar laws, rules and/or regulations) in favor of the Contractors as secured parties perfecting
all Liens the Contractors and/or any of their respective Affiliates including, but not limited to, _____, have on All Collateral
(as defined below) and/or other assets of the Distributor, the Subordination Agreements (as defined below), the Security Agreement
(as defined below), any perfection certificate, the Notes including, but not limited to, Distributor’s Notes, the Exchange
Notes and/or the Prior Notes and all other instruments, certificates, supplements, amendments, exhibits and schedules required
and/or attached pursuant to this Agreement and/or any of the above documents, and/or any other document and/or instrument related
to the above documents and the transactions hereunder and/or thereunder, and/or any other documents or instruments required or
contemplated hereunder or thereunder, whether now existing or at any time hereafter arising.

 

(o) “LIENS”
shall mean a lien, mortgage, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction,
clouds on title and/or encumbrances.

 

(p) “GAAP”
shall mean generally accepted accounting principles in the United States of America as in effect from time to time.

 

(q) “NOTES”
shall man all promissory notes, debentures, debt securities and/or other instruments evidencing Indebtedness and/or obligations
of funds owed by the Distributor to one or more of the Contractors and their respective Affiliates including, but not limited to,
____, including, but not limited to, the Prior Notes, the Distributor’s
Notes, the Exchange Notes and the following notes and/or debentures and/or any replacement thereof: (i) the ___% $_____ aggregate
principal amount Convertible Debenture, Issue Date: _____; issued to _____, (ii) ___% $_____ aggregate principal amount Convertible
Debenture, Issue Date: _____; issued to _____, (iii) ___% $_____ aggregate principal amount Convertible Debenture, Issue Date:
_____; issued to _____, (iv) ___% $_____ aggregate principal amount Convertible Debenture, Issue Date: _____; issued to _____,
and (v) ___% $_____ aggregate principal amount Convertible Debenture, Issue Date: _____; issued to _____. 

 

(r) An
“AFFILIATE” shall mean a person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the person specified.

 

2.           SUBMISSION
OF P.O.’s FOR ASSIGNMENT. Subject to the terms and conditions and requirements of this Agreement, the Distributor may request
in writing that the Contractors (x) accept an assignment of each P.O. submitted to and accepted by the Distributor from a
Customer and (y) pay to the Manufacturer of the Products set forth in the Accepted P.O., such Manufacturer’s Price to
manufacture and fulfill the Accepted P.O. Each such request shall be made pursuant to a completed and signed Certificate delivered
to the Contractors, provided all requests by the Distributor to the Contractors for the Contractors to accept the assignment
of a P.O. shall only be delivered to the Contractors on Tuesdays and Thursdays of each week; and requests received following a
Thursday will be treated as having been received by the Contractors on the next Tuesday.

 

3.            ACCEPTANCE
OF P.O. ASSIGNMENTS; AMOUNT OF FUNDS ELIGIBLE TO BE ADVANCED PURSUANT TO AN ACCEPTED P.O.

 

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(a) Subject
to the conditions and requirements set forth in this Section 3, Contractors agree to accept or decline acceptance of the
assignment of a P.O. submitted to the Contractors by the Distributor pursuant to the provisions of Section 2 above (in the
Contractors’ sole discretion), by delivery of written notice to Distributor; and Contractors will use their commercially
reasonable best efforts to deliver such written acceptance or declination by 5:00 p.m. before or during the fourth (4th)
full business day after the date Contractors receive the applicable Certificate.

 

(b) Notwithstanding
the provisions of Section 3(a) above, Contractors shall not accept the assignment of any P.O. which does not meet the following
requirements:

 

		(i)	(x) Contractors funding commitment
                                                                                                                                                 with respect to the P.O. shall not exceed 100% of the Manufacturer’s Price, and (y) be payable as follows: (I) 50% to
                                                                                                                                                 the Manufacturer within five (5) business days following the Acceptance Date; and (II) the remaining 50% within five (5)
                                                                                                                                                 business days following Contractors’ receipt of the Manufacturer’s Shipping Notice; provided, however,
                                                                                                                                                 that notwithstanding anything to the contrary provided herein or elsewhere, in the Certificate sent by the Distributor to
                                                                                                                                                 the Contractor to determine if the Contractors will accept the assignment of a P.O., the Distributor may request the
                                                                                                                                                 Contractors provide up to 85% of the P.O. Price (“Increased Funds”), which if so agreed by the
                                                                                                                                                 Contractors, such Increased Funds shall be payable by the Contractors as follows: (A) 50% of the Manufacturer’s Price
                                                                                                                                                 directly to the Manufacturer; (B) the remaining 50% of the Manufacturer’s Price shall be paid directly to the
                                                                                                                                                 Manufacturer by the Contractors, as provided elsewhere in this Agreement, provided, such amount shall not be treated
                                                                                                                                                 as being paid by the Contractor until the date the balance (or any lesser portion), of the Manufacturer’s Price is paid
                                                                                                                                                 by the Contractors to the Manufacturer; and (C) the balance of such Increased Funds directly to the Distributor; provided,
                                                                                                                                                 that a request by the Distributor, shall be conditioned on, among other terms and conditions, the Distributor acknowledging
                                                                                                                                                 and agreeing (and by executing this Agreement, the Distributor hereby expressly does so acknowledge and agree), that out of
                                                                                                                                                 the Increased Funds provided directly to the Distributor, the Distributor shall only use such portion of the Increased Funds,
                                                                                                                                                 to pay any costs and expenses relating to existing or subsequent Accepted P.O.’s, Delinquent P.O.s, any funds due and
                                                                                                                                                 owing to the Contractors and/or their respective Affiliates, including, but not limited to, ____,
                                                                                                                                                 including as a result of any Notes owned by any such persons, to create inventory of Products, to pay taxes, transfer agent
                                                                                                                                                 fees, legal fees and expenses, payments to vendors that the Contractors approve and related working capital and other general
                                                                                                                                                 corporate purposes;

 

		(ii)	Assuming payment of the total Manufacturer’s Price
by the Contractors as set forth herein and in the Certificate for the particular P.O. and/or any other advances of funds in connection
with such P.O., the Contractors aggregate outstanding funding pursuant to this Agreement shall not exceed in the aggregate $1,000,000
(including, but not limited to, the aggregate principal amount of all Exchange Notes);

 

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		(iii)	An original, signed copy of the Certificate shall have
been delivered to the Contractors;

 

		(iv)	All information contained in the Certificate and in any
attachment thereto, shall be verified by Contractors to ensure (to Contractors’ satisfaction), among other items, that the
Manufacturer’s Price, the Purchase Order, P.O. Price, Product Delivery Date and P.O. Delivery Date are reasonable and accurate
and that the P.O. is in all respects bona fide (which verification may include, without limitation, direct confirmation from the
Customer and the particular Manufacturer);

 

		(v)	The Contractors’ have approved all items in the
Certificate and/or related to the P.O. including, but not limited to, the proposed Manufacturer;

 

		(vi)	The Distributor shall have delivered to the Contractors
such additional information and documentation as the Contractors may have from time to time requested; and

 

		(vii)	The Distributor has obtained and provided to the Contractors
a fully executed and dated waiver and release of the Contractors (and the Contractors’ Agents, if any), and such other persons
as set forth in the form annexed to this Agreement as Exhibit E (the “Warranty/Waiver Release”),
by and from the Customer, of and from any and all liability for breach of any and all express or implied warranties or product
liability claims with respect to the Products or the use and distribution thereof;

 

(c) Notwithstanding
the other provisions of this Section 3 or elsewhere, the Contractors acceptance of the assignment of a P.O. shall be made
null and void and the P.O. shall be deemed a Canceled P.O. upon the occurrence of any one of the following: 

 

		(i)	Any change in the terms and conditions agreed to by the
Manufacturer relating to the manufacturing of the Products in a P.O. including, but not limited to, the Manufacturer’s Price.

 

		(ii)	The failure of the Distributor to take any action including,
but not limited to, paying all costs and/or expenses (other than the funds expressly agreed to be paid by the Contractors to the
Manufacturer relating to the particular Accepted P.O.), to be taken to produce and ship the final Products in such amounts and
that conform to the Product’s specifications and other items in the Certificate and/or the P.O.

 

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		(iii)	The failure of a Manufacturer to deliver Products (in
the amounts of which conform to the specifications in the P.O. or in the Certificate), to the Premises (or to the Customer if
so required and set forth in the Certificate) on or before the Product Delivery Date. Upon such failure of delivery, Contractor
shall have the right to require Distributor to purchase the Products from Contractor and shall assign to Distributor the right
to receive those Products which have not then arrived at the Premises;

 

		(iv)	Any cancellation and/or change of or to the P.O. by the
Customer prior to delivery of the Products to the Customer (except for reasonable extensions or delays to the Product Delivery
Date requested by the Customer and accepted by the Contractors);

 

		(v)	Any other change relating to the Products, the Manufacturer,
the Distributor, the information in the P.O. and/or the Certificate and/or otherwise that could have an adverse effect on the
Contractors and/or their rights relating to the P.O.; and

 

		(vi)	Upon the occurrence of any event set forth in Sections
3(b)(i)-(vii), any remaining obligations of the Contractors’ discretions under or pursuant to the P.O., this Agreement and/or
any other Transaction Document relating to a particular P.O., shall in the Contractor’s sole discretion, be automatically
terminated absolutely and in addition to any other rights and remedies the Contractors’ may have hereunder, in any of the
other Transaction Documents and/or in law or equity the Distributor shall pay to the Contractors such sums as so required by Section
8.

 

(d) A
P.O. shall be deemed an Accepted P.O. only when: (i) the P.O. is submitted for assignment by the Distributor pursuant to a
Certificate or such other form of submission to which the Contractors may from time to time consent, (ii) the Contractors
shall deliver notice of acceptance of assignment to the Distributor pursuant to Section 3(a) or, in the absence of such
notice of acceptance, the Contractors shall purchase Products with respect to the P.O. or otherwise advance of funds in connection
with the P.O., (iii) the P.O. shall meet each of the requirements of Section 3(b) above unless otherwise waived in
writing by the Contractors and (iv) none of the events described in Section 3(c) above shall have occurred prior
to delivery of the Products to the Customer pursuant to the P.O. Until such time as each of the afore-described requirements and
conditions is satisfied in full, Contractors’ acceptance of any assigned P.O. shall be deemed conditional and subject to
revocation at any time.

 

		4.	APPOINTMENT OF DISTRIBUTOR FOR CERTAIN ITEMS.

 

(a) Subject
to the other provisions of this Agreement, with respect to all Accepted P.O.’s (and only so long as such P.O. remains an
Accepted P.O.), Contractors hereby appoint the Distributor as Contractors’ exclusive source for acceptance of Products at
the Premises, performance of all processes, warehousing, warehousing requirements and delivery to the Customers, with respect to
the Products (unless the Products are being delivered directly to the Customer by the Manufacturer) and the Distributor hereby
accepts such appointment. Distributor agrees to perform all such requirements using its best efforts and in a businesslike manner
and to utilize quality control procedures consistent with applicable industry standards.

 

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(b) So
long as any Products are located at the Distributor’s Premises or are scheduled for delivery to the Distributor’s Premises,
Distributor agrees to warehouse all Products and, with respect to such warehousing obligations, agrees to perform such warehousing
obligations in accordance with all of the Distributor’s Specifications.

 

(c) Distributor
further agrees that with respect to all Products covered by an Accepted P.O. or that Contractors otherwise paid all or part of
the Manufacturer’s Price for, or made any advances with regard to any such Accepted P.O., which are not (or cannot be) used
in connection with the applicable Accepted P.O., the Contractors’ shall have the option of taking (and/or requiring the Distributor
to take), the following actions, in the Contractors’ sole discretion, by written notice to the Distributor:

 

		(i)	Distributor shall purchase such Products from Contractors
within three (3) business days following Contractors’ notice for an aggregate purchase price equal to Contractors’
aggregate costs and expenses (including advances and payment of the Manufacturer’s Price paid by the Contractors) paid and/or
it is bound or obligated to pay, relating to the Products;

 

		(ii)	The Contractors can sell the Products and the proceeds
thereof applied first to Contractors’ Manufacturing Price payments, other advances made in connection with such Products
and all costs and expenses relating thereto including all costs and expenses in connection with the sale of such Products including,
but not limited to, legal fees and expenses, publishing costs, filing fees and then any remaining funds shall be applied as provided
in Section 7, and the balance, if any, to Distributor; provided, however, if the Contractors elect to have
the Distributor purchase all or any portion of the Products as provided in Section 4(c)(i) above, but the Distributor fails
to do so in full and/or in the time frame provided in such Section 4(c)(i), the Contactors can, by written notice to the
Distributor, cancel its election to have some or all of the applicable Products purchased by the Distributor and sell such amount
of Product or the remaining unsold amount of Products that the Contractors have not required (or cancelled the requirement for),
the Distributor to purchase from the Contractors; or

 

		(iii)	The Contractors can require the Distributor to sell the
Products and the Distributor shall use its best efforts to sell and maximize the sale price thereof and shall upon all sales immediately
send the sale proceeds to the Contractors.

 

		5.	PAYMENT AND RESASSIGNMENT.

 

(a) Upon
delivery of Products to the Customer pursuant to an Accepted P.O., Distributor shall issue a P.O. Invoice (and deliver any other
related documents required by the applicable P.O. for issuance of an invoice on account of such P.O.) to the Customer for the full
P.O. Price. Unless otherwise expressly assigned by and at Contractors’ written direction, the P.O. so issued shall be in
the name of the Contractor and shall direct the Customer to make payment to the Contractors’ Bank Account, if applicable.
Distributor shall immediately pay to the Contractor any sums from time to time received by the Distributor from the Customer or
any other party other than the Contractors on account of a P.O. Invoice. Upon Contractors’ demand, each P.O. Invoice shall
be prepared on such invoice form as Contractors may designate.

 

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(b) At
such time as Contractors have received payment in full in cleared funds on account of a P.O. Invoice, the Contractors shall pay
Distributor in accordance with Section 7 below, and shall re-assign the applicable Accepted P.O. and all rights with respect
thereto to the Distributor and the Distributor shall accept such re-assignment. The re-assignment shall be evidenced by a Re-Assignment
and Release of Purchase Order in the form of Exhibit “C” attached hereto.

 

(c) Sums
received by the Contractor on account of a P.O. Invoice shall be applied by the Contractor for the satisfaction of the expenses,
fees and charges described in this Agreement pursuant to the priorities of payment set forth in Section 7 below; provided,
however, that Distributor shall pay all sums due Contractors upon a Delinquent P.O. in the manner and pursuant to the terms
of Section 8 below.

 

6.            COMMITMENT
FEE. Subject to the provisions of this Section 6, Distributor shall pay Contractor a commitment fee the (“Commitment
Fee”) in consideration of Contractors’ commitment to have available sufficient funds to pay the Manufacturing
Price for Products or to otherwise advance funds in connection with an Accepted P.O. in amounts equal to but not exceeding $1,000,000,
as contemplated by this Agreement. The Commitment Fee shall be in the sum of $100,000 and is payable in 4 equal installments of
$25,000 in cash payable as follows: (i) $25,000 on the date of this Agreement, and $25,000 every consecutive 30 days following
the date of this Agreement until the $100,000 amount is paid in full; provided, however, that at the Distributors,
sole option the Distributor in lieu of paying the $100,000 Commitment Fee in cash, in accordance with the provisions of this Section
6, the Distributor may issue to the Contractors a Distributors Note in the aggregate principal amount of $125,000. The Commitment
Fee for the term of this Agreement is deemed by the Parties to have been earned by the Contractors upon the signing of this Agreement
by the Contractor.

 

7.            PAYMENTS
AND COMPENSATION OF CONTRACTORS AND DISTRIBUTOR.

 

(a) Payments
received by the Contractor or into the Contractors’ Bank Account on account of Accepted P.O.’s will be applied in the
following order of priority:

 

		(i)	First, to pay Contractors’ Expenses (as defined in Section 9), to the extent
that such Contractors’ Expenses are then due pursuant to the terms of Section 9;

 

		(ii)	Second, to the payment of the Contractors’ Deal Fees (as set forth in Section 7(b),
in connection with the Accepted P.O. and all other Accepted P.O.’s that became Accepted P.O’s concurrently with such
Accepted P.O.;

 

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		(iii)	Third, to reimburse the Contractors for the Manufacturer Price paid by the Contractors and
for other advances made by the Contractors (without regard to term or prompt payment discounts) in connection with the Accepted
P.O. and all other Accepted P.O.’s that became Accepted P.O.’s concurrently with such Accepted P.O.; 

 

		(iv)	Fourth, to repay any outstanding
amounts owed to the Contractors including, but not limited to, pursuant to the Exchange Notes, Distributor’s Notes and/or
any other Notes or obligations the Distributor has to the Contractors and/or any of their respective Affiliates including, but
not limited to, ____; and

 

		(v)	Fifth, to the payment of the Distributor’s Fee in connection with the Accepted P.O.;
provided, however, that notwithstanding anything to the contrary provided in this Agreement or elsewhere, the Contractors
may in their sole discretion, subtract from the Distributor’s Fee and pay directly to any vendor or other person owed funds
by the Distributor including, but not limited to, fees and expenses of the Distributor’s transfer agent, taxes and/or filing
fees.

 

		(b)	The “Contractors’ Deal Fees” with respect to each Accepted P.O.
shall be as follows:

 

		(i)	A transaction initiation and set-up fee in a sum equal to 3.0% of the Manufacturer’s Price
plus all other funds advanced by Contractor; plus

 

		(ii)	Commencing on and including the date 31 days following the Funding Date through and including the
Clearance Date for each particular Accepted P.O., a Product advance fee for each 10 day period (pro-rata for any period less than
10 days) equal to the product of (I) 1.25%, (compounding daily) multiplied by (II) the aggregate amount of all funds paid
and/or advanced by the Contractors in connection with an Accepted P.O. (including, but not limited to, the Manufacturer’s
Price, plus

 

		(iii)	A daily maintenance equal to 0.067% (compounding daily) of the aggregate amount of the sum of the
Manufacturer’s Price paid plus all other funds advanced by Contractors which remain outstanding for more than ninety (90)
days from the Funding Date through and including the Clearance Date; plus

 

		(iv)	In the event of a Delinquent P.O., a late payment fee equal to 0.067% (compounding daily) of the
outstanding portion of the P.O. Price multiplied by the number of days from the date an Accepted P.O. becomes a Delinquent P.O.
to and including the Clearance Date.

 

Notwithstanding
the foregoing, if the sum of the transaction initiation and set-up fee and the daily maintenance fee is not equal to or greater
than $1,000 with respect to an Accepted P.O., the minimum aggregate amount payable by Distributor to Contractor for the transaction
initiation and set-up fee and the daily maintenance fee with respect to such Accepted P.O. shall be $1,000.

 

    	 	11	 

     

    

  

(c) The
“Distributor's Fee” with respect to each Accepted P.O. shall be equal to the collected P.O. Proceeds with respect
to such Accepted P.O. less all sums payable pursuant to Section (a)(i)-(v) of this Section 7 and less 100% of
all term discounts or discounts for prompt payment and/or other discount.

 

(d) Sums
due to Contractors above all shall be paid as and when proceeds are received with respect to the applicable Accepted P.O. The Distributor’s
Fee will be paid not later than the fifth (5th) business day after the Clearance Date and after satisfaction of all
costs, fees and expenses having a higher priority than due and owing by the Distributor including, but not limited to, those provided
in this Section 7.

 

		8.	REPURCHASE; REASSIGNMENT.

 

(a) Contractor
shall have the right to require the Distributor to immediately purchase any Delinquent P.O. (and inventory of Products in the case
of a Canceled P.O.) for an amount equal to the full amount outstanding under the P.O. Invoice (or the P.O. Price in the case of
a Canceled P.O.). Any such payment by the Distributor shall be deemed to be P.O. Proceeds and shall be applied in accordance with
the priorities and terms set forth in Section 7 above.

 

(b) In
the event that Distributor makes all payments due on a Delinquent P.O. or Canceled P.O. pursuant to the provisions of Section
8(a), Contractor shall thereupon immediately assign to Distributor all of Contractors’ rights and interests in and to
the P.O. Invoice and the P.O. Proceeds and any Products in the possession of Contractor or Distributor with respect to such Delinquent
P.O. or Canceled P.O.

 

9.            CONTRACTORS’
EXPENSES. Immediately upon Contractors’ demand, Distributor shall pay or reimburse Contractor for all Contractors’
Expenses. “Contractors’ Expenses” include, but are not limited to, all reasonable expenses, fees,
and costs incurred by Contractor in connection with the negotiation of creation of and performance of this Agreement and the other
Transaction Documents and each of the transactions contemplated hereby
and thereby, including without limitation, the fees and expenses of Contractors’ Agent, if any, insurance and credit insurance
premiums, audit costs, attorney's fees, Contractors’ travel expenses, Contractors’ due diligence, Contractors’
Bank Account and such other charges and filing fees incurred by the Contractors. Contractors’ demand for payment of Contractors’
Expenses will be made in writing and will include reasonable documentation of the expenses for which reimbursement is demanded.

 

10.            SECURITY
INTERESTS; LIENS. As security for the performance by the Distributor of each and all of its obligations under this Agreement and
the other Transaction Documents, Distributor hereby grants the following security interests and rights to the Contractors:

 

(a) A security interest in All Collateral (as defined below) in accordance with the provisions of the Security Agreement and
this Agreement, which security interest shall be senior to all Indebtedness of the Distributor including, but not limited to,
each person who has a security interest and/or Lien on any of the All Collateral including, but not limited to ____,
____, ____ (the “Subordinating Debt
Holders”), each of whom shall, no later than the date of this Agreement deliver to the Contractors’
executed copies of subordination agreements, in form and substance satisfactory to the Contractors, pursuant to which each
Subordinating Debt Holder shall subordinate each of their respective security interests in and Liens on any and all of the
All Collateral (the “Subordination Agreements”).

 

    	 	12	 

     

    

  

(b) The
right to set-off against any and all amounts due to the Distributor hereunder and/or in any other Transactional Document, against
any sums which are due to the Contractors which have become past due and delinquent under this Agreement and/or any other Transaction
Document.

 

(c) All
checks, notes, deposits, drafts, and other instruments of payment on account of or related to an Accepted P.O. hereby irrevocably
designate and appoint the Contractors (and all persons designated by the Contractor) as the Distributor’s true and lawful
attorney-in-fact and agent-in-fact and Contractor (or Contractors Representative) may, without notice to Distributor:

 

		(i)	At any time endorse by writing or stamping Distributor's names on any checks, notes, deposits,
drafts or other instruments of payment on account of, relating to, or representing the proceeds of an Accepted P.O., any other
assets of the Distributor or collateral described herein and/or the Collateral, as defined in the Security Agreement (collectively
"All Collateral"), which come into the possession of the Contractor or are under Contractors’ control
and deposit the same to the account of the Contractors for application to all sums due from the Distributor to the Contractors
hereunder and/or under any other Transaction Documents; and

 

		(ii)	At any time after the occurrence of an Event of Default pursuant to this Agreement and/or any of
the other Transaction Documents, in Distributor's or Contractors’ name, demand payment of, enforce payment of, exercise all
of Distributor's rights and remedies with respect to, settle, adjust, compromise, initiate and prosecute legal proceeding with
respect to, and otherwise take all actions with respect to All Collateral which are, in the Contractors’ sole discretion,
necessary or desirable in order to fulfill Distributor's obligations under this Agreement and other Transaction Documents and otherwise
realize the full economic value of All Collateral.

 

11.            WARRANTIES
AND REPRESENTATIONS OF DISTRIBUTOR. Distributor hereby makes the following warranties and representations to Contractors, each
of which is deemed a material inducement to the Contractors entering into and performing its obligations under the Agreement and
any other Transaction Document it is a party to, and each of which representations and warranties shall be deemed renewed and restated
as of each Acceptance Date of each Accepted P.O.:

 

(a) Distributor
is a corporation duly organized, validly existing, and in good standing under the laws of the state of Delaware, and is qualified
or licensed as a foreign corporation to do business in every location in which the laws require Distributor to be so qualified
or licensed;

 

 

    	 	13	 

     

    

  

(b) Distributor
has the right and power and is duly authorized and empowered to enter into, execute, deliver, and perform all of its obligations
and responsibilities in this Agreement and other Transaction Documents;

 

(c) The
execution, delivery, and performance by Distributor of this Agreement and all other Transaction Documents described herein does
not constituted a violation of any law, regulation, judgment, order, contract, charter, by-laws, or other instrument to which Distributor
is a party or is otherwise bound or subject;

 

(d) Distributor
is not in default under any loan agreement, mortgage, lease, trust deed or similar agreement relating to the borrowing of money
to which Distributor and/or any of its assets are otherwise bound;

 

(e) Each
P.O. submitted for assignment by the Distributor to the Contractors is a bona fide purchase order from the Customer named therein
and conforms in all respects to the representations contained in the Certificate, which Certificate is true and correct in all
respects;

 

(f) The
Distributor shall at all times maintain such types and amounts of insurance coverage (including without limitation credit insurance)
with respect to Distributor's business operations, the Premises, the Products located upon the Premises and as set forth in any
Accepted P.O. and such other insurance as Contractors may from time to time reasonably require; such insurance to name the Contractors
as the insured Party in the manner and to the extent required by Contractors from time to time and, upon the failure to maintain
such coverage, Contractors may purchase the same and the cost thereof shall be deemed a Contractors’ Expense;

 

(g) Except
for those set forth on Schedule I thereto, there are no Liens, judgments or claims affecting or relating to the Distributor
or any of All Collateral.

 

(h) Except
as set forth on Schedule II hereto, there are no suits, administrative proceedings, arbitration proceedings or other adversarial
proceedings or investigations pending or (to the best of Distributor’s knowledge) threatened against Distributor.

 

(i) The
Distributor is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) and the Distributor is current in its filing obligations under the 1934 Act, including, without
limitation, as to its filings of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (collectively,
the “Public Reports”).  The Public Reports, at the time filed with the SEC, did not contain any untrue
statement of a material fact or omit to state any fact necessary to make any statement therein not misleading.  All financial
statements included in the Public Reports (the “Financial Statements”) have been prepared in accordance GAAP
applied on a consistent basis throughout the periods indicated and with each other, except that unaudited Financial Statements
may not contain all footnotes required by generally accepted accounting principles.  The Financial Statements fairly present,
in all material respects, the financial condition and operating results of the Distributor as of the dates, and for the periods,
indicated therein, subject in the case of unaudited Financial Statements to normal year-end audit adjustments.

 

    	 	14	 

     

    

  

(j) Distributor
has duly filed all federal, state, county, local, and foreign income, excise, sales, customs, property, withholding, social security
and other tax and information returns and reports required to be filed by it to the date hereof, or in the alternative, has obtained
extensions for filing pursuant to established procedures, and has paid or made provision for payment of all taxes (including interest
and penalties) due and payable. Distributor has no material liability for any taxes of any nature whatsoever, except for approximately
$90,000 due to the State of New Jersey for prior payroll taxes.

 

(k) Distributor
has no Subsidiaries and without the express prior written consent of the Contractors, will not establish any Subsidiaries.

 

(l) Since the
date of the latest audited Financial Statements included in the Public Reports, except as specifically disclosed in a subsequent
Public Report filed with the SEC prior to the date hereof: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a material adverse effect on the Distributor, its business and/or its assets,
(ii) the Distributor has not incurred any Indebtedness and/or other liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (B) liabilities not required
to be reflected in the Distributor’s Financial Statements pursuant to GAAP or disclosed in Public Reports pursuant to SEC
rules and/or regulations, (iii) the Distributor has not altered its method of accounting, (iv) the Distributor has not declared
or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock, except a quarterly stock dividend on its Series G Convertible Preferred
Stock and (v) the Distributor has not issued any equity securities to any officer, director or affiliate, except pursuant to existing
Distributor stock option plans and/or disclosed in its Public Reports. The Distributor does not have pending before the SEC any
request for confidential treatment of information.  Except for the entering into and the performance by the Distributor of
this Agreement and the other Documents, no event, liability, fact, circumstance, occurrence or development has occurred or exists
or is reasonably expected to occur or exist with respect to the Distributor or its business, properties, operations, assets or
financial condition, that would be required to be disclosed by the Distributor under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at least one trading day prior to the date that this
representation is made.

 

(m)  Except with
respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Distributor confirms
that neither it nor any other person acting on its behalf has provided either of the Contractors or its agents or counsel with
any information that constitutes material, non-public information. The Distributor understands and confirms that the Contractor
will rely on the Transaction Documents, the information included therein including, but not limited to, the foregoing representation
and warranty and the Public Reports in effecting the transactions contemplated in the Transaction Documents.  All of the disclosure
furnished by or on behalf of the Distributor to the Contractor in the Transaction Documents and/or in the Public Reports regarding,
among other matters relating to the Distributor, its business and the transactions contemplated in the Transaction Documents, are
true and correct in all material respects as of the date made and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading. 

 

    	 	15	 

     

    

  

(n) The
execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby by the Distributor,
including, but not limited to, issuance of the Exchange Notes for the Prior Notes, all Distributor’s Notes, the issuance
of shares of Common Stock upon conversion of any Notes and/or other instruments of the Distributor owned by one or both Contractors
and/or their respective Affiliates, including, but not limited to, ____,
the reservation of the shares of Common Stock required to be reserved pursuant to the TA Letter and the payment of all fees, Indebtedness
and/or other obligations owed by the Distributor to the Contractors and/or any of their respective Affiliates as provided herein
and/or therein (i) are within Distributor’s corporate powers and have been duly executed by the Distributor, (ii) have been
duly authorized by all necessary action by or on behalf of Distributor (and/or its shareholders to the extent required by law),
(iii) the Distributor has received all necessary and/or required governmental, regulatory and other approvals and consents (if
any shall be required), (iv) do not and shall not contravene or conflict with any provision of, or require any consents under (1)
any law, rule, regulation or ordinance, (2)Distributor’s organizational documents; and/or (3) any agreement binding upon
Distributor or any of Distributor’s properties except as would not reasonably be expected to have a material adverse effect
on the Distributor, and (v) do not result in, or require, the creation or imposition of any Lien and/or encumbrance on any of Distributor’s
assets or revenues pursuant to any law, rule, regulation or ordinance or otherwise, except to the Contractors and/or any of their
respective Affiliates including, but not limited to, ____, as provided
herein, in the Security Agreement and/or any other Transaction Documents. 

 

12.            PRODUCT
WARRANTIES. Distributor expressly assumes and agrees to make all product and service warranties (expressed or implied) to Customers
with respect to Products and further agrees to defend, indemnify and hold the Contractors harmless from and against any claims,
proceedings, suits, investigations, obligations, costs, or expenses (including all reasonable attorney's fees and legal expenses)
with respect to all express or implied warranties in connection with the Products

 

13.            AUDIT
RIGHTS. Distributor shall deliver to Contractors (or if a Contractors’ Agent (as defined in Section 20), has been
appointed, such deliveries shall be made directly to such Contractors’ Agent), monthly financial statements, aged accounts
receivable, aged accounts payable, and Distributor's and Contractors’ inventory schedules within ten (10) business days following
the end of each month during the term hereof. In addition, Contractors shall have the right (or if a Contractors’ Agent has
been appointed, the following rights shall be provided to the Contractors’ Agent), to, among other items, inspect bank accounts,
audit and copy any financial books, computer programs, and other data containing financial information in connection with the Distributor
at any time upon not less than 24 hours' prior written notice. Distributor agrees to prepare and maintain complete and accurate
business records with respect to the transactions contemplated by this Agreement and/or the other Transaction Documents.

 

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14.            RELATIONSHIP
OF THE PARTIES. The Distributor on the one hand and the Contractors on the other hand are independent contractors and are not (and
shall not be deemed to be) partners, joint venturers, agents or representatives of the other, except and only to the extent and
expressly provided in this Agreement and/or any other Transactional Document. Each of such Parties are exclusively responsible
for the conduct of their own respective business and are not (except and to the extent expressly set forth herein), authorized
to bind the other Parties in any manner whatsoever). Further in this regard, Distributor acknowledges that it has no ownership
interest in any P.O., work-in-progress, or Products in connection with an Accepted P.O., except and to the extent otherwise expressly
provided in this Agreement.

 

15.
            INDEMNICATION. Distributor agrees to indemnify, hold harmless
and defend each Contractor, each Contractors’ Agent and all of each such Contractor’s and each Contractors’ Agent’s
respective officers, directors, agents, managers, attorneys, representatives, stockholders, members, equity holders, debtholders,
affiliates, agents, employees and other related persons (each an “Indemnified Party” and, collectively,
the “Indemnified Parties”) from and against any loss, costs, (including reasonable attorney’s fees
and costs, as and when incurred), claims, suits or causes of action brought, threatened or incurred by or against each and all
Indemnified Parties by reason of any of the following:

 

(a) As
a consequence of any breach of this Agreement and/or any other Transaction Document by Distributor, any breach of a representation
and warranty made by Distributor hereunder and/or in any other Transaction Document, or the failure of any representation or warranty,
hereunder and/or in any other Transaction Document to be true in all respects;

 

(b) Any
investigation suit or other proceeding or threat of suit by any Manufacturer, Customer, supplier and/or vendor including, without
limitation, all claims under or with respect to any Products, Product warranties, P.O.s, Accepted P.O.s, Delinquent P.O.’s,
and Cancelled P.O.s, except with respect to any suit or claim arising solely and directly by reason of Contractors’ acts
or omissions to act which constitute a direct breach of Contractors’ express obligations hereunder;

 

(c) Any
suit or threat of suit by any of Distributor’s officers, directors, managers, successors, affiliates, agents, representatives,
employees, debtholders, equity holders, except with respect to any suit or claim arising solely and directly by reason of Contractors’
acts or omissions to act which constitute a breach of Contractors’ obligations hereunder;

 

(d) Any
product liability claims of any kind, including, without limitation, all claims under or with respect to Product warranties; and

 

(e) 
Environmental liability, if any, as a result of this Agreement or any transaction contemplated by or engaged in pursuant to or
on account of this Agreement.

 

		16.	TERM AND TERMINATION; EVENTS OF DEFAULT

 

(a) Term
of Agreement. This Agreement shall terminate upon the first to occur (the “Termination Date”), of (i) the date
of twelve (12) months following the date first appearing above; and (ii) at the Contractors’ sole discretion, upon an Event
of Default (as defined below).

 

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(b) Obligations
Upon Termination. Except for termination resulting from an Event of Default by the Distributor, on the Termination Date, each Party
shall remain liable to perform all matured obligations under this Agreement and the other Transaction Documents, which remain unperformed
as of the Termination Date as if this Agreement and the other Transaction Documents, remained in full force and effect. Upon termination
for any reason and upon completion of the foregoing obligations in the case of a termination resulting from an Event of Default
by the Distributor, all obligations hereunder shall terminate except the continuing obligations of the parties under Sections
11, 12, 13, 15, and 17 (a), (b), (c) hereof.

 

(c) Events
of Default; Remedies.

 

Any
of the foregoing shall constitute an Event of Default:

 

		(i)	If Distributor (A) fails to make any payment
due to the Contractors and/or any of their respective Affiliates including, but not limited to, ____,
on the date due, or (B) fails in any respect to perform any of its other agreements covenants and/or obligations hereunder and/or
in any other Transaction Document and such failure continues unremedied for a period of three (3) business days following Contractor
notice thereof, or (C) has made a representation and/or warranty which proves to be false or breaches a representation and/or warranty
made hereunder or in any other Transaction Document, or (D) files (or has filed against it) a petition (or otherwise initiates
proceedings) for bankruptcy, reorganization, receivership or other proceedings for the protection of debtors, or (E) fails to make
any payment due to any third party on or before the due date therefor if the failure to make such payment gives rise to or creates
(or if unremedied would give rise to or create) a Lien upon any Products or otherwise restricts and/or limits Contractors’
sale or disposition of the Products or any of them, or (F) has a judgment rendered against it in excess of $50,000, or (G) defaults
or any event of default occurs with regard to any material agreement with any third party (or with the passage of time and/or the
giving of notice, an event of default or a default would occur).

 

		(ii)	Without waiving or limiting any of Contractors’
other rights and/or other remedies in an Event of a Default and in addition to Contractors’ other rights and remedies (including,
but not limited to, its right of set-off pursuant to Section 10(b) hereof), pursuant to this Agreement and/or any other
Transaction Document, upon the occurrence of any Event of Default, Distributor shall be liable for immediate payment to Contractors
of all amounts due or to become due to Contractors hereunder, including, without limitation, Contractors’ Expenses, Contractors’
Deal Fees the Commitment Fee as well as all Exchange Notes, Distributor’s Notes, and/or other Notes owned by any of the Contractors
and/or their respective Affiliates including, but not limited to, ____.
Contractors shall further be entitled to reimbursement for all of its costs of collection, whether or not suit has been filed or
judgment entered, including, without limitation, reasonable attorneys' fees and expenses as and when occurred. All amounts owed
to Contractors pursuant to this Section 16(c) shall carry interest at the rate of 2% per thirty (30) days (or pro-rata if
any period is for less than thirty (30) days) (compounding daily) from the date of the Event of Default, or, in the case of Contractors’
costs of collection, from the date such costs are incurred through and including the date all funds owed to the Contractors are
paid and received by Contractors in immediately available funds by wire transfer pursuant to wiring instructions provided by Contractor
to Distributor.

 

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		(iii)	In the Event of Default by Distributor, Contractor shall further be entitled to exercise all the
rights and remedies of a secured party under the Uniform Commercial Code as in effect in New York or as otherwise provided under
the Security Agreement. The proceeds of any amount recovered by Contractor shall be applied, first, to the payment of Contractors’
reasonable costs and expenses in connection with the enforcement of Contractors’ rights and remedies hereunder; second, toward
the payment or satisfaction of all amounts owing Contractor hereunder and/or in any other Transaction Document, including interest
thereon; and third, any surplus to be paid to Distributor or as a court of competent jurisdiction may direct. In the case of a
deficiency, Distributor shall remain liable for such deficiency after such sale, with interest at the rate herein provided.

 

		17.	MISCELLANEOUS PROVISIONS.

 

(a) Governing
Law, Etc. This Agreement and the terms and conditions set forth herein, shall be governed by and construed solely and exclusively
in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties
hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under
this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution
hereof, the parties hereto covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located
in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally,
or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect
as if personally served upon them in New York, New York. The parties hereto expressly and irrevocably waive any claim that any
such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction
with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment
from the other parties hereto of all of its reasonable counsel fees and disbursements.

 

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(b) ENFORCEMENT,
ETC. DISTRIBUTOR AGREES THAT ANY FINAL JUDGMENT RENDERED AGAINST IT IN ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AS TO THE
SUBJECT OF SUCH FINAL JUDGMENT AND MAY BE ENFORCED IN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY LAW.

 

(c) WAIVER
OF RIGHT TO JURY TRIAL. THE PARTIES HEREIN ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT,
ANY OTHER AGREEMENT RELATED HERETO OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON DIFFICULT
AND COMPLEX ISSUES, AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

(d) Notices.
All notices required or permitted pursuant to this Agreement shall be in writing and either personally delivered, sent by facsimile
transmission (provided evidence of transmission is maintained and produced to show transmissions), email (provided a receipt of
such email is provided to the extent necessary to demonstrate such email was sent), Federal Express or similar overnight delivery
service, addressed to the respective addresses, email addresses or facsimile numbers of the Parties set forth on the last page
of this Agreement, or at such other addresses, emails or facsimile numbers as have from time to time been designated by like written
notice. Notices given in the manner prescribed herein shall be deemed given on the date sent or transmitted (as the case may be).

 

(e) Severability.
The paragraphs of this Agreement are severable, and in the event that any paragraph or portion of this Agreement is declared illegal
or unenforceable, the remainder of this Agreement will be effective and binding upon the parties.

 

(f) Waiver;
Entire Agreement. This Agreement and other Transaction Documents contain the entire understanding of the parties with respect to
the subject matter hereof, and supersedes all prior oral or written agreements, understandings, or arrangements. No waiver of or
modifications to the provisions of this Agreement and/or any other Transaction Document will be valid unless in writing and signed
by all parties. This Agreement and the other Transaction Document shall be binding upon and inure to the benefit of the parties
hereto, their successors, assigns and legal representatives.

 

(g) Assignment.
Distributor may not transfer or assign its rights or obligations hereunder without the prior written consent of the Contractors,
and any attempted transfer or assignment shall be null and void.

 

    	 	20	 

     

    

  

(h) Reservation
of Shares. No later than 180 days following the date hereof (the “Start Date”), the Distributor shall
deliver the executed TA Agreement to its then transfer agent, so that at all times commencing on the Start Date and as long as
either Contractor (or any of their respective Affiliates including, but not limited to, ____)
owns any shares of Common Stock, Notes, securities of the Distributor’s convertible, assignable and/or exchangeable into
shares of Common Stock, Distributor’s Notes, and/or Exchange Notes, (the “Common Stock”) the Distributor
shall take all action necessary (and/or reasonably requested by the Contractor) to, at all times have authorized, and reserved
out of its authorized but unissued shares of Common Stock for the purpose of issuance to the Contractors and any of their respective
Affiliates including, but not limited to, ____ upon conversions of
Notes by any such persons (“Conversion Shares”), no less than four hundred (400%) percent of the sum
of the maximum number of shares of Common Stock issuable upon conversion of the issued and outstanding Notes and all other securities
of the Distributor convertible, exercisable and/or exchangeable into shares of Common Stock owned by either Contractor and/or their
respective Affiliates including, but not limited to, ____, including,
but not limited to, the Class A Warrant to Purchase 2,5000,000 shares (the “Warrant Shares”), of Common
Stock ; Warrant No.: A-1; Date of Issuance: July 14, 2014 (the “7/14/14 Warrant”) (without taking into
account any limitations on the issuance thereof pursuant to the terms of the Notes, the 7/14/14 Warrant, and/or any other securities
of the Distributor) (the “Required Reserved Amount”). If at any time, and from time to time, following
the Start Date, the number of shares of Common Stock authorized (and reserved for issuance commencing on the Start Date), is not
sufficient to meet the Required Reserved Amount, the Distributor will promptly take all corporate action necessary to authorize
(and commencing on the Start Date, reserve) a sufficient number of shares, including, without limitation, calling a special meeting
of stockholders to authorize additional shares to meet the Distributor’s obligations under the 7/14/14 Warrant and the Notes,
in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number
of shares, and voting the management shares of the Distributor in favor of an increase in the authorized shares of the Distributor
to ensure that the number of authorized shares is sufficient to meet the Required Reserved Amount. The Distributor shall, no later
than the Start Date, initially reserve the Required Reserved Amount on its own books and records (the “Reserve”)
for the issuance of Conversion Shares and Warrant Shares and any other shares of Common Stock required to be issued by the Distributor
to the Contractor, which initial reservation shall be authorized by the unanimous written consent of the Distributor’s Board
of Directors delivered on the date hereof. From and after the Start Date of this Agreement through and including the date all of
the Distributors Indebtedness and all other obligations owed to the Contractor pursuant to the Transaction Documents and/or otherwise,
including, but not limited to, the Note, is paid and performed in full, confirmation of which must be obtained by in writing from
the Contractors, the Distributor shall (a) issue or cause its transfer agent to issue the Conversion Shares, Warrant Shares and
all other shares of Common Stock required to be issued to the Contractors or any of such persons’ broker only (subject to
the immediately following clause (b)), (b) issue or cause its transfer agent to issue shares of Common Stock to the Contractor
and/or any of their respective Affiliates including, but not limited to, ____,
or its broker under the Notes and the Warrants and/or other securities of this Company from sources other than the Reserve, unless
the Contractor delivers to the Distributor written pre-approval of such issuance from the Reserve, and (c) not reduce the Reserve
under any circumstances, unless the Contractor delivers to the Distributor written pre-approval of such reduction. The Distributor
shall immediately add shares of Common Stock to the Reserve to ensure that the Required Reserve Amount is in the Reserve at all
times. The Distributor shall increase the amount of shares of Common Stock in the Reserve upon receipt of written notice, which
may be in email form, by the Contractor (and/or its assigns) in order to ensure that the Reserve contains the Required Reserve
Amount. Notwithstanding to the contrary provided herein or elsewhere, if at any time the number of shares of Common Stock in the
Reserve, is less than the Required Reserved Amount, the Contractors and/or any of their respective Affiliates including, but not
limited to, ____, may send written notice to the Distributor’s
then transfer agent to increase out of the Distributor’s authorized but unissued shares of Common Stock such number of additional
shares of Common Stock so the Reserve consists of at least the Required Reserve Amount, provided, that the number of shares of
Common Stock in the Reserve shall never be decreased or used for any other purposes other than for issue to the holder upon each
conversion by the holder of the Notes into Conversion Shares and the 7/14/14 Warrant into Warrant Shares. As a condition to the
Contractors executing this Agreement, all actions required by the Distributor in this Section 17(h) shall be approved by
the unanimous written consent of the Distributor’s Board of Directors which shall be delivered to the Contractors on the
execution of this Agreement.

 

    	 	21	 

     

    

  

(i)    Reporting
Status. Until the date on which the Contractors shall have sold all of their respective Conversion Shares, Warrant Shares and none
of the Notes and/or any portion of the 7/14/14 Warrant are outstanding (the “Reporting Period”), the Distributor
(i) shall timely file all reports required to be filed by the Distributor with the SEC pursuant to the 1934 Act within the time
periods required by the SEC including all applicable extension periods, (ii) the Distributor shall not terminate its status as
an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer
require or otherwise permit such termination, and (iii) shall at any time and from time to time file, upon request of the Contractors,
a Current Report on Form 8-K to publicly disclose any material, non-public information the Contractors reasonably believe they
are in possession of (or the Distributor reasonably believes the Contractors are in possession of); and (iv) within two (2) business
day from the execution of this Agreement file a Current Report on Form 8-K disclosing this Agreement, the other Transaction Documents
and/or any other material, non-public information that the Contractors reasonably believe they might be in possession of.

 

(j)    Further
Assurances. From and after the date hereof, each party will execute all documents and take such further actions as the other may
from time to time reasonably request in order to carry out the transactions provided for herein and in the other Transaction Documents
and accomplish the purposes contemplated hereby and thereby.

 

(k)    Publication.
Contractors each shall have the right to publicize (by "tombstone" or comparable publication) the Purchase Order Assignment
Program evidenced hereby (including the date and size of the facility).

 

(l)    Counterparts;
Facsimile and Email Delivery. This Agreement may be executed in one or more counterparts, each of which taken together shall constitute
one and the same instrument, admissible into evidence. Delivery of an executed counterpart of this Agreement by email and/or facsimile
shall be equally as effective as delivery of a manually executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by facsimile or email shall also deliver a manually executed counterpart of this Agreement, but the
failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement
and shall not be considered a breach or violation of this Agreement.

 

    	 	22	 

     

    

  

(m)    No Issuances. Unless and until (i) prior to the Start Date, there are sufficient authorized but unissued shares of Common
Stock to issue upon full conversion of all Notes issued and outstanding and the full exercise of the 7/14/14 Warrant, and (ii) following
the Start Date, the amount of shares of Common Stock authorized and reserved is sufficient at all times for the express purposes
set forth Section 17(h), then no securities of the Distributor may be issued other than to the Contractors’ and their
respective Affiliates including, but not limited to, ____.

 

18.         RIGHT
OF CONTRACTORS TO BE PAID IN DISTRIBUTOR’S NOTES. Any funds owed to the Contractors pursuant to this Agreement and/or any
of the other Transaction Documents, shall, in the sole discretion of the Contractors, be paid by the Distributor through the issuance
to the Contractors of Distributor’s Notes.

 

19.         USERY
SAVING CLAUSE; INDEPENDENT ADVICE.

 

(a)          Notwithstanding
anything to the contrary provided in this Agreement, or elsewhere, the Contractors shall never be entitled to charge, receive or
collect, nor shall amounts received by the Contractor be credited as interest (and/or deemed interest) so that the Contractor shall
be paid by the Distributor, a sum greater than interest (and/or deemed interest) at the maximum nonusurious interest rate, if any,
that at any time may be contracted for, charged, received, or collected the Distributor’s financial obligations to the Contractors
under this Agreement and/or under any other Transaction Document, under applicable law (the “Maximum Rate”).
It is the intention of the Distributor and the Contractor that this Agreement and the other Transaction Documents comply with all
applicable law. If the Contractor ever contracts for, charges, receives, or collects, anything of value from the Distributor which
is deemed to be interest (and/or deemed interest) under applicable law, and if the occurrence of any circumstance, event or contingency,
should cause such interest (and/or deemed interest) to exceed the Maximum Rate, any such excess amount shall be applied to the
reduction of any Notes and if all of such Notes are already paid in full, any remaining excess shall be deducted from funds owed
to the Contractors pursuant to this Agreement and the other Transaction Documents with any excess being paid to the Distributor.
In determining whether or not interest (and/or deemed interest) paid or payable exceeds the Maximum Amount, the Distributor and
the Contractors shall, to the maximum extent permitted by applicable law, (i) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest (and/or deemed interest), (ii) amortize, prorate, allocate and spread the total amount of
interest (and/or deemed interest) throughout the full term of the Notes so that the actual rate of interest (and/or deemed interest)on
account of such indebtedness is uniform throughout the term of the Notes and/or (iii) allocate interest (and/or deemed interest)
between portions of any notes and/or other obligations, to the end that no such portion shall bear interest (and/or deemed interest)
at a rate greater than that permitted by applicable law. The terms and provisions of this Section 19 shall control and supersede
every other conflicting provision of all agreements between the Distributor and the Contractors.

 

    	 	23	 

     

    

  

(b)          The
Distributor hereby acknowledges, represents and warrants that it (i) has been advised by the Contractor to seek the advice of its
legal, tax and accounting experts in the connection with the Transaction Documents and the transactions set forth in the Transaction
Documents, as to, among other items, the tax and accounting effects thereof, and (ii) it has had the opportunity and has obtained
the advice of legal counsel of the Distributor’s choice in connection with the transactions set forth in the Transaction
Documents.

 

20.         CONTRACTORS
RIGHT TO APPOINT AGENTS

 

(a)          The
Contractors shall, in their sole discretion, have the right at any time and from time to time, to appoint an agent (a “Contractors’
Agent”) and/or any substitute Contractors’ Agent (and deliver written notice to the Distributor of the name,
address, telephone number, email address and other contact information of the Contractors’ Agent as well as the scope of
the Contractors’ Agent’s powers), to act for and on behalf of the Contractors pursuant to and in accordance with this
Section 20. With regard to a Contractors’ Agent appointed by the Contractors pursuant to this Agreement, any such
Contractors’ Agent can take such actions on Contractors’ behalf and to exercise such powers as are delegated to the
Contractors’ Agent by the terms hereof or otherwise in writing from the Contractors, together with such actions and powers
as are reasonably incidental thereto. The provisions of this Section 20 are solely for the benefit of the Contractors’
Agent and the Contractors, and the Distributor shall not have rights as a third party beneficiary of any of such provisions.

 

(b)          The
person serving as the Contractors’ Agent hereunder shall have the same rights and powers in its capacity as Contractors’
Agent that the Contractors have and may exercise the same as though it were not the Contractors’ Agent and the term “Contractor”
or “Contractors” shall, unless otherwise expressly indicated herein or unless the context otherwise requires, include
the person serving as the Contractors’ Agent hereunder in its individual capacity. The Contractors’ Agent, in its capacity
as agent for the Contractors, may take such actions as expressly provided in writing to the Contractors’ Agent and the Distributor
by the Contractors.

 

(c)          The
Contractors’ Agent shall not have any duties or obligations except those expressly set forth herein and in the other Transaction
Documents. Without limiting the generality of the foregoing, the Contractors’ Agent:

 

(i)          shall
not be subject to any fiduciary or other implied duties, regardless of whether a breach or violation of this Agreement and/or any
other Transaction Document has occurred and is continuing; and

 

(ii)         shall
not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Transaction Documents that the Contractors’ Agent is required to exercise as
directed in writing by either or both Contractors, if any; provided, however, that the Contractors’ Agent shall
not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Contractors’ Agent
to liability or that is contrary to any Transaction Document or applicable law; provided, further, the Contractors’
Agent shall not be liable for any action taken or not taken by it (x) with the consent of or as the Contractors’ Agent shall
believe in good faith shall be necessary under the circumstances or (y) in the absence of its own gross negligence or willful misconduct.

 

    	 	24	 

     

    

  

(d)          The
Contractors’ Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet
website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper person. The Contractors’ Agent also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper person, and shall not incur any liability for relying thereon.

 

(e)          The
Contractors’ Agent may at any time give notice of its resignation to the Contractors and the Distributors.

 

21.         FUNDS
FROM PURCHASE OF DISTRIBUTOR’S NET OPERATING LOSS CARRY FORWARD. The Distributor has applied to the State of New Jersey to
receive a tax voucher from the State of New Jersey for approximately $810,000 representing the purchase price requested by the
Distributor to be paid by a third party purchaser to purchase the Distributor’s net operating loss carry-forward for the
year ending December 31, 2014. The Distributor agrees that it will immediately inform the Contractors in writing when such payment
(or if it comes in installments, each time it receives installment payments) is received by the Distributor, and each such payment
shall be forwarded and deposited in its entirety into the Contractors; Bank Account and upon receipt by the Contractors, the Contractors
shall apply all such funds, at their sole option, to pay off any obligations owed to them and/or any of their respective Affiliates
including, but not limited to, ____, under the Transaction Documents
including, but not limited to, pursuant to any Notes, with any remaining funds to be provided to the Distributor. 

 

22.         THE
CONTRACTORS. Except if and to the extent otherwise provided in writing by a Contractor to the Distributor and the other Contractor,
and notwithstanding anything to the contrary provided herein and/or in any other Transaction Document, the Distributor may rely
on any advice, notice, request, document, letter, consent, statement, instructions, direction or other message delivered by either
Contractor to the Distributor in writing of any kind and such will be binding on both Contractors, as the Contactors have agreed
that each Contractor has the power with respect to this Agreement and the other Transaction Documents to make decisions for and
on behalf of and bind the other Contractor; provided, however, neither Contractor shall be able to change the terms
of any Note or any other securities in the name of the other Contractor or change the ownership thereof or change any other term
of any other Transaction Document to make such term more favorable to such Contractor to the detriment of the other Contractor
without the express written consent of such other Contractors.

 

    	 	25	 

     

    

  

23.         CONFIDENTIALITY.
The Parties acknowledge and agree that during the term of this Agreement the Contractors on the one hand and the Distributor on
the other, may obtain information relating to each other’s business of a confidential and/or proprietary nature (“Confidential
Information”). Such Confidential Information may include, but is not limited to, future product releases, names of
vendors including, but not limited to Manufacturers, trade secrets, know-how, data, pricing, discount schedules, lists of customers,
financial information and any sales and marketing plans. The Parties agree that each shall at all times, both during the term of
this Agreement and at all times thereafter, keep and hold such Confidential Information in the strictest confidence, and shall
not use such Confidential Information for any purpose, other than as may be reasonably necessary for the performance of their respective
obligations as provided herein and in the other Transaction Documents without the other’s prior written consent. Information
shall not be considered to be Confidential Information if (1) it has been published or is otherwise readily available to the
public other than by a breach of this Agreement; (2) it has been rightfully received from a third party without confidential
limitations; (3) it has been independently developed by personnel or agents having no access to Confidential Information;
or (4) it was known prior to its first receipt from the other Party. The Parties agree, however, that each may disclose Confidential
Information to their respective representatives, agents, legal counsel and/or employees solely for the purposes of exercising their
respective rights or performing their respective obligations under this Agreement and the other Transaction Documents. A disclosure
of Confidential Information (i) in response to a valid order by a court, subpoena or other governmental and/or regulatory
body, (ii) otherwise required by law, or (iii) necessary to establish and/or enforce a Party’s rights and remedies
under this Agreement and/or any other Transaction Documents, shall not be considered to be a breach of this Agreement or a waiver
of confidentiality for other purposes; provided, however, that a Party shall provide prompt written notice thereof
to the other Parties to enable such other Parties to seek a protective order or otherwise prevent such disclosure.

 

[SIGNATURE
PAGES TO FOLLOW]

 

    	 	26	 

     

    

   

This Agreement
has been executed in New York, New York on the day and year first above written.

  

	DISTRIBUTOR:	CONTRACTORS:
	 	 
	INERGETICS, INC.	[____]	

 

 

	By:	 	 	By:	 
	 	Name:  Michael James	 	 	Name:  
	 	Title: Chief Executive Officer	 	 	Title:

  

	Address:	 	 	Address:	 
	 	 	 
	 	 	 	 	 
	Facsimile: 	 	 	Facsimile:	 
	 	 	 	 	 
	Email: 	 	 	Email:	 
	 	 	 	 
	 	 	[____]	

  

	 	 	By:	 
	 	 	 	Name:  
	 	 	 	Title:

  

		 	 	Address:	 
	 	 	 
	 	 	 	 	 
		 	 	Facsimile:	 
	 	 	 	 	 
		 	 	Email:	 

   

    	 	27	 

     

    

  

EXHIBIT A

 

PURCHASE ORDER
PACKAGE CERTIFICATE

 

This
Certificate is executed by ___________________________, who is the ______________________ of INERGETICS, INC., a Delaware corporation
("Distributor"), in connection with the Master Purchase Order Agreement dated as of September 1, 2015, (the "Agreement")
by and among ____ and ____
(collectively, "Contractors")

 

This
Certificate is being delivered by the Distributor to the Contractors pursuant to the Agreement to provide information to the Contractors
to assist the Contractors in determining whether to, among other items, accept the assignment from the Distributor of a P.O. and
provide the Distributor with certain funds, all as provided in, pursuant to and in accordance with the Agreement.

 

The undersigned
certifies to Contractors that all of the information contained in this Certificate is true, complete and accurate in all respects
and does not omit any information necessary to make the information contained herein in light of the circumstances upon which information
is given true, complete and accurate in all respects; and this representation and warranty is made to the Contractors to induce
Contractors to accept the assignment of a P.O. and to pay the Manufacturer’s Price for the Products and make advances in
accordance with the Agreement in connection with such P.O.

 

All capitalized
terms set forth herein and not otherwise defined herein, shall have the meanings set forth in the Agreement.

 

all
requests by the Distributor to the Contractors for the Contractors to accept an assignment of a P.O. shall only be delivered to
the Contractors on TUESDAYS AND Thursdays of each week; and any such requestS received following a Thursday will be TREATED by
Contractors AS HAVING BEEN RECEIVED ON the next TUESDAY.

 

NO P.O. MAY BE
SUBMITTED BASED UPON INDICATIONS OF INTEREST BY A CUSTOMER; ALL P.O.’s SUBMITTED TO THE CONTRACTORS FOR APPROVAL MUST BE
ACTUAL AND TO THE BEST KNOWLEDGE OF THE DISTRIBUTOR, P.O.’s THAT THE CUSTOMER INTENDS TO HONOR AND BE BOUND BY.

 

THE DISTRIBUTOR
IS REQUESTING THE CONTRACTORS PROVIDE TO THE DISTRIBUTOR THE FOLLOWING DOLLAR AMOUNT OF FUNDS RELATING TO THE P.O.:

 

		(i)	Name of Customer set forth on the P.O. _______

 

		(ii)	Date of P.O. _______

 

    	 	1	 

     

    

  

		(iii)	Distributor is requesting $_____ from Contractors

 

		(iv)	The P.O. Price is $ _________

 

		(v)	Such $ ________ represents _____ % of the P.O. Price

 

		(vi)	Of such above requested amount, please send (x) $_____
directly to the Manufacturer named and in accordance with the information provided below, which $______, represents 50% of the
Manufacturer’s Price for the Products set forth in the P.O. (y) the remaining 50% of the Manufacturer’s Price directly
to the Manufacturer within five (5) business days of the Manufacturer’s Shipping Notice provided, such amount shall
not be treated as being paid by the Contractors until the date the balance (or any lesser portion), of the Manufacturer’s
Price is paid by the Contractors to the Manufacturer, and (z) the remaining funds to the Distributor in accordance with the
information provided below, but subject to Section (viii) immediately below.

 

		(vii)	As provided in the Agreement, the undersigned acknowledges,
understands and agrees that (x) if the above requested amount of funds is provided by the Contractor to the Distributor,
all of the funds sent directly to the Distributor by the Contractors shall only be used for the purposes set forth in Section
3(b)(i)(C) of the Agreement, and (y) in no event shall such requested amount exceed (A) 85% of the P.O. Price and/or
(B) when aggregated with all other funds provided to the Distributor (directly and/or indirectly by way of direct payment by the
Contractors to the Manufacturer or otherwise), outstanding under the Agreement and/or the other Transaction Documents including,
but not limited to, the aggregate principal amount of Exchange Notes, exceed $1,000,000.

 

		(viii)	Such requested amount will only be provided if, among other conditions, all of the required conditions
set forth in the Agreement have occurred and no Event of Default has occurred (or with the passage of time would occur) and is
continuing.

 

1.             Customer
Information

 

(a)          Attached
is a purchase order for Products (the “Purchase Order”) number: _______ ; dated: _______________, 201__; in
the total amount of: $________; and from the following customer ("Customer"), and Distributor has received a bona
fide indication of interest from the following Customer.

 

	Name:	 	 
	Address:	 	 
	Person in charge:	 	 
	Phone Number:	 	 
	Facsimile:	 	 
	Email:	 	 

 

    	 	2	 

     

    

  

(b)          Attached
is a true and complete credit history, payment history and credit report of the Customer.

 

(c)          The
Purchase Order is (check one):

 

______   Assignable
to the Contractors by Distributor without Customer's consent; or

 

		______	Not assignable without Customer's consent, but attached
is the consent of the Customer to assignment to Contractor;

 

		______	Not assignable, but the proceeds of the Purchase Order
are assignable; or

 

2.          Product
Information

 

		(a)	Original (or a true, accurate and complete copy of) Purchase
Order - attached.

 

		(b)	Identification of "Product(s)":

 

                     
———————————————————-

 

                     
———————————————————-

 

                     
———————————————————-

 

		(c)	Quantity of Product Ordered:

 

                     
———————————————————-

 

                     
———————————————————-

 

                     
———————————————————-

 

		(d)	Specifications of Product:

 

                     
———————————————————-

 

                     
———————————————————-

 

                     
———————————————————-

 

    	 	3	 

     

    

  

		3.	Price and Delivery Information

 

		(a)	Aggregate Purchase Order Price: __________________

 

		(b)	Price per Unit of Product: __________________

 

		(c)	Delivery Date ("P.O. Delivery Date")
__________________

 

		(d)	Terms as to liability for shipping cost, insurance, "process
and hold", risk of loss, etc.:

 

                     
———————————————————-

 

                     
———————————————————-

 

                     
———————————————————-

 

		4.	Manufacturer’s Information

 

		(b)	Name of the Manufacturer:

 

———————————————————-

 

———————————————————-

 

———————————————————-

 

		(c)	Address of Manufacturer’s Facility where Manufacturing
of Products will occur:

 

———————————————————-

 

———————————————————-

 

———————————————————-

 

		(d)	Contact Person at Such Address:

 

(i)          Name:
_____________________________

 

(ii)         Title:
______________________________

 

(iii)        Cell:
_______________________________

 

(iv)        Landline:
___________________________

 

(v)         Email:
______________________________

 

(vi)        Facsimile:
___________________________

 

    	 	4	 

     

    

  

		(e)	Contact Person at Such Address:

 

(i)          Name:
_____________________________

 

(ii)         Title:
______________________________

 

(iii)        Cell:
_______________________________

 

(iv)        Landline:
___________________________

 

(v)         Email:
______________________________

 

(vi)        Facsimile:
___________________________

 

		(f)	Aggregate Manufacturer’s Price to be Paid:

 

U.S. $_________________

 

		(g)	Due Date and the Amount of each Installment Payment for
the Manufacturer’s Price is due:

 

(i)     $____________
    on ______________; and

 

(ii)     $____________    on
______________;

 

		(h)	How Manufacturer’s Price is to be Paid [CHECK
ONE]:

 

(i)           ̈
Wire Transfer

 

(ii)          ̈
Check

 

 

(i)          Wiring
Instructions of Manufacturer if Payment of Manufacturer’s Price is to be made by Wire:

 

———————————————————-

 

———————————————————-

 

———————————————————-

 

    	 	5	 

     

    

 

(j)        Attached
hereto is a copy of the Manufacturer’s Pricing Quote for the Manufacturer’s Price for the Purchase Order

 

(k)       Date
Manufacturer will start manufacturing Products:

 

________________________________

 

(l)        Date
Manufacturer will have completed manufacturing:

 

________________________________

 

(m)      Estimated
date Manufacturer will ship Products:

 

________________________________

 

(n)       Manufacturer
will Ship Products to [CHECK ONE]:

 

(i)               ̈        The
Distributor

 

(ii)              ̈        The
Customer (if to Customer and the Customer’s address for delivery of Product is different than that provided in Section
1(a) of this Certificate, provide below Customer’s address for delivery of the Products:

 

———————————————————

 

———————————————————

 

———————————————————

 

		5.	Production Information

 

		(a)	Brief description of Production Processes and Requirements:

 

———————————————————-

 

———————————————————-

 

———————————————————-

 

		(b)	Cost of Production:

 

		(c)	Units of Product per day:

 

		(d)	Duration of Production Run to Manufacture Products
for the P.O. Order:

 

    	 	6	 

     

    

  

6.             Gross Margin

 

 Here
is the computation of Projected Net Gross Margin before depreciation, including, without limitation,  Manufacturer’s Price
(which includes all of cost of materials, packaging, shipping and Distributor's direct costs:

 

7.             Assignment
of Purchase Order

 

 Attached
is an Assignment of the Purchase Order, duly executed by authorized officers of Distributor.

 

8.           Distributor represents, warranties, agrees and covenants that, among the other representations, warranties, agreements and covenants
set forth in the Agreement, the Security Agreement and/or any other Transaction Document, that none of the Products, work-in-process
or inventory is subject to a Lien and/or other security interest of any person other than the Contractors and/or any of their respective
Affiliates including, but not limited to, ____; and the Distributor
shall inform the Contractors immediately of, and shall take any and all actions to prevent a Lien and/or security interest being
placed on or against, any Products, work-in-process or inventory at any time as long as the Contractors are owed any funds related
to such Products, work-in-process or inventory. 

 

9.            Attached
hereto is a fully executed, dated and binding Warranty/Release Waiver (as required pursuant to and defined in Section 3(b)(vii)
of the Agreement), of the Customer.

 

Dated: ___________________, 2015

 

INERGETICS, INC.

 

	By:	 	 
	 	Name:  Michael James	 
	 	Title:  Chief Executive Officer	 

 

    	 	7	 

     

    

  

EXHIBIT A (continued)

ACCEPTANCE OF
PURCHASE ORDER CERTIFICATE

 

The foregoing Purchase
Order Certificate, as prepared and delivered by Distributor, is hereby accepted and approved.

 

This Acceptance
of Purchase Order Certificate is executed and dated by [CHECK ONE]

 

		 ̈	The Duly Appointed Agent of the Contractors (the “Agent”)

Or

		 ̈	One of the Contractors

 

A.           If
the Agent is signing for and on behalf of the Assignors, the Agent must sign, complete and date the following:

 

___________________________________

Signature of Agent

 

___________________________________

Name of Agent (Print)

 

___________________________________

Social Security
Number of Agent

 

Address of Agent:

 

___________________________________

 

___________________________________

 

		B.	If one of the Assignors is signing for the Assignors, such Assignor must check the proper box below, execute, complete and
date the following:

 

Assignor signing for the Assignors
[CHECK ONE] 

 

		 ̈	____ (an Assignor)

Or

		 ̈	____ (an Assignor)

 

	By:	 	,
	 	Name:	 
	 	Title:	 

 

Dated:

___________, 201__

 

    	 	8	 

     

    

 

EXHIBIT A (continued)

ASSIGNMENT OF
PURCHASE ORDER

 

FOR
VALUE RECEIVED, INERGETICS, INC., a Delaware corporation ("Assignor") hereby assigns, transfers and delivers to ____,
and ____ ("Assignees") all of Assignor's right, title and
interest in, to and under that certain Purchase Order, identified as follows, for the purposes, and pursuant to the terms and conditions
of that certain Master Purchase Order Purchase Agreement, dated as of September 1, 2015, between Assignor and Assignees:

 

Assignor's P.O.
No.:_______________

 

Customer Name:_____________________

 

P.O. Date:_________________________

 

INERGETICS, INC.

 

	By:	 	 
	 	Name:  Michael James	 
	 	Title:  Chief Executive Officer	 

 

    	 	9	 

     

    

 

EXHIBIT B

DISTRIBUTOR'S
SPECIFICATIONS

 

The
following are performance specifications, obligations, agreements and covenants (collectively the "Distributor’s
Specifications") required of Distributor in connection with its obligations under the Purchase Order Assignment Agreement
(the “Agreement”), to which this Exhibit B is attached. All capitalized terms used but not defined herein
shall have the meaning set forth in this Agreement.

 

1.
To deliver to each Customer a Purchase Order Acknowledgement on such form as Contractor may accept directing that payment of each
P.O. Invoice be made to Contractor or the Contractors’ Bank (if any).

 

2.
To cooperate with Contractor and the Manufacturer concerning the Manufacturing of Products pursuant to an Accepted P.O.

 

3.
To notify Contractor immediately upon the receipt of Products at the Premises or delivery of the products to the Customer’s
Premises. Upon such delivery to the Distributor’s Premises, to inspect the quality and quantity of Products and to notify
Contractor of any deficiencies.

 

4.
To permit Contractors access to the Distributor’s Premises during normal business hours for the purpose of inspecting, safeguarding,
and otherwise observing and overseeing the storage of Products.

 

5.
To take all actions necessary to ensure the proper manufacturing of Products and the shipment thereof to Customers in accordance
with Accepted P.O.'s, including without limitation, processing, warehousing, shipping and insuring Products in accordance with
the specifications set forth in the applicable Accepted P.O., and to deliver the same to the Customer on or before the P.O. Delivery
Date.

 

6.
To maintain and supply sufficient quantity and quality of equipment, Products, labor and facilities in order to perform each of
its obligations described in this Exhibit "B".

 

7.
To maintain all inventories of Products in such segregated locations upon the Premises as the Contractor may approve; to properly
identify such Products as being the property of the Contractor and further identify the same by the P.O. and the Customer for which
such Products relate; and to implement such commercially reasonable security procedures and devices as Contractor may require for
the preservation and segregation of Products, including without limitation, the construction and maintenance of secured cages and
storage rooms for such Products. To not ship or otherwise release any Products except with the prior written consent of the Contractors.

 

8.
To ship all P.O. Inventory by such date, by such means, and under such terms as required pursuant to the applicable P.O. and to
deliver the P.O. Inventory on or before the P.O. Delivery Date. Distributor shall further provide Contractors with written notice
of each shipment of P.O. Inventory immediately following shipment thereof.

 

    	 	10	 

     

    

  

9.
To prepare and deliver to the Contractors each P.O. Invoice immediately following shipment of the P.O. Inventory.

 

10.
To fully insure in the name of the Distributor and the Contractors all P.O. Inventory during shipment to Customers in amounts,
with carriers and on terms and conditions acceptable to Contractor.

 

11.
To direct all Customers to make payment with respect to a P.O. Invoice to the Contractors’ Bank Account and to take no actions
and make no statements which direct (or have the effect of causing) any P.O. Customer to make any payment with respect to any P.O.
Invoice to anyone other than to the Contractors’ Bank Account.

 

12.
Except as provided in Section 13 below, to not accept any payment (including rebates, set-offs, and other Customer adjustments)
with respect to any P.O. Invoice other than through the Contractors’ Bank Account.

 

13.
To receive and hold in trust for the sole and exclusive benefit of Contractors all sums and instruments representing payment of
any P.O. Invoice and all proceeds which for any reason come into the possession of Distributor, its agents, representatives or
any other party acting on behalf of Distributor, and promptly to deliver or cause delivery of such sums to the Contractor.

 

14.
To maintain in the name of Distributor and Contractors general comprehensive liability insurance, with extended coverage and coverage
against theft and product liability and such other insurance and coverages as may be commercially reasonable with exclusions, with
carriers, and on terms and conditions that may be acceptable to Contractors in their sole discretion.

 

15.
To deliver to Contractors a list of unpaid accounts receivable relating to P.O. Invoices as of last day of the preceding calendar
month, such list to be delivered by the 10th day of the next succeeding month and certified as complete and accurate by a duly
authorized officer of Distributor.

 

16.
To not pledge any of its assets or cause or permit any Lien or security interest to be taken in any of its assets and/or the All
Collateral, except such Liens as are described on Schedule "I" of this Agreement or are otherwise approved in
writing by Contractor.

 

17.
To provide Contractors with written notice immediately upon (i) the filing or threat of filing of a bankruptcy petition by or against
Distributor, (ii) the initiation of foreclosure proceedings or other similar action against Distributor or any of its assets, (iii)
a request or demand made upon Distributor to make, or for any reason Distributor makes, an assignment for the benefit of its creditors,
or (iv) Distributor becomes unable to pay its bills in the ordinary course of business as they become due.

 

18.
To immediately notify Contractors of any pending or threatened litigation, administrative proceeding, arbitration, or governmental
investigation concerning or relating to Distributor or any goods, services or assets that are the subject of an Accepted P.O. or
are pledged as Collateral pursuant to the Security Agreement.

 

    	 	11	 

     

    

 

EXHIBIT D

 

RE-ASSIGNMENT
AND RELEASE OF PURCHASE ORDER

 

UPON
AND SUBJECT TO PAYMENT OF the sum of $_____ on or before _________, 201_ ("Payment Date"), [____]
and [____], ("Assignors") hereby assigns,
transfers and delivers to INERGETICS, INC. ("Assignee") all of Assignors’ right, title and interest in,
to and under that certain Purchase Order identified below, and hereby releases any claims in or with respect to such Purchase Order.
The applicable Purchase Order is:

 

	 	P.O. Invoice No.:	 	 
	 	Customer Name:	 	 
	 	P.O. Invoice Date:	 	 

 

This Assignment
shall become effective immediately upon receipt of immediately available funds in the amount described above.

 

This Re-Assignment
and Release of Purchase Order is executed and dated by [CHECK ONE]

 

		 ̈	The Duly Appointed Agent of the Assignors (the “Agent”)

Or

		 ̈	One of the Contractors

 

A.           If
the Agent is signing for and on behalf of the Assignors, on behalf of the Assignors, the Agent must sign, complete and date the
following:

 

___________________________________

Signature of Agent

 

___________________________________

Name of Agent (Print)

 

___________________________________

Social Security
Number of Agent

 

Address of Agent:

 

___________________________________

 

___________________________________

 

    	 	12	 

     

    

 

		B.	If one of the Assignors is signing such Assignor must check the proper box below, execute, complete and date the following:

 

Assignor signing for the Assignors
[CHECK ONE] 

 

		 ̈	____ (an Assignor)

Or

		 ̈	____ (an Assignor)

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

Dated:

___________, 201__

 

    	 	13	 

     

    

 

ACCEPTANCE

 

INERGETICS,
INC., a Delaware corporation ("Assignee"), hereby accepts the foregoing re-assignment of Purchase Order, and covenants
and agrees to fully perform all obligations with respect thereto and hereby releases and holds harmless ____,
____, any and all Contractors’ Agents and each of the above
named person’s respective employees, successors, Affiliates, equity holders, debtholders, attorneys, representatives, advisors,
members, managers, officers and directors and all other related persons from any responsibility for the performance of any such
obligations whether required before, on or after the date of this Acceptance. 

 

INERGETICS, INC.

 

	By:	 	,
	 	Name:  	 
	 	Title:	 

 

Dated: _________________

 

    	 	14	 

     

    

  

ADDENDUM I

 

In this Agreement:

 

(a)      The
"Contractors’ Bank" is:

 

(b)      The "Contractors’
Bank Account" is maintained at the Contractors’ Bank; ACCOUNT NO. ______________ at               the Contractors’ Bank.

 

A

 

    	 	15Exhibit 10.2

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (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, 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. ANY
TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY,
THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF.

 

INERGETICS,
INC.

 

SENIOR SECURED CONVERTIBLE DEMAND PROMISSORY
NOTE

 

	Issuance Date: September 1, 2015	 	Original Principal Amount: U.S. $_______ 
	Note: P.O. Note No-[__]	 	 

 

FOR VALUE RECEIVED,
Inergetics, Inc., a Delaware corporation (the “Company”), hereby promises to pay to ______ or registered assigns
(the “Holder”) $______ (the “Original Principal Amount,” and as reduced pursuant to the terms
hereof pursuant to any payment, conversion or otherwise, the “Principal”), and to pay interest (“Interest”)
on any outstanding Principal at the applicable Interest Rate from the date set out above as the Issuance Date (the “Issuance
Date”), until all amounts due under this 12% Senior Secured Convertible Promissory Note (including all Notes issued in
exchange, transfer or replacement hereof this “Note”), have been paid in full by the Company to the Holder.
This Note was issued to the original Holder by the Company on the Issuance Date pursuant to the Master Purchase Order Assignment
Agreement, dated as of September 1, 2015, by and among, ______ (“______”),______ (“______”) and the Company
(the “P.O. Agreement”), solely in exchange for a 12% $______ aggregate principal amount Convertible Promissory
Note of the Company owed by the Holder; Issue Date ______, 2015 (the “Exchange Note”). The $______ Original
Principal Amount of this Note equaled the sum of (i) the $______ aggregate principal amount, plus (ii) $______ accrued but unpaid
interest outstanding on the Exchange Note through and including the Issuance Date. Certain capitalized terms used here are defined
in Section 22. This Note is one of a series of 12% Senior Secured Convertible Demand Promissory Notes issued pursuant to
the P.O. Agreement.

 

(i) This Note and all
obligations of the Company under this Note to the original Holder (the “Obligations”), and (ii) certain other
obligations of the Company to the original Holder, ______ and ______ (the original Holder, ______ and ______ shall collectively
be referred to as the “Secured Parties”), pursuant to various other notes, debentures and/or other instruments
(the “Other Instruments”), are secured by and pursuant to a Security Agreement dated as of September 1, 2015,
by and among, the Company and the Secured Parties; and certain payment obligations of the Company to the Subordinating Creditors
(as defined below), were expressly subordinated by the Subordinating Creditors to the Obligations of the Company to (i) the Holder
under this Note, and (ii) the Holder and the other Secured Parties under the Other Instruments pursuant, to a Subordination Agreement
dated September 1, 2015 by, between and among, the Company, ______ and ______ (collectively, the “Subordinating Parties”),
and the original Holder and the other Secured Parties (the “Subordination Agreement”).

 

     

     

    

 

1)           MATURITY.
This Note and all amounts due hereunder including, but not limited to, the Principal and Interest thereon (or any portion of this
Note if the Demand (as defined below) states that a specific portion of the Principal and Interest on this Note the Holder is declaring
due and payable, with the remaining portion of Principal and Interest continuing to be issued and outstanding and continuing to
accrue Interest as provided elsewhere herein) shall be due and payable immediately upon the sending of a written demand by the
Holder to the Company (a “Demand”).

 

2)           INTEREST;
INTEREST RATE.

 

a)    This
Note shall accrue Interest daily on a compounding basis on all amounts due under this Note commencing on the Issuance Date through
and including the date all amounts owed pursuant to this Note have been received in full by the Holder at the Interest Rate. Interest
on this Note shall be due and payable upon (i) Demand, or (ii) upon conversion into shares of Common Stock pursuant to Section
3 of the Principal related to the Interest (each an “Interest Date”). If an Interest Date falls on a Holiday,
the next day that is not a Holiday shall be the Interest Date. All amounts due under this Note shall be paid in cash.

 

b)    This
Note shall accrue Interest on all Principal owed hereunder  (“Interest”) at the rate of (i) 3.5% from the
Issuance Date through and including the date and thirty (30) days from the Issuance Date (the “30th Day”),
and (ii) for each ten (10) consecutive days (pro-rata for shorter than 10 day periods) following the 30th Day, until
the date all amounts owed to the Holder under this Note are paid in full, one at one-half (1.5% percent)  (collectively, the
“Interest Rate”).

 

c)    
From and after the occurrence and during the continuance of an Event of Default, the Interest Rate shall be increased to 4.5% and
2.5% for the 30 day period ending on the 30th Day and for each ten (10) consecutive days (pro-rata for shorter than
10 day periods) following the 30th Day, respectively. In the event that such Event of Default is subsequently cured,
the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such cure; provided,
that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of cure
of such Event of Default.

 

3)     CONVERSION
OF NOTES. This Note shall be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), on the terms and conditions set forth in this Section 3.

 

a)      Conversion
Right. Subject to the provisions of Section 3(d), at any time or times following the Issuance Date, the Holder shall
be entitled to convert all or any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and
nonassessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company
shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock to the nearest whole share.
The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery
of Common Stock upon conversion of any Conversion Amount.

 

    	 	2	 

     

    

 

b)     Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a)
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).

 

i)      
“Conversion Amount” means the sum of (A) the portion of the Principal to be converted, with respect to which
this determination is being made, (B) accrued and unpaid Interest with respect to such portion of the Principal, and (C) all other
amounts due to the Holder hereunder.

 

ii)      “Conversion
Price” means, as of any Conversion Date (as defined below) or other date of determination, the Market Price (as defined
below).

 

c)     Mechanics
of Conversion.

 

i)      Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such
date, a copy of an executed notice of conversion in the form attached hereto as  Exhibit I (the “Conversion Notice”)
to the Company and the Transfer Agent and (B) if required by Section 3(c)(iii), surrender this Note to a common carrier
for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to
this Note in the case of its loss, theft or destruction). On or before the first (1st) Business Day following the date
of receipt of a Conversion Notice, the Company shall transmit by facsimile a confirmation of receipt of such Conversion Notice
to the Holder and the Transfer Agent. On or before the third (3rd) Trading Day following the date of receipt of a Conversion
Notice (the “Share Delivery Date”), the Company shall (x) provided that the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder
shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system or (y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver
to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for
the number of shares of Common Stock to which the Holder shall be entitled. If required by Section 3(c)(iii), within three
(3) Business Days following a conversion of this Note, the Holder shall surrender this Note (or deliver an indemnification undertaking
with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 11(b)) to the Company.
If this Note is physically surrendered for conversion if required by Section 3(c)(iii) and the outstanding Principal of
this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable
and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the
Holder a new Note (in accordance with Section 11(d)) representing the outstanding Principal not converted. The Person or
Persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on the Conversion Date, irrespective of the date such Conversion
Shares are credited to the Holder’s account with DTC or the date of delivery of the certificates evidencing such Conversion
Shares, as the case may be.

 

    	 	3	 

     

    

 

ii)      Company’s
Failure to Timely Convert. If the Company shall fail to issue a certificate to the Holder or credit the Holder’s balance
account with DTC, as applicable, for the number of shares of Common Stock to which the Holder is entitled upon conversion of any
Conversion Amount on or prior to the Share Delivery Date (a “Conversion Failure”), then (A) the Company shall
pay damages to the Holder for each Trading Day of such Conversion Failure in an amount equal to 5.0% of the product of (1) the
sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder
is entitled, and (2) the Closing Sale Price of the Common Stock on the Share Delivery Date and (B) the Holder, upon written notice
to the Company, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any portion of
this Note that has not been converted pursuant to such Conversion Notice;  provided that the voiding of a Conversion Notice
shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant
to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if the Company shall fail on or prior to the Share
Delivery Date to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount or on any
date of the Company’s obligation to deliver shares of Common Stock as contemplated pursuant to clause (ii) below, and if
on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction
of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from the Company (a
“Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in the
Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to issue and deliver such certificate or credit the Holder’s
balance account with DTC for the shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of the
applicable Conversion Amount shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock or credit the Holder’s balance account with DTC for the number of shares of Common Stock to
which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B)
the Closing Sale Price on the Conversion Date.

 

iii)      Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the name and address
of the Holders of the Note and the principal amount of the Note held by such Holders (the “Registered Notes”).
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the Holders
of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes, including,
without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice to the contrary.
The Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register.
Upon its receipt of a written request to assign or sell all or part of any Registered Note by a Holder, together with any required
documentation under the Documents (as defined in the Securities Purchase Agreement) including any legal opinions, if applicable,
the Company shall record the information contained therein in the Register and issue one or more new Registered Notes in the same
aggregate Principal Amount as the Principal Amount of the surrendered Registered Note to the designated assignee or transferee
pursuant to Section 11. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this
Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless
(A) the full Principal amount represented by this Note is being converted or (B) the Holder has provided the Company with prior
written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender
of this Note. The Holder and the Company shall maintain records showing the Principal and Interest, if any, converted and the dates
of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this Note upon conversion.

 

    	 	4	 

     

    

 

iv)      Disputes.
In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of
this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in
accordance with Section 16.

 

d)     Limitations
on Conversions. The Company shall not effect any conversion of this Note, and the Holder of this Note shall not have the right
to convert any portion of this Note pursuant to the terms and conditions of this Note, to the extent that after giving effect to
such conversion, the Holder (together with the Holder’s Affiliates) would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates
shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which the determination
of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion
of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of its Affiliates and (B) exercise
or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation,
any Other Notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 3(d)(i),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“ Exchange Act ”). For purposes of this Section 3(d)(i), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Form 10-K, Form 10-Q, Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement
by the Company or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business
Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common
Stock was reported. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first
(61 st ) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder
and not to any other holder of Notes. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 3(d)(i) to correct this paragraph (or any portion hereof) which
may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.

 

    	 	5	 

     

    

 

4)     EVENTS
OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT.

 

a)      Event
of Default. Each of the following events shall constitute an “Event of Default”:

 

i)      if
the Common Stock is or becomes DTC Eligible, then at any time thereafter that the Common Stock is no longer DTC Eligible or DTC
has issued a “freeze” or “chill” on the Common Stock;

 

ii)      the
suspension from trading or quotation eligibility or failure of the Common Stock to be listed or eligible for quotation on an Eligible
Market for a period of five (5) consecutive Trading Days or for more than an aggregate of ten (10) Trading Days in any 360-day
period;

 

iii)    the
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five
(5) days after the applicable Conversion Date or (B) notice, written or oral, to the Holder, including by way of public announcement
or through any of its agents, at any time, of its intention not to comply with a request for conversion of the Note into shares
of Common Stock that is tendered in accordance with the provisions of the Note, other than as a result of Section 3(d);

 

iv)    the
Company’s failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due under this Note,
the Security Agreement, the P.O. Agreement, any Other Notes and/or any other document, agreement and/or instruments related to
any of such items, together with all exhibits, schedules and annexes to any of the above, and as amended supplemental and/or modified
from time to time (collectively the “Documents”);

 

v)    any
default under or acceleration prior to maturity of an aggregate amount of Indebtedness in excess of $50,000 of the Company;

 

vi)    the
Company, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief
of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee, liquidator
or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors or (E)
admits in writing that it is generally unable to pay its debts as they become due;

 

vii)   a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in
an involuntary case, (B) appoints a Custodian of the Company or (C) orders the liquidation of the Company;

 

viii)  a
final judgment or judgments for the payment of money aggregating in excess of $50,000 are rendered against the Company and which
judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay;

 

ix)    other
than as specifically set forth in another clause of this Section 4(a), the Company breaches any representation, warranty,
agreement, covenant, condition and/or term of this Note and/or any other Document, except, in the case of a breach of a covenant
or other term or condition of any Document which is capable of being cured and is cured no later than five (5) Trading Days following
such breach; or

 

    	 	6	 

     

    

 

x)     any
event of default occurs (or with the passage of time or giving of notice, would occur) with respect to any Indebtedness.

 

b)     Remedies
Upon an Event of Default. Upon the occurrence and, continuance of any Event of Default, notwithstanding anything to the contrary
provided herein, and/or in the other Documents and/or elsewhere, Holder may, in its sole and absolute discretion, among other actions
declare all Principal, Interest and/or other amounts owed to the Holder by the Company under this Note and any of the other Documents,
all through and including the date all amounts owed to the Holder from the Company pursuant to this Note, the other Documents,
and/or otherwise, are received in full by the Holder in cash by the payment of immediately available funds by wire transfer pursuant
to wire transfer instruction provided to the Company from the Holder (the “Owed Amount”), to be immediately
due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the
Company, and the Company shall pay to Holder an amount equal to (i) the product of 140% multiplied by (ii) the Owed Amount (collectively,
the “Event of Default Payment Amount”); provided, that upon the occurrence of an Event of Default under
Section 5(a)(vi)-(vii) hereof, all amounts set forth in this Section 5(b) shall automatically become forthwith due
and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company
and the Company shall pay to Holder the Event of Default Payment Amount;

 

c)      Remedies
Are Severable and Cumulative. All provisions contained herein pertaining to any remedy of the Holder shall be and are severable
and cumulative and in addition to all other rights and remedies available herein and in the other Documents, at law and in equity,
and any one or more may be exercised simultaneously or successively. Any notification required pursuant to this Section 4
or under applicable law shall be reasonably and properly given to Company at the address and by any of the methods of giving such
notice as set forth in the P.O. Agreement.

 

d)      No
Waiver. No waiver or failure to exercise at any time any default and/or remedy or right upon a default shall operate as a direct
and/or indirect waiver of any other default or right or of the same default or right on any subsequent occasion..

 

5)     DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

a)      Distribution
of Assets. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (the “ Distributions ”), then the Holder
will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately
prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record
holders of Common Stock are to be determined for such Distributions (provided,  however, that to the extent that
the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Maximum Percentage, then
the Holder shall not be entitled to participate in such Distribution to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

 

    	 	7	 

     

    

 

b)      Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase
Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Maximum Percentage, at which time the Holder shall be granted such right to the same
extent as if there had been no such limitation).

 

c)      Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Major
Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision
to insure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option,
(i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder
would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon
the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of
this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets
received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as
the Holder would have been entitled to receive had this Note initially been issued with conversion rights for the form of such
consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion
Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions
of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations
on the conversion or redemption of this Note.

 

6)     RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.

 

a)      Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately
reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased.

 

    	 	8	 

     

    

 

b)      Issuance
of Securities Below the Conversion Price. If and whenever on or after the Subscription Date, the Company issues or sells, or
in accordance with this Section 6 is deemed to have issued or sold, any shares of Common Stock (including the issuance or
sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued
or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less
than a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion
Price then in effect is referred to as the “Applicable Price”) (the foregoing a “ Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New
Issuance Price. For purposes of determining the adjusted Conversion Price under this Section 6(b), the following shall be
applicable:

 

i)      Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 6(b)(i), the “lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option,
upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such
Option and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon the exercise
of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option
minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of
such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

 

ii)     Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 6(b)(ii),
the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 6(b), except as contemplated below, no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.

 

    	 	9	 

     

    

 

iii)    Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have
been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or
sold. For purposes of this Section 6(b)(iii), if the terms of any Option or Convertible Security that was outstanding as
of the Issuance Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 6(b) shall be made
if such adjustment would result in an increase of the Conversion Price then in effect.

 

iv)    Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific consideration is allocated to such options by the parties thereto,
(x) the Options will be deemed to have been issued for the Option Value of such Options and (y) the other securities issued or
sold in such integrated transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration
received by the Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of
the Company, less (II) the Option Value. If any shares of Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount received by
the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration other than cash received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the
Company for such securities will be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following the Valuation Event by an independent, reputable appraiser
selected by the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and
the fees and expenses of such appraiser shall be borne by the Company.

 

    	 	10	 

     

    

 

v)    Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

 

c)      Voluntary
Adjustment By Company. The Company may at any time during the term of this Note reduce the then current Conversion Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

7)     RESERVATION
OF AUTHORIZED SHARES.

 

a)      Reservation.
Following the date the Company effectuates a reverse split of its issued and outstanding Common Stock and/or increase its authorized
but unissued shares of Common Stock, the Company shall initially reserve out of its authorized and unissued Common Stock a number
of shares of Common Stock for this Note equal to 400% of the Conversion Rate with respect to the Conversion Amount of this Note
as of the Issuance Date. So long as any of the Notes are outstanding, the Company shall take all action necessary to reserve and
keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of this Note,
400% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of this Note and
the Other Notes (not taking into effect any Beneficial Ownership Limitation, but giving effect to any event set forth in Section
5 and Section 6); provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares
required to be reserved by this sentence (without regard to any limitations on conversions) (the “Required Reserve Amount”).

 

b)      Insufficient
Authorized Shares. If at any time while this Note remain outstanding the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of this Note at least a
number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then
the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an
amount sufficient to allow the Company to reserve the Required Reserve Amount for this Note. Without limiting the generality of
the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event
later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall either (x) obtain the written
consent of its stockholders for the approval of an increase in the number of authorized shares of Common Stock and provide each
stockholder with an information statement with respect thereto or (y) hold a meeting of its stockholders for the approval of an
increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.

 

    	 	11	 

     

    

 

The above Sections 7(a) and
7(b) are subject to Section 17(h) of the P.O. Agreement, which takes precendent over any conflicting provisions set forth
in these Sections 7(a) and 7(b).

 

8)     VOTING
RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and/or as expressly provided
in this Note.

 

9)     COVENANTS.

 

a)      Cash
Dividend. So long as this Note is outstanding, the Company shall not directly or indirectly, declare or pay any cash dividends
or distributions on any Equity Interests of the Company or of its Subsidiaries.

 

b)      Restricted
Payments. The Company shall not directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect
of, by the payment of cash or Cash Equivalents (in whole or in part, whether by way of open market purchases, tender offers, private
transactions or otherwise), all or any portion of any Indebtedness (other than with respect to this Note, Other Notes and/or Permitted
Indebtedness), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness (or
otherwise);

 

c)      Restriction
on Redemption. Until all of this Note has been converted or otherwise satisfied in accordance with its terms, the Company shall
not, directly or indirectly, redeem or repurchase its Equity Interests without in each case the prior express written consent of
the Holder.

 

d)      Change
in Nature of Business. The Company shall not make any material change in the nature of its business as described in the Company’s
most recent annual report filed on Form 10-K with the SEC. The Company shall not modify its corporate structure or purpose.

 

e)      Intellectual
Property. The Company shall not directly or indirectly, encumber or allow any Liens on, any of its copyright rights, copyright
applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or
unpublished, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals,
reissues, extensions, and continuations-in-part of the same, trademarks, service marks and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, and the goodwill of the business of the Company connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of
any past, present, or future infringement of any of the foregoing, other than Permitted Liens.

 

f)      Preservation
of Existence, Etc. The Company shall maintain and preserve its existence, rights and privileges, and become or remain duly
qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary, except where the failure to be so qualified would not result
in a Material Adverse Effect (as defined in the Securities Purchase Agreement).

 

    	 	12	 

     

    

 

g)      Maintenance
of Properties, Etc. The Company shall maintain and preserve all of its properties which are necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply in all material respects
to comply in all material respects, at all times with the provisions of all leases to which it is a party as lessee or under which
it occupies property, so as to prevent any material loss or forfeiture thereof or thereunder.

 

h)      Maintenance
of Insurance. The Company shall maintain insurance with responsible and reputable insurance companies or associations (including,
without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties
(including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any
governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated.

 

i)      Transactions
with Affiliates. The Company shall not enter into, renew, extend or be a party to, any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering
of services of any kind) with any Affiliate.

 

10)    TRANSFER.
This Note and any shares of Common Stock issued and/or issuable upon conversion of this Note may be offered, sold, assigned or
transferred by the Holder without the consent of the Company, subject only to compliance with applicable securities laws.

 

11)    REISSUANCE
OF THIS NOTE.

 

a)      Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note (in accordance with Section 11(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less then the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 11(d)) to the Holder representing the outstanding Principal not being transferred. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following
conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal
stated on the face of this Note.

 

b)      Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note (in accordance with Section 11(d)) representing the outstanding Principal.

 

c)      Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 11(d) and in principal amounts of at least $25,000)
representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such
outstanding Principal as is designated by the Holder at the time of such surrender.

 

    	 	13	 

     

    

 

d)      Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 11(a) or Section 11(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest, if any, on the Principal of this Note, from the Issuance Date.

 

12)   REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF . The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Documents at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided
for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or other security being required.

 

13)   PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.

 

14)   CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and all the Purchasers and shall not be construed
against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of,
or affect the interpretation of, this Note. Terms used in this Note but defined in the other shall have the meanings ascribed to
such terms on the Initial Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.

 

15)   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 privilege.

 

16)   DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Closing Bid Price, the Closing Sale Price or the Weighted
Average Price or the arithmetic calculation of the Conversion Rate, the Conversion Price or any Redemption Price, the Company shall
submit the disputed determinations or arithmetic calculations via facsimile within one (1) Business Day of receipt, or deemed receipt,
of the Conversion Notice or Redemption Notice or other event giving rise to such dispute, as the case may be, to the Holder. If
the Holder and the Company are unable to agree upon such determination or calculation within one (1) Business Day of such disputed
determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one Business Day submit via
facsimile (a) the disputed determination of the Closing Bid Price, the Closing Sale Price or the Weighted Average Price to an independent,
reputable investment bank selected by the Holder, or (b) the disputed arithmetic calculation of the Conversion Rate, Conversion
Price or any Redemption Price to an independent, outside accountant, selected by the Holder. The Company, at the Company’s
expense, shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and
notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations
or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.

 

    	 	14	 

     

    

 

17)   NOTICES;
PAYMENTS.

 

a)      Notices.
Whenever All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, email or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery, delivery by email, 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 Company, to:	 
	 	 	 
	 	INERGETICS, INC.	 
	 	550 BROAD STREET, SUITE 1212	 
	 	NEWARK, NJ 07652	 
	 	Attn: Mr. Michael C. James, CEO	 
	 	Email: MJames@inergetics.com	 
	 	Fax: 	 	 
	 	 	 	 
	 	If to the Holder:	 
	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Attn: 	 	 
	 	Email: 	 	 
	 	Fax: 	 	 

 

    	 	15	 

     

    

 

b)      Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to
such Person at such address as previously provided to the Company in writing (which address, in the case of each of the Purchasers,
shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement); provided that the Holder
may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written
notice setting out such request and the Holder’s wire transfer instructions. 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 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.

 

18)    CANCELLATION.
After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically
be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

19)    WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities Purchase Agreement.

 

20)    GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough
of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address it set forth on the signature page hereto and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
 THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. 

 

    	 	16	 

     

    

 

21)   SEVERABILITY
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

22)   CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

a)     
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.

 

b)     “Approved
Stock Plan” means any employee benefit or incentive plan which has been approved by the Board of Directors of the Company,
pursuant to which the Company’s securities may be issued to any employee, officer or director for services provided to the
Company.

 

c)     
“Bloomberg” means Bloomberg Financial Markets.

 

d)     “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

e)     
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg,
or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m.,
New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market
for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for
such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security
as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly the Pink OTC Markets Inc.). If the
Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value
as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 16. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction during the applicable
calculation period.

 

    	 	17	 

     

    

 

f)     
“Eligible Market” shall mean any of the following markets or exchanges on which the Common Stock (or any other
common stock of any other Person that references the Trading Market for its common stock) is listed or quoted for trading on the
date in question: the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market,
the New York Stock Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace
or any other tier operated by OTC Markets Group Inc. (or any successor to any of the foregoing)..

 

g)     
“Equity Interests” means (a) all shares of capital stock (whether denominated as common stock or preferred stock),
equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or
profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting
or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable
or exercisable.

 

h)      “GAAP”
means United States generally accepted accounting principles, consistently applied.

 

i)      
“Holiday” means a day other than a Business Day or on which trading does not take place on the Principal Market.

 

j)      
“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations
issued, undertaken or assumed as the deferred purchase price of property or services, including (without limitation) “capital
leases” in accordance with GAAP (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness
(even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP,
consistently applied for the periods covered thereby, is classified as a capital lease, (vii) all indebtedness referred to in clauses
(i) through (vi) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not
assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (i) through (vii) above.

 

k)      “Interest
Rate” means has the meaning set forth in Section 3(b).

 

l)      “Liens”
means a lien, mortgage, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction,
clouds on title and/or encumbrances

 

    	 	18	 

     

    

 

m)     
“Market Price” means the lower of (i) $0.07, and (ii) 62% of the lowest price any share of Common Stock was
bought or sold at on the Principal Market during the ten (10) consecutive Trading Days immediately preceding the applicable date
of determination. All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination,
reclassification or other similar transaction during such period.

 

n)     
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.

 

o)      “Permitted
Indebtedness” means

 

p)      “Permitted
Liens” means

 

q)     
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

r)     
“Principal Market” means the Trading Market on the date in question on which the Common Stock trades or is quoted
on.

 

s)     
“SEC” means the United States Securities and Exchange Commission or the successor thereto.

 

t)     
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market
on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from
trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).

 

u)      “Trading
Market” shall mean any of the following markets or exchanges on which the Common Stock (or any other common stock of
any other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question:
the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier operated
by OTC Markets Group Inc. (or any successor to any of the foregoing).

 

23)    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, nonpublic information relating to the Company,
the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material, nonpublic information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic
information relating to the Company or 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, nonpublic information relating to the Company or its Subsidiaries.

 

[Signature Page Follows]

 

    	 	19	 

     

    

 

IN WITNESS WHEREOF, the Company has caused
this Note to be duly executed as of the Issuance Date set out above.

 

	 	INERGETICS, INC.
	 	 
	 	 
	 	By:	 
	 	 	Name: Michael James
	 	 	Title: Chief Executive Officer

 

    	 	20	 

     

    

 

Exhibit I

 

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert $________________ of the Principal of the Note (defined below) into shares of Common Stock of Inergetics, Inc.,
a Delaware corporation (the “Company”) according to the conditions of the Senior Secured Demand Convertible
Promissory Note of the Company; Issuance Date: September 1, 2015 (the “Note”). No fee will be charged to the
Holder or Holder’s Custodian for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

		 ̈	The Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal
Agent Commission system (“DWAC Transfer”).

 

	 	Name of DTC Prime Broker:	 

 

	 	Account Number:	 

 

		 ̈	The undersigned hereby requests that the Borrower issue a certificate
or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation
attached hereto) in the name(s) specified immediately below:

 

_______________________________________

 

	Date of Conversion:	 	 
	 	 	 
	Conversion Price:  	 	 
	 	 	 
	Shares to Be Delivered:	 	 
	 	 	 
	
        Remaining Principal Balance Due

        After This Conversion:
	 	 
	 	 	 
	Signature	 	 
	 	 	 
	 	 	 
	Print Name:

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