Document:

Exhibit 10.2

 

THIS INSTRUMENT CONTAINS AN AFFIDAVIT
OF CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS BORROWER MAY HAVE AND ALLOWS THE HOLDER TO OBTAIN
A JUDGMENT AGAINST BORROWER WITHOUT ANY FURTHER NOTICE.

 

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

 

	Principal Amount: US$107,500.00	Issue Date: November 20, 2017

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, DRONE USA,
INC., a Delaware corporation (hereinafter called the “Borrower” or “Company”), hereby promises to pay
to the order of LABRYS FUND, LP, a Delaware limited partnership, or registered assigns (the “Holder”) the sum
of US$107,500.00, together with any interest as set forth herein, on August 20, 2018 (the “Maturity Date”), and to
pay interest on the unpaid principal balance hereof at the rate of ten percent (10%) (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. In connection with the issuance of this convertible promissory note (the “Note”), the
Borrower shall, on the Issue Date, issue 335,938 shares of common stock (the “Returnable Shares”) to Holder as a commitment
fee, provided, however, the Returnable Shares must be returned to the Borrower’s treasury if the Note is fully
repaid and satisfied prior to the date which is one hundred eighty (180) days following the Issue Date, subject further to the
terms and conditions of this Note.

 

This Note may not be prepaid in whole or
in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when
due shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum or (ii) the maximum amount allowed
by law from the due date thereof until the same is paid (the “Default Interest”). Interest shall commence accruing
on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed.
All payments due hereunder (to the extent not converted into common stock, $0.0001 par value per share (the “Common Stock”)
in accordance with the terms hereof) shall be made in lawful money of the United States of America.

 

     

     

    

 

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

 

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

 

The following terms shall apply to this
Note:

 

Article
I. CONVERSION RIGHTS

 

1.1   Conversion Right.
The Holder shall have the right, in its sole and absolute discretion, from time to time, and at any time on or following the date
of this Note and ending on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in
Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note
to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as
provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to
convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security
of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number
of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however,
that the limitations on conversion may be waived by the Holder (up to a maximum of 9.99%) upon, at the election of the Holder,
not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply
until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number
of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower before 11:59 p.m., New York, New York time on such conversion
date (the “Conversion Date”).

 

     

     

    

 

The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion,
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all interest
in cash, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2), plus (4) any Additional Principal for such Conversions, plus (5) at the Holder’s
option, any amounts owed to the Holder pursuant to any other provision of this Note, all subject to the 4.99% (or up to 9.99% if
increased as provided above) limitation discussed above.

 

1.2   Conversion Price.

 

(a)    Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal the Alternate Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends
or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate Conversion
Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market
Price” means the average of the two (2) lowest Trading Prices (as defined below) for the Common Stock during the fifteen
(15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” and
“Trading Prices” means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink,
OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Holder or, if the OTC Market is not the principal trading market for such security, the trading
price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no
trading price of such security is available in any of the foregoing manners, the average of the trading prices of any market makers
for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc., or (ii) the lowest closing
bid price on the OTC Market as reported by a Reporting Service designated by the Holder or, if the OTC Market is not the principal
trading market for such security, the closing bid price of such security on the principal securities exchange or trading market
where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners,
the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by
the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in
interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion
Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC
Market or on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Borrower
shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

 

     

     

    

 

Each time, while this Note is outstanding,
the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of
a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd party has the right to convert monies
owed to that 3rd party (or receive shares pursuant to a settlement or otherwise) at a discount to market greater than
the Alternate Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the Alternate
Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable adjustments in this
Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9)
transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory note), or Section
3(a)(10) transaction, in which any 3rd party has a look back period greater than the look back period in effect under
the Note at that time, then the Holder’s look back period shall automatically be adjusted to such greater number of days
until this Note is no longer outstanding. The Borrower shall give written notice to the Holder, with the adjusted Alternate Conversion
Price and/or adjusted look back period (each adjustment that is applicable due to the triggering event), within one (1) business
day of an event that requires any adjustment described in the two immediately preceding sentences. The Conversion Price is subject
to full ratchet anti-dilution in the event that the Company issues any common stock at a per share price lower than the Conversion
Price (each a “Dilutive Price”) then in effect, provided, however, that Holder shall have the sole discretion in deciding
whether to utilize such Dilutive Price instead of the Conversion Price otherwise in effect at the time of the respective conversion.

 

     

     

    

 

(b)    Adjustment
to Conversion Price. At any time after the Issue Date, (i) if in the case that the Borrower’s Common Stock is not deliverable
by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s
Common Stock specified in a Notice of Conversion), (ii) if the Borrower ceases to be a reporting company pursuant or subject to
the Exchange Act, (iii) if the Borrower loses a market (including the OTCBB, OTCQB or an equivalent replacement exchange) for its
Common Stock, (iv) if the Borrower fails to maintain its status as “DTC Eligible” for any reason, (v) if the Conversion
Price is less than one cent ($0.01), (vi) if the Note cannot be converted into free trading shares on or after six months from
the Issue Date, (vii) if at any time the Borrower does not maintain or replenish the Reserved Amount (as defined herein) within
three (3) business days of the request of the Holder, (viii) if the Borrower fails to maintain the listing of the Common Stock
on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market,
the New York Stock Exchange, or the NYSE MKT, (ix) if the Borrower fails to comply with the reporting requirements of the Exchange
Act; the reporting requirements necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including but not
limited to the timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, the requirements
for XBRL filings, the requirements for disclosure of financial statements on its website, (x) if the Borrower effectuates a reverse
split of its Common Stock without twenty (20) days prior written notice to the Holder, (xi) if OTC Markets changes the Borrower’s
designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’,
‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign), (xii) the restatement of any financial statements
filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note
is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted
a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement, (xiii) any cessation
of trading of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market,
the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT, and such cessation of trading shall continue for a period
of five consecutive (5) Trading Days, and/or (xiv) the Borrower loses the “bid” price for its Common Stock ($0.0001
on the “Ask” with zero market makers on the “Bid” per Level 2), and/or (xv) if the Holder is notified in
writing by the Company or the Company’s transfer agent that the Company does not have the necessary amount of authorized
and issuable shares of Common Stock available to satisfy the issuance of Shares pursuant to a Conversion Notice, then the Holder
shall be entitled to increase, by 10% for each occurrence, cumulative or otherwise, the discount to the Conversion Price shall
apply for all future conversions under the Note. The Holder maintains the option and sole discretion to increase by Five Thousand
and No/100 United States Dollars ($5,000) per each occurrence described above (under Holder’s and Borrower’s expectation
that any principal amount increase will tack back to the Issue Date) the principal amount of the Note instead of applying further
discounts to the Conversion Price. Under no circumstances shall the principal amount exceed an additional Twenty Five Thousand
and No/100 United States Dollars ($25,000) or the Conversion Price be less than 30% multiplied by the Market Price due to cumulative
effect.

 

     

     

    

 

(c)    DTC Chill.
If in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible
for clearing deposit, then an additional 15% discount to the Conversion Price shall apply for all future conversions under all
Notes while the “chill” is in effect. 

 

(d)    [Intentionally
Omitted].

 

(e)    Par Value
Adjustments. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share,
the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value
possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment, provided, however, that the
Holder, in its sole and absolute discretion may elect to instead to set the Conversion Price to par value for such Conversion(s)
and the Conversion Amount for such Conversion(s) shall be increased to include Additional Principal, where “Additional Principal”
means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of Conversion Shares
issuable upon such Conversion(s) to equal the same number of Conversion Shares as would have been issued had the Conversion Price
not been set to par value pursuant to this Section 1.2(e).

 

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

 

     

     

    

 

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

 

1.3   Authorized Shares.
The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued
Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full
conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and
reserved six (6) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion
Price of the Notes in effect from time to time) (the “Reserved Amount”). Initially, the Company will instruct the Transfer
Agent to reserve 6,198,049 shares of common stock in the name of the Holder for issuance upon conversion hereof. The Reserved
Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 3(d) of the
Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. If, at any time the Borrower does not maintain
the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note, and the then outstanding principal
due under this Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).

 

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

  

1.4   Method of Conversion.

 

(a)    Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time on or following
the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of
communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time) and (B) subject to Section 1.4(b),
surrendering this Note at the principal office of the Borrower.

 

     

     

    

 

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

 

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

 

     

     

    

 

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

 

(e)   Delivery of Common
Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the
Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common
Stock issuable upon such conversion within two (2) business days after such receipt (the “Deadline”) (and, solely in
the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof
and the Purchase Agreement.

 

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

 

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

 

     

     

    

  

(i)   Failure to Deliver
Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this
Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure
shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline
that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder or credit
the Holder's balance account with OTC for the number of shares of Common Stock to which the Holder is entitled upon such Holder's
conversion of any Conversion Amount (under Holder's and Borrower's expectation that any damages will tack back to the Issue Date).
Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option
of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall
be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate,
and interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that
the liquidated damages provision contained in this Section 1.4(i) are justified. 

 

(j)   Rescindment of
a Notice of Conversion.  If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion
Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the Borrower’s
Common Stock requested in the Notice of Conversion within two (2) business days from the Conversion Date specified therein, (iii)
the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s Common Stock issued unrestricted
and/or deposited to sell for any reason related to the Borrower’s standing, (iv) the Holder is unable to deposit the shares
of the Borrower’s Common Stock requested in the Notice of Conversion for any reason related to the Borrower’s standing,
(v) at any time after a missed Deadline, at the Holder’s sole discretion, (vi) if, within three (3) business days of the
transmittal of the Notice of Conversion to the Borrower, the Common Stock has a closing bid which is 5% or lower than that set
forth in the Notice of Conversion, or (vii) if OTC Markets changes the Borrower's designation to ‘Limited Information’
(Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull & Crossbones), ‘OTC’, ‘Other
OTC’ or ‘Grey Market’ (Exclamation Mark Sign) or other trading restriction on the day of or any day after the
Conversion Date, then the Holder maintains the option and sole discretion to rescind the applicable Notice of Conversion (“Rescindment”)
pursuant to which such Conversion Shares were issuable with a “Notice of Rescindment.” This Note shall remain convertible
before and after the Maturity Date hereof until this Note is repaid or converted in full.

 

     

     

    

 

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

 

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

 

     

     

    

 

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

 

1.6   Effect of Certain
Events.

 

(a)    Effect of
Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of
the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than
50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower
with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to
be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the
consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii)
be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company,
partnership, association, trust or other entity or organization.

 

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

 

     

     

    

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

     

     

    

 

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

 

1.7   [Intentionally
Omitted].

 

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

 

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

 

(a)    At any time
during the period beginning on the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue
Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder
of the Note, to prepay the outstanding Note in full by making a payment to the Holder of an amount in cash equal to the sum of:
(i) the then outstanding principal amount of this Note plus (ii) accrued and unpaid interest on the unpaid principal
amount of this Note plus (iii) Default Interest, if any, in accordance with Article III, plus (iv) any Additional
Principal, plus (v) at the Holder’s option, any amounts owed to the Holder pursuant to any other provision of this
Note, plus (vi) $750.00 to reimburse Holder for the fees associated with the Returnable Shares.

 

     

     

    

 

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

 

Any notice of prepayment hereunder (an
“Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state:
(1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three
(3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment
Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date.

 

Upon confirmation by Holder that the prepayment
has been received by the Holder and that all amounts outstanding under this Note are paid in full, the Holder shall return the
Returnable Shares back to the Company’s treasury. If the Borrower delivers an Optional Prepayment Notice and fails to pay
the applicable prepayment amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date,
then the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9 and the Holder shall no longer
be required to return the Returnable Shares to the Borrower under any circumstances.

 

Article
II. CERTAIN COVENANTS

 

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

 

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

 

     

     

    

 

2.3   Borrowings; Liens.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written 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, except (a) borrowings in existence or committed on the date hereof and of
which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors financial institutions
or other lenders incurred in the ordinary course of business, (c) borrowings, the proceeds of which shall be used to repay this
Note, or (ii) enter into, create or incur any liens, claims or encumbrances of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, securing any indebtedness
occurring after the date hereof.

  

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

 

2.5   Advances and Loans.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed
on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course
of business or (c) not in excess of $100,000.

 

2.6   Section 3(a)(9)
or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement
structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities
Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In
the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than Fifteen Thousand Dollars ($15,000), will be assessed and will become immediately due and payable to the Holder
at its election in the form of a cash payment or added to the balance of this Note (under Holder's and Borrower's expectation that
this amount will tack back to the Issue Date).

 

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

 

     

     

    

 

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

 

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

 

2.10  Repayment from Proceeds.
While any portion of this Note is outstanding, if the Company receives cash proceeds from any source or series of related or unrelated
sources, including but not limited to, from payments from customers, the issuance of equity or debt, the conversion of outstanding
warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets,
the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder of such receipt,
following which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any
portion of such proceeds to repay all or any portion of the outstanding amounts owed under this Note. Failure of the Borrower to
comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by the Holder prior
to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.

 

Article
III. EVENTS OF DEFAULT

 

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

 

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

 

3.2   Conversion and
the Shares. The Borrower fails to reserve the Reserved Amount required for Holder at all times, issue shares of Common Stock
to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder
of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent
to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not
to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated
form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note
as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations
described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not
to honor its obligations shall not be rescinded in writing) for two (2) business days after the Holder shall have delivered a Notice
of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event
of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower
to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in
order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of
a demand from the Holder.  

 

     

     

    

 

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

 

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

 

3.5   Receiver or Trustee.
The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors or commence proceedings for
its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property
or business, or such a receiver or trustee shall otherwise be appointed for the Borrower or for a substantial part of its property
or business without its consent and shall not be discharged within sixty (60) days after such appointment. 

 

3.6   Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an
involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower admits in writing its
inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all
under international, federal or state laws as applicable.

 

     

     

    

 

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

 

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

 

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

 

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

 

3.11  Funding Window.  The
Borrower agrees that it will not enter into a similar type financing transaction (e.g. convertible promissory note) with or issue
a Variable Security to any party other than the Holder for a period of thirty (30) Trading Days following the Issue Date without
written approval from the Holder. The Borrower agrees that this is a material term of the Note and any breach of this Section 3.11
will result in an Event of Default.

 

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

 

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

 

     

     

    

 

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

 

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

 

3.16  Market Capitalization.  The
Borrower fails to maintain a market capitalization of at least $5,000,000 on any Trading Day, which shall be calculated by multiplying
(i) the closing bid price of the Borrower’s common stock on the Trading Day immediately preceding the respective date of
calculation by (ii) the total shares of the Borrower’s common stock issued and outstanding on the Trading Day immediately
preceding the respective date of calculation.

 

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

 

3.18  Prohibition on Debt
and Variable Securities.  So long as the Note is outstanding, the Issuer shall not, without written consent of the Investor,
issue any debt (including, but not limited to any loan, bond, note, debenture, lien, mortgage, debt security, convertible security,
or variable rate security), excluding debt that (i) is incurred by a subsidiary or special purpose entity owned directly or indirectly
in whole or in part by the Company for the purpose of financing the purchase of the Company’s products and services in the
ordinary course of the Company’s business, and (ii) is not required to be reflected as a liability on the face of the Company’s
consolidated balance sheet in accordance with U.S. generally accepted accounting principles) or any Variable Security. A Variable
Security shall mean any security issued by the Issuer that (i) has or may have conversion rights of any kind, contingent, conditional
or otherwise in which the number of shares that may be issued pursuant to such conversion right varies with the market price of
the common stock; (ii) is or may become convertible into common stock (including without limitation convertible debt, warrants
or convertible preferred stock), with a conversion or exercise price that varies with the market price of the common stock, even
if such security only becomes convertible or exercisable following an event of default, the passage of time, or another trigger
event or condition; or (iii) was issued or may be issued in the future in exchange for or in connection with any contract, security,
or instrument, whether convertible or not, where the number of shares of common stock issued or to be issued is based upon or related
in any way to the market price of the common stock, including, but not limited to, common stock issued in connection with a Section
3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange.

 

     

     

    

 

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

 

3.20  Dilutive Issuance.  If
at any time while this Note is outstanding, the Company issues any of its common stock at a price per share price lower than the
Conversion Price then in effect.

 

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

 

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

 

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

 

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

 

     

     

    

 

Upon the occurrence of any Event of Default
specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19,
3.20, 3.21, 3.22, 3.23, and/or 3.24, the Holder shall no longer be required to return the Returnable Shares to the Borrower under
any circumstances and the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to (i) 150% (except with respect to SECTION
3.2, in which case 150% shall be replaced with 200%) times the sum of (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the
“Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or
(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount
of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known
as the “Default Sum”) and all other amounts payable hereunder shall immediately become due and payable, all without
demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation,
legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at
law or in equity. This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without
the need for any party to give any notice or take any other action. Additionally, if this Note is not paid at the Maturity Date,
then the outstanding principal due under this Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).

 

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

 

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

 

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

 

Holder’s Right to Confession of
Judgment.  Upon the occurrence and during the continuation of any Event of Default, and in addition to any other right
or remedy of the Holder hereunder, under the related transaction documents, or otherwise at law or in equity, the Borrower hereby
irrevocably authorizes and empowers Holder or its legal counsel, each as the Borrower’s attorney-in-fact, to appear ex
parte and without notice to the Borrower to confess judgment against the Borrower for the unpaid amount of this Note.
The judgment shall set forth the amount then due hereunder, plus attorney’s fees and cost of suit, and to release all errors,
and waive all rights of appeal. The Borrower waives the right to contest Holder’s rights under this section, including without
limitation the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. No single exercise
of the foregoing right and power to confess judgment will be deemed to exhaust such power, whether or not any such exercise shall
be held by any court to be invalid, voidable, or void, and such power shall continue undiminished and may be exercised from time
to time as the Holder may elect until all amounts owing on this Note have been paid in full.

 

     

     

    

 

Article
IV. MISCELLANEOUS

 

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

 

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

 

If to the
Borrower, to:

 

Drone USA, Inc.

16 Hamilton Street

West Haven, CT 06516

E-mail: grant@droneusainc.com

  

If to the Holder:

 

Labrys Fund, LP

48 Parker
Road

Wellesley,
MA 02482

E-mail: admin@equiluxgroup.com

 

With a copy
to (which copy shall not constitute notice):

 

Legal & Compliance,
LLC

330 Clematis
Street, Ste. 217

West Palm
Beach, FL 33401

Attn: Chad
Friend, Esq., LL.M.

E-mail: CFriend@LegalAndCompliance.com

 

     

     

    

 

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

 

4.4   Assignability.
The Holder may assign or transfer this Note to any transferee at its sole discretion. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee
of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other
lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of
a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the
amount stated on the face hereof.

 

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

 

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

 

     

     

    

 

If the Holder elects alternative dispute
resolution by arbitration, the arbitration proceedings shall be conducted in the Commonwealth of Massachusetts and administered
by the American Arbitration Association in accordance with its Commercial Arbitration Rules and Mediation Procedures in effect
on the Issue Date, except as modified by this Note. The Holder’s election to arbitrate shall be made in writing, delivered
to the other party, and filed with the American Arbitration Association. The American Arbitration Association must receive the
demand for arbitration prior to the date when the institution of legal or equitable proceedings would be barred by the applicable
statute of limitations, unless legal or equitable proceedings between the parties have already commenced, and the receipt by the
American Arbitration Association of a written demand for arbitration also shall constitute the institution of legal or equitable
proceedings for statute of limitations purposes. The parties shall be entitled to limited discovery at the discretion of the arbitrator(s)
who may, but are not required to, allow depositions. The parties acknowledge that the arbitrators’ subpoena power is not
subject to geographic limitations. The arbitrator(s) shall have the right to award individual relief which he or she deems proper
under the evidence presented and applicable law and consistent with the parties’ rights to, and limitations on, damages and
other relief as expressly set forth in this Note. The award and decision of the arbitrator(s) shall be conclusive and binding on
all parties, and judgment upon the award may be entered in any court of competent jurisdiction. The Holder reserves the right,
but shall have no obligation, to advance the Issuer’s share of the costs, fees and expenses of any arbitration proceeding,
including any arbitrator fees, in order for such arbitration proceeding to take place, and by doing so will not be deemed to have
waived or relinquished its right to seek the recovery of those amounts from the arbitrator, who shall provide for such relief in
the final award, in addition to the costs, fees, and expenses that are otherwise recoverable. The foregoing agreement to arbitrate
shall be specifically enforceable under applicable law in any court having jurisdiction thereof.

 

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

 

The prevailing party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Note or any other related transaction document by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law.

 

     

     

    

 

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

 

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

 

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

 

     

     

    

 

4.10   Usury. If
Notwithstanding any provision in this Note or the related transaction documents to the contrary, the total liability
for payments of interest and payments in the nature of interest, including, without limitation, all charges,
fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by
the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability
of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions
or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate
of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of
the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction
of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder
hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied
to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept
such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time
to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any
sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal
balance then outstanding. It is the intention of the parties that the Company does not intend or expect
to pay, nor does the Holder intend or expect to charge or collect any interest under this Note greater than the
highest non-usurious rate of interest which may be charged under applicable law.

 

4.11   Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for
a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law
or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing
any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic
loss and without any bond or other security being required. No provision of this Note shall alter or impair the obligation of the
Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate,
and in the form, herein prescribed.

 

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

 

     

     

    

 

4.13   Dispute Resolution.
In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount,
Default Sum, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic
calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall
submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the
applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at
any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to
agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation
(as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Business Days, submit
via facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the case
may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the disputed arithmetic
calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum to an independent,
outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense
the investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the
results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations. Such investment
bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable error.

 

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

 

4.15   Piggyback Registration
Rights. The Borrower shall include on the next registration statement the Borrower files with SEC (or on the subsequent registration
statement if such registration statement is withdrawn) all shares issuable upon conversion of this Note. Failure to do so will
result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand and No/100
United States Dollars ($15,000), being immediately due and payable to the Holder at its election in the form of a cash payment
or added to the balance of this Note.

 

     

     

    

 

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

 

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

 

[signature page to follow]

 

     

     

    

 

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

 

	 	DRONE USA, INC.

 

	 	By: 	/s/ Michael Bannon
	 	Name: Michael Bannon
	 	Title: Chief Executive Officer

 

     

     

    

 

EXHIBIT A

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert $_________________principal amount of the Note (defined below) together with $________________ of accrued and
unpaid interest thereto, totaling $_____________ into that number of shares of Common Stock
to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Drone USA, Inc.,
a Delaware corporation (the “Borrower”), according to the conditions of the convertible note of the Borrower dated
as of November 20, 2017 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion,
except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

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

 

Name of DTC Prime Broker:

Account Number:

 

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

 

Name: Labrys Fund, LP

Address: _________________________________

 

	Date of Conversion:	 	 	 	 
	 	 	 	 	 
	Applicable Conversion Price:	 	$	 	 
	 	 	 	 	 
	Number of Shares of Common Stock to be Issued	 	 	 	 
	Pursuant to Conversion of the Notes:	 	 	 	 
	 	 	 	 	 
	Amount of Principal Balance Due remaining	 	 	 	 
	Under the Note after this conversion:	 	 	 	 
	 	 	 	 	 
	Accrued and unpaid interest remaining:	 	 	 	 
	 	 	$	 	 
	Default Amounts & Penalties remaining (if applicable):	 	 	 	 
	 	 	$	 	 

 

LABRYS FUND, LP

 

By:_____________________________

Name: _________________________

Title: Principal

Date: ___________________________

 

     

     

    

 

EXHIBIT B

Affidavit of Confession of Judgment

 

	COMMONWEALTH OF MASSACHUSETTS	X	 
	LABRYS FUND, LP,	 
	 	 	Index No.
	Plaintiff,	 	 
	 	 	AFFIDAVIT OF CONFESSION OF
	- against -	 	JUDGMENT
	 	 	 
	DRONE USA, INC.,	 	 
	Defendant.	X	 
	 	 

 

	COMMONWEALTH OF MASSACHUSETTS	)
	 	)      ss.:

 

Michael Bannon, being duly sworn, hereby
deposes and says:

 

1.        I
am the Chief Executive Officer of defendant DRONE USA, INC. (“Borrower”). As such, I am fully familiar with all the
facts and circumstances recited herein on personal knowledge. Borrower has its principal place of business at 16 Hamilton Street,
West Haven, CT 06516. On behalf of the Borrower, I hereby confess judgment in favor of Labrys Fund, LP (“Labrys Fund”),
residing at 48 Parker Road, Wellesley, MA 02482, in the amount of One Hundred Seven Thousand Five Hundred Dollars ($107,500.00),
less any payments made on or after the date of this affidavit of confession of judgment, plus interest at default interest rate
of twenty four percent (24%) percent per annum on said amount and all other applicable penalties under the Note (as defined herein).
In no event shall interest payable hereunder exceed the maximum permissible under applicable law.

 

2.        I
hereby authorize the federal courts and/or state courts located in the Commonwealth of Massachusetts to enter judgment against
Borrower in the amount of in the amount of One Hundred Seven Thousand Five Hundred Dollars ($107,500.00), less any payments made
on or after the date of this affidavit of confession of judgment, plus interest at default interest rate of twenty four percent
(24%) percent per annum on said amount and all other applicable penalties under the Note, plus the costs and attorneys’ fees
that are set forth below, less any payments made on or after the date of this affidavit of confession of judgment, upon Borrower’s
failure for any reason to timely make any payment to Labrys Fund called for by the convertible promissory note between of the parties,
dated November 20, 2017 (the “Note”), due to the occurrence of an Event of Default (as defined in the Note) under the
Note.

 

     

     

    

 

3.        In
order to secure these obligations, Borrower agreed to simultaneously deliver with the execution of the Note this Affidavit of Confession
of Judgment.

 

4.        The
sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Labrys Fund under the following
circumstances: Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Labrys Fund the principal
sum of One Hundred Seven Thousand Five Hundred Dollars ($107,500.00) plus interest as provided for therein. The amounts confessed
by this affidavit represent a convertible promissory note investment by Labrys Fund in Borrower and arise out of Borrower’s
breach of its obligations under the Note.

 

5.        Borrower
agrees to pay any and all costs and expenses incurred by Labrys Fund in enforcing the terms of this affidavit of confession of
judgment, including reasonable attorneys’ fees and expenses at the rate of $475.00 per hour that Labrys Fund incurs or is
billed for in connection with enforcing the terms of the affidavit of confession of judgment, entering any Judgment, collecting
upon said Judgment, and defending or prosecuting any appeals.

 

     

     

    

 

	 	DRONE USA, INC.
	 	 
	 	By: 	/s/ Michael Bannon
	 	Name: 	Michael Bannon
	 	Title: 	Chief Executive Officer

 

     

     

    

 

STATE OF ______________       )

ss.:

COUNTY OF ______________   )

 

ACKNOWLEDGMENT

 

On __________, 2017 before me personally
came ________________________________________, to me known, who, by me duly sworn, did depose and say that deponent is an officer
of DRONE USA, INC., the corporation described in, and which executed the foregoing affidavit of confession of judgment, that deponent
knows the seal of the corporation, that the seal affixed to the affidavit of confession of judgment is the corporation’s
seal, that it was affixed by order of the board of directors of the corporation and that deponent signed deponent’s name
by like order.

 

	 	 
	Notary Public	 

 

SEAL:

 

[Signature Page to Affidavit of Confession
of Judgment]EX-10.1

 Exhibit 10.1 

LIBERTY LATIN AMERICA 2018 INCENTIVE PLAN 

ARTICLE I 
 PURPOSE OF
PLAN 
 1.1    Purpose. The purpose of the Plan is to promote the success of the Company by
providing a method whereby (a) eligible employees of the Company and its Subsidiaries and (b) consultants providing services to the Company and its Subsidiaries may be awarded additional remuneration for services rendered and encouraged to
acquire shares of the Company, thereby increasing their proprietary interest in the Company’s businesses, encouraging them to remain in the employ of the Company or its Subsidiaries, and increasing their personal interest in the continued
success and progress of the Company and its Subsidiaries. The Plan is also intended to aid in (a) attracting Persons of exceptional ability to become officers and employees of the Company and its Subsidiaries and (b) inducing consultants
to agree to provide services to the Company and its Subsidiaries. 
 1.2    Effective Date.
The Plan is effective             ,          (the “Effective Date”). 

ARTICLE II 
 DEFINITIONS

 2.1    Certain Defined Terms. Capitalized terms not defined elsewhere in the Plan shall
have the following meanings (whether used in the singular or plural): 
 “Act” means the Bermuda
Companies Act 1981, as amended from time to time, and the rules and regulations thereunder. 

“Affiliate” of the Company means any corporation, partnership or other business association that,
directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having
ordinary voting power for the election of directors of the controlled entity or organization, or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of
voting securities or by contract or otherwise. 
 “Agreement” means a share option agreement, share
appreciation rights agreement, restricted shares agreement, restricted share units agreement, cash award agreement or an agreement evidencing more than one type of Award, specified in Section 11.5, as any such Agreement may be supplemented or
amended from time to time. 

 “Approved Transaction” means any transaction in which
the Board (or, if approval of the Board is not required as a matter of law, the Shareholders) shall approve (i) any consolidation, amalgamation or merger of the Company, or binding share exchange, pursuant to which Shares of the Company would
be changed or converted into or exchanged for cash, securities, or other property (including pursuant to a Scheme of Arrangement), other than any such transaction in which the Shareholders immediately prior to such transaction have the same
proportionate ownership of the shares of, and voting power with respect to, the surviving corporation immediately after such transaction, (ii) any merger, consolidation, amalgamation or binding share exchange to which the Company is a party as
a result of which the Persons who are Shareholders immediately prior thereto have less than a majority of the combined voting power of the outstanding capital shares of the Company ordinarily (and apart from the rights accruing under special
circumstances) having the right to vote in the election of directors immediately following such merger, consolidation, amalgamation or binding share exchange (including pursuant to a Scheme of Arrangement), (iii) the adoption of any plan or proposal
for the liquidation or dissolution of the Company, or (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company. 

“Award” means a grant of Options, SARs, Restricted Shares, Restricted Share Units, Performance
Awards, Cash Awards and/or cash amounts under the Plan. 
 “Board” means the Board of Directors of
the Company. 
 “Board Change” means, during any period of two consecutive years, individuals who
at the beginning of such period constituted the entire Board cease for any reason to constitute a majority thereof unless the election, or the nomination for election, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 

“Cash Award” means an Award made pursuant to Section 10.1 of the Plan to a Holder that is paid
solely on account of the attainment of one or more Performance Objectives that have been pre-established by the Committee. 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor
statute or statutes thereto. Reference to any specific Code section shall include any successor section. 

“Committee” means the committee of the Board appointed pursuant to Section 3.1 to administer the
Plan. 
 “Company” means Liberty Latin America Ltd., an exempted Bermuda company limited by shares.

 “Consultant” means an independent contractor, consultant, or any other individual who is not an
employee or non-employee director of the Company or any of its Subsidiaries and who (i) in the opinion of the Committee is in a position to contribute to the growth or financial success of the Company,
(ii) is a natural person and (iii) provides bona fide services to the Company or any of its Subsidiaries. 

  
 2 

 “Control Purchase” means any transaction (or series of
related transactions) in which any Person (as such term is so defined), corporation or other entity (other than the Company, any Subsidiary of the Company, any employee benefit plan sponsored by the Company or any Subsidiary of the Company or any
Exempt Person (as defined below)) shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
20% or more of the combined voting power of the then outstanding shares of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to acquire the Company’s securities), other than in a transaction (or series of related transactions) approved by the Board. For purposes of this
definition, “Exempt Person” means the Chairman of the Board and each of the directors of the Company as of the Effective Date, and (b) the respective family members, estates and heirs of each of the Persons referred to in clause
(a) above and any trust or other investment vehicle for the primary benefit of any of such Persons or their respective family members or heirs. As used with respect to any Person, the term “family member” means the spouse, siblings
and lineal descendants of such Person. 
 “Disability” means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as
supported by a written opinion of a physician and determined by the Company. The Company may seek a second opinion as to the determination of Disability from a physician selected by the Company, and in such case, the Holder will be required to
submit to an examination and provide the physician with any information that is necessary for such determination. 

“Dividend Equivalents” means, with respect to Restricted Share Units, to the extent specified by the
Committee only, a right to receive a cash amount equal to all dividends and other distributions (or the economic equivalent thereof) which are payable to Shareholders of record during the Restriction Period on a like number and kind of Shares
represented by the Award of Restricted Share Units. 
 “Domestic Relations Order” means any final
and legally enforceable judgment, decree or other order regarding the division of property under domestic relations law applicable to the Holder. 

“Effective Date” has the meaning ascribed thereto in Section 1.2. 

“Equity Security” shall have the meaning ascribed to such term in Section 3(a)(11) of the
Exchange Act, and an equity security of an issuer shall have the meaning ascribed thereto in Rule 16a-1 promulgated under the Exchange Act, or any successor Rule. 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any
successor statute or statutes thereto. Reference to any specific Exchange Act section shall include any successor section. 

  
 3 

 “Fair Market Value” of a Share on any day means the
closing price (or, if no closing price is reported, the average of the high bid and low asked prices) for a Share on such day (or, if such day is not a trading day, on the next preceding trading day) as reported on the Nasdaq or, if not traded on
the Nasdaq, such other principal U.S. securities exchange for such security on the date of determination. If for any day the Fair Market Value of a Share is not determinable by any of the foregoing means, then the Fair Market Value for such day
shall be determined in good faith by the Committee on the basis of such quotations and other considerations as the Committee deems appropriate. 

“Free Standing SAR” has the meaning ascribed thereto in Section 7.1. 

“Holder” means a Person who has received an Award under the Plan. 

“Nasdaq” means the Nasdaq Global Select Market. 

“Option” means a share option granted under Article VI. 

“Performance Award” means an Award made pursuant to Article X of the Plan to a Holder that is subject
to the attainment of one or more Performance Objectives. 
 “Performance Objective” means a
standard established by the Committee to determine in whole or in part whether a Performance Award shall be earned. 

“Person” means an individual, corporation, limited liability company, partnership, trust,
incorporated or unincorporated association, joint venture or other entity of any kind. 
 “Plan”
means this Liberty Latin America 2018 Incentive Plan, as effective as of the Effective Date, and as may be amended from time to time. 

“Restricted Share Unit” means a unit representing the right to receive one Share or the equivalent
value in cash that is subject to a Restriction Period and awarded pursuant to Article IX. 
 “Restricted
Shares” means Shares subject to a Restriction Period and awarded pursuant to Article VIII. 

“Restriction Period” means a period of time beginning on the date of each Award of Restricted Shares
or Restricted Share Units and ending on the Vesting Date with respect to such Award. 
 “Retained
Distribution” has the meaning ascribed thereto in Section 8.3. 
 “Retirement” means the
voluntary termination of a Holder’s employment with the Company and its Subsidiaries on such terms as are determined by the Committee and set forth in the Agreement, or, if not otherwise set forth in the Agreement, the voluntary termination on
or after the date that the sum of the Holder’s years of age and years of employment with the Company and its Subsidiaries is at least 70. 

  
 4 

 “SARs” means share appreciation rights, awarded
pursuant to Article VII, with respect to Shares. 
 “Scheme of Arrangement” means a scheme of a
compromise or arrangement sanctioned by a court under Part VII of the Act, as may be amended or similar procedure under a succeeding law or regulation. 

“Share” means each or any (as the context may require) share of a class in the share capital of the
Company, each of which as of the Effective Date has a par value of $0.01. 
 “Shareholder” means a
holder of any class of shares of the Company, sometimes referred to as “member” under Bermuda law. 

“Subsidiary” of a Person means any present or future subsidiary (as defined in Section 424(f) of
the Code) of such Person or any business entity in which such Person owns, directly or indirectly, 50% or more of the voting, capital or profits interests. An entity shall be deemed a subsidiary of a Person for purposes of this definition only for
such periods as the requisite ownership or control relationship is maintained. For purposes of Section 5.1, a Subsidiary shall additionally mean a subsidiary within the meaning of Section 86 of the Act. 

“Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in
substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines. 

“Tandem SARs” has the meaning ascribed thereto in Section 7.1. 

“Vesting Date,” with respect to any Restricted Shares or Restricted Share Units awarded hereunder,
means the date on which such Restricted Shares or Restricted Share Units cease to be subject to cancellation or automatic repurchase by the Company in accordance with applicable law for a price equal to the aggregate par value thereof, as designated
in or determined in accordance with the Agreement with respect to such Award of Restricted Shares or Restricted Share Units. If more than one Vesting Date is designated for an Award of Restricted Shares or Restricted Share Units, reference in the
Plan to a Vesting Date in respect of such Award shall be deemed to refer to each part of such Award and the Vesting Date for such part. 

ARTICLE III 

ADMINISTRATION 

3.1    Committee. The Plan shall be administered by the Compensation Committee of the Board unless
a different committee is subsequently appointed by the Board. The Committee shall be comprised of not less than two Persons who fulfill the “non-employee director” requirements of

  
 5 

 
Rule 16b-3 under the Exchange Act, the “outside director” requirements of Section 162(m) of the Code and the “independent”
requirement of the rules of any principal securities exchange on which any of the securities of the Company are traded, listed or quoted, if any. To the extent that one or more members of the Committee do not satisfy the foregoing requirements
generally or with respect to a particular matter, any such members may recuse themselves or abstain from participation, and the remaining members of the Committee may act for the Committee as a whole provided such remaining members satisfy the
requirements of the previous sentence. The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed, may fill vacancies in the Committee and may remove members of the Committee.
The Committee shall select one of its members as its chairman and shall hold its meetings at such times and places as it shall deem advisable. A majority of its members shall constitute a quorum and all determinations shall be made by a majority of
such quorum. Any determination reduced to writing and signed by all of the members shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. 

3.2    Powers. The Committee shall have full power and authority to grant to eligible Persons
Options under Article VI of the Plan, SARs under Article VII of the Plan, Restricted Shares under Article VIII of the Plan, Restricted Share Units under Article IX of the Plan, Cash Awards under Article X of the Plan and/or
Performance Awards under Article X of the Plan, to determine the terms and conditions (which need not be identical) of all Awards so granted (which may include, without limitation, providing for the recoupment of Shares or the cash equivalent
thereof), to interpret the provisions of the Plan and any Agreements relating to Awards granted under the Plan, to adopt sub-plans under the Plan, to adopt special terms for Awards granted to eligible Persons
in countries outside Bermuda and the United States, to enter into arrangements to facilitate the administration of Awards under the Plan, and to supervise the administration of the Plan. The Committee in making an Award may provide for the granting
or issuance of additional, replacement or alternative Awards upon the occurrence of specified events, including the exercise of the original Award. The Committee shall have sole authority in the selection of Persons to whom Awards may be granted
under the Plan and in the determination of the timing, pricing and amount of any such Award, subject only to the express provisions of the Plan. In making determinations hereunder, the Committee may take into account the nature of the services
rendered by the respective employees or by Consultants, their present and potential contributions to the success of the Company and its Subsidiaries, and such other factors as the Committee in its discretion deems relevant. 

3.3    Interpretation. The Committee is authorized, subject to the provisions of the Plan, to
establish, amend and rescind such rules and regulations as it deems necessary or advisable for the proper administration of the Plan and to take such other action in connection with or in relation to the Plan as it deems necessary or advisable. Each
action and determination made or taken pursuant to the Plan by the Committee, including any interpretation or construction of the Plan, shall be final and conclusive for all purposes and upon all Persons. No member of the Committee shall be liable
for any action or determination made or taken by him or her or the Committee in good faith with respect to the Plan. 

  
 6 

 ARTICLE IV 

SHARES SUBJECT TO THE PLAN 

4.1    Number of Shares; Award Limits. Subject to the provisions of this Article IV, the maximum
number of Shares with respect to which Awards may be granted during the term of the Plan shall be 25 million Shares; provided, however, that the maximum number of class B Shares of the Company (the “Class B Shares”) with respect
to which Awards may be so granted during the term of the Plan shall be 10 million Shares. Shares issued pursuant to the Plan shall be fully paid and, to the extent permitted by the laws of Bermuda, will be made available from treasury Shares or
newly allotted and issued Shares. Any Shares (i) subject to any Award granted under the Plan that shall expire, terminate or be annulled for any reason without having been exercised (or considered to have been exercised), (ii) subject to any
Award of any SAR granted under the Plan that shall be exercised for cash, (iii) subject to any Award of Restricted Shares that shall be automatically repurchased by the Company in accordance with applicable law for a price equal to the
aggregate par value thereof or any Award of Restricted Share Units that shall be cancelled, in each case prior to becoming vested or settled in cash on vesting (provided that the Holder received no benefits of ownership of such Restricted Shares or
Restricted Share Units other than voting rights), (iv) covered by an Award and not delivered to the Holder due to payment of withholding taxes or purchase prices and (v) that the Company repurchases on the open market by the Company with
the proceeds of an Option purchase price, shall to the extent permitted under applicable law, again be available for purposes of the Plan. Except for Awards described in Section 11.1, and subject to adjustment from time to time as provided in
Section 4.2, (i) no Person may be granted in any calendar year Awards covering more than 4 million Shares, and (ii) no Person may be granted in any calendar year Awards covering more than 2 million Shares of Class B
Shares. No Person shall receive payment for Cash Awards during any calendar year aggregating in excess of $10,000,000 (or the equivalent thereof in any currency). 

4.2    Adjustments. If the Company subdivides its outstanding Shares into a greater number of Shares
(by share dividend, share split, reclassification, alteration of capital, capitalization of profits or otherwise) or combines its outstanding Shares into a smaller number of Shares (by consolidation, reclassification, amalgamation or otherwise) or
if the Committee determines that there is any variation in the share capital of the Company or that there is any Share dividend, extraordinary cash dividend, alteration of capital, capitalization of profits, bonus issue, reclassification,
recapitalization, reorganization, amalgamation, consolidation, split-up, spin-off, combination, exchange of Shares, warrants or rights offering to purchase any class of
Shares or other similar corporate event (including compromises or arrangements sanctioned by a court under Part VII of the Act, mergers, amalgamations or consolidations, other than those which constitute Approved Transactions, adjustments with
respect to which shall be governed by Section 11.1(b)) affects any class of Shares so that an adjustment is required to preserve the benefits or potential benefits intended to be made available under the Plan, then the Committee, in its sole
discretion and in such manner as the Committee may deem equitable and appropriate, may make such adjustments to any or all of (i) the number and kind of Shares which thereafter may be awarded, optioned or otherwise made subject to the benefits
contemplated by the Plan, (ii) the number and kind of Shares subject to outstanding Awards, and (iii) the purchase or exercise price and the relevant appreciation base with respect to any of the foregoing, provided, however, that
the number of Shares subject to any Award shall always be a whole number. Notwithstanding the foregoing, if 

  
 7 

 
all Shares of any class of Shares are redeemed, then each outstanding Award shall be adjusted to substitute for the Shares subject thereto the kind and amount of cash, securities or other assets
issued or paid in the redemption of the equivalent number of Shares of such class of Shares and otherwise the terms of such Award, including, in the case of Options or similar rights, the aggregate exercise price, and, in the case of Free Standing
SARs, the aggregate base price, shall remain constant before and after the substitution (unless otherwise determined by the Committee and provided in the applicable Agreement). The Committee may, if deemed appropriate, provide for a cash payment to
any Holder of an Award in connection with any adjustment made pursuant to this Section 4.2. 

4.3    Substitute Awards. Substitute Awards shall not reduce the Shares authorized for grant under
the Plan or authorized for grant to a Person in any calendar year. Additionally, in the event that a company acquired by the Company or any Subsidiary, or with which the Company or any Subsidiary combines, has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, a number of Shares equal to the number of shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to
the shareholders of the entities party to such acquisition or combination) shall be available for grant under Section 4.1; provided that Awards using such available shares shall not be made after the date awards or grants could have been made
under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to Persons who were not employed by the Company or its Subsidiaries prior to such acquisition or
combination. 
 ARTICLE V 

ELIGIBILITY 

5.1    General. The Persons who shall be eligible to participate in the Plan and to receive Awards
under the Plan shall, subject to Section 5.2, be such Persons who are employees (including officers and directors) of or Consultants providing services to the Company or its Subsidiaries as the Committee shall select. Awards may be made to
employees or Consultants who hold or have held Awards under the Plan or any similar or other awards under any other plan of the Company or any of its Affiliates. 

5.2    Ineligibility. No member of the Committee, while serving as such, shall be eligible to
receive an Award. 
 ARTICLE VI 

OPTIONS 

6.1    Grant of Options. Subject to the limitations of the Plan, the Committee shall designate from
time to time those eligible Persons to be granted Options, the time when each Option shall be granted to such eligible Persons, the class and number of Shares subject to such Option, and, subject to Section 6.2, the purchase price of the Shares
subject to such Option. 

  
 8 

 6.2    Option Price.  

(a)    Price on Date of Grant. The price at which Shares may be purchased upon
exercise of an Option shall be fixed by the Committee and may be no less than the Fair Market Value of the Shares subject to the Option as of the date the Option is granted. 

(b)    Repricing Prohibited. Except for adjustments pursuant to Section 4.2,
the purchase price of a Share for any outstanding Option granted under the Plan may not be decreased after the date of grant nor may an outstanding Option granted under the Plan be surrendered to the Company as consideration for the grant of a new
Option with a lower purchase price, cash or a new Award unless there is prior approval by the Shareholders. 

6.3    Term of Options. Subject to the provisions of the Plan with respect to death, Disability,
Retirement and termination of employment or services, the term of each Option shall be for such period as the Committee shall determine as set forth in the applicable Agreement, provided that such term may not exceed ten years. 

6.4    Exercise of Options. An Option granted under the Plan shall become (and remain) exercisable
during the term of the Option to the extent provided in the applicable Agreement and the Plan and, unless the Agreement otherwise provides, may be exercised to the extent exercisable, in whole or in part, at any time and from time to time during
such term; provided, however, that subsequent to the grant of an Option, the Committee, at any time before complete termination of such Option, may accelerate the time or times at which such Option may be exercised in whole or in part
(without reducing the term of such Option). 
 6.5    Manner of Exercise. 

(a)    Form of Payment. An Option shall be exercised by written notice to the
Company upon such terms and conditions as the Agreement may provide and in accordance with such other procedures for the exercise of Options as the Committee may establish from time to time. The method or methods of payment of the purchase price for
the Shares to be purchased upon exercise of an Option and of any amounts required by Section 11.9 shall be determined by the Committee and may consist of (i) cash, (ii) check, (iii) promissory note (subject to the Act and other
applicable law), (iv) whole Shares of any class, (v) the cancellation of the right to receive part of the Shares of the applicable class of Shares issuable upon such exercise of the Option in consideration for cash paid by the Company to
the Holder to be applied by the Holder solely for the purpose of subscribing for and paying up the aggregate par value of the balance of the Shares issuable upon such Option (subject to the Act or other applicable law), (vi) the delivery,
together with a properly executed exercise notice, of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the purchase price (subject to the Act and other applicable law), (vii)
any other method as provided in the applicable Agreement or (viii) any combination of the foregoing methods of payment, or such other consideration and method of payment as may be permitted for the issuance of Shares under the Act. The
permitted method or methods of payment of the amounts payable upon exercise of an Option, if other than in cash, shall be set forth in the applicable Agreement and may be subject to such conditions as the Committee deems appropriate. The Committee
may adopt a policy providing for the automatic exercise of an Option due to its expiration. 

  
 9 

 (b)    Value of Shares. Unless
otherwise determined by the Committee and provided in the applicable Agreement, Shares of any class of Shares delivered in payment of all or any part of the amounts payable in connection with the exercise of an Option, and Shares of any class of
Shares withheld for such payment, shall be valued for such purpose at their Fair Market Value as of the exercise date. Notwithstanding the foregoing, with respect to an Option exercise the purchase price of which is paid pursuant to clause
(vi) of Section 6.5(a), Shares shall be valued at the price Shares are sold in the market. 

(c)    Issuance of Shares. The Company shall effect the transfer of the Shares
purchased under the Option as soon as practicable after the exercise thereof and payment in full of the purchase price therefor and of any amounts required by Section 11.9, and within a reasonable time thereafter, such transfer shall be
evidenced on the books of the Company. Unless otherwise determined by the Committee and provided in the applicable Agreement, (i) no Holder or other Person exercising an Option shall have any of the rights of a Shareholder with respect to
Shares subject to an Option granted under the Plan until due exercise and full payment has been made, and (ii) no adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such due exercise
and full payment. 
 ARTICLE VII 

SARS 

7.1    Grant of SARs. Subject to the limitations of the Plan, SARs may be granted by the Committee
to such eligible Persons in such numbers, with respect to any specified class of Shares, and at such times during the term of the Plan as the Committee shall determine. A SAR may be granted to a Holder of an Option (hereinafter called a
“related Option”) with respect to all or a portion of the Shares subject to the related Option (a “Tandem SAR”) or may be granted separately to an eligible Person (a “Free Standing SAR”). Subject to the limitations of
the Plan, SARs shall be exercisable in whole or in part upon notice to the Company upon such terms and conditions as are provided in the Agreement. 

7.2    Tandem SARs. A Tandem SAR may be granted either concurrently with the grant of the related
Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related Option. Tandem SARs shall be exercisable only at the time and to the extent that the related Option is exercisable (and may be
subject to such additional limitations on exercisability as the Agreement may provide) and in no event after the complete termination or full exercise of the related Option. Upon the exercise or termination of the related Option, the Tandem SARs
with respect thereto shall be canceled automatically to the extent of the number of Shares with respect to which the related Option was so exercised or terminated. Subject to the limitations of the Plan, upon the exercise of a Tandem SAR and unless
otherwise determined by the Committee and provided in the applicable Agreement, (i) the Holder thereof shall be entitled to receive, for each of the applicable classes of Shares with respect to which the Tandem SAR is being exercised,
consideration (in the form determined as provided in Section 7.4) equal in value to the excess of the Fair Market Value of a Share of the applicable class of Shares with respect to which the Tandem SAR was granted on the date of exercise over
the related Option purchase price per Share, and (ii) the related Option with respect thereto shall be canceled automatically to the extent of the number of Shares with respect to which the Tandem SAR was so exercised. 

  
 10 

 7.3    Free Standing SARs. Free Standing SARs shall be
exercisable at the time, to the extent and upon the terms and conditions set forth in the applicable Agreement. Subject to the provisions of the Plan with respect to death, Disability, Retirement and termination of employment or services, the term
of a Free Standing SAR shall be for such period as the Committee shall determine as set forth in the applicable Agreement, provided that such term may not exceed ten years. The base price of a Free Standing SAR may be no less than the Fair Market
Value of the Shares with respect to which the Free Standing SAR was granted as of the date the Free Standing SAR is granted. Subject to the limitations of the Plan, upon the exercise of a Free Standing SAR and unless otherwise determined by the
Committee and provided in the applicable Agreement, the Holder thereof shall be entitled to receive from the Company, for each Share with respect to which the Free Standing SAR is being exercised, consideration (in the form determined as provided in
Section 7.4) equal in value to the excess of the Fair Market Value of a Share with respect to which the Free Standing SAR was granted on the date of exercise over the base price per Share of such Free Standing SAR. Except for adjustments
pursuant to Section 4.2, the base price of a Free Standing SAR granted under the Plan may not be decreased after the date of grant nor may an outstanding Free Standing SAR granted under the Plan be surrendered to the Company as consideration
for the grant of a new SAR with a lower base price, cash or a new Award unless there is prior approval by the Shareholders. 

7.4    Consideration. The consideration to be received upon the exercise of a SAR by the Holder
shall be paid in the applicable class of Shares with respect to which the SAR was granted (valued at Fair Market Value on the date of exercise of such SAR); such payment will be made by the Company first advancing cash equal to the aggregate par
value of the Shares to be issued pursuant to the relevant SAR, followed by the immediate application by the Holder thereof of such cash advance in paying up the par value of the Shares to be issued pursuant to the relevant SAR. No fractional Shares
shall be issuable upon exercise of a SAR, and unless otherwise provided in the applicable Agreement, the Holder will receive cash in lieu of any fractional Shares. Unless the Committee shall otherwise determine, to the extent a Free Standing SAR is
exercisable, it will be exercised automatically on its expiration date. Notwithstanding the foregoing, the issuance of Shares upon exercise of a SAR shall be for at least the minimum consideration necessary to permit such Shares to be fully paid,
and the Committee may permit the Holder of a SAR who is not subject to United States federal income tax to be paid consideration in the form of cash, or a combination of cash and the applicable class of Shares with respect to which the SAR was
granted. 
 7.5    Limitations. The applicable Agreement may provide for a limit on the amount
payable to a Holder upon exercise of SARs at any time or in the aggregate, for a limit on the time periods during which a Holder may exercise SARs, and for such other limits on the rights of the Holder and such other terms and conditions of the SAR,
including a condition that the SAR may be exercised only in accordance with rules and regulations adopted from time to time, as the Committee may determine. Unless otherwise so provided in the applicable Agreement, any such limit relating to a
Tandem SAR shall not restrict the exercisability of the related Option. Such rules and regulations may govern the right to exercise SARs granted prior to the adoption or amendment of such rules and regulations as well as SARs granted thereafter.

 7.6    Exercise. For purposes of this Article VII, the date of exercise of a SAR shall mean the
date on which the Company shall have received notice from the Holder of the SAR of the exercise of such SAR (unless otherwise determined by the Committee and provided in the applicable Agreement). 

  
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 ARTICLE VIII 

RESTRICTED SHARES 

8.1    Grant. Subject to the limitations of the Plan, the Committee shall designate those eligible Persons
to be granted Awards of Restricted Shares, shall determine the time when each such Award shall be granted, and shall designate (or set forth the basis for determining) the Vesting Date or Vesting Dates for each Award of Restricted Shares, and may
prescribe other restrictions, terms and conditions applicable to the vesting of such Restricted Shares in addition to those provided in the Plan. The Committee shall determine the price, if any, to be paid by the Holder for the Restricted Shares;
provided, however, that the issuance of Restricted Shares shall be made for at least the minimum consideration necessary to permit such Restricted Shares to be deemed fully paid. All determinations made by the Committee pursuant to this
Section 8.1 shall be specified in the Agreement. 
 8.2    Award of Restricted Shares. An
Award of Restricted Shares may be registered electronically in the name of the Holder to whom such Restricted Shares shall have been awarded. During the Restriction Period, any electronically registered Restricted Shares and any securities
constituting Retained Distributions shall bear a restrictive legend to the effect that ownership of the Restricted Shares (and such Retained Distributions), and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms
and conditions provided in the Plan and the applicable Agreement. Any such electronically registered Restricted Shares and Retained Distributions shall remain in the custody of the Company or its designee, and the Holder shall deposit with the
custodian share powers or other instruments of assignment, each endorsed in blank, so as to permit transfer of all or any portion of the Restricted Shares and any securities constituting Retained Distributions that shall not become vested in
accordance with the Plan and the applicable Agreement. 
 8.3    Restrictions. Restricted Shares
shall constitute issued and outstanding Shares of the applicable class of Shares for all corporate purposes. The Holder will have the right to vote such Restricted Shares, to receive and retain such dividends and distributions, as the Committee may
designate, paid or distributed on such Restricted Shares, and to exercise all other rights, powers and privileges of a Holder of Shares of the applicable class of Shares with respect to such Restricted Shares; except, that, unless otherwise
determined by the Committee and provided in the applicable Agreement, (i) the Holder will not be entitled to delivery of any electronically registered Restricted Shares until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived; (ii) the Company or its designee will retain custody of any electronically registered Restricted Shares during the Restriction Period as provided in
Section 8.2; (iii) other than such dividends and distributions as the Committee may designate, the Company or its designee may retain custody of all distributions (“Retained Distributions”) made or declared with respect to the
Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and vesting, and other conditions as are applicable to the Restricted Shares) until such time, if ever, as the Restricted Shares with respect to which
such Retained Distributions shall have been made, paid or declared shall have become vested, and such Retained Distributions shall not bear interest or be segregated in a separate account; (iv) the Holder may not sell, assign, transfer, pledge,
exchange, encumber or dispose of the Restricted Shares or any Retained Distributions or his or her interest in any of them during the Restriction Period; and (v) a breach of any restrictions, terms or conditions provided in the Plan or
established by the Committee 

  
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with respect to any Restricted Shares or Retained Distributions will cause (A) the automatic repurchase of such Restricted Shares by the Company in accordance with applicable law for a price
equal to the aggregate par value of such Restricted Shares and (B) the automatic payment of any Retained Distributions with respect thereto to the Company. 

8.4    Completion of Restriction Period. On the Vesting Date with respect to each Award of
Restricted Shares and the satisfaction of any other applicable restrictions, terms and conditions, (i) all or the applicable portion of such Restricted Shares shall become vested, (ii) any Retained Distributions with respect to such
Restricted Shares shall become vested to the extent that the Restricted Shares related thereto shall have become vested, and (iii) any cash amount to be received by the Holder with respect to such Restricted Shares shall become payable, all in
accordance with the terms of the applicable Agreement. Any such (x) Restricted Shares that shall not become vested shall be automatically repurchased by the Company in accordance with applicable law for a price equal to the aggregate par value
of such Restricted Shares and (y) Retained Distributions that shall not become vested shall be automatically paid to the Company, and the Holder shall not thereafter have any rights (including dividend and voting rights) with respect to such
Restricted Shares and Retained Distributions. The Committee may, in its discretion, provide for the deferral of an Award of Restricted Shares, Retained Distributions and any cash amounts related to such Award, provided that any such deferral
election of a recipient shall be filed in writing with the Committee in accordance with such rules and regulations, including any deadline for the making of such an election, as the Committee may provide, and shall be made in compliance with
Section 409A of the Code to the extent applicable. 
 8.5    Cash Payments. In connection
with any Award of Restricted Shares, an Agreement may provide for the payment of a cash amount to the Holder of such Restricted Shares after such Restricted Shares shall have become vested. Such cash amounts shall be payable in accordance with such
additional restrictions, terms and conditions as shall be prescribed by the Committee in the Agreement and shall be in addition to any other salary, incentive, bonus or other compensation payments which such Holder shall be otherwise entitled or
eligible to receive from the Company. 
 ARTICLE IX 

RESTRICTED SHARE UNITS 

9.1    Grant. Subject to the limitations of the Plan, the Committee shall designate those eligible
Persons to be granted Awards of Restricted Share Units, shall determine the time when each such Award shall be granted, and shall designate (or set forth the basis for determining) the Vesting Date or Vesting Dates for each such Award of Restricted
Share Units, and may prescribe other restrictions, terms and conditions applicable to the vesting of such Restricted Share Units in addition to those provided in the Plan. The Committee shall determine the price to be paid by the Holder for the
Restricted Share Units; provided, however, that the issuance of Shares in settlement of such Awards shall be made for at least the minimum consideration necessary to permit such Shares to be deemed fully paid. All determinations made by the
Committee pursuant to this Section 9.1 shall be specified in the Agreement. 

9.2    Restrictions with Respect to Restricted Share Units. Any Award of Restricted Share Units,
including any Shares which are represented by an Award of Restricted Share Units, may not be assigned, sold, transferred, pledged or otherwise encumbered prior to the date on which the 

  
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shares are issued or, if later, the date provided by the Committee at the time of the Award. A breach of any restrictions, terms or conditions provided in the Plan or established by the Committee
with respect to any Award of Restricted Share Units will cause a cancellation of such Restricted Share Units and any Dividend Equivalents with respect thereto. 

9.3    Award of Restricted Share Units. An Award of Restricted Share Units shall not constitute
issued and outstanding Shares, and the Holder shall not have any of the rights of a Shareholder with respect to any Shares represented by an Award of Restricted Share Units, in each case until Shares shall have been issued to the Holder as provided
in Section 9.4. To the extent provided by the Committee in an Agreement, the Holder may be entitled to receive Dividend Equivalents with respect to an Award of Restricted Share Units, which may be subject to such restrictions, including, but
not limited to, the rules applicable to Retained Distributions in Section 8.3 hereof, as the Committee shall determine. 

9.4    Completion of Restriction Period. On the Vesting Date with respect to each Award of
Restricted Share Units and the satisfaction of any other applicable restrictions, terms and conditions, (i) all or the applicable portion of such Restricted Share Units shall become vested and Shares issued or cash paid to the Holder therefor,
(ii) any unpaid Dividend Equivalents with respect to such Restricted Share Units shall become vested and payable to the Holder to the extent that the Award related thereto shall have become vested, and (iii) any cash amount to be received
by the Holder with respect to such Restricted Share Units shall become payable, all in accordance with the terms of the applicable Agreement. Any such Restricted Share Units and any unpaid Dividend Equivalents that shall not become vested shall be
cancelled with no Shares issued therefor, and the Holder shall not thereafter have any rights with respect to such Restricted Share Units and any unpaid Dividend Equivalents that shall have been so cancelled. The Committee may, in its discretion,
provide for the deferral of an Award of Restricted Share Units, unpaid Dividend Equivalents and any cash amounts related to such Award, provided that any such deferral election of a recipient shall be filed in writing with the Committee in
accordance with such rules and regulations, including any deadline for the making of such an election, as the Committee may provide, and shall be made in compliance with Section 409A of the Code to the extent applicable. 

9.5    Cash Payments. In connection with any Award of Restricted Share Units, an Agreement may
provide for the payment of a cash amount to the Holder of such Restricted Share Units after such Restricted Share Units shall have become vested. Such cash amounts shall be payable in accordance with such additional restrictions, terms and
conditions as shall be prescribed by the Committee in the Agreement and shall be in addition to any other salary, incentive, bonus or other compensation payments which such Holder shall be otherwise entitled or eligible to receive from the Company.

 ARTICLE X 
 CASH
AND PERFORMANCE AWARDS 
 10.1    Cash Awards. In addition to granting Options, SARs,
Restricted Shares and Restricted Share Units, the Committee shall, subject to the limitations of the Plan, have authority to grant to eligible Persons Cash Awards. Each Cash Award shall be subject to such terms and conditions, restrictions and
contingencies as the Committee shall determine. Restrictions and contingencies limiting the right to receive a cash payment pursuant to a Cash Award shall be based upon the achievement of single or multiple Performance Objectives over a performance
period established by the Committee. The determinations made by the Committee pursuant to this Section 10.1 shall be specified in the applicable Agreement. 

  
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 10.2    Designation as a Performance Award. The
Committee shall have the right to designate any Award of Options, SARs, Restricted Shares or Restricted Share Units as a Performance Award. 

10.3    Performance Objectives. The grant or vesting of a Performance Award shall be subject to the
achievement of Performance Objectives over a performance period established by the Committee based upon one or more of the following business criteria that apply to the Holder, one or more business units, divisions or Subsidiaries of the Company or
the applicable sector of the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies: increased revenue; net income measures (including income after capital costs and income before or
after taxes); share price measures (including growth measures and total shareholder return); price per Share; market share; earnings per Share (actual or targeted growth); earnings before interest, taxes, depreciation, and amortization (EBITDA);
economic value added (or an equivalent metric); market value added; debt to equity ratio; cash flow measures (including operating cash flow, operating free cash flow, free cash flow, cash flow return on capital, cash flow return on tangible capital,
net cash flow and net cash flow before financing activities); return measures (including return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity);
operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes and production efficiency); net promoter score or
other metrics regarding quality or extent of customer satisfaction or service; expense measures (including overhead cost and general and administrative expense); margins; shareholder value; total shareholder return; proceeds from dispositions; total
market value and corporate values measures (including ethics compliance, corporate responsibility, environmental and safety). Unless otherwise stated, such a Performance Objective need not be based upon an increase or positive result under a
particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). The Committee shall have the authority to determine whether
the Performance Objectives and other terms and conditions of the Award are satisfied, and the Committee’s determination as to the achievement of Performance Objectives relating to a Performance Award shall be made in writing. 

10.4    Section 162(m) of the Code. Notwithstanding the foregoing provisions, if the Committee
intends for a Performance Award to be granted and administered in a manner designed to preserve the deductibility of the compensation resulting from such Award in accordance with Section 162(m) of the Code, then the Performance Objectives for
such particular Performance Award relative to the particular period of service to which the Performance Objectives relate shall be established by the Committee in writing (i) no later than 90 days after the beginning of such period and
(ii) prior to the completion of 25% of such period. 
 10.5    Waiver of Performance Objectives.
The Committee shall have no discretion to modify or waive the Performance Objectives or conditions to the grant or vesting of a Performance Award unless such Award is not intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code and the relevant Agreement provides for such discretion. 

  
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 ARTICLE XI 

GENERAL PROVISIONS 

11.1    Acceleration of Awards. 

  (a)    Death or Disability. If a Holder’s employment with the
Company and its Subsidiaries shall terminate by reason of death or Disability, notwithstanding any contrary waiting period, installment period, vesting schedule or Restriction Period in any Agreement or in the Plan, unless the applicable Agreement
provides otherwise: (i) in the case of an Option or SAR, each outstanding Option or SAR granted under the Plan shall immediately become exercisable in full in respect of the aggregate number of Shares covered thereby; (ii) in the case of
Restricted Shares, the Restriction Period applicable to each such Award of Restricted Shares shall be deemed to have expired and all such Restricted Shares and any related Retained Distributions shall become vested and any related cash amounts
payable pursuant to the applicable Agreement shall be adjusted in such manner as may be provided in the Agreement; and (iii) in the case of Restricted Share Units, each such Award of Restricted Share Units and any unpaid Dividend Equivalents
shall become vested in full. Upon the deemed expiration of the Restriction Period applicable to each such Award of Restricted Shares in connection with the Holder’s termination of employment by reason of death or Disability, any related cash
amounts payable pursuant to the applicable Agreement shall be distributed in such manner as may be provided in the Agreement. 

  (b)    Approved Transactions; Board Change; Control Purchase. In the
event of any Approved Transaction, Board Change or Control Purchase, notwithstanding any contrary waiting period, installment period, vesting schedule or Restriction Period in any Agreement or in the Plan, unless the applicable Agreement provides
otherwise: (i) in the case of an Option or SAR, each such outstanding Option or SAR granted under the Plan shall become exercisable in full in respect of the aggregate number of Shares covered thereby; (ii) in the case of Restricted
Shares, the Restriction Period applicable to each such Award of Restricted Shares shall be deemed to have expired and all such Restricted Shares, any related Retained Distributions and any cash amounts payable pursuant to the applicable Agreement
shall become vested and any related cash amounts payable pursuant to the applicable Agreement shall be adjusted in such manner as may be provided in the Agreement; and (iii) in the case of Restricted Share Units, each such Award of Restricted
Share Units, any unpaid Dividend Equivalents and any cash amounts payable pursuant to the applicable Agreement shall become vested in full, in each case effective upon the Board Change or Control Purchase or immediately prior to consummation of the
Approved Transaction. In the event that the terms of a Holder’s Agreement provide for vesting or expiration of a Restriction Period due to any designated termination of service event on or following an Approved Transaction then, to the extent
that such Holder is employed by or providing services to the Company or any of its Subsidiaries as of the date of the Approved Transaction, the terms of such Holder’s Agreement shall be deemed to control in lieu of the foregoing sentence. The
effects, if any, on a Cash Award of an Approved Transaction, Board Change, or Control Purchase shall be prescribed in the applicable Agreement. Notwithstanding the foregoing, unless otherwise provided in the applicable Agreement, the Committee may,
in its discretion, determine that any or all outstanding Awards of any or all 

  
 16 

 
types granted pursuant to the Plan will not vest or become exercisable on an accelerated basis in connection with an Approved Transaction if effective provision has been made for the taking of
such action which, in the opinion of the Committee, is equitable and appropriate to substitute a new Award for such Award or to assume such Award and to make such new or assumed Award, as nearly as may be practicable, equivalent to the old Award
(before giving effect to any acceleration of the vesting or exercisability thereof), taking into account, to the extent applicable, the kind and amount of securities, cash or other assets into or for which the applicable class of Shares may be
changed, converted or exchanged in connection with the Approved Transaction. 
 11.2    Termination of
Employment or Service. 
   (a)    General. If a Holder’s
employment or service with the Company and its Subsidiaries shall terminate prior to an Option or SAR becoming exercisable or being exercised (or deemed exercised, as provided in Section 7.2 or pursuant to a policy adopted under
Section 6.5(a)) in full, or during the Restriction Period with respect to any Restricted Shares or prior to the vesting of any Restricted Share Units, then such Option or SAR shall thereafter become or be exercisable, and the Holder’s
rights to any unvested Restricted Shares, Retained Distributions, any such unvested Restricted Share Units and unpaid Dividend Equivalents and any related cash amounts shall thereafter vest, in each case solely to the extent provided in the
applicable Agreement; provided, however, that, unless otherwise determined by the Committee and provided in the applicable Agreement, (i) no Option or SAR may be exercised after the scheduled expiration date thereof; (ii) if the
Holder’s employment or service terminates by reason of death or Disability, the Option or SAR shall remain exercisable for a period of at least one year following such termination (but not later than the scheduled expiration of such Option or
SAR); and (iii) any termination of the Holder’s employment or service for cause will be treated in accordance with the provisions of Section 11.2(c). If the Holder’s employment or service with the Company and its Subsidiaries
shall terminate during the Restriction Period with respect to any Restricted Shares or Restricted Share Units, the Holder’s rights to any related cash amounts shall thereafter vest solely to the extent provided in the applicable Agreement. The
effect on a Cash Award of the termination of a Holder’s employment or service for any reason, other than for cause, shall be prescribed in the applicable Agreement. 

  (b)    Retirement. Notwithstanding the provisions of
Section 11.2(a) to the contrary and unless otherwise determined by the Committee, if a Holder’s employment with the Company and its Subsidiaries is terminated due to Retirement during a Restriction Period applicable to any Restricted
Shares or prior to any Option or SAR becoming exercisable or being exercised in full or prior to the vesting of any Restricted Share Units or the payment in full of any Cash Award, then such Option or SAR shall thereafter become or be exercisable,
and the Holder’s rights to any unvested Restricted Shares, Retained Distributions, any such unvested Restricted Share Units and unpaid Dividend Equivalents and all unpaid Cash Awards shall immediately vest to the extent that such Awards
(including any Retained Distributions and unpaid Dividend Equivalents) would have become vested and exercisable had the Holder remained in continuous employment with the Company through the date that is one year after the date of the Holder’s
Retirement. Unless otherwise determined by the Committee and provided in the applicable Agreement, upon termination of a Holder’s employment with the Company and its Subsidiaries due to 

  
 17 

 
Retirement, Options and SARs that are vested and exercisable as of the date of the Holder’s Retirement shall remain exercisable until the first to occur of the date that is two years after
the date of the Holder’s Retirement or the scheduled expiration of such Options or SARs. Notwithstanding the foregoing and unless otherwise determined by the Committee, for purposes of any Performance Award, a Holder’s Retirement during
the performance period applicable to such Performance Award shall have no effect on such Performance Award, provided that the additional one-year of vesting service described in this Section 11.2(b) shall
apply to a Performance Award if a Holder’s Retirement occurs during a service period applicable to such Performance Award following completion of the performance period. 

  (c)    Termination for Cause. If a Holder’s employment or service
with the Company and its Subsidiaries shall be terminated by the Company or a Subsidiary for “cause” during the Restriction Period with respect to any Restricted Shares or prior to any Option or SAR becoming exercisable or being exercised
in full or prior to the vesting of any Restricted Share Unit or the payment in full of any Cash Award (for these purposes, “cause” shall have the meaning ascribed thereto in any employment agreement to which such Holder is a party or, in
the absence thereof, shall include insubordination, dishonesty, incompetence, moral turpitude, other misconduct of any kind and the refusal to perform his or her duties and responsibilities for any reason other than illness or incapacity;
provided, however, that if such termination occurs within 12 months after an Approved Transaction or Control Purchase or Board Change, termination for “cause” shall mean only a felony conviction (or its equivalent under local law)
for fraud, misappropriation, or embezzlement), then, unless otherwise determined by the Committee and provided in the applicable Agreement, (i) all Options and SARs and all unvested Restricted Share Units and all unpaid Cash Awards held by such
Holder shall immediately terminate, and (ii) such Holder’s Restricted Shares shall be automatically repurchased by the Company in accordance with applicable law for a price equal to the aggregate par value of such Restricted Shares,
Retained Distributions shall be automatically paid to the Company, and any unpaid Dividend Equivalents and any related cash amounts shall be cancelled immediately. 

  (d)    Miscellaneous. The Committee may determine whether any given
leave of absence constitutes a termination of employment; provided, however, that for purposes of the Plan, (i) a leave of absence, duly authorized in writing by the Company for military service or sickness, or for any other purpose
approved by the Company if the period of such leave does not exceed 90 days, and (ii) a leave of absence in excess of 90 days, duly authorized in writing by the Company provided the employee’s right to reemployment is guaranteed either by
statute or contract, shall not be deemed a termination of employment. Unless otherwise determined by the Committee and provided in the applicable Agreement, Awards made under the Plan shall not be affected by any change of employment so long as the
Holder continues to be an employee of the Company. 
 11.3    Right of Company to Terminate
Employment. Nothing contained in the Plan or in any Award, and no action of the Company or the Committee with respect thereto, shall confer or be construed to confer on any Holder any right to continue in the employ of or as a Consultant for the
Company or any of its Subsidiaries or interfere in any way with the right of the Company or any Subsidiary of the Company to terminate the employment or service of the Holder at any time, with or without cause, subject, however, to the provisions of
any employment or other agreement between the Holder and the Company or any Subsidiary of the Company. 

  
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 11.4    Nonalienation of Benefits. Except as set forth
herein, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the Person entitled to such benefits. 

11.5    Written Agreement. Each Award of Options shall be evidenced by a share option agreement;
each Award of SARs shall be evidenced by a share appreciation rights agreement; each Award of Restricted Shares shall be evidenced by a restricted shares agreement; each Award of Restricted Share Units shall be evidenced by a restricted share units
agreement; and each Performance Award shall be evidenced by a performance award agreement (including a cash award agreement evidencing a Cash Award), each in such form and containing such terms and provisions not inconsistent with the provisions of
the Plan as the Committee from time to time shall approve; provided, however, that if more than one type of Award is made to the same Holder, such Awards may be evidenced by a single Agreement with such Holder. Each grantee of an Option, SAR,
Restricted Shares, Restricted Share Units or Performance Award (including a Cash Award) shall be notified promptly of such grant, and a written Agreement shall be promptly executed and delivered by the Company. Any such written Agreement may contain
(but shall not be required to contain) such provisions as the Committee deems appropriate to insure that the penalty provisions of Section 4999 of the Code will not apply to any Shares or cash received by the Holder from the Company. Any such
Agreement may be supplemented or amended from time to time as approved by the Committee as contemplated by Section 11.7(b). 

11.6    Nontransferability; Designation of Beneficiaries. 

  (a)    Nontransferability. Awards shall not be transferable other than
as approved by the Committee and provided in the applicable Agreement, or by will or the laws of descent and distribution or pursuant to a Domestic Relations Order, and, except as otherwise required pursuant to a Domestic Relations Order, during the
lifetime of the Holder Awards may be paid only to and exercised only by such Holder (or his or her court-appointed legal representative). 

  (b)    Designation of Beneficiaries. The Committee may, to the extent
permissible and deemed to have operable effect under applicable law, permit a Holder to designate a beneficiary or beneficiaries with respect to Awards under the Plan by filing a written designation of beneficiary or beneficiaries with the Committee
on a form and in such manner as the Committee may prescribe from time to time. 
 11.7    Termination
and Amendment. 
   (a)    General. Unless the Plan shall
theretofore have been terminated as hereinafter provided, no Awards may be made under the Plan on or after the tenth anniversary of the Effective Date. The Plan may be terminated at any time prior to the tenth anniversary of the Effective Date and
may, from time to time, be suspended or discontinued or modified or amended if such action is deemed advisable by the Committee. 

  
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   (b)    Modification. No
termination, modification or amendment of the Plan may, without the consent of the Person to whom any Award shall theretofore have been granted, adversely affect the rights of such Person with respect to such Award. No modification, extension,
renewal or other change in any Award granted under the Plan shall be made after the grant of such Award, unless the same is consistent with the provisions of the Plan. With the consent of the Holder and subject to the terms and conditions of the
Plan (including Section 11.7(a)), the Committee may amend outstanding Agreements with any Holder, including any amendment which would (i) accelerate the time or times at which the Award may be exercised and/or (ii) extend the
scheduled expiration date of the Award. Without limiting the generality of the foregoing, the Committee may, but solely with the Holder’s consent unless otherwise provided in the Agreement, agree to cancel any Award under the Plan and grant a
new Award in substitution therefor, provided that the Award so substituted shall satisfy all of the requirements of the Plan as of the date such new Award is made. Nothing contained in the foregoing provisions of this Section 11.7(b) shall be
construed to prevent the Committee from providing in any Agreement that the rights of the Holder with respect to the Award evidenced thereby shall be subject to such rules and regulations as the Committee may, subject to the express provisions of
the Plan, adopt from time to time or impair the enforceability of any such provision. 

11.8    Government and Other Regulations. The obligation of the Company with respect to Awards shall
be subject to all applicable laws, rules and regulations, including the Act, and to such approvals by any governmental agencies as may be required, including the effectiveness of any registration statement required under the U.S. Securities Act of
1933, and the rules and regulations of any securities exchange or association on which the Shares may be listed or quoted. For so long as any class of Shares is registered under the Exchange Act, the Company shall use its reasonable efforts to
comply with any legal requirements (i) to maintain a registration statement in effect under the U.S. Securities Act of 1933 with respect to all Shares of the applicable class that may be issued to Holders under the Plan and (ii) to file in
a timely manner all reports required to be filed by it under the Exchange Act. 

11.9    Withholding. The Company’s obligation to deliver Shares under the Plan shall be subject
to applicable national, state and local tax and employee social security contribution withholding requirements. National, state and local withholding tax and employee social security contribution withholding due at the time of an Award, upon the
exercise of any Option or SAR or upon the vesting of, or expiration of restrictions with respect to, Restricted Shares or Restricted Share Units or the satisfaction of the Performance Objectives applicable to a Performance Award, as appropriate,
may, in the discretion of the Committee, be paid through the partial cancellation of Options, SARs or Restricted Share Units, or the repurchase at below market value of Restricted Shares, in each case, otherwise issuable to or payable to such Holder
(subject to compliance with applicable law), upon such terms and conditions (including the conditions referenced in Section 6.5) as the Committee shall determine. If the Holder shall fail to pay, or make arrangements satisfactory to the
Committee for the payment to the Company of, all such national, state and local taxes and employee social security contributions required to be withheld by the Company, then the Company shall, to the extent permitted by law, have the right to deduct
from any payment of any kind otherwise due to such Holder an amount equal to any national, state or local taxes and 

  
 20 

 
employee social security contributions of any kind required to be withheld by the Company with respect to such Award. The foregoing powers of the Company and the Committee with respect to
withholding for taxes shall apply to Cash Awards or cash amounts paid in settlement of any Award (or portion thereof) under the Plan. 

11.10    Nonexclusivity of the Plan. The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including the granting of Share options and the awarding of Shares and cash otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases. 
 11.11    Exclusion from
Pension and Profit-Sharing Computation. By acceptance of an Award, unless otherwise provided in the applicable Agreement, each Holder shall be deemed to have agreed that such Award is special incentive compensation that will not be taken into
account, in any manner, as salary, compensation or bonus in determining the amount of any payment under any pension, retirement or other employee benefit plan, program or policy of the Company or any Subsidiary of the Company. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that such Award will not affect the amount of any life insurance coverage, if any, provided by the Company on the life of the Holder which is payable to such beneficiary under any life
insurance plan covering employees of the Company or any Subsidiary of the Company. 

11.12    Unfunded Plan. Neither the Company nor any Subsidiary of the Company shall be required to
segregate any Shares or cash, which may at any time be represented by Awards, and the Plan shall constitute an “unfunded” plan of the Company. Except as provided in Article VIII with respect to Awards of Restricted Shares and except as
expressly set forth in an Agreement, no Holder shall have voting or other rights with respect to the Shares covered by an Award prior to the delivery of such Shares. Neither the Company nor any Subsidiary of the Company shall, by any provisions of
the Plan, be deemed to be a trustee of any Shares or any other property, and the liabilities of the Company and any Subsidiary of the Company to any employee or Consultant pursuant to the Plan shall be those of a debtor pursuant to such contract
obligations as are created by or pursuant to the Plan, and the rights of any employee, former employee, Consultant or beneficiary under the Plan shall be limited to those of a general creditor of the Company or the applicable Subsidiary of the
Company, as the case may be. In its sole discretion, the Board may authorize the creation of arrangements to meet the obligations of the Company under the Plan, provided, however, that the existence of such arrangements is consistent with
applicable law and the unfunded status of the Plan. 
 11.13    Governing Law. Except as otherwise
set forth in an Agreement, the Plan and Awards shall be governed by, and construed in accordance with, the laws of the State of Delaware. 

11.14    Accounts. The delivery of any Shares and the payment of any cash amount in respect of an
Award shall be for the account of the Company or the applicable Subsidiary of the Company, as the case may be, and any such delivery or payment shall not be made until the recipient shall have paid or made satisfactory arrangements for the payment
of any applicable withholding taxes as provided in Section 11.9. 
 11.15    Legends. Shares
subject to an Award shall bear or otherwise be subject to such legends as the Committee deems necessary or appropriate to reflect or refer to any terms, 

  
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conditions or restrictions of the Award applicable to such Shares, including any to the effect that the Shares represented thereby may not be disposed of unless the Company has received an
opinion of counsel, acceptable to the Company, that such disposition will not violate any national or state securities laws. 

11.16    Company’s Rights. The grant of Awards pursuant to the Plan shall not affect in any way
the right or power of the Company to make reclassifications, reorganizations or other changes of or to its capital or business structure or to merge, consolidate, liquidate, sell or otherwise dispose of all or any part of its business or assets.

 11.17    Interpretation. The words “include,” “includes,”
“included” and “including” to the extent used in the Plan shall be deemed in each case to be followed by the words “without limitation.” 

11.18    Section 409A. The Plan and Awards are intended to be exempt from or compliant with the
requirements of Code Section 409A and related regulations and United States Department of the Treasury pronouncements (“Section 409A”) to the extent that Section 409A is applicable to a Holder. Notwithstanding anything in
this Plan to the contrary, if any Plan provision or Award under the Plan would result in the imposition of an additional tax under Section 409A, that Plan provision or Award will be reformed to be exempt from Section 409A or comply with
the requirements of Section 409A, and no such action taken shall be deemed to adversely affect the Holder’s rights to an Award. 

  
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