Document:

Exhibit
4.4 

 

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

 

 

US
$44,000.00 

 

 

GUIDED
THERAPEUTICS, INC.

8%
CONVERTIBLE REDEEMABLE NOTE

DUE
MAY 17, 2018

BACK
END NOTE

 

 

FOR
VALUE RECEIVED, Guided Therapeutics, Inc. (the “Company”) promises to pay to the order of ADAR BAYS, LLC and its authorized
successors and Permitted Assigns, defined below, ("Holder"), the aggregate principal face amount Forty-Four Thousand
Dollars exactly (U.S. $44,000.00) on May 17, 2018 ("Maturity Date") and to pay interest on the principal amount
outstanding hereunder at the rate of 8% per annum commencing on May 17, 2017. This Note shall contain a 10% OID such that the
purchase price shall be $40,000. The interest will be paid to the Holder in whose name this Note is registered on the records
of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable at
3411 Indian Creek Drive, Suite 403, Miami Beach, FL 33140, initially, and if changed, last appearing on the records of the Company
as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding
principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the
Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company.
The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy
and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest
may be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein. Permitted Assigns means any Holder assignment,
transfer or sale of all or a portion of this Note accompanied by an Opinion of Counsel as provided for in Sections 2(f) and 5(f)
of the Securities Purchase Agreement, dated May 17, 2017, by and between the Company and the Holder (the “Securities Purchase
Agreement”). All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Securities
Purchase Agreement.

 

This
Note is subject to the following additional provisions:

 

1.This
Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder
shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers,
assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company
with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.

 

2.The
Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.This
Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act"),
applicable state securities laws and Sections 2(f) and 5(f) of the Securities Purchase Agreement. Any attempted transfer to a
non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of this Note, the Company
and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's records as the owner
hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected
or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section
4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prequalified prospective transferee of this Note,
also is required to give the Company written confirmation that this Note is being converted ("Notice of Conversion")
in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion
shall be the Conversion Date. All notices of conversion will be accompanied by an Opinion of Counsel.

 

4.(a)The
Holder of this Note is entitled, at its option, at any time after (i) five months from the date of issuance of this Note, and
(ii) the outstanding principal and interest on the Buyer Note has been paid in full in cash to the Company, to convert all or
any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common
Stock") at a price ("Conversion Price") for each share of Common Stock equal to 60% of the lowest
trading price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange which the Company’s
shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange"), for
the twenty prior trading days including the day upon which a Notice of Conversion is received
by the Company (provided such Notice of Conversion is delivered together with an Opinion of Counsel, by fax or other electronic
method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include
the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded.
Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days
of receipt by the Company of the Notice of Conversion. Accrued, but unpaid interest shall be subject to conversion. No fractional
shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded
to the nearest whole share. To the extent the Conversion Price of the Company’s Common Stock closes below the par value
per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the
lowest value possible under law. The Company agrees to honor all conversions submitted pending this increase. In the event
the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 50% instead of 60%
while that “Chill” is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion,
along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of
the outstanding shares of the Common Stock of the Company (which may be increased to 9.99% on 61 days prior written notice).

 

(b)Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company
in cash or in Common Stock ("Interest Shares"), at its election. Holder may, at any time conversion is permitted under
Section 4(a), send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a)
above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid
principal balance of this Note to the date of such notice.

 

(c)This
Note may not be prepaid, except that if the First Note is redeemed by the Company within 6 months of the issuance date of such
Note, all obligations of the Company under this Note and all obligations of the Holder under the Holder issued Buyer Note will
be automatically be deemed satisfied and this Note and the Buyer Note will be automatically be deemed cancelled and of no further
force or effect.

 

 

(d)
Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series
of related transactions, (ii) a reclassification, capital reorganization (excluding an increase in authorized capital) or other
change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or
(iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving
entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in
a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of
items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company shall, upon request
of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of
redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with
the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion
Price.

 

(e)
In case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection
with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of
this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number
of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization
or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon
exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing
provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other
than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good
faith.

 

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

 

6.The
Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice
of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for
hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.The
Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the
Holder in collecting any amount due under this Note.

 

8.If
one or more of the following described "Events of Default" shall occur:

 

(a)The
Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company;
or

 

(b)Any
of the representations or warranties made by the Company herein or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or
the Securities Purchase Agreement under which this note was issued shall be false or misleading in any material respect; or

 

(c)The
Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or any other note issued to the Holder; or

 

(d)The
Company shall (1) become insolvent (which does not include a “going concern opinion); (2) admit in writing its inability
to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its
dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part
of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against
it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or

 

(e)A
trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment; or

 

(f)Any
governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)One
or more money judgments, writs or warrants of attachment, or similar process, in excess of one hundred thousand dollars ($100,000)
in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid,
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or

 

(h)Defaulted
on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such
default within the appropriate grace period; or

 

(i)The
Company shall have its Common Stock delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades
on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934
Act reports with the SEC;

 

(j)If
a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the
Board;

 

(k)The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal
of a restrictive legend; or

 

(l)
The Company shall not replenish the reserve set forth in Section 12, within 5 business days of the request of the Holder;
or

 

(m)
The Company’s Common Stock has a closing bid price of less than $0.10 per share for at least 5 consecutive trading days;
or

 

(n)
The aggregate dollar trading volume of the Company’s Common Stock is less than twenty five thousand dollars ($25,000.00)
in any 5 consecutive trading days; or

 

(o)
Beginning on the 6th monthly anniversary of this Note, the Company shall cease to be “current” in its
periodic report filings with the Securities and Exchange Commission; or

 

(p)
The Company shall lose the “bid” price for its stock in a market (including the OTC marketplace or other exchange)

 

Then,
or at any time thereafter, unless cured (except for 8(m) and 8(n)) which are incurable defaults, the sole remedy of which
is to allow the Holder to cancel both this Note and the Holder Issued Note, and in each and every such case, unless such Event
of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent
default)at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and
payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which
are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and
the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default
interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest
permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning
on the 4th day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day
beginning on the 10th day. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal
amounts by 20%. In case of a breach of Section 8(i), the outstanding principal due under this Note shall increase by 50%. If this
Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%. Further, if a breach of Section
8(m) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing
bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during
the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions
at $0.005 per share.

 

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

 

Make-Whole
for Failure to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the
conversion shares by the by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder
incurs a Failure to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable
to the Holder in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows:

Failure
to Deliver Loss = [(High trade price at any time on or after the day of exercise) x (Number of conversion shares)]

 

The
Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day
from the time of the Holder’s written notice to the Company.

 

9.In
case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired
thereby.

 

10.Neither
this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the
Company and the Holder.

 

11.The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer.

 

12.Prior
to payment in full of the Buyer Note, the Company will issue irrevocable transfer agent instructions reserving 3x the number of
shares of Common Stock necessary to allow the holder to convert this note based on the discounted conversion price set forth in
Section 4(a) herewith. Upon full conversion of this Note, the reserve representing this Note shall be cancelled. The Company will
pay all transfer agent costs associated with issuing and delivering the shares. If such amounts are to be paid by the Holder,
it may deduct such amounts from the Conversion Price. Conversion Notices may be sent to the Company or its transfer agent via
electric mail. The Company will instruct its transfer agent to provide the outstanding share information to the Holder in connection
with its conversions.

 

13.The
Company will give the Holder direct notice of any corporate actions including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law.

 

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

 

15.This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be
performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and
the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of
New York or in the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and
the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.

 

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.

 

 

Dated:
5/18/17

 

	 	GUIDED THERAPEUTICS, INC.	 
	 	 	 
	 	By:  /s/ Gene S. Cartwright	 
	 	 	 
	 	Title: CEO	 

 

 

    

     

    

EXHIBIT A

 

 

NOTICE
OF CONVERSION

 

(To
be Executed by the Registered Holder in order to Convert the Note)

 

The
undersigned hereby irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Guided
Therapeutics, Inc. (“Shares”) according to the conditions set forth in such Note, as of the date written below.

 

If
Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes
and charges payable with respect thereto.

 

 

	Date of Conversion:               ____________________________	 
	Applicable Conversion Price    ___________________________	 
	Signature: ___________________________________________	 
	[Print Name of Holder and Title of Signer]	 	 
	 	 	 
	Address: ____________________________________________
	____________________________________________________	 	 
	 	 	 
	SSN or EIN: __________________________________________
	Shares are to be registered in the following name: ____________	 
	 	 	 
	Name: ______________________________________________	 
	Address: _____________________________________________
	Tel: _________________________________________________
	Fax: ________________________________________________
	SSN or EIN: __________________________________________
	 	 	 
	Shares are to be sent or delivered to the following account:	 	 
	 	 	 
	Account Name: _______________________________________	 
	Address: ____________________________________________
	                _____________________________________________Exhibit
4.5 

 

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

 

 

 

Amount:
$66,000

Date:
May 18, 2017

 

 

CONVERTIBLE
PROMISSORY
NOTE

 

Guided
Therapeutics, Inc., (hereinafter
called
the “Company”),
hereby
promises
to pay
to the order
of GHS Investments, LLC, a Nevada
Limited Liability Company, or its
registered
assigns
(the “Holder”)
the sum
of $66,000 upon the earlier of (a) the Company receiving, whether through revenues, loans, investments or any
other means (other than through the issuance of four short term promissory notes to two investors on or around the date hereof),
One Hundred Thousand Dollars ($100,000) in the aggregate or more; or (b) on December 31, 2017 (the "Maturity Date")
together
with any interest
as set forth
herein, and to pay
interest
on the unpaid principal
balance
hereof
at the rate
of eight percent
(8%) (the
“Interest Rate”)
per annum from
the date hereof
(the “Issue Date”)
until the same becomes
 due  and
 payable,
 whether
 at 
maturity 
or  upon  acceleration
 or  by
 prepayment
 or otherwise.
This Note is being issued with a ten percent (10%) original issuance discount to offset transaction costs. 

  

This
Note may
not be prepaid
in whole
or in part
except
as otherwise
explicitly
set forth
herein. Following any Event of Default,
all amounts owing pursuant to this Note shall bear
interest
at the
rate of
twenty percent
(20%)
per annum
from the
due date
thereof
until the same
is paid
(“Default
Interest”).
 Interest
shall be computed
on the basis of a 365-day
year and
the actual
number of days elapsed.
 All payments
due hereunder
(to the extent
not converted
into common stock)
shall be made in lawful
money of
the United
States
of America.

 

All
payments
shall be
made
at such
address
as the Holder
shall
hereafter
give to
the Company
by written
notice made
in accordance
with the provisions
of this Note. 
Whenever
any amount
expressed
to be due by the terms
of this Note is due on
any day
which is not a
business day,
the same
shall instead
be due on
the next
succeeding
day which
is a business
day and,
in the case
of any interest
payment
date
which
is not the
date on
which this Note is paid in full,
the extension of
the due date thereof shall
not be taken into account
for
purposes
of determining
the amount
of interest due on
such date.
As used
in this Note, the term
“business day”
shall mean
any day
other than
a Saturday,
Sunday
or a day on which
commercial
banks in the city
of New York,
New York
are authorized
or required
by law or executive
order to remain
closed. Each
capitalized
term used herein,
and not otherwise defined,
shall have
the meaning
ascribed
thereto in the supporting documents of same date (attached hereto).

 

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

 

The
following terms
shall apply
to this Note:

 

ARTICLE
I. CONVERSION
RIGHTS

 

1.1Conversion
Right. 
The Holder
shall have
the right
and at
any
time following six months from the issuance of this Note or following an Event
of Default, to convert
all or
any
part of
the outstanding
and unpaid
principal
amount of this
Note into fully
paid and
non- assessable
shares
of Common
Stock,
as such
Common Stock
exists on
the Issue Date, or any
shares
of capital
stock or other
securities
of the Company into which such
Common Stock
shall hereafter
be changed
or reclassified
at the conversion
price (the
“Conversion
Price”)
determined
as provided
herein (a “Conversion”);
provided, however,
that in
no event
shall the Holder
be entitled to
convert
any
portion of this
Note in excess
of that portion
of this Note upon
conversion
of which the
sum of (1) the number
of shares
of Common Stock
beneficially
owned by
the Holder and its affiliates
(other than
shares of Common
Stock which
may be deemed
beneficially
owned
through
the ownership
of the
unconverted
portion
of the Notes or the unexercised
or unconverted
portion of any
other security
of the Company subject to a limitation
on conversion
or exercise
analogous
to the limitations contained
herein) and
(2) the number
of shares
of Common
Stock
issuable upon the
conversion
of the portion of this Note with respect
to which the determination
of this proviso is being
made, would result
in beneficial
ownership by
the Holder and its affiliates
of more than 4.99%
of the outstanding shares
of Common Stock
(such sum, the “Maximum Share Amount”). For purposes
of the proviso
to the immediately
preceding
sentence,
beneficial
ownership shall
be determined
in accordance
with Section 13(d)
of the Securities
Exchange
Act of 1934, as amended
(the “Exchange
Act”),
and Regulations
13D-G thereunder.
The number
of shares
of Common
Stock to be
issued upon each
conversion
of this Note shall be determined
by dividing the
Conversion
Amount (as defined
below) by the applicable
Conversion Price
then in effect on the date
specified
in the notice of conversion,
(the “Notice
of Conversion”),
delivered
to the Company by
the Holder in accordance
with the Sections
below; provided
that the Notice of Conversion
is submitted by facsimile
or e-mail (or
by other means
resulting in, or reasonably
expected
to result
in, notice)
to the Company before
6:00 p.m., New
York, New
York time on such
conversion
date (the “Conversion
Date”). Notwithstanding the foregoing,
the term "4.99%" above shall be replaced with "9.99%" following any Event of Default if the Holder, in its
sole discretion and in writing, elects to demand the replacement. If the term "4.99%" is replaced with "9.99%"
pursuant to the preceding sentence, such increase to "9.99%" shall remain at 9.99% until decreased by the Holder in
writing.

 

The
number
of shares
of Common
Stock to be
issued upon each
conversion
of this Note
shall be
determined
by dividing
the Conversion
Amount (as defined
below) by
the applicable
Conversion
Price
then in
effect on
the date
specified
in the notice 
of conversion, (the
“Notice
of Conversion”),
delivered to the Company by
the Holder in accordance
with the Sections below.

The
term “Conversion
Amount” means, with
respect
to any
conversion
of this Note,
the sum
of (1)
the principal
amount of
this Note to be
converted
in such
conversion
plus (2)
at the
Company’s
option, accrued
and unpaid
interest, if any,
on such principal
amount at the interest
rates provided
in this Note to the Conversion
Date,
plus (3) at the Company’s
option, Default Interest,
if any, on the amounts
referred
to in the immediately
preceding
clauses
(1) and/or
(2) plus
(4) at
the Holder’s
option, any
amounts owed
to the Holder.

 

1.2Conversion
Price.

 

(a)Calculation
 of  Conversion
 Price.Holder,
at its discretion, shall have the right to convert this Note in its entirety or in part(s) into common stock of the Company valued
at a forty percent (40%) discount off of the lowest trading price for the Company’s common stock during the twenty five
(25) trading days immediately preceding a conversion date, as reported by Quotestream Media.

If at any time after the execution of this Note, the Company experiences a "DTC Chill," the Conversion Price Discount
shall be increased by ten percent (10%). If at any time following the execution of this Note, the Company becomes ineligible to
participate in the DTC's "DWAC" system, the Conversion Price Discount will be increased by five percent (5%). Following
any Event of Default, the Conversion Price discount shall be permanently increased by ten percent (10%).

 

 

1.3Authorized
Shares. 
The Company
covenants
that
during the
period
the conversion 
right
exists the
Company will
reserve
from its
authorized
and unissued
Common Stock
a sufficient
number of
shares, free
from preemptive
rights,
to provide
for the
issuance of Common
Stock upon the
full conversion of
this Note. The
Company is required
at all
times to
have
authorized
and reserved
three times the number
of shares that
is actually
issuable upon full conversion
of the Note (based
on the Conversion
Price
of the Notes in effect
from time to time)(the
“Reserved
Amount”). The Reserved
Amount shall be increased
from time
to time in accordance
with the Company’s
obligations.

The
Company represents
that
upon issuance,
such shares
will be duly
and validly
issued, fully
paid and
non-assessable.
 In
addition, if
the Company
shall issue any
securities
or make
any
change
to its capital
structure
which
would change
the number
of shares of 
Common Stock
into which the  Notes
shall be  convertible
 at the 
then  current
Conversion
Price,
the Company
shall at
the same
time make
proper
provision
so that
thereafter there
shall be
a sufficient
number of
shares of
Common
Stock
authorized
and reserved,
free
from preemptive
rights,
for conversion
of the outstanding Notes.

 

The
Company (i)
acknowledges
that it will
irrevocably
instruct
its transfer
agent
to issue
certificates
for the
Common Stock
issuable upon conversion
of this Note,
and (ii)
agrees
that
its issuance
of this Note
shall constitute
full authority
to its officers
and agents
who are
charged
with the duty of executing
stock certificates
to execute
and issue the necessary
certificates
for shares
of Common Stock
in accordance
with the terms and
conditions of this Note.

 

If,
at any
time the Company
does not
maintain
the Reserved
Amount it will
be considered
an Event of
Default as defined in this Note.

 

1.4Method
of Conversion.

 

(a)Mechanics
of Conversion.
 This
Note may be
converted
by the
Holder,
in whole
or in part,
at any
time following execution by
 submitting  to 
the  Company 
a  Notice 
of  Conversion
 (by
 facsimile,
 e-mail
 or  other
reasonable
means
of communication
dispatched
on the Conversion
Date
prior to 4:00
p.m., New York,
New York
time).

 

(b)Surrender
of Note
Upon Conversion.
 Notwithstanding
anything
to the contrary
set forth
herein,
upon conversion
of this
Note in accordance
with the terms
hereof, the Holder
shall not be required
to physically
surrender this Note to the
Company unless the entire
unpaid principal
amount of this
Note is so converted.
The Holder and
the Company shall maintain
records
showing the
principal
amount so converted
and the dates
of such
conversions
or shall use
such other
method,
reasonably
satisfactory
to the Holder
and the Company,
so as not
to require
physical
surrender
of this Note upon
each
such conversion.
 In the event
of any
dispute or discrepancy,
such records
of the Holder
shall, prima facie,
be controlling
and determinative
in the absence
of manifest error.
The Holder
and any
assignee,
by acceptance
of this Note,
acknowledge
and agree
that, by
reason
of the provisions
of this paragraph,
following conversion
of a
portion of this
Note, the unpaid
and unconverted
principal
amount of
this Note represented
by this Note
may be
less than the
amount stated
on the face
hereof.

 

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

 

(d)Delivery
of Common
Stock
Upon Conversion.
 Upon receipt
by the Company
from the
Holder of
a facsimile
transmission
or e-mail
(or other
reasonable
means of  communication)
 of  a 
Notice  of 
Conversion
 meeting 
the  requirements
for  conversion
 as provided
in this Section, the Company
shall issue and deliver
or cause to be issued
and delivered
to or upon the order
of the Holder
certificates
for the
Common Stock
issuable upon such
conversion within three
(3) business days
after
such receipt
(the “Deadline”)
(and, solely
in the case of conversion
of the entire
unpaid principal
amount hereof,
surrender
of this Note) in accordance
with the terms hereof
and the Purchase
Agreement. The Company will pay any
and all legal and transfer agent fees that may be incurred or charged in connection with the issuance of shares of the Company's
Common Stock to the Holder arising out of or relating to the conversions of this Note.

 

Within
Five (5) business days of having received common stock pursuant to a Notice of Conversion and prior to having traded any shares
from that specific conversion, Holder may elect to rescind the Notice of Conversion and return the shares, at Holder's expense,
to the Company's Transfer Agent. In the event of such rescission, the principal amount outstanding under this Note shall be adjusted
to include the Conversion Amount which was deducted from the Note as part of the rescinded Notice of Conversion.

 

(e)Obligation
of Company
to Deliver
Common Stock.
 Upon receipt
by the
 Company
of a Notice
of Conversion,
the Holder
shall be
deemed
to be the
holder of record
of the Common Stock
issuable upon such
conversion,
the outstanding principal
amount and the
amount of accrued
and unpaid interest
on this Note shall be
reduced
to reflect
such conversion,
and, unless
the Company
defaults
on its obligations
under this
Article I, all
rights
with respect
to the portion of this Note being
so converted
shall forthwith
terminate except
the right to receive
the Common Stock
or other securities,
cash or other assets,
as herein provided,
on such conversion.
 If the Holder shall
have given
a Notice of Conversion
as provided
herein, the 
Company’s 
obligation  to 
issue  and
 deliver
 the  certificates
 for Common
Stock shall
be absolute and
unconditional,
irrespective
of the
absence
of any action
by the Holder
to enforce
the same, any
waiver or consent
with respect to any
provision thereof,
the recovery
of any judgment
against
any person
or any
action
to enforce
the same,
any failure
or delay in the
enforcement
of any other
 obligation
 of the  Company
 to  the 
holder  of 
record,
 or  any
setoff, 
counterclaim,
recoupment, limitation
or termination,
or any
breach or
alleged
breach
by the  Holder
of any obligation
to the Company,
and irrespective
of any
other circumstance
which
might otherwise
limit such
obligation
of the Company
to the Holder
in connection
with such
conversion.
The Conversion
Date specified
in the Notice of Conversion
shall be the Conversion
Date so long as the Notice
of Conversion
is received by the
Company before
4:00 p.m., New York, New
York time, on such
date.

 

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

 

(g)Failure
to Deliver
Common Stock
Prior
to Deadline.
 Without
in any
way limiting
the Holder’s
right
to pursue
other remedies,
including actual
damages
and/or equitable
relief,
the parties
agree
that if delivery
of the Common
Stock
issuable
upon conversion
of this Note is not delivered
by the Deadline the Company
shall pay to the Holder
$500 per day
in cash, for
each day
beyond the Deadline
that the Company
fails
to deliver
such Common
Stock. Such
cash amount
shall be paid
to Holder
by the fifth
day of
the month following
the month in
which it
has accrued
or, at
the option
of the Holder
(by written
notice to the Company by the
first day
of the month following the month in which
it has accrued),
shall
be added
to the principal
amount
of this Note,
in which
event
interest
shall accrue
thereon in
accordance
with the terms
of this Note
and such
additional
principal
amount shall 
be  convertible
 into  Common
Stock 
in accordance
 with  the 
terms  of 
this  Note. The Company
agrees
that the right
to convert
is a valuable
right to the
Holder.  The
damages
resulting from
a failure,
attempt
to frustrate,
interference
with such
conversion
right
are difficult
if not impossible  to 
qualify.

 

Accordingly
 the  parties
 acknowledge
 that 
the  liquidated
 damages
provision contained
in this Section are
justified.
Any delay or failure of performance by the Company hereunder shall be excused if and to the extent caused by Force Majeure. For
purposes of this agreement, Force Majeure shall mean a cause or event that is not reasonably foreseeable and not caused by the
Company, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.

 

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

 

“NEITHERTHEISSUANCEANDSALEOFTHESECURITIES
REPRESENTED
 BY  THIS
 CERTIFICATE
 NOR
 THE
 SECURITIES
 INTO WHICHTHESE
SECURITIES
AREEXERCISABLEHAVE
BEEN REGISTERED
UNDER
THE SECURITIES
ACT OF
1933, AS
AMENDED,
OR APPLICABLE
STATE SECURITIES
LAWS.  THE
SECURITIES
MAY NOT
BE OFFERED
 FOR 
SALE, SOLD,
 TRANSFERRED
 OR 
ASSIGNED 
(I) 
IN  THE
ABSENCE
OF (A)
AN EFFECTIVE
REGISTRATION
STATEMENT FOR
THE SECURITIES
UNDER THE
SECURITIES
ACT OF
1933, AS
AMENDED,
OR (B)
AN OPINION
OF COUNSEL
(WHICH
COUNSEL
SHALL BE
SELECTED
BY THEHOLDER),INAGENERALLYACCEPTABLEFORM,THAT
REGISTRATION
 IS  NOT
 REQUIRED
 UNDER
 SAID 
ACT  OR
 (II) 
UNLESS SOLD
PURSUANT
 TO RULE
 144  OR
 RULE 
144A  UNDER 
SAID  ACT.
NOTWITHSTANDING
THE 
FOREGOING,
 THE
 SECURITIES
 MAY 
BE PLEDGED
IN CONNECTION
WITH A BONA
FIDE MARGIN
ACCOUNT
OR OTHER
LOAN
OR FINANCING
ARRANGEMENT
SECURED BY THE
SECURITIES.”

 

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

 

1.6Effect
of Certain
Events.

      

       (a)     Intentionally
omitted. 

 

     (b)
Adjustment Due
to Merger,
Consolidation,
Etc.If,
at any
time when this
Note is issued
and outstanding
and prior
to conversion
of all
of the Notes,
there shall
be any merger,
consolidation, 
exchange
of shares, 
recapitalization,
 reorganization,
 or other similar
event, as
a result of which shares
of Common Stock
of the Company shall
be changed
into the same or a different
number of shares
of another
class or classes
of stock or securities
of the Company or another
entity, or in
case of any
sale or conveyance
of all or substantially
all of the assets
of the Company other
than in connection
with a plan of complete
liquidation of the Company, then
the Holder of this Note shall
thereafter
have the right
to receive
upon conversion
of this Note,
upon the basis
and upon
the terms and
conditions specified
herein and
in lieu
of the shares of
Common Stock
immediately
theretofore
issuable upon conversion,
such stock, securities
or assets which
the Holder would have
been entitled
to receive
in such transaction
had this Note been converted
in full immediately
prior to such transaction
(without regard
to any limitations
on conversion set
forth herein),
and in any
such case
appropriate
provisions shall be made
with respect
to the
rights
and interests
of the Holder
of this Note
to the end
that the provisions
hereof (including,
without limitation, provisions for
adjustment of the Conversion
Price
and of the number
of shares
issuable upon conversion
of the Note) shall
thereafter
be applicable,
as nearly
as may
be practicable
in relation to any
securities
or assets thereafter
deliverable upon the
conversion
hereof.
 The Company
shall not affect
any
transaction
described
in this Section 1.6(b)
unless (a)
it first gives,
to the extent
practicable,
thirty (30) days prior
written
notice (but
in any
event
at least
fifteen
(15)
days prior
written
notice) of
the record
date of 
the  special
meeting 
of  shareholders
to  approve,
 or  if 
there 
is no  such 
record
 date,
 the consummation
of, such merger,
consolidation, exchange
of shares,
recapitalization,
reorganization
or other similar event
or sale of assets
(during which
time the Holder shall be entitled
to convert this Note)
and (b) the resulting
successor
or acquiring entity
(if not the Company) assumes
by written
instrument
the obligations
of this Section
1.6(b). The above
provisions shall similarly
apply to successive
consolidations,
mergers,
sales, transfers
or share exchanges.

 

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

 

(d)Adjustment
Due to Dilutive
Issuance.
 If, at any time when any Notes are issued and outstanding, the Borrower issues or
sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock in connection
with a financing transaction based on a variable price formula (the “Alternative Variable Price Formula”) that is
more favorable to the investor in such financing transaction than the formula for calculating the Conversion Price in effect on
the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately
upon the Dilutive Issuance, the formula for the Conversion Price will be adjusted to match the Alternative Variable Price Formula.
If it is unclear whether the Alternative Variable Price Formula is better or worse, then Holder, in its sole discretion, may elect
at the time of such issuance whether to switch to the Alternative Variable Price Formula or not.

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

 

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

 

1.7Security.
OMIT.

 

1.8Status
as Shareholder.
 Upon submission
of a Notice
of Conversion
by a Holder,
(i)  the 
shares
covered
thereby
(other
than
the shares,
if any,
which
cannot be issued
because their
issuance would
exceed
such Holder’s
allocated
portion of the Reserved
Amount or Maximum
Share
Amount) shall be deemed
converted
into shares of Common Stock
and (ii) the Holder’s
rights as
a Holder of such
converted
portion
of this Note shall cease and
terminate,
excepting
only the right
to receive
certificates
for such
shares of Common
Stock
and to
any remedies
provided herein
or otherwise available
at law or in equity
to such Holder because
of a failure by
the Company to
comply with the terms
of this Note. 
Notwithstanding the foregoing,
if a Holder has not received
certificates
for all shares
of Common Stock
prior to the tenth (10th)
business day
after
the expiration
of the Deadline with
respect
to a conversion
of any portion
of this Note for any
reason,
then (unless
the Holder
otherwise elects
to retain
its status as a
holder of
Common Stock
by so notifying
the Company) the Holder
shall regain
the rights of
a Holder of this Note with respect
to such unconverted
portions of this Note and
the Company shall, as soon as
 practicable,
return such
 unconverted
 Note  to 
the Holder or,
 if the Note has
 not  been
surrendered,
adjust its records
to reflect
that such
portion of this Note
has not been
converted.
In all cases,
the Holder shall
retain all
of its rights and
remedies
(including, without
limitation, (i)
the right to
receive
Conversion
Default
Payments
pursuant
to Section
1.3 to the extent
required thereby
for such Conversion
Default and any
subsequent Conversion
Default
and (ii) the right
to have the
Conversion Price
with respect
to subsequent
conversions determined
in accordance
with Section 1.3)
for the Company’s
failure
to convert
this Note.

 

1.9Prepayment.
Maker may prepay this Note, in accordance with the following schedule: If within 30 calendar days from the execution of this Note,
110% of all outstanding principal and interest due on each outstanding Note in one payment; After 30 calendar days from the execution
of the note and within 60 days from execution, 120% of all outstanding principal and interest due on each outstanding Note in
one payment. Between 60 and 180 days from the date of execution, the Note may be prepaid for 140% of all outstanding amounts due
on each outstanding Note in one payment.

 

 

 

ARTICLE
II. 
CERTAIN
COVENANTS

 

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

 

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

  

2.3Borrowings.
 The Issuer shall
 retain the ability to  consent,
 create,
 incur,
 assume guarantee,
 endorse,
 contingently
 agree
 to  purchase
 or  otherwise
 become
 liable 
upon  the obligation
 of  any
 person,
 firm,
partnership, 
joint  venture
 or  corporation,
 except
 by 
the endorsement
of negotiable
instruments for
deposit or collection,
or suffer
to exist
any liability
for borrowed
money (a “Future Financing”), as long as it shall first provide Holder with at least twenty four (24) hour notice
of such Future Financing and provide Holder with the ability to match the same terms of the Future Financing, except
no notice shall be required to Holder for: (a)
borrowings
in existence
or committed
on the date
hereof
and of which
the Issuer has
informed
Holder in writing
prior to
the date hereof,
(b) indebtedness
to trade creditors
or  financial
institutions  incurred
 in  the ordinary
 course
of  business or 
(c) borrowings,
the proceeds
of which shall
be used to
repay this Note.

 

2.4Sale
of Assets. 
So long
as the
Company shall
have any
obligation
under this
Note, the
Company shall
not, without the
Holder’s written
consent,
sell, lease
or otherwise
dispose of any
significant
portion of
its assets outside
the ordinary
course
of business.  Any consent
to the disposition of any
assets may be
conditioned on a specified
use of the proceeds
of disposition.

 

2.5Advances
and Loans.
 So
long as
the Company
shall
have any
obligation
under this Note,
the Company shall
not, without the
Holder’s written
consent,
lend money,
give credit
or make
advances
to any
person, firm,
joint venture or corporation,
including,
without limitation, officers,
 directors,
employees,
subsidiaries and
affiliates
of the Company, except
loans, credits or advances
(a) in  existence
or committed on the date
hereof and which
the Company has
informed
Holder in writing prior
to the date hereof,
(b) made in the ordinary
course
of business or
(c)
not in excess
of $50,000.

 

 

ARTICLE
III. 
EVENTS OF DEFAULT

 

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

 

3.1Failure
 to  Pay
 Principal
 or  Interest.The
 Company 
fails  to 
pay 
the principal
 hereof
 or  interest
 thereon 
when 
due  on 
this  Note, 
whether 
at  maturity,
 upon acceleration
or otherwise.

 

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

 

3.3Breach
of Covenants.
 The Company
breaches
any
covenant
or other
term or
condition contained
in this Note
and any
collateral
documents
including but
not limited
to the Purchase
Agreement.

 

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

 

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

 

3.6Judgments.
 Any money
judgment,
writ
or similar
process
shall be
entered
or filed
against
the Company
or any
subsidiary
of the Company
or any
of its property
or other
assets for
more than $100,000,
and shall remain
unvacated,
unbonded or unstayed
for a period
of twenty (20)
 days 
unless 
otherwise  consented
 to  by the 
Holder, 
which  consent
 will  not be unreasonably
withheld.

 

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

 

3.8Delisting
of Common
Stock. If the
Company shall
fail to
maintain in good standing
the listing  of  the
Common Stock
on the OTC Marketplaces
or an
equivalent
replacement
exchange,
the Nasdaq
National
Market,
the Nasdaq
SmallCap
Market
or the New
York Stock
Exchange
or if the Company's shall lose the "bid" price for its common stock on any given trading day.

 

3.9Failure
to Comply
with the Exchange
Act. If the
Company shall
fail to comply,
in a timely manner, with the
reporting
requirements
of the Exchange
Act (other than the filing of the Company’s quarterly report on Form 10-Q for
the quarter ended March 31, 2017); and/or
the Company
shall cease
to be subject to the
reporting
requirements
of the
Exchange
Act.

 

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

 

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

 

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

 

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

 

3.14Reverse
Splits. The  Company
 effectuates
 a  reverse
 split  of 
its

Common
Stock without at least
twenty
(20) days
prior
written
notice to the
Holder.

 

 

3.15Replacement
of Transfer
Agent. In
the event
that the
Company proposes
to replace
its transfer
agent,
the Company
fails to
provide,
prior to
the effective
date
of such replacement,
a fully
executed
 Irrevocable
Transfer
Agent
Instructions
in a form
as initially
delivered
pursuant
to the Purchase
Agreement
(including but
not limited
to the provision
to irrevocably
reserve
shares of Common
Stock in the
Reserved
Amount) signed by
the successor transfer
agent
to Company and the
Company.

 

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

 

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

 

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

 

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

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

normal
business hours
where such
notice is
to be received)
or (b)
on the second
business day
following  the 
date  of 
mailing  by 
express
 courier
 service,
 fully
prepaid,
 addressed
 to  such
address,
or upon
actual
receipt
of such
mailing,
whichever
shall first
occur.
The addresses
for such communications
shall be:

 

If
to the Company, to:

 

 

 

If
to the Holder:

GHS
Investments, LLC. 

420JerichoTurnpike,

Suite 207

Jericho,
NY 11753

 

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

 

4.4Assignability.This
Note shall
be binding upon
the Company
and its successors
 and
assigns,
and shall
inure to
be the benefit
of the Holder
and its
successors
and assigns.
 Notwithstanding
anything
in this Note to the contrary,
this Note may be pledged
as collateral
in connection with a bona fide
margin
account or other
lending arrangement.

4.5Cost
of Collection.
 If
default
is made
in the payment
of this
Note, the

Company
shall
pay the
Holder
hereof
costs of collection,
including reasonable
attorneys’
fees.

 

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

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

 

4.8Purchase
Agreement.
 By
its acceptance
of this Note,
each
party
agrees
to be bound by
the applicable
terms of the Assignment Agreement and
supporting documents of same date.

 

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

 

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

 

  

 

IN
WITNESS
WHEREOF,
Company has
caused
this Note
to be signed
in its
name by
its duly authorized
officer:

 

 

	 	Guided Therapeutics, Inc.	 
	 	 	 
	 	By:     /s/ Gene Cartwright	 
	 	 	 
	 	Print: Gene Cartwright	 
	 	 	 
	 	Title/Date: CEO 5/19/17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]