Document:

Exhibit 10.20

 

SECURITIES PURCHASE
AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is made and entered into as of March 30, 2016, by and between NUGENE INTERNATIONAL,
INC., a Nevada corporation (“Company”), and the investor listed on the signature page hereof (“Purchaser”).

 

RECITALS

 

WHEREAS, the Company desires
to sell to the Purchaser, and the Purchaser desires to purchase from the Company, on the terms and conditions set forth in this
Agreement, the Company’s 8% Senior Convertible Note Due December 31, 2016, in the form of Exhibit A attached hereto
(the “Note”) and 50,000 restricted shares of common stock (the “Shares”), and

 

NOW, THEREFORE, in consideration
of the foregoing, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           AGREEMENT
TO PURCHASE AND SELL SECURITIES. Subject to the terms and conditions of this Agreement, the Purchaser hereby agrees to
purchase the Note and Shares from the Company, and the Company hereby agrees to sell the Note and Shares to the Purchaser at the
Closing (as defined below). The aggregate purchase price for the Note and Shares shall be $250,000 (“Purchase Price”).
As used herein, the term “Securities” shall mean (i) the Note and shares of Common Stock issued upon conversion
of the Note and (ii) the Shares.

 

2.           CLOSING.

 

(a)         The
purchase and sale of the Securities shall take place within two (2) calendar days after the date of this Agreement, on such
date as the Company and the Purchaser may agree either in writing or orally (the “Closing”).

 

(b)         At
the Closing, against delivery of the Purchase Price by wire transfer of immediately available funds in accordance with the Company’s
instructions, the Company shall issue and deliver or cause to be delivered to the Purchaser an originally executed Note and a stock
certificate for the Shares.

 

3.         REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to the Purchaser, as of the date hereof and as
of the Closing, that:

 

(a)          Organization
and Existence; Authority/Capacity. The Company is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with full right, power and authority to enter into this Agreement, issue the Note and the Shares
(“Transaction Documents”) and to consummate the transactions contemplated hereby and otherwise to carry out,
perform and discharge its obligations under such documents.

 

    	 	1	 

     

    

 

(b)          Due
Authorization. All corporate actions on the part of the Company necessary for the authorization, execution, delivery of, and
the performance of all obligations of the Company under this Agreement, including the authorization, issuance, reservation for
issuance and delivery of the Securities, have been taken and no further consent or authorization of the Company, the Board of Directors
of the Company or the Company’s stockholders is required. Each of the Note and this Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement
of creditors’ rights generally, and (ii) the effect of rules of law governing the availability of equitable remedies.

 

(c)          Valid
Issuance of the Securities. When issued at the Closing, the Securities will be duly authorized, validly issued, fully paid
and non-assessable, free and clear from all taxes and liens, claims and encumbrances imposed by the Company, other than restrictions
under applicable securities laws, and will not be subject to any preemptive rights or similar rights that have not been waived
by the holders thereof. The Company has reserved for issuance, and at all times hereafter will reserve for issuance, a sufficient
number of shares of Common Stock to permit all shares of common stock to be issued upon full conversion of the Securities.

 

(d)          No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, and the consummation by the
Company of the transactions contemplated thereby, do not and will not (i) conflict with or violate any provision of the Company’s
organizational documents, (ii) conflict with, result in a breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company
or any of its subsidiaries pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument to which the Company (or
any of its subsidiaries) is a party or by which any property or asset of the Company (or any of its subsidiaries) is bound or affected,
except to the extent such conflict, breach, default, lien or right would not reasonably be expected to result in a material adverse
effect on the Company, or (iii) result in a violation of any constitution, statute, law, rule, regulation, order, judgment, injunction,
decree, ruling, charge or other restriction of any court or governmental authority to which the Company (or any of its subsidiaries)
is subject (including without limitation federal, state and foreign securities laws and regulations) or by which any material property
or asset of the Company (or any of its subsidiaries) is bound or affected, except to the extent such violation would not reasonably
be expected to result in a material adverse effect on the Company.

 

(e)          Exchange
Act Documents. Since September 30, 2015, the Company has filed all reports, schedules, statements and other documents required
to be filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated
thereunder (the “Exchange Act Documents”). Each of the Exchange Act Documents, as of the respective dates thereof
(or, if amended or superseded by a filing or submission, as the case may be, prior to the Closing date, then on the date of such
filing or submission, as the case may be), (1) did not contain any untrue statement of a material fact nor omit to state a
material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made,
not misleading and (2) complied in all material respects with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder applicable to such Exchange Act Document. The Company and its subsidiaries have no liabilities
or obligations which are not disclosed in the Exchange Act Documents, other than those liabilities or obligations incurred in the
ordinary course of the Company's or its subsidiaries' respective businesses since the date of the financial statements contained
therein which liabilities and obligations, individually or in the aggregate, do not have, and could not reasonably be expected
to result in, a material adverse effect on the Company. Since September 30, 2015, there has not been and there exists no event,
occurrence, circumstance, condition or development (whether with or without notice or the passage of time or both) that, individually
or in the aggregate, has had or could reasonably be expected to result in a material adverse effect on the Company.

 

    	 	2	 

     

    

 

4.          REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER. The Purchaser represents and warrants to the Company that:

 

(a)          Due
Authorization. All action on the part of the Purchaser necessary for the authorization, execution, delivery of and the performance
of the transactions contemplated by this Agreement have been taken and no further consent or authorization of the Purchaser is
necessary. This Agreement, when delivered by the Purchaser in accordance with the terms hereof, will constitute Purchaser’s
legal, valid and binding obligation, enforceable in accordance with its terms, except as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the availability of equitable remedies.

 

(b)          Purchase
for Own Account. The Securities are being acquired for investment for the Purchaser’s own account, not as a nominee or
agent, in the ordinary course of business, and not with a view to the public resale or distribution thereof within the meaning
of the Securities Act of 1933, as amended (the “Securities Act”). The Purchaser does not have any agreement
or understanding, direct or indirect, with any other person to sell or otherwise distribute the Securities. Notwithstanding the
foregoing, the parties hereto acknowledge the Purchaser’s right at all times to sell or otherwise dispose of all or any part
of the Securities in compliance with applicable federal and state securities laws and as otherwise contemplated by this Agreement.

 

(c)          Investment
Experience and Knowledge of the Company. Purchaser represents that it is an accredited investor within the meaning of Regulation
D under the Securities Act. The Purchaser has substantial experience as an investor in private placement transactions of securities
of public companies similar to the Company and acknowledges that it can bear the economic risk of its investment in the Securities
and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of
this investment in the Securities and protecting its own interests in connection with this investment. The Purchaser has also had
the opportunity to ask questions of and receive answers from the Company and its management regarding the Company and the terms
and conditions of this investment.

 

5.          MISCELLANEOUS.

 

(a)          Successors
and Assigns. The terms and conditions of this Agreement will inure to the benefit of and be binding upon the respective successors
and permitted assigns of the parties. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Purchaser. The Purchaser may assign its rights under this Agreement to any person to whom such
Purchaser assigns or transfers any of the Securities, provided that such transferee agrees in writing to be bound by the terms
and provisions of this Agreement, and such transfer is in compliance with the terms and provisions of this Agreement and permitted
by federal and state securities laws.

 

    	 	3	 

     

    

  

(b)          Expenses.
Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities
to the Purchaser. The Purchaser as designated on the signature page will receive a non-accountable legal documentation preparation
fee equal to $5,000 which will be netted against its Purchase Price.

 

(c)          Governing
Law. This Agreement will be governed by and construed and enforced under the internal laws of the State of New York, without
reference to principles of conflict of laws or choice of laws.

 

(d)          Survival.
The representations and warranties of the Company contained in Section 3 of this Agreement and of the Purchaser contained
in Section 4 of this Agreement shall survive the Closing.

 

(e)          Counterparts;
Electronic Delivery. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against
the parties actually executing such counterparts, and all of which together shall constitute one instrument, and such counterparts
may be delivered electronically via PDF or facsimile.

 

(f)          Headings.
The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.

 

(g)          Prohibition
on Variable Rate Transactions and Section 3(a)(10) Transactions. The Company agrees not to enter into any financing transactions
that contain a conversion price that changes daily or varies based on the current market price of the common stock (a “Variable
Rate Transaction”). The Company agrees not to enter into any debt settlement agreements pursuant to Section 3(a)(10) of the
Securities Act of 1933.

 

    	 	4	 

     

    

 

(h)          Indemnification
of Purchaser. Subject to the provisions of this Section 5(h), the Company will indemnify and hold the Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that the Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate
of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of the Purchaser Party’s representations, warranties or covenants under the Transaction Documents or
any agreements or understandings the Purchaser Party may have with any such shareholder or any violations by such Purchaser Party
of state or federal securities laws or any conduct by the Purchaser Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, the Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Purchaser Party except to the extent that the employment thereof has been specifically authorized
by the Company in writing, (ii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of the Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser
Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by the Purchaser Party in this Agreement. The indemnification required by this Section 5(h) shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.

 

(i)          Notices.
Any notices and other communications required or permitted under this Agreement shall be in writing and shall be delivered (i) personally
by hand or by courier, (ii) mailed by United States first-class mail, postage prepaid or (iii) sent by facsimile or other
electronic transmission directed to the address or facsimile number or other address for electronic transmission set forth below.
All such notices and other communications shall be deemed given upon (i) receipt or refusal of receipt, if delivered personally,
(ii) three (3) days after being placed in the mail, if mailed, or (iii) confirmation of facsimile transfer or other
electronic transmission, if faxed or emailed.

 

If to the Company:

Nugene International,
Inc.

17912 Cowan,
Suite A

Irvine, California
92614

 

If to the Purchaser:

 

Gemini Master
Fund, Ltd.

c/o Gemini Strategies

619 South Vulcan
Ave.; Suite #203

Encinitas, CA
92024

Steve@GeminiStrategies.com

 

(j)          Amendments.
This Agreement may be amended and the observance of any term of this Agreement may be amended or waived only with the written consent
of the Company and all of the Purchasers.

 

    	 	5	 

     

    

 

(k)          Severability.
If any provision of this Agreement is held to be unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such provision were so excluded and will be enforceable in
accordance with its terms.

 

(l)          Entire
Agreement. This Agreement, together with all exhibits and schedules thereto, constitutes the entire agreement and understanding
of the parties with respect to the subject matter hereof and thereof and supersede any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties with respect to the subject matter hereof and thereof.

 

(m)          Waivers.
No waiver by any party to this Agreement of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

 

(n)          Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser
and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not
be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby
agree to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

[Signature
Page Follows]

 

    	 	6	 

     

    

 

IN WITNESS WHEREOF, as
of the date first written above, the parties hereto have duly executed, or caused their authorized officers to duly execute,
this Agreement.

 

	COMPANY:	 
	 	 
	NUGENE INTERNATIONAL, INC.	 
	 	 
	By:	 	 
	Name:	 
	Title:	 

 

	PURCHASER:	 
	 	 
	GEMINI MASTER FUND, LTD.	 
	BY: GEMINI STRATEGIES LLC, INC.	 
	 	 
	 	By:	 	 
	 	Name:    Steven Winters	 
	 	Title:      President	 

 

Principal Amount of Note:
$275,000

Purchase Price of Note:
$250,000 (less documentation preparation fee of $5,000)

# of Shares to be issued:
50,000

 

    	 	7	 

     

    

 

Exhibit A

 

FORM OF SENIOR 8%
CONVERTIBLE NOTE

 

    	 	8Exhibit 10.21

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND HAS
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.

 

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

 

	Original Issue Date:  March 30, 2016	$275,000.00

 

NUGENE
INTERNATIONAL, INC.

 

8% SENIOR CONVERTIBLE NOTE DUE DECEMBER 31,
2016

 

This 8% Senior Convertible
Note of NUGENE INTERNATIONAL, INC., a Nevada corporation (the “Company”), having its principal place of business
at 17912 Cowan, Suite A, Irvine, California 92614 (this “Note”), is duly authorized and validly issued. This
Note is being issued with an original issue discount of $25,000 for a purchase price of $250,000 (the “Purchase Price”).

 

FOR VALUE RECEIVED, the
Company promises to pay to the order of GEMINI MASTER FUND, LTD., a Cayman Islands company, or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, on or before December 31, 2016 (the “Maturity Date”) or
such earlier date as this Note is required or permitted to be repaid as provided hereunder, the principal sum of $275,000.00.

 

This Note is subject to
the following additional provisions:

 

Section 1.          Definitions.
 For the purposes hereof, in addition to the terms defined elsewhere in this Note (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

    	 	1	 

     

    

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company
or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company
or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or
proceeding is entered; (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or
any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company
or any Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Subsidiary thereof calls
a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company
or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any
of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States
or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange
Act of 1934, as amended) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by
contract or otherwise) of in excess of 33% of the voting securities of the Company, or (ii) the Company merges into or consolidates
with any other entity, or any entity merges into or consolidates with the Company and, after giving effect to such transaction,
the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the Company
or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to
a third party and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting
power of the acquiring entity immediately after the transaction, or (iv) a replacement at one time or within a three year period
of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals
who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors
who are members on the date hereof), or (v) the execution by the Company of an agreement to which the Company is a party or by
which it is bound, providing for any of the events set forth in clauses (i) through (iv) above.

 

“Event
of Default” shall have the meaning set forth in Section 5.

 

“Fundamental
Transaction” means any Change of Control Transaction.

 

    	 	2	 

     

    

 

“Mandatory
Default Amount” is equal to the greater of (i) one hundred twenty percent (120%) of the outstanding principal (plus all
accrued and unpaid Interest, if any) and (ii) the product of (A) the highest closing price for the five (5) days on which the principal
Primary Market is open for business (a “Trading Day”) immediately preceding the Holder’s acceleration
and (B) a fraction, of which the numerator is the entire outstanding principal, and of which the denominator is the Conversion
Price as of the date such ratio is being determined.

 

“New
York Courts” shall have the meaning set forth in Section 7(d).

 

“Original
Issue Date” means the date of the issuance of this Note, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence this Note.

 

“Purchase
Agreement” means that certain Securities Purchase Agreement, dated on or about the date hereof, among the Company
and the Holder, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Subsidiary”
means any direct or indirect subsidiary of the Company currently existing or formed or acquired after the date hereof.

 

Section 2.            Interest
Rate; Default Interest.

 

a)          Interest
Rate. Interest shall accrue on this note at an annual rate of 8% commencing on the Original Issue Date and shall be payable
in cash on the Maturity Date, or in shares of common stock upon a conversion.

 

b)          Default
Interest Rate. Upon an Event of Default hereunder, interest shall accrue daily on the outstanding principal amount of this
Note at a rate per annum equal to 18%.

 

Section 3.            Conversion
of Note; Prepayment.  This Note shall be convertible into shares of Common Stock, on the terms and conditions
set forth in this Section 3.

 

(a)           Conversion
Right.  Subject to the provisions of Section 3(c), at any time or times on or after the date set out above
as the Original Issue Date (the “Original Issue Date”), the Holder shall be entitled to convert 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(b), at the Conversion Price (as defined below) subject to the Conversion Minimum (as defined below).  The
number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be
equal to the quotient of dividing the Conversion Amount by the Conversion Price (“Conversion Shares”).  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 up to the
nearest whole share.  The Company shall pay any and all transfer agent fees, legal fees, costs and any other fees or
costs that may be incurred or charged in connection with the issuance of shares of Common Stock to the Holder arising out of or
relating to the conversion of this Note.

 

    	 	3	 

     

    

 

(i)           “Conversion
Amount” means the portion of the principal and Interest to be converted, plus any penalties, redeemed or otherwise
with respect to which this determination is being made.

 

(ii)          
“Conversion Price” shall equal $0.70, subject to adjustment as provided in this Note.

 

(iii)          “Conversion
Minimum” shall, unless otherwise approved in writing by the Company, constitute any individual conversion of at least
an amount equal to $10,000 of the principal.

 

(iv)         “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on the Primary Market; (b) if the Common Stock is not then quoted
for trading on the Primary Market and if prices for the Common Stock are then reported in the “Pink Sheets” published
by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

 

(b)           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 transmit by email, facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York, NY Time,
on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the “Conversion
Notice”) to the Company.  On or before the third (3rd) Business Day following the date of receipt of a
Conversion Notice, the Company shall (A) if legends are not required to be placed on certificates of Common Stock pursuant to the
then existing provisions of Rule 144 of the Securities Act of 1933 (“Rule 144”) and provided that the
Company’s transfer agent is participating in the Depository Trust Company's (“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, or (B) if the Company’s 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 which certificates shall not bear any restrictive legends unless required pursuant the Rule 144.  If
this Note is physically surrendered for conversion and the outstanding principal is greater than the principal portion of the Conversion
Amount being converted, then the Company shall, upon request of the Holder, 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 representing the
outstanding principal not converted.  The individual, corporation, partnership, limited liability company, limited liability
partnership, trust, association, organization or other entity (each a “Person”) 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 upon the transmission of a Conversion Notice.  For the purposes hereof, the term “Business
Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United
States or any day on which banking institutions in the State of California are authorized or required by law or other governmental
action to close.

 

    	 	4	 

     

    

 

(ii)           Company’s
Failure to Timely Convert. If within three (3) Business Days after the Company’s receipt of the facsimile or email copy
of a Conversion Notice, the Company shall fail to issue and deliver to Holder the number of shares of Common Stock to which the
Holder is entitled upon such Holder's conversion of any Conversion Amount (a “Conversion Failure”), then
in addition to any remedies available under 3(d)(iv) below, the principal shall increase by $3,000 per day until the Company issues
and delivers a certificate to the Holder for the number of shares of Common Stock to which the Holder is entitled upon such Holder’s
conversion of any Conversion Amount.  If the Company fails to deliver shares in accordance with the timeframe stated
in this Section, resulting in a Conversion Failure, the Holder, at any time prior to selling all of those shares, may rescind any
portion, in whole or in part, of that particular conversion attributable to the unsold shares and have the rescinded Conversion
Amount returned to the principal with the rescinded Conversion Shares returned to the Company.

 

(iii)           DTC
Eligibility.  If the Company loses its status as “DTC Eligible” for any reason, the Conversion Price
shall thereafter be redefined to mean $0.25, subject to further adjustment as provided in this Note.

 

(iv)           Book-Entry.  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 Conversion 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 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.

 

    	 	5	 

     

    

 

(c)           Limitations
on Conversions.  The Company shall not effect any conversions of this Note and the Holder shall not have the right
to convert any portion of this Note or receive shares of Common Stock as payment of interest hereunder to the extent that after
giving effect to such conversion or receipt of such Interest payment, the Holder, together with any affiliate thereof, would beneficially
own (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules promulgated thereunder) in excess of 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion or receipt of shares as payment of Interest.  Since the Holder will
not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder,
unless the conversion at issue would result in the issuance of shares of Common Stock in excess of 4.99% of the then outstanding
shares of Common Stock without regard to any other shares which may be beneficially owned by the Holder or an affiliate thereof,
the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit any
particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies,
the determination of which portion of the principal amount of this Note is convertible shall be the responsibility and obligation
of the Holder.  If the Holder has delivered a Conversion Notice for a principal amount of this Note that, without regard
to any other shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted
amount hereunder, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum principal amount
permitted to be converted on such Conversion Date in accordance with Section 3(a) and, any principal amount tendered for
conversion in excess of the permitted amount hereunder shall remain outstanding under this Note.  The provisions of this
Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than sixty-five (65) days’
prior notice to the Company.  Other Holders shall be unaffected by any such waiver.

 

(d)           Other
Provisions.

 

(i)           Share
Reservation.      The Company shall at all times reserve and keep available out of its authorized
Common Stock a number of shares of Common Stock equal to 200% of the full number of shares of Common Stock issuable upon conversion
of all outstanding amounts under this Note.

 

(ii)           Prepayment.  At
any time the Company shall have the option, upon five (5) Business Days’ written notice to Holder, to pre-pay the entire
remaining outstanding principal amount of this Note in cash, provided that (A) the Company shall pay the Holder one hundred twelve
percent (112%) of the principal plus Interest outstanding in repayment hereof, (B) such amount must be paid in cash on the next
Business Day following such five (5) Business Day notice period, and (C) the Holder may still convert this Note pursuant to the
terms hereof at all times until such prepayment amount has been received in full.  In the event that the Company completes
a financing or a series of financings, with the same or different investors, that in the aggregate result in gross proceeds to
the Company of at least $1.5 million, then the Company is required to pre-pay and redeem the entire remaining outstanding principal
amount plus Interest of this Note in cash, provided that (A) the Company shall pay the Holder one hundred twelve percent (112%)
of the principal plus Interest outstanding in repayment hereof and (B) such amount must be paid in cash on the next Business Day
after receipt of the gross proceeds. Except as set forth in this Section 3, the Company may not prepay this Note in whole or in
part.

 

    	 	6	 

     

    

 

(iii)           All
calculations under this Section 3 shall be rounded up to the nearest $0.00001 or whole share.

 

(iv)           Nothing
herein shall limit a Holder’s right to pursue actual damages (such damages shall include but not be limited to the loss of
potential trading gains) or declare an Event of Default herein for the Company’s failure to deliver certificates representing
shares of Common Stock upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in
each case without the need to post a bond or provide other security.  The exercise of any such rights shall not prohibit
the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

Section 4.            Adjustments
to Conversion Price; Fundamental Transactions.  The Conversion Price and the number and kind of securities issuable
upon conversion of this Note shall be subject to adjustment from time to time as set forth in this Section 4.

 

(a)           Stock
Dividends and Splits.  If at any time while this Note is outstanding the Company (i) declares or pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of capital stock (or securities convertible into or
exercisable or exchangeable for capital stock) that is payable in shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including, without limitation, by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares
of capital stock of the Company (including, without limitation, in connection with any merger or consolidation), then in each such
case the Conversion Price then in effect shall be adjusted by multiplying such Conversion Price by a fraction of which (A) the
numerator shall be the number of shares of Common Stock outstanding immediately before such event, and (B) the denominator shall
be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date for such dividend or distribution, and any adjustment
made pursuant to clauses (ii), (iii) or (iv) of this paragraph shall become effective immediately after the effective date of such
subdivision, combination or reclassification.

 

    	 	7	 

     

    

 

(b)           Pro
Rata Distributions.  Subject to Section 4(c) below, if at any time while this Note is outstanding the
Company declares or pays any dividend or otherwise distributes any of its assets (including, without limitation, cash, properties,
evidences of indebtedness, securities (including any options or other convertible securities but excluding a distribution of Common
Stock covered by Section 4(a) above or Purchase Rights covered by Section 4(c) below) or options or rights to acquire
any such assets) (in each case, “Distributed Property”) to all holders of Common Stock pro
rata (and not to all Holders in their capacity as holders of Notes), whether by way of dividend, return of capital, spin-off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction, then in each such case the Conversion
Price in effect immediately prior to the close of business on the record date for such dividend or distribution shall be reduced,
effective as of the close of business on such record date, to a price determined by multiplying such Conversion Price by a fraction
of which (i) the denominator shall be the closing price of Common Stock on the Primary Market on such record date (the “Market
Price”), and (ii) the numerator shall be such Market Price minus the value of the Distributed Property on such date
applicable to one outstanding share of Common Stock, as determined by the Company’s independent certified public accounting
firm that regularly examines the financial statements of the Company.

 

(c)           Rights
Offerings Below Market.  Notwithstanding Section 4(b) above, if at any time while this Note is outstanding
the Company grants, issues or sells pro rata to all holders of its outstanding shares of Common Stock, any options, convertible
securities or other rights (the “Purchase Rights”) entitling them to directly or indirectly
subscribe for or purchase shares of Common Stock at an effective price per share less than the Market Price on the record date
of such grant, issuance or sale, then in each such case the Conversion Price in effect immediately prior to the close of business
on such record date shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying
such Conversion Price by a fraction of which (i) the numerator shall be the number of shares of Common Stock outstanding as of
the close of business on such record date plus the number of shares of Common Stock which the aggregate offering price of the total
number of shares so offered for subscription or purchase (including and assuming receipt by the Company in full of all consideration
payable upon both issuance and exercise of such Purchase Rights) would purchase at such Market Price, and (ii) the denominator
shall be the number of shares of Common Stock outstanding as of the close of business on such record date plus the total number
of additional shares of Common Stock so offered for subscription or purchase; provided, that in lieu of receiving such adjustment
to the Conversion Price, the Holder shall have the option, upon written notice to the Company within thirty (30) days following
its receipt of the notice of such adjustment, to elect to acquire, upon any conversion of this Note and in accordance with the
terms applicable to the issuance of such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if
the Holder had converted such portion of this Note being converted (without regard to any limitations on ownership or conversion
and regardless of whether this Note was then convertible) immediately prior to such record date.  To the extent that
shares of Common Stock have not been delivered pursuant to such Purchase Rights specified in this Section upon the expiration or
termination of such Purchase Rights, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect
had the adjustment made upon the issuance of such Purchase Rights been made on the basis of delivery of only the number of shares
of Common Stock actually delivered. In determining whether any Purchase Rights entitle the holder thereof to subscribe for or purchase
shares of Common Stock at less than such Market Price, and in determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received for such Purchase Rights, the value of such consideration (if
other than cash) to be determined in good faith by the Company’s Board of Directors.

 

    	 	8	 

     

    

 

(d)           Fundamental
Transactions.  If at any time while this Note is outstanding, (i) the Company effects any merger or consolidation
of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property,
or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (each, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon any conversion of this Note, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same amount and
kind of securities, cash and property as the Holder would have been entitled to receive upon the occurrence of such Fundamental
Transaction if the Holder had been the record holder of one Conversion Share immediately prior to such Fundamental Transaction
(without regard to any limitations or restrictions on conversion or acquisition of Conversion Shares and whether or not this Note
was then convertible) (the “Alternate Consideration”), and the Conversion Price shall be appropriately
and equitably adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction relative to the then Conversion Price.  The Company shall
apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any conversion of this Note following such Fundamental Transaction.  In case of any such Fundamental Transaction,
any successor to the Company, acquirer or surviving entity (if other than the Company) shall expressly assume the due and punctual
observance and performance of each and every covenant, obligation, liability and condition under this Note to be performed and
observed by the Company, subject to such modifications as may be reasonably deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for adjustments of the number and kind of Conversion Shares
for which this Note is convertible which shall be as nearly equivalent as practicable to the adjustments provided for in this Section.  Such
assumption shall be pursuant to a written agreement in form and substance reasonably satisfactory to the Holder.  At
the Holder’s request, any successor to the Company, acquirer or surviving entity in such Fundamental Transaction shall issue
to the Holder a new Note from such entity substantially similar in form and substance to this Note and consistent with the foregoing
provisions, which new Note shall be reasonably satisfactory to the Holder and include, without limitation, (A) the outstanding
principal and Interest owed to the Holder under this Note, (B) an interest rate equal to the Interest Rate, (C) similar ranking
to this Note, and (D) the Holder’s right to convert the new Note into Alternate Consideration.  The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor, acquirer or
surviving entity to comply with the provisions of this Section and ensuring that this Note (or any such replacement security) will
be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.  Notwithstanding anything
to the contrary contained herein, if a Fundamental Transaction (X) is an all cash transaction, (Y) constitutes or results in a
“Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act (going private transaction), or (Z) otherwise
results in the successor, surviving or acquiring entity not being traded on a national securities exchange, the Nasdaq Global Select
Market, the Nasdaq Global Market or the Nasdaq Capital Market, then upon the written request of the Holder, delivered before the
sixtieth (60th) day after such Fundamental Transaction, the Company (or any such successor, acquirer or surviving entity) shall
redeem this Note from the Holder for a redemption price, payable in cash within five (5) Business Days after such request (or,
if later, on the effective date of such Fundamental Transaction), equal to the value of this Note as determined using the Black-Scholes
Option Pricing Model via Bloomberg.  The provisions of this Section shall similarly apply to successive Fundamental Transactions
and shall be applied without regard to any limitations of this Note.

 

    	 	9	 

     

    

 

Section
5.        Subsequent Equity Sales. If the Company, at any time while this
Note is outstanding, shall issue shares of Common Stock or securities or rights convertible or exchangeable into shares of Common
Stock (“Common Stock Equivalents”) entitling any person to acquire shares of Common Stock, at a price per share
less than the then current Conversion Price (such lower price, the “Base Share Price” and such issuances collectively,
a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights issued in connection with such issuance, be entitled to receive shares of Common
Stock at a price less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price),
then, the Conversion Price shall be reduced to such lower Dilutive Issuance price. Such adjustment shall be made whenever such
Common Stock or Common Stock Equivalents are issued. If the Company enters into a Variable Rate Transaction, despite the prohibition
set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the
lowest possible conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in
writing, no later than three Trading Days following the issuance of any Common Stock or Common Stock Equivalents subject to this
Section 5, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other
pricing terms (such notice the “Dilutive Issuance Notice”).  For purposes of clarification, whether or
not the Company provides a Dilutive Issuance Notice pursuant to this Section 5, upon the occurrence of any Dilutive Issuance,
after the date of such Dilutive Issuance the Holder is entitled to receive a number of shares of common stock based upon the Base
Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Conversion. In no event
will the Base Share Price be less than $0.25.

 

For purposes of
this Section 5, the following subsections (1) to (5) shall also be applicable:

 

    	 	10	 

     

    

 

(1)         Issuance
of Rights or Options. In case at any time the Company shall in any manner grant (directly and not by assumption in a merger
or otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or
any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or options being called “Options”
and such convertible or exchangeable stock or securities being called “Convertible Securities”) whether
or not such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price
per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible
Securities (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount,
if any, received or receivable by the Company as consideration for the granting of such Options, plus (y) the aggregate amount
of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options
which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon the issue or sale
of such Convertible Securities and upon the conversion or exchange thereof, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options) shall be less than the Conversion Price in effect immediately prior to the time of the granting
of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options or upon conversion
or exchange of the total amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have
been issued for such price per share as of the date of granting of such Options or the issuance of such Convertible Securities
and thereafter shall be deemed to be outstanding for purposes of adjusting the Conversion Price. Except as otherwise provided below,
no adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock or of such Convertible Securities
upon exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

 

(2)         Issuance
of Convertible Securities. In case the Company shall in any manner issue (directly and not by assumption in a merger or otherwise)
or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount received or receivable by the Company
as consideration for the issue or sale of such Convertible Securities, plus (y) the aggregate amount of additional consideration,
if any, payable to the Company upon the conversion or exchange thereof, by (ii) the total number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be less than the Conversion Price in effect immediately
prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange
of all such Convertible Securities shall be deemed to have been issued for such price per share as of the date of the issue or
sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Conversion Price,
provided that (a) except as otherwise provided in subsection (3) below, no adjustment of the Conversion Price shall be made upon
the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities and (b) no further adjustment
of the Conversion Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to
purchase any such Convertible Securities for which adjustments of the Conversion Price have been made pursuant to the other provisions
of this Section 5.

 

    	 	11	 

     

    

 

(3)         Change
in Option Price or Conversion Rate. Upon the happening of any of the following events, namely, if the purchase price provided
for in any Option referred to above, the additional consideration, if any, payable upon the conversion or exchange of any Convertible
Securities referred to above, or the rate at which Convertible Securities referred to above are convertible into or exchangeable
for Common Stock shall change at any time (including, but not limited to, changes under or by reason of provisions designed to
protect against dilution), the Conversion Price in effect at the time of such event shall forthwith be readjusted to the Conversion
Price which would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued
or sold.

 

(4)         Consideration
for Stock. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the gross amount received by the Company therefor, before any deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case
any shares of Common Stock, Options or Convertible Securities shall be issued or sold for a consideration other than cash, the
amount of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company, after deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection therewith. In case any Options shall be issued in connection
with the issue and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as
determined in good faith by the Board of Directors of the Company. If Common Stock, Options or Convertible Securities shall be
issued or sold by the Company and, in connection therewith, other Options or Convertible Securities (the “Additional
Rights”) are issued, then the consideration received or deemed to be received by the Company shall be reduced
by the fair market value of the Additional Rights (as determined using a method mutually agreed to by the Company and the Holder).
The Board of Directors of the Company shall respond promptly, in writing, to an inquiry by the Holders as to the fair market value
of the Additional Rights. In the event that the Board of Directors of the Company and the Holders are unable to agree upon the
fair market value of the Additional Rights, the Company and the Holders shall jointly select an appraiser, who is experienced in
such matters. The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne evenly
by the Company and the Holder.

 

    	 	12	 

     

    

 

(5)         Record
Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (ii) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such record date shall 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.

 

Section 6.            Events
of Default. 

 

a)         “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):

 

i.          any
default in the payment of (A) the principal amount under this Note, or (B) interest, liquidated damages and other amounts owing
under this Note as and when the same shall become due and payable (whether on
the Maturity Date or by acceleration or otherwise) which default is not cured within 3 business days;

 

ii.         the
Company shall fail to observe or perform any other covenant or agreement contained in this Note which failure is not cured, if
possible to cure, within 5 days after notice of such failure is delivered by the Holder or after the Company has become or should
have become aware of such failure, whichever is earlier;

 

iii.        a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) the Purchase Agreement or (B) any other material agreement, lease, document or instrument to which the Company
or any Subsidiary is obligated (and not otherwise covered below);

 

iv.       the
Company or any Subsidiary shall be subject to a Bankruptcy Event;

 

v.        the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $10,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

    	 	13	 

     

    

 

vi.         the
Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 33% of its
assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control Transaction);

 

vii.         any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective properties or other assets for more than $10,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days; or

 

viii.         The
common stock of the Company (“Common Stock”) is suspended or delisted for trading on the Over the Counter
Bulletin Board market (the “Primary Market”) and the OTCQB;

 

ix.           A
Conversion Failure as defined in Section 3(b)(ii) hereof;

 

x.            The
Company loses its status as “DTC Eligible”; or

 

xi.          The
Company shall become late or delinquent in its filing requirements as a fully-reporting issuer registered with the Securities &
Exchange Commission.

 

b)         Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid
interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the
Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence and during the
continuance of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Holder
need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law.

 

Section 7.         Rank;
Miscellaneous.

 

a)         Rank.
The obligations of the Company under this Note shall rank senior to all other borrowings
and debt of the Company, whether now or hereinafter existing. Upon any Bankruptcy Event, the Holder will be entitled to receive,
before any distribution or payment is made upon, or set apart with respect to, any other borrowings or debt of the Company or any
class of capital stock or the Company, an amount equal to the principal amount plus all accrued interest thereon. 

 

    	 	14	 

     

    

  

b)         Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, shall be in writing and delivered
personally, by facsimile, by email or sent by a nationally recognized overnight courier service, addressed to the Company, at the
address set forth above, or such other facsimile number, email or address as the Company may specify for such purpose by notice
to the Holder delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided
by the Company hereunder shall be in writing and delivered personally, by facsimile, by email or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the
Company, or if no such facsimile number, email or address appears, at the principal place of business of the Holder. Any notice
or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified to such
party prior to 8:30 p.m. (New York City time), (ii) the date immediately following the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile number or email address specified to such party between 8:30
p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as set forth in the Purchase Agreement.

 

c)         Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.         

 

d)         Lost or
Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company, as well as
an affidavit and indemnification agreement in form and substance reasonably acceptable to the Company.

 

    	 	15	 

     

    

 

e)         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by this Note or the Purchase Agreement (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of this Note or the Purchase Agreement), 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 such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each
party 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses
reasonably incurred in the investigation, preparation and prosecution of such action or proceeding.

 

f)         Waiver;
Amendments. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any
waiver by the Company or the Holder must be in writing. This Note shall not be directly or indirectly effectively modified or amended
without the prior written consent of the Holder.

 

g)         Successors
and Assigns. This Note may be assigned by the Holder with the prior written consent of the Company. This Note may not be assigned
by the Company, except to a successor in the event of a Fundamental Transaction. This Note shall be binding on and inure to the
benefit of the parties thereto and their respective successors and assigns.

 

h)         Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or entity or circumstance, it shall nevertheless remain applicable to all other persons,
entities and circumstances.

 

i)         Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

    	 	16	 

     

    

 

j)         Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit
or affect any of the provisions hereof.

 

k)         Assumption. 
Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such Fundamental Transaction,
all of the obligations of the Company under this Note and the Purchase Agreement pursuant to written agreements in form and substance
satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue to the Holder a new Note of
such successor entity evidenced by a written instrument substantially similar in form and substance to this Note, including, without
limitation, having a principal amount and interest rate equal to the principal amount and the interest rate of this Note and having
similar ranking to this Note, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed).
 The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied
without regard to any limitations of this Note.

 

l)         No
Usury. To the fullest extent permitted by law, the Company agrees not to insist upon or plead or in any manner whatsoever claim,
and shall resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, in force
at the time of execution of this Note or hereafter, in connection with any action that may be brought by the Holder in order to
enforce any right or remedy under this Note or other Transaction Documents. Notwithstanding any provision to the contrary contained
herein, it is expressly agreed and provided that the total liability of the Company under this Note for payments in the nature
of interest shall not exceed the maximum lawful interest rate authorized under applicable law. If the effective interest rate otherwise
applicable under this Note exceeds such maximum lawful interest rate, then such applicable interest rate shall be reduced so as
not to exceed such maximum lawful interest rate.

 

*********************

 

    	 	17	 

     

    

 

IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

	 	NUGENE INTERNATIONAL, INC.
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

    	 	18	 

     

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal
under the 8% Convertible Note (the “Note”) due December 31, 2016 of NUGENE INTERNATIONAL, INC., a Nevada
corporation (the “Company”), into shares of common stock (“Common Stock”) of
the Company according to the conditions hereof, as of the date written below.

 

	Conversion
    calculations:	Date
    to Effect Conversion:	 
	 	 	 
	 	Principal
    to be Converted:	 
	 	 	 
	 	Interest
    Accrued on Account of Conversion at Issue:	 
	 	 
	 	Number
    of shares of Common Stock to be issued (not less than $10,000 of the principal and any accrued but unpaid interest
    thereon:
	 		 
	 	 	 	 
	 	 	Signature:	 
	 	 	 	 
	 	 	Name:	 
	 	 	 	 
	 	 	Address
    for Delivery of Common Stock Certificates:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 	19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00256-of-00352.parquet"}]]