Document:

Hooters®
International Franchise Agreement

 

Between

 

Hooters
of America, LLC

1815
The Exchange

Atlanta,
Georgia 30339

(770) 951-2040

 

AND

 

 

 

    	 

    	 

    

 

Hooters
of America, LLC 

Franchise
Agreement 

Table
of Contents

 

	 	 	Page
	1.	GRANT, ACCEPTED LOCATION, CONSTRUCTION, AND PERMITTING	1
	 	 	 
	2.	TERM; RENEWAL	5
	 	 	 
	3.	HOA’S OBLIGATIONS 	6
	 	 	 
	4.	FEES 	7
	 	 	 
	5.	DUTIES OF FRANCHISEE	10
	 	 	 
	6.	PROPRIETARY MARKS 	17
	 	 	 
	7.	HOOTERS OF AMERICA MANUALS 	20
	 	 	 
	8.	CONFIDENTIAL INFORMATION 	21
	 	 	 
	9.	TECHNOLOGY 	22
	 	 	 
	10.	ACCOUNTING AND RECORDS 	25
	 	 	 
	11.	ADVERTISING	26
	 	 	 
	12.	INSURANCE	27
	 	 	 
	13.	TRANSFER OF INTEREST 	28
	 	 	 
	14.	DEFAULT AND TERMINATION 	31
	 	 	 
	15.	OBLIGATIONS ON TERMINATION OR EXPIRATION	34
	 	 	 
	16.	COVENANTS 	39
	 	 	 
	17.	TAXES, PERMITS, AND INDEBTEDNESS 	41
	 	 	 
	18.	INDEPENDENT CONTRACTOR	42
	 	 	 
	19.	INDEMNIFICATION	43
	 	 	 
	20.	APPROVALS AND WAIVERS 	44
	 	 	 
	21.	NOTICES	45
	 	 	 
	22.	ENTIRE AGREEMENT	45
	 	 	 
	23.	SEVERABILITY AND CONSTRUCTION 	46
	 	 	 
	24.	FORCE MAJEURE 	47
	 	 	 
	25.	APPLICABLE LAW; DISPUTE RESOLUTION	47
	 	 	 
	26.	ACKNOWLEDGMENTS 	49
	 	 	 
	27.	REGISTRATION OF AGREEMENT	51

 

EXHIBITS

 

	 	A	-	ACCEPTED LOCATION INFORMATION
	 	B	-	PROPRIETARY MARKS
	 	C	-	LIST OF FRANCHISEE’S PRINCIPAL OWNERS
	 	D	-	FORM OF RELEASE
	 	E	-	SPECIAL STIPULATIONS

 

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Hooters
of America, LLC 

Franchise
Agreement 

 

THIS FRANCHISE AGREEMENT (the “Agreement”)
is made and entered into the ___ day of _______, 20 __ (the “Effective Date”), by and between HOOTERS OF AMERICA,
LLC, a Georgia limited liability company with its principal business address at 1815 The Exchange, Atlanta, Georgia 30339 (hereinafter
“HOA”), and, a ____________ [corporation/limited liability company/partnership] with its registered business
address at _____________________, enrolled with the General Taxpayers’ Registry (“CNPJ/MF”) under no.
________ , herein represented by its undersigned legal representative (hereinafter the “Franchisee”).

  

Recitals

 

A.           HOA,
itself and/or through affiliates, has developed a distinctive system (the “Hooters System”) for the establishment
and operation of restaurants (the “Hooters Restaurants”) that offer a limited menu featuring chicken wings,
seafood and burgers, together with beer, wine, and liquor and other food and beverage offerings and merchandise (the “Products”).
The Hooters System includes HOA’s distinctive exterior and interior restaurant design, trade dress, décor, and color
scheme; distinctive standards, specifications, and procedures for operations; procedures for quality control; training and ongoing
operational assistance; and advertising and promotional programs; all of which HOA may add to, delete from, and modify from time
to time.

 

B.           Pursuant
to certain license agreement with an affiliate (the “License Agreement”), HOA has the right to use the Hooters
System, along with certain trademarks, trade names, service marks, logotypes, and other commercial symbols set forth on Exhibit
B, in connection with the operation of restaurants. HOA identifies the Hooters System by means of such trademarks, trade names,
service marks, logotypes, and other commercial symbols, together with HOA’s trade dress, décor, color schemes, and
other identifying characteristics (all of which are referred to collectively in this Agreement as the “Proprietary Marks”),
all of which HOA may add to, delete from, and modify from time to time.

 

C.           Franchisee
desires for HOA to grant Franchisee a franchise to operate a Hooters restaurant, using the Proprietary Marks, under the Hooters
System, and for HOA to provide Franchisee with certain training and other assistance in connection with such franchise, all as
set forth in and subject to this Agreement.

 

D.           Franchisee
understands and acknowledges the importance of HOA’s high standards of quality, appearance, and service, and the necessity
of operating its franchised business in compliance with HOA’s standards and specifications.

 

In consideration of the foregoing and the mutual promises
and commitments set forth in this Agreement, the parties hereby agree as follows:

 

1.          GRANT,
ACCEPTED LOCATION, CONSTRUCTION, AND PERMITTING

 

1.1           Grant.
HOA hereby grants to Franchisee, on the terms and conditions set forth in this Agreement and subject to the License Agreement,
the right, license, and privilege, and Franchisee undertakes the obligation, to operate a business to develop, open, and operate
a Hooters restaurant (the “Franchisee’s Restaurant”), using the Proprietary Marks and the Hooters System,
at the Accepted Location (as defined in Section 1.2. of this Agreement) (collectively, the “Franchise”).

 

    	 

    	 

    

 

1.2           Accepted
Location. The street address of the Franchisee’s Restaurant accepted under this Agreement is specified in Exhibit
A to this Agreement (the “Accepted Location Information”), and is referred to as the “Accepted
Location.” Franchisee shall not relocate the Franchisee’s Restaurant without HOA’s prior written consent.
HOA shall have the right to grant or withhold acceptance of the Accepted Location under this Section 1.2. Franchisee acknowledges
and agrees that acceptance of Franchisee’s proposed location, under this Section 1.2 or pursuant Section 1.3 below, does
not constitute any assurance, representation, or warranty of HOA of any kind, that the Franchisee’s Restaurant located at
the Accepted Location shall be profitable or successful.

 

1.3           Accepted
Location Selection. If, when this Agreement is signed, Franchisee has not yet found a suitable location for the Franchisee’s
Restaurant that has been accepted by HOA in writing as the Accepted Location, Franchisee shall lease, sublease, or acquire a site
for the Franchisee’s Restaurant, subject to HOA’s acceptance, in accordance with the following procedure:

 

1.3.1           Time
to Locate Site: Franchisee shall submit to HOA at least one (1) location for acceptance pursuant to Subsection 1.3.3 below
within forty five (45) days of the Effective Date. Within ninety (90) days after the Effective Date, Franchisee shall acquire or
lease/sublease, at Franchisee's expense, commercial real estate that is properly zoned for the use of the business as a restaurant
at a site accepted by HOA as hereinafter provided. Failure by Franchisee to acquire or lease a site for Franchisee’s Restaurant,
or to submit to HOA at least one (1) location for site acceptance, within the time specified, shall constitute a default under
Section 14.3 of the Franchise Agreement.

 

1.3.2           Site
Evaluation Services: HOA or its designee shall furnish to Franchisee site selection guidelines, including HOA’s minimum
standards for a location for Franchisee’s Restaurant, and such site selection counseling and assistance as HOA may deem advisable.
In response to Franchisee’s request for site acceptance, HOA or its designee shall have the right to perform one (1) on-site
evaluation of a proposed site for Franchisee’s Restaurant. HOA shall have the right to designate a third party designee to
conduct any or all of the site selection counseling and assistance and evaluation, and Franchisee may be required to pay such third
party designee a fee for such services; provided, however that such fee shall not exceed Ten Thousand U.S. Dollars (US$10,000)
(or its equivalent in Brazilian Reais if such third party is a Brazilian entity or individual).

 

1.3.3           Site
Selection Package Submission and Site Acceptance: Franchisee shall submit to HOA, in the form specified by HOA, a completed
site selection package, which may include a site selection form prescribed by HOA, copy of the site plan, business plan, demographic
statistics and information regarding the surrounding businesses, and such other information or materials as HOA may reasonably
require, together with an option contract, letter of intent or other evidence satisfactory to HOA which confirms Franchisee's favorable
prospects for obtaining the site for the Accepted Location. Franchisee acknowledges that time is of the essence. HOA shall have
thirty (30) days after receipt of such information and materials from Franchisee to accept or decline, in its sole discretion,
the proposed site as the location for Franchisee’s Restaurant. In the event HOA does not accept a proposed site by written
notice to Franchisee within said thirty (30) days, such site shall be deemed declined by HOA.

  

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1.3.4           Lease
Responsibilities: Within fifteen (15) days of site acceptance by HOA, Franchisee shall execute a lease which shall be
coterminous with the Franchise Agreement, or a binding agreement to purchase the site. Franchisee must provide to HOA a copy
of the actual lease or sublease (and an English translation thereof, if it is not in English) to be executed for the Accepted
Location, which must be approved in writing by HOA, and which shall provide HOA the right to enter the Accepted Location to
make any modifications necessary to protect the Proprietary Marks. The lease must attach a “Collateral Assignment of
Lease” in a form acceptable to HOA, executed by Franchisee and the lessor of the premises, providing HOA notice of
Franchisee’s default of the lease, a right (but not an obligation) to cure such default, and the right to assume the
lease with the right to sublease to a Hooters franchisee and containing other provisions as required by HOA, including the
right to assume the lease upon a default under this Agreement or under any document or instrument securing this Agreement. In
lieu of the Collateral Assignment of Lease, such lease must: (1) provide HOA, at HOA’s option, with the right to act as
prime lessee under the lease and to sublease such site to Franchisee; or (2) in form and substance satisfactory to HOA: (a)
provide for notice to HOA of Franchisee’s default under the lease or sublease; (b) require the lessor or sublessor to
disclose to HOA, on HOA request, sales and other information furnished by Franchisee; (c) give HOA (or its designee) the
right to enter the premises to make any modifications to the building to protect HOA rights to the Marks, and provide that
the lessor and/or sublessor relinquishes to HOA (or its designee), on any termination or expiration of this Agreement, any
lien or other ownership interest, whether by operation of law or otherwise, in and to any tangible property (including any
outdoor sign) that embodies the Marks; (d) require that the lessor and/or sublessor acknowledges that HOA has no liability or
obligation whatsoever under the lease or sublease; and (e) allow HOA or its designee the right to elect to take an assignment
of the leasehold interest upon termination or expiration of Franchisee’s rights under this Agreement. HOA’s
approval of the lease or sublease is an indication only that the lease or sublease agreement meets HOA’s criteria for
leases and subleases. HOA’s approval of a lease or sublease does not constitute an assurance, representation, or
warranty of any kind, express or implied, as to the suitability of the lease or sublease for Franchisee’s success or
for any other purpose.

 

1.3.5           HOA
shall not be responsible for review of the lease for any terms other than those described in Subsection 1.3.4 above.

 

1.4           Protected
Territory and HOA’s Reserved Rights. Except as otherwise provided in this Agreement, during the term of this Agreement,
HOA shall not establish or operate, or license any other person to establish or operate, a Hooters Restaurant at any location within
the territory specified in Exhibit A (the “Protected Territory”). HOA retains all other rights, and may,
among other things, on any terms and conditions HOA deems advisable, and without granting Franchisee any rights therein:

 

1.4.1           Own,
acquire, establish, and/or operate and license others to establish and operate, Hooters Restaurants at any location outside the
Protected Territory notwithstanding their proximity to the Protected Territory or the Accepted Location or their actual or threatened
impact on sales at the Franchisee’s Restaurant;

 

1.4.2           Own,
acquire, establish, and/or operate, and license others to establish and operate, Hooters Restaurants under the Proprietary Marks
at Reserved Facilities (as defined below) at any location within or outside the Protected Territory. As used in this Agreement,
“Reserved Facilities” shall mean: airports; hotels; department stores; supermarkets; cultural institutions (examples
include, but are not limited to, theaters, museums, art centers and educational facilities); casinos; United States military bases;
sports and entertainment venues and stadiums; and business and industrial complexes and offices at which the food services are
managed by service providers with national or international operations;

 

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1.4.3           Own,
acquire, establish, and/or operate and license others to establish and operate businesses: (a) using the Proprietary Marks
(but not the “Hooters®” mark) and other marks in connection with the
operation of such businesses; (b) which businesses may be the same as, similar to, or different from Hooters Restaurants; and
(c) which may be located within or outside the Protected Territory, despite the proximity of such businesses to the Accepted
Location (but this clause shall not allow HOA to operate or license others to operate a Hooters Restaurant inside the
Protected Territory, unless permitted pursuant to Section 1.4.2 above); and/or

 

1.4.4           Sell
and distribute, directly or indirectly, or license others to sell and to distribute, directly or indirectly, any Products from
any location to any business or customer, including without limitation through restaurants, cafes, retail kiosks, grocery or convenience
stores or other retail outlets, and any other distribution channels (including without limitation, through retail, wholesale, mail
order, toll free numbers, or the Internet), provided that this clause shall not allow HOA to operate or license others to operate
a Hooters Restaurant inside the Protected Territory under: (a) the Hooters System; and (b) the Proprietary Marks, unless permitted
pursuant to Section 1.4.2 above).

 

1.4.5           HOA
and/or its affiliates have the unrestricted right to engage, directly or indirectly, through its or their employees, representatives,
licensees, assigns, agents, and others, at wholesale, retail, and otherwise, in the production, distribution, and sale of products
bearing the Proprietary Marks licensed under this Agreement or other names or marks, including without limitation products included
as part of the Hooters System.

 

1.5           Franchisee
shall offer and sell Products only from Franchisee’s Restaurant; only in accordance with the requirements of this Agreement,
the procedures set forth in the Manuals (as this term is defined in Section 2.2.4, below), or as otherwise set forth by HOA in
writing; and only to: (a) retail customers for consumption at or in common seating near to Franchisee’s Restaurant; (b) retail
customers for personal carry-out consumption of Products sold at Franchisee’s Restaurant. Franchisee will not under any circumstances
engage in any wholesale trade or sale of Hooters System Products for resale. Franchisee also shall not engage in delivery unless
expressly permitted by HOA, and unless such delivery is conducted in accordance with the requirements as set forth by HOA in the
Manuals or otherwise in writing. As used in this Agreement, “delivery customers” means customers that purchase Products
for delivery to (and consumption in) their home or office. Franchisee shall not engage, unless expressly permitted by HOA in writing,
in any other type of sale of, or offer to sell, or distribution of Products, including but not limited to, selling, distributing,
or otherwise providing, any Products at wholesale, or for resale or distribution by any third party, or through satellite locations,
sales or mail order catalogs, temporary locations, carts or kiosks, the Internet, or through any other electronic or print media.

 

1.6           Construction,
Permitting, and Licensing.

 

1.6.1           Franchisee
shall complete the construction of Franchisee’s Restaurant in accordance with the provisions and requirements of Section
5.5. of this Agreement (the “Construction”) and shall open Franchisee’s Restaurant for business within
six (6) months after the Effective Date of this Agreement (the “Opening Date”). On Franchisee’s written
request, HOA may grant Franchisee one (1) ninety (90) day extension past the six (6) months allotted within which to open Franchisee’s
Restaurant. Franchisee shall pay HOA a non-refundable extension fee of Five Thousand U.S. Dollars (US$5,000) contemporaneously
with Franchisee’s request for the extension.

 

1.6.2           Provided
that Franchisee has made full and complete application for all building permits, operating licenses, and all other permits required
to open its Restaurant, within ninety (90) days after the Effective Date of this Agreement, HOA may, on Franchisee’s written
request, grant Franchisee one (1) thirty (30) day extension to obtain all necessary permits, without charging Franchisee any amounts
for such extensions, if the delay was due to causes beyond Franchisee’s reasonable control, which grant HOA will not unreasonably
withhold. Franchisee must submit documentation of the status of the license and permit applications together with Franchisee’s
request for such extension. On HOA’s grant of such extension, HOA will commensurately extend the Opening Date.

 

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1.6.3           Should
Franchisee be unable to obtain all necessary permits and licenses (as detailed in Section 5.5.4, below) during the stated period
and extension time periods as a result of causes beyond Franchisee’s reasonable control, HOA or Franchisee, with proof of
attempt to get permits and licenses, may terminate this Agreement on written notice to the other, without the necessity of further
action by either party or further documentation. On such termination, HOA will retain one-third (1/3) of the Initial Franchise
Fee set forth in Section 4.2 of this Agreement to compensate HOA for its costs and administrative expenses spent in granting Franchisee
its Franchise, and for its lost or deferred opportunities to grant Hooters System franchises to others. HOA will refund the amount
HOA owes Franchisee within thirty (30) days after notice by HOA or Franchisee of the termination of this Agreement.

 

1.7           Destruction
of Accepted Location. In the event Franchisee’s Restaurant is damaged or destroyed by fire or other casualty, or is required
by any governmental authority to be repaired or reconstructed, Franchisee shall commence repair or reconstruction of the building
within ninety (90) days after the date of such casualty or notice of governmental requirement (or such lesser period as such governmental
requirement may specify) and shall complete all required repair or reconstruction as soon as possible thereafter, but in no event
later than one hundred eighty (180) days after the date of such casualty or governmental requirement. In the case of reconstruction
due to casualty, the minimum acceptable appearance for the restored building will be that which existed immediately prior to the
casualty; provided, however, Franchisee will use its best efforts to have the restored building include the then- current image,
design, and specifications of new Restaurants.

 

1.8           No
Subfranchising. FRANCHISEE SHALL HAVE NO RIGHT TO GRANT SUBFRANCHISES TO OTHERS. FRANCHISEE SHALL NOT, AND SHALL NOT ATTEMPT
TO, GRANT SUBFRANCHISES TO OTHERS.

 

2.          TERM;
RENEWAL

 

2.1           Initial
Term. This Agreement will commence on the Effective Date and will continue in effect for a period of twenty (20) years thereafter
(the “Initial Term”), subject to earlier termination as set forth in this Agreement.

 

2.2           Renewal
Term. Franchisee may renew the Franchise as to Franchisee’s Restaurant for two (2) additional ten (10) year terms (such
additional terms being referred to in this Agreement as the “Renewal Terms,” and the Initial Term, together
with the Renewal Terms, being referred to collectively in this Agreement as the “Term”), provided that:

 

2.2.1           Franchisee
delivers written notice (the “Renewal Notice”) fewer than eighteen (18) months but more than six (6) months
before the end of the Initial Term, of Franchisee’s intent to renew the Franchise for the Renewal Term;

 

2.2.2           Franchisee
pays HOA a renewal fee in the amount of one-third (1/3) of the then- current Initial Franchise Fee (as defined in Section 4.2,
below), delivered contemporaneously with Franchisee’s delivery of the Renewal Notice, for renewal of the Franchise for Franchisee’s
Restaurant (the “Renewal Fee”);

 

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2.2.3           Franchisee
is, at the time Franchisee delivers the Renewal Notice, in compliance with all other agreements to which HOA or its affiliates
on the one hand, and Franchisee or its affiliates on the other hand, are parties;

 

2.2.4           Franchisee
is and has been, at all times during the Initial Term, in compliance with: (i) this Agreement and all amendments to it; and (ii)
HOA’s confidential operations manuals (the “Manuals”);

 

2.2.5           Franchisee
is, at the time Franchisee delivers the Renewal Notice, current with respect to its obligations to its lessor, suppliers, and any
other parties with whom it does business.

 

2.2.6           Franchisee
enters into HOA’s then-current form of franchise agreement, including all schedules, exhibits, addenda, and attachments to
it (collectively, the “Renewal Franchise Agreement”), all of which may contain terms that vary materially from
the terms of this Agreement; and

 

2.2.7           Franchisee
and its Principal Owners (as defined in Section 13.2 of this Agreement) execute and deliver to HOA a general release in substantially
the form set forth in Exhibit D to this Agreement (collectively, the “Release”).

 

2.3           Non-Renewal
By Franchisee. Franchisee will be deemed to have declined to renew the Franchise as to Franchisee’s Restaurant, and the
option to renew the Franchise set forth in Section 2.2 of this Agreement will expire automatically and without notice as to such
Restaurant, if Franchisee does not deliver to HOA all items required for renewal, including without limitation the Renewal Fee,
the executed Renewal Franchise Agreement, and the executed Release, to HOA within thirty (30) days after HOA delivers the Renewal
Franchise Agreement and Release to Franchisee for execution.

 

2.4           Effect
of Non-Renewal or Expiration. Non-renewal or expiration of this Agreement will end the Franchise as to Franchisee’s Restaurant
described in this Agreement. Upon non-renewal or expiration of this Agreement, Franchisee must meet all of the obligations upon
termination or expiration, as set forth in Section 15, below.

 

3.          HOA’S
OBLIGATIONS

 

3.1           HOA
will provide Franchisee with guidance relating to the opening of Franchisee’s Restaurant, including without limitation providing
acceptable site criteria, approved supplier lists, and approved renovation criteria; and, at HOA’s option, a set of architectural
plans of an existing Hooters restaurant.

 

3.2           HOA
will provide Franchisee with the manager training program described in Section 5.6 of this Agreement.

 

3.3           HOA
will offer Franchisee additional pre-opening training and opening supervision and assistance as HOA deems advisable, provided that
Franchisee must give HOA adequate prior written notice of its proposed opening date.

 

3.4           HOA
will provide such continuing advisory assistance to Franchisee in the operation, advertising, and promotion of Franchisee’s
Restaurant as HOA deems appropriate.

 

3.5           HOA
will provide such refresher training for Franchisee and Franchisee’s employees as HOA deems appropriate.

 

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3.6           HOA
may provide Franchisee, itself or thorough the Global Advertising Fund, with advertising and promotional plans and materials for
local advertising as described in Section 11 of this Agreement.

 

3.7           HOA
will provide Franchisee with access to the Manuals, as set forth in Section 7 of this Agreement.

 

3.8           HOA
may provide Franchisee with such merchandising, marketing, and other data and advice as HOA may develop and deem to be helpful
in the management and operation of Franchisee’s Restaurant.

 

3.9           HOA
may provide Franchisee with such periodic individual or group advice, consultation, and assistance, rendered by personal visit
or telephone, through newsletters, bulletins or other communications (delivered in hard copy or digitally), or by utilizing mystery-shopper
or other similar programs; such advice, consultation and assistance will made available from time to time to all HOA franchisees,
as HOA deems appropriate.

 

3.10         HOA
will provide Franchisee with such bulletins, webinars, brochures, manuals, and reports, as HOA may publish for franchisees generally
regarding HOA’s plans, policies, developments, and activities. In addition, HOA will provide such communication concerning
new developments, techniques, and improvements in food preparation, equipment, food products, packaging, and restaurant management,
that HOA deems relevant to the operation of Franchisee’s Restaurant.

 

3.11         HOA
will provide Franchisee with the requirements for a standardized system for accounting, cost control, and inventory control.

 

4.          FEES

 

4.1           Application
Fee. Franchisee shall have paid an Application Fee in the amount of Three Thousand U.S. Dollars (US$3,000) (the “Application
Fee”) at the time of application to HOA for the grant of a Franchise, in consideration of the administrative and other
expenses HOA incurs in reviewing Franchisee’s franchise application. The Application Fee will be credited towards the Initial
Franchise Fee, as described in Section 4.2, below.

 

4.2           Initial
Franchise Fee. Franchisee shall pay to HOA an initial franchise fee (the “Initial Franchise Fee”) in the
amount of Seventy-Five Thousand U.S. Dollars (US$75,000) immediately following registration of the Agreement with the Brazilian
Institute of Industrial Property (“INPI”). Franchisee shall pay the Initial Franchise Fee in a lump sum in immediately-available
bank funds. Except as described in Section 1.6.3 of this Agreement, the Initial Franchise Fee shall be deemed fully-earned and
nonrefundable upon Franchisee’s execution of this Agreement, in consideration of the administrative and other expenses HOA
incurs in granting Franchisee its Franchise and in further consideration of HOA’s lost or deferred opportunities to grant
Hooters System franchises to others. If Franchisee paid HOA an Application Fee prior to HOA’s execution of this Agreement,
HOA will credit the amount of the Application Fee against the amount of the Initial Franchise Fee.

 

4.3           Continuing
Franchise Fee. In consideration for the right to operate the Franchisee’s Restaurant using the Proprietary Marks and
the Hooters System, Franchisee shall pay to HOA a continuing franchise fee (the “Continuing Franchise Fee”)
of six percent (6%) of Franchisee’s Gross Sales (as defined in Section 4.9 of this Agreement). Continuing Franchise Fees
shall be payable by Franchisee to HOA, so that HOA actually receives such payment by the end of ten (10) days after the end of
each month.

 

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4.4           Local
Advertising.

 

4.4.1           Franchisee
shall spend each calendar year a minimum of two and one-half percent (2.5%) of the Gross Sales of Franchisee’s Restaurant
on local advertising and promotion (the “Minimum Local Advertising Expenditure”).

 

4.4.2           In
the event HOA establishes a Local Advertising Cooperative that encompasses the Franchisee’s Restaurant, Franchisee shall
contribute up to one-half (1⁄2) of the Minimum Local Advertising Expenditure described above to such Cooperative, so that
the Cooperative actually receives such payment (the “Cooperative Contribution”) by the end of ten (10) days
after the end of each month. HOA shall designate Franchisee’s Cooperative Contribution from time to time.

 

4.5           Global
Advertising Fee. Franchisee shall pay to HOA, to be actually received by the end of ten (10) days after the end of each month,
a global advertising fee equal to one-half percent (0.5%) of Franchisee’s Gross Sales of Franchisee’s Restaurant (the
“Global Advertising Fee”) during such month. HOA may increase the Global Advertising Fee from time to time;
provided that it shall not be more than one percent (1%) of the Gross Sales at the Franchisee’s Restaurant. HOA or HOA’s
designee will maintain and administer the Global Advertising Fund as provided in Section 11.3 of this Agreement.

 

4.6           Advertising
Fee Cap. Notwithstanding the percentages set forth in Sections 4.4.1 and 4.5 above for the Minimum Local Advertising Expenditure,
Cooperative Contribution and Global Advertising Fee, HOA will not require Franchisee to pay a combined amount for the Minimum Local
Advertising Expenditure, Cooperative Contribution and Global Advertising Fee that exceeds three and one-half percent (3.5%) of
Franchisee’s Gross Sales.

 

4.7           Casualties.
Franchisee’s obligation to pay the Continuing Franchise Fee and the Global Advertising Fee (collectively, the “Fees”)
shall not be altered by the occurrence of any casualty or event that would cause a temporary closing of Franchisee’s Restaurant
for a period of more than five (5) days. In the event that such a casualty or event occurs, the Fees to be paid by Franchisee for
each month in which Franchisee’s Restaurant is closed shall be the average of all Fees payable by Franchisee during the immediately-
preceding thirteen (13) months, or such lesser period as Franchisee’s Restaurant has been open if Franchisee’s Restaurant
has been open fewer than thirteen (13) months.

 

4.8           Past-Due
Payments. Any payment that HOA does not actually receive by the end of the specified date shall be deemed past due. If any
payment is past due, in addition to HOA’s right to exercise all rights and remedies available to HOA under Section 14 of
this Agreement, Franchisee shall pay to HOA, in addition to the past-due amount, interest on such amount from the date it came
due until the date HOA actually receives such payment. The rate of such interest shall be the lesser of: (i) eighteen percent (18%)
per annum; or (ii) the maximum rate allowed by applicable laws (hereinafter the “Default Rate”), until paid
in full.

 

4.9           Gross
Sales. As used in this Agreement, “Gross Sales” shall include all revenue related to the sale of Products
and performance of services in, at, about, through, or from Franchisee’s Restaurant, whether for cash, check, meal vouchers,
credit or any other electronic means of payment, and regardless of collection in the case of credit and electronic payment, and
income of every kind and nature related to Franchisee’s Restaurant, including without limitation insurance proceeds and
condemnation awards for loss of sales, profits, or business; and further including without limitation amounts from vending machines,
slot machines or gambling devices, any coin-operated machines for vending merchandise to customers, entertainment devices for
the playing of electronic or manual games, pool tables, juke boxes, ATM fees, liquor, gift cards, merchandise, delivery, catering,
and any off-premises consumption; provided, however, that “Gross Sales” shall not include: (i) revenues from sales
taxes or other add-on taxes Franchisee collects from guests and actually transmits to the appropriate taxing authority; (ii) tips
guests give and that are charged to the guests’ credit or debit cards; and (iii) the retail value of any complimentary services,
discounts, trade-outs, credit card fees, cash refunds to guests, and promotional coupons used by guests (collectively, the “Comps”),
up to a maximum of two percent (2%) of Gross Sales in the aggregate. In no event may Franchisee exclude or deduct from Franchisee’s
Gross Sales greater than two percent (2%) of such Gross Sales for Comps.

 

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4.10         Payment
of Amounts Owed.

 

4.10.1 Unless
notified by HOA in writing to pay any amounts due under this Agreement in the local currency (the “Local Currency”),
Franchisee shall pay all amounts due under this Agreement in United States Dollars or Euro as designated by Franchisor (the “Designated
Currency”) by wire transfer to such bank account as HOA may notify Franchisee from time to time. All costs, charges and
expenses, including bank charges, incurred in association with such payments or currency conversions shall be borne by Franchisee.
Franchisee shall participate in any automatic debit/credit transfer program specified by HOA from time to time for the payment
of amounts due to HOA under this Agreement, and shall execute and deliver to HOA all necessary documents and instruments therefor.

 

4.10.2 Franchisee
shall pay all amounts due to HOA under this Agreement without counterclaim or set-off.

 

4.11         Currency
Conversions. All amounts payable to HOA under this Agreement shall be paid in the Designated Currency. On or about the first
(1st) business day of each calendar month, HOA will convert the amounts reported by Franchisee in Brazilian Reais with respect
to the immediately preceding month, according to the prevailing exchange rate as reported in the “Currency Trading”
section of The Wall Street Journal (or its future equivalent), or such other source as HOA reasonably deems appropriate, on or
for the first business day of each calendar month. The amounts thus converted by HOA into the Designated Currency pursuant to this
Paragraph shall be paid by Franchisee within the applicable payment terms specified in this Agreement, at the conversion rate applicable
on the date of actual remittance, as published by the Central Bank of Brazil.

 

4.12         Local
Withholding Taxes.

 

4.12.1 HOA
and its affiliates shall not have any liability for any taxes, duties, assessments, fees or other governmental charges, including
any sales tax, use tax business tax, value-added tax, service tax, excise tax, gross receipts tax, property tax, workers’
compensation, unemployment compensation, or otherwise (“Local Taxes”), whether levied upon Franchisee or its
assets or income, or upon HOA or its affiliates, in connection with business conducted or services performed by the Restaurant,
or any payment to HOA or its affiliates under this Agreement, except for any non-resident income withholding tax levied by the
government agency in Brazil (the “Income Withholdings”).

 

4.12.2
If any Local Taxes are required to be deducted or withheld from any payment to HOA under this Agreement, then the amount
payable shall be increased by Franchisee by such amount as is necessary to make the actual amount received by HOA (after such
Local Taxes and after any additional Local Taxes on account of such additional payment) equal to the amount due before the
application of any Local Taxes. If any Income Withholdings are required to be deducted or withheld from any payment to HOA
under this Agreement, then the amount payable shall be so deducted. Franchisee shall promptly pay the Local Taxes and Income
Withholdings required to be deducted or withhold to the applicable taxing authority and deliver to HOA original receipts of
applicable governmental authorities showing that all Local Taxes and Income Withholdings were properly deducted or withheld
in compliance with applicable law (or, if original receipts are unavailable, photocopies, tax returns and other
documentation, as HOA may require).

  

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4.12.3 The
parties shall, subject to applicable law, use all reasonable endeavors to minimize any Local Taxes and Income Withholdings payable
by each party under this Agreement, and to secure all tax refunds and credits available to each party, including if necessary by
restructuring or amending this Agreement.

 

4.13         In
the event that any order, law, regulation, court decision, financial constraint, embargo or any other act or fact that is beyond
Franchisee’s reasonable control shall prevent Franchisee from remitting any amounts due under this Agreement to HOA, Franchisee
shall notify HOA immediately. Franchisee shall use its best efforts to obtain any consents or authorizations which may be necessary
in order to permit timely payments in the Designated Currency of all amounts payable hereunder. While such restrictions are in
effect, HOA may require Franchisee to deposit all amounts due but unpaid in any bank or institution and in any currency designated
by HOA that is available to Franchisee. HOA shall be entitled to all interest earned on such deposits. If such restrictions are
in place for more than one hundred and eighty (180) days, HOA may, upon the delivery of written notice to Franchisee, terminate
this Agreement.

 

5.          DUTIES
OF FRANCHISEE

 

5.1           Franchisee
acknowledges and agrees that every detail of Franchisee’s Restaurant, including without limitation the uniformity of appearance,
service, products, and advertising of Franchisee’s Restaurant, is important to Franchisee, HOA, the Hooters System, and HOA’s
other franchisees, in order to maintain the Hooters System’s high and uniform operating standards, to increase the demand
for the Products and services, and to protect HOA’s reputation and goodwill.

 

5.2           If
Franchisee is or becomes a corporation, limited liability company, or any other form of business entity, Franchisee shall comply
with Section 13 of this Agreement and the following requirements:

 

5.2.1           Franchisee
shall confine its activities exclusively to the development, opening and operation of Franchisee’s Restaurant.

 

5.2.2           Franchisee’s
Bylaws, Articles of Association, or any other comparable acts of incorporation and governing documents shall at all times provide
that: (i) Franchisee’s activities shall be confined exclusively to the development, opening, and operation of Franchisee’s
Restaurant; and (ii) the issuance, redemption, purchase for cancellation, and transfer of voting stock, partnership interests,
membership interests, or other equity interests in Franchisee, are restricted by the terms of this Agreement.

 

5.2.3           Franchisee
shall provide to HOA copies of Franchisee’s Bylaws, Articles of Association or any other comparable acts of incorporation
and governing documents, and any other documents HOA may reasonably request, and any amendments to any of them (all with an English
translation thereof, if it is not in English), so that HOA actually receives such copies by the end of ten (10) days after HOA
requests such copies.

 

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5.2.4 Franchisee
shall maintain stop transfer instructions against the transfer on its record of any equity securities (voting or otherwise) except
in compliance with Section 13 and Section 16 of this Agreement. All securities Franchisee issues shall bear the following legend,
which shall be printed legibly and conspicuously on each stock certificate or other evidence of ownership interest:

 

THE TRANSFER OF THESE SECURITIES
IS SUBJECT TO THE TERMS AND CONDITIONS OF A FRANCHISE AGREEMENT WITH HOOTERS OF AMERICA, LLC DATED [INSERT DATE]. REFERENCE IS
MADE TO SUCH AGREEMENT AND TO THE RESTRICTIVE PROVISIONS OF THE [INSERT TYPE OF CERTIFICATE] OF THIS [INSERT TYPE OF ENTITY].

 

5.2.5 Franchisee
shall maintain a current list of all owners of record and all beneficial owners of any class of voting equity of Franchisee and
shall furnish the list to HOA upon request (and an English translation thereof, if it is not in English) so that HOA actually receives
such list by the end of ten (10) days after HOA requests such list.

 

5.2.6           If
Franchisee is a partnership, Franchisee shall maintain a current list of all general and limited partners, and a list of all owners
of record and all beneficial owners of any class of voting equity of Franchisee and such general and limited partners, and shall
furnish such list to HOA so that HOA actually receives such list upon request by the end of ten (10) days after HOA requests such
list.

 

5.3           Each
Principal Owner (as defined in Section 13.2.1 below) of Franchisee, and such of Franchisee’s other Owners as HOA may specify,
shall enter into a continuing guaranty agreement in a form acceptable to HOA (the “Guaranty”), which Guaranty
must be delivered to HOA upon execution of this Agreement. HOA may amend or modify the form of such Guaranty from time to time
as to Owners signing the Guaranty after the Effective Date of this Agreement.

 

5.4           Franchisee
assumes all costs, liability, expense, and responsibility for locating, obtaining, and developing the Accepted Location for Franchisee’s
Restaurant and for constructing and equipping Franchisee’s Restaurant at such Accepted Location. Franchisee shall not make
any binding commitment to a prospective vendor or lessor of real estate with respect to the Accepted Location unless HOA accepts
such Accepted Location in accordance with the procedures set forth in this Agreement and unless the lease documents for such Accepted
Location provide, without limitation: (i) that the landlord shall provide HOA with notice of any default thereunder at least thirty
(30) days prior to any termination of the lease, specifying such default and granting HOA the right (but not the obligation) to
cure any such default within such period; and (ii) that the landlord accepts HOA as an assignee of Franchisee’s interest
thereunder. FRANCHISEE ACKNOWLEDGES THAT HOA’S ACCEPTANCE OF A SITE AND THE RENDERING OF ASSISTANCE IN THE SELECTION OF A
SITE DOES NOT CONSTITUTE HOA’S REPRESENTATION, PROMISE, WARRANTY, OR GUARANTY THAT A HOOTERS RESTAURANT AT THE ACCEPTED SITE
WILL BE PROFITABLE OR OTHERWISE SUCCESSFUL. Franchisee must agree to a collateral assignment of the leases for the Accepted Location,
in a form acceptable to the HOA. Under the collateral assignment of leases, upon default by Franchisee of the lease for the Accepted
Location, this Agreement, or the document securing this Agreement, HOA will have right to take possession of the Accepted Location
and Franchisee will have no further right, title or interest in the lease.

 

5.5           Franchisee
shall, at its expense, and to HOA’s satisfaction, comply with all of the following requirements:

 

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5.5.1           Before
commencing Construction of Franchisee’s Restaurant, Franchisee shall submit a site plan to HOA, including a footprint of
the proposed building, and architectural, kitchen, and signage drawings, for HOA’s approval. Franchisee must use an architect
or engineer approved by HOA to prepare detailed plans and specifications for the Construction of Franchisee’s Restaurant.

 

5.5.2           Franchisee
shall: (i) use a qualified general contractor or construction supervisor to supervise the Construction of Franchisee’s Restaurant
and the completion of all improvements; and (ii) submit to HOA a statement providing the name and contact information of such general
contractor or construction supervisor.

 

5.5.3           Franchisee
shall cause such Construction to be performed only in accordance with the site plan and the plans and specifications HOA approved.
No changes will be made to such approved plans and specifications, or to the Construction, or to any of the materials used in Franchisee’s
Restaurant, or to interior and exterior colors of Franchisee’s Restaurant, without HOA’s express prior written consent.

 

5.5.4           Franchisee
shall obtain and shall thereafter maintain all licenses, permits, and certifications required for lawful Construction of Franchisee’s
Restaurant, including without limitation building, zoning, access, parking, driveway access, sign, and occupancy permits and licenses,
and shall certify in writing to HOA that it has obtained all such licenses, permits, and certifications

 

5.5.5          Franchisee
shall obtain and shall thereafter maintain all health, life, safety, operational, and other licenses, permits, and certifications
required for operation of Franchisee’s Restaurant and shall certify in writing to HOA prior to the Opening Date that it has
obtained all such licenses, permits, and certifications.

 

5.5.6           Franchisee
shall complete Construction of Franchisee’s Restaurant in order to meet the requirements to open Franchisee’s Restaurant
in compliance with Section 1.6.1, above.

 

5.6           HOA
will provide its manager training program to up to six (6) of Franchisee’s manager- in-training personnel. If
Franchisee is an individual, Franchisee and Franchisee’s management personnel must complete HOA’s manager
training program to HOA’s reasonable satisfaction prior to Franchisee’s opening of Franchisee’s Restaurant
for business. If Franchisee is a corporation, partnership, limited liability company, or any other form of business entity,
at least the General Manager (as defined in Section 5.7, below) of Franchisee and Franchisee’s other management
personnel must complete HOA’s manager training program to HOA’s reasonable satisfaction prior to
Franchisee’s opening of Franchisee’s Restaurant for business. In the event the General Manager is not a Principal
Owner, then at least one (1) Principal Owner must attend HOA’s “executive overview” training program (the
term “Principal Owner” is defined in Section 13.2.1, below). At HOA’s option, key personnel Franchisee
subsequently employs must also complete HOA’s manager training program to HOA’s reasonable satisfaction. HOA may,
at its discretion, make available additional training programs, seminars, and refresher courses to Franchisee and
Franchisee’s designated personnel from time to time. All such training will take place at the locations HOA designates.
HOA may, at any time, discontinue management training and decline to certify Franchisee or Franchisee’s designated
personnel who fail to demonstrate an understanding acceptable to HOA of the management training. If HOA discontinues the
management training of Franchisee or Franchisee’s designated personnel, Franchisee shall have thirty (30) days to
present HOA with an acceptable alternative candidate for the manager training program. If HOA reasonably determines that
Franchisee is unable or unwilling to provide individuals who can complete the manager training program to HOA’s
reasonable satisfaction, or if HOA reasonably determines that the individuals whom Franchisee has presented for manager
training lack the skills to operate Franchisee’s Restaurant successfully, HOA will have the right to terminate this
Agreement pursuant to Section 14.3 hereof. HOA will provide instructors and training materials for all required training
programs. Franchisee shall be responsible for all expenses Franchisee or its personnel incur in connection with any training
programs, including without limitation wage and benefit costs, and the costs of transportation, lodging, and meals. If the
Hooters Restaurant developed under this Agreement is not the first Hooters Restaurant developed by Franchisee or its
affiliate pursuant to a development agreement entered into by the parties (or their respective affiliates), HOA may, at its
sole discretion, waive certain initial training requirements and on-site assistance programs.

 

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5.7           Franchisee
shall designate at least one (1) manager (the “General Manager”) of Franchisee’s Restaurant who shall
have authority over the other managers. If Franchisee is an individual, Franchisee may serve as General Manager. Franchisee’s
designated General Manager shall devote his or her full time, energy, and best efforts to the management and operation of Franchisee’s
Restaurant. Franchisee will require such General Manager to complete, to HOA’s reasonable satisfaction, an HOA- approved
manager training program by the end of ninety (90) days after such individual’s appointment to serve as General Manager.
If Franchisee is a corporation or other business entity, General Manager shall be an individual appointed by Franchisee and approved
by HOA.

 

5.7.1           HOA
will offer Franchisee training resources for Franchisee’s hourly employees as described in the Manual or otherwise in writing.

 

5.7.2           Franchisee
shall pay, as directed by HOA, the expenses of HOA personnel that provide training to Franchisee and Franchisee’s employees
at Franchisee’s Restaurant. Expenses shall include, without limitation, travel expenses, per diem, and lodging expenses.

 

5.7.3           If
Franchisee’s Restaurant opened under this Agreement is not the first restaurant the Franchisee has opened under the Hooters
System, HOA may waive certain training requirements, at HOA’s sole discretion.

 

5.8           Franchisee
shall use the Accepted Location solely for the operation of Franchisee’s Restaurant. Franchisee shall not use or permit the
use of the Accepted Location for any other purpose or activity at any time without first obtaining HOA’s written consent.
Franchisee shall keep Franchisee’s Restaurant open and in normal operation as designated by HOA in the Manuals or otherwise
in writing. Franchisee shall not locate or permit to be located on or about Franchisee’s Restaurant premises or any other
area of the Accepted Location any slot machines or gambling devices, or any coin-operated machines for vending of any merchandise,
entertainment devices for the playing of electronic or manual games or for any similar purpose, pool tables or juke boxes, except
as prescribed in the Manuals or as HOA may otherwise approve in writing. Franchisee shall not permit on or about Franchisee’s
Restaurant premises or any other area of the Accepted Location the sale of products or services not included in the Hooters System
without HOA’s prior express written consent. HOA, in its sole discretion, may prescribe conditions under which Franchisee
may sell such products or services.

 

5.9           Franchisee
shall display all signs and other promotional materials HOA may require, to the extent permitted by applicable laws, ordinances,
rules, regulations, court orders, and decisional authority of all applicable governmental authorities having jurisdiction over
Franchisee’s Restaurant (hereinafter collectively the “Laws”). The color, size, design, and location of
such signs shall be as HOA specifies or approves. Franchisee shall not place additional signs, posters, or other décor items
in, on, or about the Accepted Location without HOA’s prior written consent.

 

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5.10         Franchisee
shall comply with, and shall cause the Accepted Location and Franchisee’s Restaurant to comply with, any and all Laws. Franchisee
shall be solely responsible for ensuring that all requirements set forth in this Agreement and all other requirements related to
the development, opening, and operation of Franchisee’s Restaurant, including without limitation all requirements related
to employment, employment discrimination, wage and hour rules, building design, building construction, hygiene, food and beverage
products, and alcoholic beverages, comply with any and all Laws. In the event that any requirement set forth in this Agreement
or any other requirement related to the development, opening, and operation of Franchisee’s Restaurant violates any Law,
and as a result Franchisee does not comply with this Agreement or other requirements related to the development, opening, and operation
of Franchisee’s Restaurant, the existence or enforcement of such Law shall not excuse Franchisee’s noncompliance and
shall not prevent HOA from asserting that such noncompliance constitutes a default of this Agreement. Franchisee acknowledges and
agrees that it has taken any and all steps necessary to ensure that this Agreement and all other requirements related to the development,
opening, and operation of Franchisee’s Restaurant comply with all Laws.

 

5.11         Franchisee
shall maintain the interior and exterior of Franchisee’s Restaurant, and all other areas of the Accepted Location, in first-class
repair and condition, and in compliance with all of HOA’s maintenance and operating standards. In connection with such maintenance,
Franchisee shall make such additions, alterations, and repairs to the Accepted Location, and such replacement of items in and about
Franchisee’s Restaurant, as HOA may require, which additions, alterations, and repairs may include, without limitation, periodic
repainting, refinishing, and repairing of Franchisee’s Restaurant interior and exterior and replacing of obsolete or worn
signs, furnishings, fixtures, and equipment.

 

5.12         Franchisee
acknowledges and agrees that it is in Franchisee’s best interests, and in the best interests of the Hooters System, that
Franchisee’s Restaurant be clean, up-to-date, well-maintained, and well-appointed. Therefore, Franchisee acknowledges and
agrees that Franchisee will, at HOA’s request, remodel, redecorate, equip, improve, and modify (collectively, “Renovate”)
Franchisee’s Restaurant to conform such Restaurant to: (i) the building design, trade dress, color schemes, signage, and
presentation of trademarks and service marks consistent with HOA’s then-current image; (ii) the requirements set forth in
the Manuals; and (iii) the condition, state of repair, and general appearance of Hooters restaurants that HOA reasonably deems
desirable. HOA and Franchisee acknowledge and agree that the obligation to Renovate is intended to be periodic remodeling, redecorating,
equipping, improvement to, and modification of, Franchisee’s Restaurant, and that nothing contained in this Section 5.12
will affect Franchisee’s obligation to maintain its Restaurant in compliance with the other provisions of this Agreement
and the Manuals. Notwithstanding anything set forth in this Section 5.12 to the contrary, HOA will not require Franchisee to Renovate
Franchisee’s Restaurant more often than one (1) time every seven (7) years. Upon request by HOA, Franchisee shall perform
reasonable equipment upgrades, as determined by HOA, within ninety (90) days after receipt of notice from HOA to upgrade equipment.

 

5.13         Franchisee
shall operate Franchisee’s Restaurant in strict compliance with such methods, standards, and specifications as HOA may from
time to time prescribe in the Manuals or otherwise in writing, to maintain maximum efficiency and productivity and to ensure that
the highest degree of quality, appearance, and service is consistently maintained. Without limiting the generality of the foregoing,
Franchisee specifically agrees:

 

5.13.1 To
maintain in sufficient supply, and to use at all times, only such products, materials, supplies, ingredients, and like items as
HOA may require, and to refrain from deviating therefrom by using nonconforming items without HOA’s prior written consent;

 

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5.13.2 To
use at all times only such methods of preparation, methods of service, and like methods as HOA may require, including without limitation
HOA’s standards and specifications for preparation and presentation of products served; and to refrain from deviating therefrom
by using nonconforming methods without HOA’s prior written consent;

 

5.13.3 To maintain the highest standards of cleanliness,
health, and sanitation;

 

5.13.4 To
obtain such products, equipment, services, and supplies as HOA may require, for the appropriate handling, preparation, presentation,
selling, and service of any food or beverage products;

 

5.13.5 To
require clean uniforms conforming to such specifications as to color, design, and like factors as HOA may designate from time to
time, to be worn by all of Franchisee’s personnel at all times while working at, in, through, or on behalf of Franchisee’s
Restaurant, and to cause all personnel to present a clean, neat appearance and to render competent and courteous service to guests;

 

5.13.6 To
permit HOA, at any reasonable time, to remove from Franchisee’s Restaurant samples of items without payment therefor, in
amounts reasonably necessary for testing by HOA or an independent laboratory to determine whether such samples meet HOA’s
then-current standards and specifications. HOA may require Franchisee to bear the cost of such testing if HOA has not previously
approved the supplier of the item, or if the sample fails to conform to HOA’s specifications;

 

5.13.7 Not
to install or permit to be installed on or about Franchisee’s Restaurant premises, without HOA’s prior written consent,
any furnishings, fixtures, equipment, décor, signage, or other improvements not previously approved as meeting HOA’s
standards and specifications;

 

5.13.8 To employ a sufficient number of trained and
qualified personnel to operate Franchisee’s Restaurant;

 

5.13.9 To maintain sufficient inventories to operate
Franchisee’s Restaurant; and

 

5.13.10 To
honor all credit, charge, courtesy or cash cards or other credit devices required or approved by HOA. Franchisee must obtain the
written approval of HOA prior to honoring any previously unapproved credit, charge, courtesy or cash cards or other credit devices.
Franchisee shall ensure that the Restaurant adheres to the standards applicable to electronic payments including PCI (Payment Card
Industry) standards or any equivalent thereof. If required by HOA, Franchisee shall provide HOA with evidence of compliance with
the applicable standards and provide, or make available to HOA copies of an audit, scanning results or related documentation relating
to such compliance. Any costs associated with an audit or to gain compliance with these standards shall be borne by Franchisee.
Franchisee shall immediately (in any event within 24 hours) notify HOA if it suspects or has been notified by any third party of
a possible security breach related to the cashless system (or related cashless data) used in the Restaurant.

  

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5.14         HOA
may require Franchisee to purchase or lease certain products (including food and beverages), equipment, services, and
supplies, including without limitation furnishings, fixtures, equipment, signage, and other items required for the operation
of Franchisee’s Restaurant, solely from suppliers (including manufacturers, distributors, and other sources), that
demonstrate, to HOA’s continuing reasonable satisfaction, the ability to meet HOA’s then-current standards and
specifications for such items; that possess adequate quality controls and capacity to supply Franchisee’s needs
promptly and reliably; and that HOA has first approved in writing and has not thereafter withdrawn from the approved supplier
list. HOA will list such items and suppliers in the Manuals or in periodic bulletins and newsletters HOA may supply. If
Franchisee desires to purchase any items from an unapproved supplier, Franchisee shall submit to HOA a written request for
HOA’s consent to use such supplier, and shall have such supplier acknowledge in writing that Franchisee is an
independent entity from HOA and that HOA is not liable for debts Franchisee incurs. HOA shall have the right to require that
its representatives be permitted to inspect the supplier’s facilities, and that samples from the supplier be delivered
to HOA or to an independent laboratory that HOA designates for testing. Franchisee will pay a charge not to exceed the
reasonable cost of the inspection and the actual cost of the test. HOA may also require that the supplier comply with such
other reasonable requirements as HOA may deem appropriate, including without limitation payment of reasonable
continuing inspection fees and administrative costs. HOA reserves the right, following HOA’s consent to use any
supplier, to reinspect the facilities and products of such supplier and to revoke its consent on the supplier’s failure
to continue to meet any of HOA’s then- current standards. If, in providing products, equipment, services, or supplies
to Franchisee, any third party may obtain access to any of HOA’s confidential information or trade secrets (as defined
below), HOA may require, as a condition of approval of such supplier, that the supplier execute covenants of non- disclosure
and non-competition in a form HOA provides.

 

5.15         Franchisee
recognizes that HOA shall have the right to appoint only one manufacturer, distributor, reseller, and/or other vendor for any particular
item. HOA may, in some instances, be the only designated supplier of an item.

 

5.16         HOA
may require Franchisee to purchase or lease products, equipment, services, and supplies from HOA, HOA’s affiliates, or third
parties HOA designates or approves. Franchisee acknowledges and agrees that HOA and HOA’s affiliates may enter into agreements
with third parties, including without limitation suppliers and distributors, under which HOA and HOA’s affiliates may derive
revenue, profits, and other benefits, including without limitation rebates, credits, discounts, allowances, monies, payments, or
marketing assistance (collectively, “Allowances”) as a result of consideration Franchisee pays to such third
parties for purchases or leases HOA requires Franchisee to make. These Allowances may be based on individual or Hooters System-wide
purchases of food, beverages, paper goods and other items. Franchisee assigns to HOA or its designee all of Franchisee’s
right, title and interest in and to any and all such Allowances and authorizes HOA or its designee to collect and retain any or
all such Allowances without restriction (unless otherwise instructed by the supplier).

 

5.17         Franchisee
shall grant HOA the right to enter Franchisee’s Restaurant premises at any reasonable time to inspect, photograph, audiotape,
or videotape Franchisee’s Restaurant and the equipment and operations at Franchisee’s Restaurant, to ensure compliance
with this Agreement and the Manuals; provided, however, that HOA, in the exercise of such right, shall use all reasonable efforts
to prevent disruption or interference with the operation of Franchisee’s Restaurant. Franchisee shall cooperate with HOA
in such inspections by rendering such assistance as HOA may reasonably request, and shall enforce and comply with all inspection
standards HOA may establish; and, on reasonable notice from HOA, and without limiting HOA’s other rights under this Agreement,
shall take such steps as may be necessary to correct immediately the deficiencies detected during any such inspection, including
without limitation immediately desisting from the further use of any products, equipment, services, or supplies, including without
limitation advertising material, that do not conform to HOA’s then-current standards or specifications.

 

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5.18         Franchisee
shall not engage in any trade practice or other activity, and shall not offer any product or service, that HOA determines to be
harmful to the goodwill of, or to reflect unfavorably on the reputation of, Franchisee, HOA, Franchisee’s Restaurant, the
Products sold at Franchisee’s Restaurant, or the Hooters System; or that constitutes a deceptive or unfair trade practice;
or that otherwise violates any Law.

 

5.19         In
any equipment or trade fixture lease or financing that Franchisee enters into in connection with Franchisee’s Restaurant,
Franchisee shall include a provision approving HOA as transferee without any right to accelerate or to modify such lease or financing,
and requiring the lessor or lender to send notice of any default of such lease or financing to HOA at HOA’s then-current
address and to give HOA thirty (30) days from the date HOA receives such notice of default to cure such default. HOA is under no
duty or obligation whatsoever to cure such default, but should HOA elect to cure such default, Franchisee shall reimburse and indemnify
HOA for any costs and expenses HOA incurs in connection with the cure of such default, on HOA’s written request, so that
HOA actually receives such reimbursement by the end of ten (10) days after HOA requests such reimbursement.

 

5.20         In
order to secure payment of all amounts Franchisee is obligated to pay under this Agreement, Franchisee hereby grants to HOA a first
priority, unsubordinated security interest in all of Franchisee’s trade fixtures, equipment, inventory, and accounts receivable,
and in the proceeds of the foregoing. Franchisee shall execute all documents HOA reasonably deems necessary to perfect HOA’s
security interest in such items.

 

5.21         Franchisee
will immediately notify HOA, in writing, of any act, omission, or circumstance that: (i) would constitute a default by Franchisee
of this Agreement or any other agreement to which Franchisee and HOA are parties; or (ii) would reasonably be expected to impair
Franchisee’s ability to fulfill its obligations to HOA. Franchisee will not intentionally, willfully, or negligently: (a)
misrepresent any matter to HOA; or (b) fail to immediately notify HOA of any matter as to which this Agreement requires Franchisee
to notify HOA.

 

5.22         Incentive/Convenience
Programs. If required by HOA, Franchisee shall offer for sale, and will honor for purchases by customers, any incentive or
convenience programs which HOA may institute from time to time, and Franchisee shall do so in compliance with HOA’s standards
and procedures for such programs. Additionally, Franchisee shall sell, issue, and redeem gift cards (“Gift Cards”)
and (whether as a part of, or separate from, Gift Cards) loyalty cards (“Loyalty Cards”) that have been prepared
utilizing the standard form of Gift Card or Loyalty Card provided or designated by HOA, and only in the manner specified in the
Manuals or otherwise in writing. Franchisee shall fully honor all Gift Cards and Loyalty Cards regardless of whether a Gift Card
or Loyalty Card was issued by HOA or another franchisee, regardless of whether the Gift Card or Loyalty Card has been discounted
for third-party retailer fees pursuant to arrangements that HOA has established with such retailers for the sale of Gift Cards
and Loyalty Cards.

 

6.          PROPRIETARY
MARKS

 

6.1         HOA
represents with respect to the Proprietary Marks that:

 

6.1.1           Pursuant
to the License Agreement with an affiliate, HOA has been granted the exclusive right to use and to license others to use the Proprietary
Marks and the Hooter System to establish Hooters restaurants in Brazil. HOA has taken, and shall take or cause to be taken, all
steps reasonably necessary to preserve and protect the ownership and validity in Brazil of the Proprietary Marks that HOA has designated
for use in the Hooters System in Brazil.

 

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6.2         Franchisee
covenants, warrants, represents, and agrees that:

 

6.2.1           Franchisee
will use only the Proprietary Marks HOA designates, and will use them only in the manner HOA authorizes and permits. Franchisee
acknowledges and agrees that any unauthorized use of the Proprietary Marks will constitute an infringement of HOA’s rights.

 

6.2.2           Franchisee
will use the Proprietary Marks only for the operation of Franchisee’s Restaurant, and only at Franchisee’s Restaurant
or in advertising for Franchisee’s Restaurant.

 

6.2.3           Franchisee
will operate and advertise Franchisee’s Restaurant only under the name “Hooters” without prefix or suffix, except
as otherwise authorized or required by us.

 

6.2.4           Franchisee
will identify itself as the owner of Franchisee’s Restaurant in connection with any use of the Proprietary Marks, including
without limitation on invoices, order forms, receipts, menus, employee forms, and contracts, and at such conspicuous locations
on the premises of Franchisee’s Restaurant as HOA may require. The form and content of such identification will comply with
HOA’s standards and specifications.

 

6.2.5           Franchisee
will not use any Proprietary Mark: (i) to incur any obligation or indebtedness on behalf of HOA; (ii) as a part of Franchisee’s
corporate or other legal name; (iii) in any part of a web site domain name without HOA’s prior written consent, which consent
HOA will not unreasonably withhold; or (iv) on a web site, including without limitation a social media site, without HOA’s
prior written consent.

 

6.2.6           Franchisee
will file for and maintain, at its sole cost and expense, all trade name or business name registrations required by HOA or by Law.

 

6.2.7           Franchisee
will promptly execute any powers of attorney or other documents HOA deems necessary to obtain or enhance protection for the Proprietary
Marks, to maintain the continued validity and enforceability of the Proprietary Marks, to further HOA’s exercise of its rights
under this Agreement, or otherwise. Without limiting the generality of the foregoing, Franchisee must execute (and file, if applicable)
any documents that HOA or its counsel deem necessary to obtain protection for the Proprietary Marks or to maintain their continued
validity and enforceability, including license agreements (which shall be subject to the terms of this Agreement). Upon termination
or expiration of this Agreement, Franchisee agrees to do everything necessary to ensure that Franchisee ceases to be a licensee
of the Marks, and Franchisee hereby appoints HOA as Franchisee’s attorney to execute any documents and to do such things
as may be necessary for this purpose. Franchisee agrees to pay for all costs of preparation, recordation and cancellation of the
license agreement.

 

6.2.8           In
the event that any person or entity commences or threatens litigation against Franchisee related to the Proprietary Marks or the
Hooters System, Franchisee will promptly notify HOA and will cooperate fully in defending or settling such litigation, as determined
exclusively by HOA.

 

6.3         Franchisee
expressly acknowledges and agrees that:

 

6.3.1           As
between HOA and Franchisee, HOA has the sole and exclusive right and interest in and to the Proprietary Marks and the goodwill
associated with and symbolized by them.

 

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6.3.2      The
Proprietary Marks are valid, distinctive, and serve to identify HOA as the source of the goods and services offered pursuant to
those marks and by those who are authorized to operate under the Hooters System.

 

6.3.3      Franchisee
will not directly or indirectly contest the validity, distinctiveness, or ownership of the Proprietary Marks, or HOA’s right
to license the Proprietary Marks, either during the Term or thereafter.

 

6.3.4      Franchisee
has no ownership interest or other interest in or to the Proprietary Marks, except the license granted by this Agreement.

 

6.3.5      In
the event HOA substitutes different Proprietary Marks for the Proprietary Marks Franchisee is then using, Franchisee will promptly
effect such substitution at Franchisee’s sole cost and expense.

 

6.3.6      Any
and all goodwill related to Franchisee’s use of the Hooters System or the Proprietary Marks will inure solely and exclusively
to the benefit of HOA, and on termination or expiration of this Agreement and the license granted under this Agreement, no monetary
amount will be assigned as attributable to any goodwill associated with Franchisee’s use of the Hooters System or the Proprietary
Marks.

 

6.3.7      The
license of the Proprietary Marks granted to Franchisee under this Agreement is nonexclusive, and HOA thus has and retains the rights,
among others:

 

(a)          To
use the Proprietary Marks itself in connection with selling products and services;

 

(b)          To
grant other licenses for the Proprietary Marks, in addition to those licenses already granted to existing franchisees and otherwise;
and

 

(c)          To
develop and establish other systems using marks the same or similar to the Proprietary Marks, or any other marks, and to grant
licenses or franchises thereto at any locations whatsoever, without providing any rights or compensation to Franchisee.

 

6.4         HOA
represents and warrants that Exhibit B is a true and correct description of HOA’s trademark applications and registrations
for the Proprietary Marks in Brazil (the “Country”). During the term of this Agreement, HOA shall use commercially
reasonable efforts to obtain and maintain the registration for such Proprietary Marks in the Country. Franchisee acknowledges and
agrees that: (a) HOA makes no representation or covenant that any Proprietary Marks for which applications are currently pending,
or for which applications may be filed in the future, will be registered in the Country; and (b) HOA will have no liability to
Franchisee if HOA does not obtain registration for one or more of the Proprietary Marks in the Country.

 

6.5         Franchisee
acknowledges and agrees that HOA has no obligation to, and has not and will not investigate or research whether the Proprietary
Marks or other intellectual property infringes the intellectual property rights of any third party in the Country. Except as expressly
provided in this Agreement, HOA shall have no responsibility for any such infringements. Nothing in this Agreement shall be construed
as a warranty by HOA regarding clear title to or ownership of the Proprietary Marks or any other intellectual property, which such
warranty is hereby expressly disclaimed.

 

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7.           HOOTERS
OF AMERICA MANUALS

 

7.1         In
order to protect the reputation and goodwill of HOA and the Proprietary Marks, to maintain the high standards of operation under
the Hooters System, and to protect the investments of HOA and HOA’s other franchisees, Franchisee shall conduct Franchisee’s
Restaurant in compliance with this Agreement, the Manuals, and such other written directives as HOA may issue from time to time
whether or not such directives are made part of the Manuals, and any other manuals, videos, or materials HOA may create or approve
for use in the operation of the Hooters System or Franchisee’s Restaurant.

 

7.2         The
Manuals, written directives, other manuals and materials, and any other confidential communications HOA provides or approves, shall
at all times remain the sole property of HOA and shall at all times be kept and maintained in a secure place on Franchisee’s
Restaurant premises.

 

7.3         HOA
may add to, delete from, or modify the contents of the Manuals and any other written directives, manuals, and materials created
or approved for use in the operation of the Hooters System, or Franchisee’s Restaurant. Franchisee expressly agrees that
such contents shall be deemed effective on receipt by Franchisee or at such other time as HOA may otherwise specify.

 

7.4         Franchisee
shall at all times ensure that its copy of the Manuals is kept current and up-to- date. In the event of any dispute as to the contents
of the Manuals, the master copy of the Manuals that HOA maintains shall be controlling.

 

7.5         The
Manuals, their contents and all intellectual property rights therein shall be HOA’s sole property, notwithstanding that Franchisee
may have materially assisted HOA in adapting the Manuals or translating the Manuals into another language. Franchisee shall sign
whatever assignment or other documents HOA requests to evidence HOA’s ownership or to provide such other assistance to secure
HOA’s intellectual property rights in such ideas, concepts, methods and techniques.

 

7.6         From
time to time, Franchisee may submit to HOA for its review and approval any proposed modifications to the Manuals and the Hooters
System that, in Franchisee’s reasonable judgment, are necessary to comply with applicable Laws or for the commercial success
of the Hooters Restaurants in the Country, including any modifications to, additions to or deletions from the menu items. HOA will
consider in good faith such proposed modifications, but retains the sole and complete discretion to approve or reject such proposed
modifications.

 

7.7         HOA
may provide the Manual and all other materials only in English. If Franchisee considers it necessary or desirable to translate
the Manuals and/or all other bulletins, brochures, labels, advertising materials or audio or visual materials into local language,
Franchisee, at Franchisee’s expense, shall be responsible for complete and accurate translations. HOA has the right to review,
re-translate or comment upon any translation prepared by Franchisee. Franchisee must immediately at Franchisee’s expense
make any modifications to any translation that HOA reasonably requests. Franchisee must not use any translations disapproved by
HOA.

 

7.8         HOA
reserves the right to provide the Manuals in hard copy, electronic or such other form as it may select, including through an intranet
portal. Franchisee shall at its expense ensure that it has the necessary equipment to receive and use the Manuals in its various
forms.

 

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8.           CONFIDENTIAL
INFORMATION

 

8.1         “Confidential
Information” means any information that HOA discloses to Franchisee that HOA designates as confidential or that, by its
nature, would reasonably be expected to be held in confidence or kept secret, whether such disclosure occurred prior to or after
the Effective Date of this Agreement. Without limiting the definition of “Confidential Information,” all the following
shall be conclusively presumed to be Confidential Information whether or not HOA designates them as such: (i) all information that
HOA has marked or designated as confidential; (ii) HOA’s Marketing Manual, Promotions Management Manual, Concept Overview
Manual, and all other Hooters System Manuals, including without limitation those on the subjects of Franchise Operations, Employee
Relations, Finance and Administration, Field Operations, Purchasing, and Marketing, together with all similar directives and documentation;
(iii) HOA’s training programs and the material contained in them; (iv) HOA’s rules, guidelines, standards, specifications,
plans, programs, procedures, and agreements, related to the development, opening, and operation of restaurants; (v) HOA’s
cost information; and (vi) all other information that HOA provides to Franchisee in confidence, except where such information is
a Trade Secret.

 

8.2         “Trade
Secrets” means information that derives independent economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who may obtain economic value from its disclosure or
use, whether Franchisee obtained such information prior to or after the Effective Date of this Agreement. Without limiting the
definition of “Trade Secret,” all the following shall be conclusively presumed to be Trade Secrets whether or not HOA
or any judicial or other administrative body has designated them as such: (i) the Hooters System’s guest lists, and the contact
information of such guests, including without limitation guest lists and contact information compiled by Franchisee; (ii) HOA’s
food and beverage recipes, lists of ingredients, preparation instructions, and serving instructions; (iii) HOA’s advertising,
marketing, and public relations strategies; (iv) HOA’s marketing analyses; (v) products and services that HOA proposes to
introduce, but that it has not yet introduced; and (vi) HOA’s expansion plans.

 

8.3         Confidentiality.
Franchisee shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other
person, persons, partnership, entity, association, or corporation any Confidential Information, Trade Secret, knowledge, or know-how
concerning the methods of operation of the business franchised hereunder which may be communicated to Franchisee or of which Franchisee
may be apprised by virtue of Franchisee’s operation under the terms of this Agreement. Franchisee shall divulge such confidential
information only to such of its employees as must have access to it in order to operate Franchisee’s Restaurant. Any and
all information, knowledge, know-how, and techniques which HOA designates as confidential shall be deemed confidential for purposes
of this Agreement, except information which Franchisee can demonstrate came to its attention before disclosure thereof by HOA;
or which, at or after the time of disclosure by HOA to Franchisee, had become or later becomes a part of the public domain, through
publication or communication by others. Any employee who may have access to any confidential information regarding Franchisee’s
Restaurant shall execute a covenant that s/he will maintain the confidentiality of information they receive in connection with
their association with Franchisee. Such covenants shall be on a form provided by HOA, (an “Individual Non-Disclosure and
Non-Competition Agreement”), which form shall, among other things, designate HOA as a third party beneficiary of such
covenants with the independent right to enforce them.

 

8.4         Consequences
of Breach. Franchisee acknowledges that any failure to comply with the requirements of this Section 8 will cause HOA irreparable
injury, and Franchisee agrees to pay all court costs and reasonable attorney’s fees incurred by HOA in obtaining specific
performance of, or an injunction against violation of, the requirements of this Section 8.

 

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8.5         Franchisee-Developed
Concepts. Franchisee agrees to disclose to HOA all ideas, concepts, methods, techniques and products conceived or developed
by Franchisee, its affiliates, owners or employees during the term of this Agreement relating to the development and/or operation
of Franchisee’s Restaurant. Franchisee hereby grants to HOA and agrees to procure from its affiliates, owners or employees
a perpetual, non-exclusive, and worldwide right to use any such ideas, concepts, methods, techniques and products in all food and
beverage service businesses operated by HOA or its affiliates, franchisees and designees. HOA shall have no obligation to make
any payments to Franchisee with respect to any such ideas, concepts, methods, techniques or products. Franchisee agrees that Franchisee
will not use or allow any other person or entity to use any such concept, method, technique or product without obtaining HOA’s
prior written approval.

 

9.           TECHNOLOGY

 

9.1         Computer
Systems and Software. With respect to computer systems and required software:

 

9.1.1           HOA
shall have the right to specify or require that certain brands, types, makes, and/or models of communications, computer systems,
and hardware to be used by, between, or among Restaurants, including without limitation: (a) back office and point of sale systems,
data, audio, video, and voice storage, retrieval, and transmission systems for use at Restaurants, between or among Restaurants,
and between and among Franchisee’s Restaurants and HOA, HOA’s designee and/or Franchisee; (b) cash register systems;
(c) physical, electronic, and other security systems; (d) printers, “media wall” systems, and other peripheral devices;
(e) archival back-up systems; and (f) internet access mode (e.g., form of telecommunications connection) and speed (collectively,
the “Computer System”).

 

9.1.2           HOA
shall have the right, but not the obligation, to develop or have developed for it, or to designate: (a) computer software programs
and accounting system software that Franchisee must use in connection with the Computer System (“Required Software”),
which Franchisee shall install; (b) updates, supplements, modifications, or enhancements to the Required Software, which Franchisee
shall install; (c) the tangible media upon which such Franchisee shall record or receive data; and (d) the database file structure
of Franchisee’s Computer System.

 

9.1.3           Franchisee
shall install and use the Computer System and Required Software in the manner required by HOA.

 

9.1.4           Franchisee
shall record all sales on the computer-based point of sale system specified by HOA in the Manuals or otherwise in writing, which
shall be deemed part of the Franchisee’s Computer System.

 

9.1.5           Franchisee
shall implement and periodically make upgrades and other changes to the Computer System and Required Software as HOA may reasonably
request in writing (collectively, “Computer Upgrades”).

 

9.1.6           Franchisee
shall comply with all specifications issued by HOA with respect to the Computer System and the Required Software, and with respect
to Computer Upgrades, at Franchisee’s expense. Franchisee shall also afford HOA unimpeded access to Franchisee’s Computer
System and Required Software as HOA may request, in the manner, form, and at the times requested by HOA.

 

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9.2       Data.
All data provided by Franchisee, uploaded to HOA’s system from the Franchisee’s system, and/or downloaded from the
Franchisee’s system to HOA’s system is and will be owned exclusively by HOA, and HOA will have the right to use such
data in any manner that HOA deems appropriate without compensation to Franchisee. In addition, all other data created or collected
by Franchisee in connection with the Computer System, or in connection with Franchisee’s operation of the business (including
but not limited to consumer and transaction data), is and will be owned exclusively by HOA during the term of, and following termination
or expiration of, this Agreement. Copies and/or originals of such data must be provided to HOA upon HOA’s request. HOA hereby
licenses use of such data back to Franchisee, at no additional cost, solely for the term of this Agreement and solely for Franchisee’s
use in connection with the business franchised under this Agreement.

 

9.3       Data
Requirements and Usage. HOA may, from time-to-time, specify in the Manuals or otherwise in writing the information that Franchisee
shall collect and maintain on the Computer System installed at Franchisee’s Restaurant, and Franchisee shall provide to HOA
such reports as HOA may reasonably request from the data so collected and maintained. Franchisee shall download daily, or in such
other intervals as HOA may require, all information and materials HOA may require in connection with the operation of Franchisee’s
Restaurant, and shall display such information and materials in the manner HOA may prescribe, including, without limitation, to
employees of Franchisee’s Restaurant, or on media displayed at Franchisee’s Restaurant. During and subsequent to the
term of this Agreement, HOA shall have the right to use all data pertaining to, derived from, or displayed at Franchisee’s
Restaurant (including, without limitation, data pertaining to or otherwise related to Franchisee’s Restaurant customers).

 

9.3.1           Franchisee
shall abide by all of the Country’s Laws pertaining to the privacy of consumer, employee, and transactional information (“Privacy
Laws”). Without limiting the generality of the foregoing, Franchisee shall adopt and maintain strict procedures to safeguard
the security and confidentiality of such information, and shall ensure that all necessary or required consents or authorizations
are obtained regarding the use and disclosure of their information as may be necessary, in light of applicable Privacy Laws;

 

9.3.2           Franchisee
shall comply with HOA’s standards and policies pertaining to Privacy Laws. If there is a conflict between HOA’s standards
and policies pertaining to Privacy Laws and actual applicable Laws, Franchisee shall: (a) comply with the requirements of applicable
Law; (b) immediately give HOA written notice of said conflict; and (c) promptly and fully cooperate with HOA and HOA’s counsel
in determining the most effective way, if any, to meet HOA’s standards and policies pertaining to Privacy Laws within the
bounds of applicable Law.

 

9.3.3           Franchisee
shall not publish, disseminate, implement, revise, or rescind a data privacy policy without HOA’s prior written consent as
to such policy.

 

9.4         Electronic
Identifiers; E-Mail. Franchisee shall not use the Proprietary Marks or any abbreviation or other name associated with HOA and/or
the System as part of any e-mail address, domain name, and/or other identification of Franchisee in any electronic medium. Franchisee
agrees not to transmit or cause any other party to transmit advertisements or solicitations by e-mail or other electronic media
without first obtaining HOA’s written consent as to: (a) the content of such e-mail advertisements or solicitations; and
(b) Franchisee’s plan for transmitting such advertisements. In addition to any other provision of this Agreement, Franchisee
shall be solely responsible for compliance with any Law pertaining to sending e-mails.

 

9.5         Internet
Web Sites and Listings.

 

9.5.1        Franchisee
may, at its expense, create its own web site and social media sites for Franchisee’s Restaurant. To do so, Franchisee must
submit all web site and social media site plans and information to HOA for HOA’s prior written consent.

 

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9.5.2      Franchisee’s
web site, and the content of all Franchisee’s social media sites, must conform to HOA’s then-current standards. Franchisee
must keep HOA advised at all times of all of Franchisee’s web site and social media site addresses and domain names. Upon
notice to Franchisee, and notwithstanding the provisions of Section 9.5.1 above, HOA shall have the right to acquire control over
Franchisee’s web site, social media addresses and domain names, and Franchisee agrees to execute such documents and take
such actions as may be necessary to cooperate fully with HOA in connection with HOA’s doing so.

 

9.5.3      Franchisee
has, or may acquire during the term of this Agreement, certain right, title, and interest in and to certain domain names, hypertext
markup language (“html”), uniform resource locator (“url”) addresses, and access to corresponding
Internet web sites, and the right to hyperlink to certain web sites and listings on various Internet search engines and other social
networking media, business networking media, and marketing media sites, applications, and platforms, all as modified and expanded
from time to time as technology progresses and otherwise (collectively, the “Internet Web Sites and Listings”)
related to the Franchise or the Proprietary Marks.

 

9.5.4      Franchisee
must comply with all Laws in relation to its Internet Web Sites and Listings, and must obtain HOA’s prior written consent
for any online ordering that may occur through Franchisee’s web site.

 

9.5.5      Transfer.
On Termination of the Franchise Agreement:

 

(a)          Franchise
shall immediately and without request therefor provide HOA with a full and complete written list and description of any and all
Internet Web Sites and Listings; and

 

(b)          If
HOA directs Franchisee to do so, Franchisee shall immediately direct all Internet Service Providers, domain name registries, Internet
search engines, and other listing agencies (collectively, the “Internet Companies”) with which Franchisee has
Internet Web Sites and Listings: (i) to transfer all Franchisee’s interest in such Internet Web Sites and Listings to HOA;
and (ii) to execute such documents and take such actions as may be necessary to effectuate such transfer. In the event HOA does
not desire to accept any or all of such Internet Web Sites and Listings, Franchisee shall immediately direct the Internet Companies
to terminate such Internet Web Sites and Listings or shall take such other actions with respect to the Internet Web Sites and Listings
as HOA may direct.

 

9.5.6       Appointment;
Power of Attorney. Franchisee hereby constitutes and appoints HOA and any officer or agent of HOA, for HOA’s benefit
under this Agreement and this Agreement or otherwise, with full power of substitution, as Franchisee’s true and lawful attorney-
in-fact with full power and authority in Franchisee’s place and stead, and in Franchisee’s name, on termination of
this Agreement, to take any and all appropriate action and to execute and deliver any and all documents that may be necessary or
desirable to accomplish the purposes of this Internet Listing Agreement. Franchisee further agrees that this appointment constitutes
a power coupled with an interest and is irrevocable. Without limiting the generality of the foregoing, Franchisee hereby grants
to HOA the power and right to do the following:

 

(a)          Direct
the Internet Companies to transfer all or any part of Franchisee’s interest in and to the Internet Web Sites and Listings
to HOA or any third party HOA designates;

 

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(b)         Direct
the Internet Companies to terminate all or any part of the Internet Web Sites and Listings; and

 

(c)          Execute
the Internet Companies’ standard assignment forms or other documents in order to effect such transfer or termination of Franchisee’s
interest in the Internet Web Sites and Listings.

 

To the extent
required by applicable Laws or deemed convenient by Franchisor, Franchisee further undertakes to execute any documents and take
any actions as may be necessary to confirm the powers and rights granted hereunder.

 

9.5.7           Certification
of Termination. Franchisee hereby directs the Internet Companies that they shall accept, as conclusive proof of termination
of this Agreement, HOA’s written statement, signed by an officer or agent of HOA, that this Agreement has terminated.

 

9.5.8           Cessation
of Obligations. After the Internet Companies have duly transferred all Franchisee’s interest in such Internet Web Sites
and Listings to HOA, or after the Internet Companies have duly terminated Franchisee’s interest in such Internet Web Sites
and Listings, as between Franchisee and HOA, Franchisee will have no further interest in, or obligations under, such Internet Web
Sites and Listings. Notwithstanding the foregoing, Franchisee shall remain liable to each and all of the Internet Companies for
the sums Franchisee is obligated to pay such Internet Companies for obligations Franchisee incurred before the date HOA duly accepted
the transfer of such interest in the Internet Web Sites and Listings, or for any other obligations not subject to the Franchise
Agreement.

 

9.6         Changes.
Franchisee and HOA acknowledge and agree that changes to technology are dynamic and not predictable within the term of this Agreement.
In order to provide for inevitable but unpredictable changes to technological needs and opportunities, Franchisee agrees that HOA
shall have the right to establish, in writing, reasonable new standards for the implementation of technology in the Hooters System;
and Franchisee agrees that it shall abide by those reasonable new standards established by HOA as if this Section 9 were periodically
revised by HOA for that purpose.

 

10.         ACCOUNTING
AND RECORDS

 

10.1       Franchisee shall maintain, and shall preserve for at least five (5) years after the dates of their preparation, full, complete,
and accurate books, records, and accounts, prepared in accordance with generally-accepted accounting principles consistently applied,
in the form and manner HOA prescribes.

 

10.2       Franchisee
shall submit to HOA:

 

10.2.1        After
the opening of Franchisee’s Restaurant: (i) a royalty report, on a monthly basis, in the form HOA prescribes, that accurately
states all Gross Sales during each preceding month and that provides such other data or information as HOA may require, so that
HOA actually receives such report by the end of ten (10) days after the end of each such month; (ii) profit and loss statements
and balance sheets prepared in a form that we shall designate and in accordance with generally-accepted accounting principles consistently
applied for each accounting period, so that HOA actually receives such information by the end of fifteen (15) days after the end
of each period covered by the report; and (iii) copies of all tax returns that Franchisee is required by Law to file related to
Franchisee’s Restaurant, so that HOA actually receives such returns by the end of ten (10) days after the end of the applicable
tax reporting period.

 

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10.2.2        Reports
of daily receipts, vendor purchases, payroll payments, and such other forms, reports, records, and information as HOA may request
from time to time, and reports of all rebates, discounts, allowances, marketing assistance, or other benefits received from vendors,
on forms HOA provides to Franchisee or in the form HOA specifies.

 

10.2.3        Such
records, reports, documents, data, certificates, and other information related to this Agreement, Franchisee’s obligations
or Franchisee’s Restaurant, as HOA may require, so that HOA actually receives such items by the end of ten (10) days after
HOA requests that Franchisee submit such items to HOA.

 

10.3       Franchisee shall, at its expense, provide to HOA a profit and loss statement and balance sheet, accompanied by a review report
certified by Franchisee’s chief executive officer or chief financial officer, within ninety (90) days after the end of each
of Franchisee’s fiscal years, showing the results of operations of Franchisee’s Restaurant during such fiscal year.
HOA reserves the right to require Franchisee to have such review report prepared by an independent certified public accountant
satisfactory to HOA.

 

10.4       HOA and its designated agents shall have the right, at all reasonable times, to examine and copy, at HOA’s expense, the books,
records, tax returns, and tax filings of Franchisee and Franchisee’s Restaurant. HOA shall also have the right, at any time,
to have an independent audit made of the books of Franchisee’s Restaurant. If an inspection should reveal that any payments
to HOA have been understated in any report to HOA, Franchisee shall immediately pay to HOA the amount understated on HOA’s
demand, plus interest on such amount from the date such amount came due until paid, at the Default Rate, calculated on a daily
basis. If an inspection discloses an understatement in any payment to HOA of two percent (2%) or more, Franchisee shall, in addition,
reimburse HOA for any and all costs and expenses related to the inspection (including without limitation travel, food, lodging,
and wage expenses of HOA’s personnel, and reasonable accounting and legal fees and costs); and, at HOA’s discretion,
shall submit audited financial statements prepared, at Franchisee’s expense, by an independent certified public accountant
satisfactory to HOA. If an inspection discloses an understatement in any payment to HOA of four percent (4%) or more, such act
or omission shall constitute grounds for termination of this Agreement pursuant to Section 14.3.8 of this Agreement. The foregoing
remedies shall be in addition to any other remedies HOA may have pursuant to this Agreement or at law, in equity, or otherwise.

 

10.5       Franchisee
shall comply with the daily accounting and reporting procedures HOA prescribes, as modified from time to time, and shall purchase
the accounting and reporting equipment, including without limitation point of sale equipment, that HOA requires.

 

11.         ADVERTISING

 

11.1       Franchisee will comply with its local advertising obligations set forth in Section 4.4 of this Agreement. Franchisee may conduct
such additional local advertising and promotion of Franchisee’s Restaurant as Franchisee deems appropriate. All advertising
and promotion Franchisee conducts shall conform to such standards and requirements as HOA may specify. Franchisee shall submit
to HOA for HOA’s prior written approval, to the extent the Law requires, samples of all advertising and promotional plans
and materials that Franchisee desires to use and that HOA has not prepared or previously approved. Franchisee shall display the
Proprietary Marks in the manner HOA prescribes on all signs and other advertising and promotional materials used in connection
with Franchisee’s Restaurant.

 

11.2       HOA
may provide to Franchisee, itself or through the Global Advertising Fund, at Franchisee’s expense, such advertising and promotional
plans and materials as HOA deems advisable for local advertising. HOA may develop advertising programs for the promotion of the
Proprietary Marks or merchandise offered at Hooters restaurants, and Franchisee must comply with the requirements of such programs.

 

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11.3       Global Advertising Fund. HOA reserves the right to establish a global advertising fund (the “Global Advertising
Fund”), for which Franchisee will be required to pay the Global Advertising Fee. If and when established, the Global
Advertising Fund shall be maintained and administered by HOA or its designee, on such terms and conditions as HOA deems appropriate,
including control over content and media; deposits and expenditures of the Global Advertising Fund; and allocation of HOA’s
direct costs and overhead relating to the Ad Fund. For purpose of clarification, the Global Advertising Fund is not intended to
be, and should not be treated as, a trust or similar arrangement.

 

11.4       HOA may require Franchisee to participate in cooperative advertising programs with certain suppliers or approved sources of goods.
Franchisee agrees that HOA reserves the right, to the fullest extent allowed by Law, to establish maximum, minimum or other pricing
requirements with respect to the prices Franchisee may charge for the Products offered and sold at Franchisee’s Restaurant.

 

11.5       Franchisee
acknowledges that periodic rebates, give-aways and other promotions and programs are an integral part of the Hooters System. Accordingly,
Franchisee, at its sole cost and expense, from time to time shall issue and offer such rebates, give-aways, discounts, incentives
and promotions in accordance with any reasonable marketing programs established by HOA, and further shall honor rebates, give-aways
and other promotions issued by other franchisees as long as all of the above do not contravene the Laws of appropriate governmental
authorities.

 

12.         INSURANCE

 

12.1       Franchisee shall obtain, prior to the commencement of any operations under this Agreement, and shall maintain in full force and
effect at all times, at Franchisee’s expense, an insurance policy or policies insuring Franchisee, together with HOA, HOA’s
affiliates, and Franchisee’s and HOA’s respective directors, officers, shareholders, general partners, limited partners,
members, employees, and agents, as additional insureds, against any demand or claim related to personal injury, death, or property
damage, or any other loss, expense, liability, damage, or damages whatsoever, arising out of or related to Franchisee’s Restaurant.

 

12.2       Such policy or policies shall, to the fullest extent allowed by Law, be in accordance with standards and specifications set forth
in the Manuals or otherwise in writing from time to time, and shall include, at a minimum: (a) comprehensive, general and product
liability insurance; (b) general casualty insurance, including fire and extended coverage, vandalism and malicious mischief insurance,
for the replacement value of the Restaurant and its contents; and (c) such other insurance policies, such as business interruption
and unemployment insurance, as HOA may determine from time to time. All insurance policies must: (i) be issued by carriers approved
by HOA; (ii) contain such types and minimum amounts of coverage, exclusions and maximum deductibles as HOA prescribes from time
to time; (iii) name HOA and its Affiliates as additional insured (or otherwise provide coverage that is equivalent to additional
insured coverage); (iv) provide for thirty (30) days’ prior written notice to HOA of any material modification, cancellation
or expiration of such policy that may affect HOA; and (v) include such other provisions as HOA may reasonably require from time
to time. Franchisee shall notify HOA immediately of cancellation of insurance or any modification of insurance that is inconsistent
with the foregoing requirements.

 

12.3       Franchisee’s
obligation to obtain and maintain the foregoing policy or policies in the amounts specified shall not be limited in any way by
reason of any insurance that HOA may maintain, nor shall Franchisee’s performance of such obligations relieve Franchisee
of liability under the indemnity provisions set forth in Section 19 of this Agreement.

 

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12.4       Prior to the opening of Franchisee’s Restaurant, and thereafter at least thirty (30) days prior to the expiration of any
such policy, Franchisee shall deliver to HOA certificates of insurance evidencing the proper coverage with limits not less than
those required under this Agreement. All certificates shall expressly provide that the insurer will give HOA not less than thirty
(30) days’ prior written notice in the event of material alteration to, termination of, non-renewal of, or cancellation of,
the coverages evidenced by such certificates.

 

12.5       In the event of fire or other insured casualty that results in the damage or destruction of Franchisee’s Restaurant, Franchisee
shall pay to HOA, from the proceeds received by Franchisee of any business interruption or other insurance applicable to loss of
revenues or proceeds, an amount equal to five percent (5%) of such insurance proceeds (the “Casualty Proceeds”).
HOA’s portion of the Casualty Proceeds shall be paid to HOA within ten (10) days after receipt. At the same time, Franchisee
shall notify HOA whether it will reconstruct Franchisee’s Restaurant in a prompt and timely manner. In the event Franchisee
notifies HOA that it will not do so, HOA shall terminate this Agreement pursuant to Section 14.2.3 and Franchisee shall thereafter
comply with all of the obligations upon termination set forth in Section 15 of this Agreement that HOA may reasonably require under
the circumstances.

 

13.         TRANSFER
OF INTEREST

 

13.1       Transfer by HOA. HOA shall have the absolute right to transfer, assign, and delegate all or any part of its rights and obligations
under this Agreement to any person or entity HOA deems appropriate. Such transfer, assignment, or delegation shall effect a complete
novation as to the right or obligation transferred, assigned, or delegated. After such transfer, assignment, or delegation, Franchisee
shall look solely to the transferee, assignee, or delegatee, and not to HOA, for the satisfaction of any obligation transferred,
assigned, or delegated. HOA may also, without Franchisee’s consent, transfer, assign, or otherwise alter any or all of the
ownership in HOA.

 

13.2       Transfer
by Franchisee or Owners.

 

13.2.1        An
“Owner” is a natural person who “owns” equity in the Franchisee, where such ownership is direct,
indirect, or beneficial. A “Principal Owner” of Franchisee shall mean each: (i) an Owner with ten percent (10%)
or more equity in Franchisee; and (ii) an Owner with ten percent (10%) or more equity in any business entity that holds a ten percent
(10%) or more equity in Franchisee. If there are no such natural persons (e.g., in the case of a publicly-held franchisee), “Principal
Owners” shall mean the eight (8) natural persons who own or hold the greatest shares of equity of Franchisee. Franchisee’s
Principal Owners and other Owners as of the Effective Date, and the percentage and type of equity of Franchisee each such Owner
owns or holds, and the manner of such holding, are set forth on Exhibit C to this Agreement.

 

13.2.2        Franchisee
acknowledges and agrees that: (i) this Agreement is a contract for the personal services of Franchisee and its Principal Owners;
and (ii) HOA has granted this Agreement in reliance on information Franchisee and its Principal Owners provided related to Franchisee’s
and such Principal Owners’ business skills, business acumen, personal character, education, credit rating, and financial
resources (collectively, the “Principal Owner Qualifications”). Franchisee hereby directs any party construing
this Agreement, including without limitation any court, mediator, master, or other party acting as a trier of fact or law, to conclusively
presume that this Agreement is a contract for the personal services of Franchisee and its Principal Owners.

 

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13.2.3    Unless
HOA otherwise consents in writing, Principal Owners shall own and hold a majority of the equity in Franchisee. The remaining equity
in Franchisee may be owned or held by Owners, persons not to exceed ten (10) in number, directly, indirectly, or beneficially,
with HOA’s prior written consent, which consent HOA may grant or withhold in HOA’s sole discretion.

 

13.2.4    HOA’s
prior written consent is a necessary condition precedent to the sale, assignment, delegation, transfer, conveyance, gift, pledge,
mortgage, encumbrance, or hypothecation (collectively, the “Transfer”) of any direct, indirect, or beneficial
interest of an Owner in Franchisee, of Franchisee’s Restaurant (or all or substantially all of its assets) Franchised Business,
of this Agreement, in any interest or rights granted under this Agreement.

 

13.2.5    Except
as specifically provided in this Agreement, HOA has the absolute and unfettered right to withhold its consent to a Transfer of
any interest described in Section 13.2.4 of this Agreement (collectively, any “Interest”). Any permitted transferee
of a Principal Owner must satisfy the Principal Owner Qualifications. In addition, HOA may, in its sole discretion, require any
or all of the following as conditions precedent to HOA’s consent to a Transfer:

 

(a)          Franchisee
and its affiliates must satisfy all monetary obligations and other outstanding obligations owed to HOA, HOA’s affiliates,
and Franchisee’s other creditors.

 

(b)          Franchisee
and its affiliates must have substantially complied with this Agreement, any amendment to this Agreement, and all other agreements
between Franchisee or such affiliates on the one hand, and HOA or HOA’s affiliates on the other hand; and, at the time of
Transfer, must not be in default of any such agreements.

 

(c)          Franchisee,
Owners, transferor, and transferee must duly execute and deliver to HOA the then-current form of transfer and assumption agreement,
which transfer and assumption agreement: (i) will require the transferee to assume and agree to discharge all of the obligations
of the transferor; (ii) will provide that the transferor shall remain liable for all of the obligations to HOA and HOA’s
affiliates in connection with Franchisee’s Restaurant arising prior to the effective date of the Transfer; and (iii) will
contain a Release in substantially the form attached as Exhibit D to this Agreement.

 

13.2.6      In
addition, if a Transfer is of a controlling interest in Franchisee, Franchisee’s Restaurant (or all or substantially all
of its assets), this Agreement, in any interest or rights granted under this Agreement (a “Controlling Interest Transfer”),
HOA may, in its sole discretion, require any or all of the following as conditions precedent to HOA’s consent to such transfer:

 

(a)          Transferee
must enter into HOA’s then-current form of franchise agreement (the “Replacement Franchise Agreement”).
The provisions of the Replacement Franchise Agreement may differ materially from the provisions of this Agreement. HOA will not
require the transferee to pay the Initial Franchise Fee set forth in 4.2 of this Agreement. The initial term of the Replacement
Franchise Agreement shall be the balance remaining of the Initial Term of this Agreement.

 

(b)          Transferor
or transferee must pay HOA a Transfer fee in an amount equal to twenty percent (20%) of HOA’s then-current Initial Franchise
Fee (the “Transfer Fee”).

 

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(c)          The
transferee, at its expense, must Renovate Franchisee’s Restaurant, and must complete such obligation to Renovate by the end
of the reasonable time HOA may specify.

 

(d)          The
transferee and, if applicable, the transferee’s designated general manager, must complete any training programs then in effect
for new franchisees prior to the effective date of such Transfer, on such terms and conditions as HOA may reasonably require.

 

(e)          The
transferee must agree to a sublease, or to a transfer and assumption, of the lease of the Accepted Location from the original franchisee,
and must obtain the landlord’s approval prior to any transfer or sublease, if applicable.

 

(f)          
If Franchisee (or any of its affiliates) owns and operates one or more Hooters Restaurants in addition to the Franchisee’s
Restaurant operated hereunder, all such Hooters Restaurants, at HOA’s option, must be transferred to the same transferee
as part of a single transaction.

 

13.2.7     Any
purported Transfer that does not comply with this Section 13.2 shall be voidable by HOA, and shall be a default of this Agreement
that shall permit HOA to terminate this Agreement pursuant to Section 14.2.5 of this Agreement.

 

13.3       Right
of First Refusal.

 

13.3.1           Franchisee
and any Owner who desires to accept any bona fide offer from a third party to purchase any Interest shall notify HOA in
writing of each such offer, and shall provide such information and documentation related to the offer as HOA may require,
including without limitation a true copy of any such offer. HOA shall have the right and option, exercisable within thirty
(30) business days after HOA receives such written notification, to send written notice to the seller that HOA may desire to
purchase the Interest on substantially the same terms and conditions as offered by the third party. To enable HOA to
determine whether it will exercise its option, Franchisee or Owner, as appropriate, and the third party shall provide such
information and documentation, including without limitation financial statements, as HOA may require. In the event that HOA
elects to purchase such Interest, closing on such purchase must occur within ninety (90) days after the date of notice to the
seller of HOA’s election to purchase such Interest. HOA’s election not to exercise the option afforded by this
Section 13.3 shall not constitute a waiver of any other provision of this Agreement, including all of the requirements of
this Section 13 related to a proposed Transfer of any Interest. Any subsequent change in the terms of any offer prior to
closing shall constitute a new offer subject to the same rights of first refusal by HOA as in the case of an initial
offer.

 

13.3.2           In
the event that the consideration, terms, or conditions offered by a third party are such that HOA may not reasonably be required
to furnish the same consideration, terms, or conditions, then HOA may purchase such Interest for the reasonable equivalent in cash.
If the parties cannot agree within a reasonable time on the cash consideration, HOA will designate an independent appraiser experienced
in appraising such Interest, and the determination of such appraiser shall be conclusive and binding on all parties.

 

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13.4       Transfer On Death or Mental Incompetence. On the death or mental incompetence of any Principal Owner, the executor, administrator,
or personal representative of such individual shall Transfer within one (1) year after such death or mental incompetence the Interest
owned and controlled by the Principal Owner to a natural person or persons who satisfy the Principal Owner Qualifications, and
whom HOA approves. Mental incompetence, for purposes of this Agreement, shall mean the appointment of a guardian for the Principal
Owner by a court of competent jurisdiction. Such Transfers, including without limitation Transfers by devise or inheritance, shall
be subject to the same conditions as any inter vivos Transfer. However, in the case of Transfer by devise or inheritance, if the
heirs or beneficiaries of any such Principal Owner are unable to satisfy the conditions in this Section 13 within such one (l)
year period, HOA may terminate this Agreement or may exercise its option to purchase the Interest at fair market value, as determined
by an independent appraiser HOA designates, which determination shall be conclusive and binding on all parties.

 

13.5       Interim Operation of Franchisee’s Restaurant. Pending assignment on the death of the Principal Owner, or in the event
of any temporary or permanent mental incompetence or physical disability of the Principal Owner, a manager shall be employed for
the operation of Franchisee’s Restaurant who has successfully completed an HOA-approved manager training program, to serve
as General Manager and to operate Franchisee’s Restaurant for the account of Franchisee. If Franchisee’s Restaurant
is not being managed by such General Manager, Franchisee hereby grants to HOA (or its designee) the right, but not the obligation,
to immediately take such steps as are necessary to manage Franchisee’s Restaurant for the account of Franchisee in the event
of the death of, or reasonable determination by an independent third party (such as a medical doctor) as to the physical incapacity
or mental incompetency of the Franchisee or the Principal Owner who is managing Franchisee’s Restaurant on behalf of Franchisee,
until such time as Franchisee appoints a new General Manager who has been trained pursuant to Section 5.7 of this Agreement. Franchisee
agrees to hold HOA and its respective directors, officers, agents, employees, attorneys and shareholders harmless from all claims
or damages arising out of or connected with HOA’s management of the Franchise. Franchisee shall pay HOA in addition to all
other amounts due pursuant to the terms of this Agreement a fee of eight percent (8%) of the Gross Sales, plus costs during the
period in which the Franchise is so managed by HOA.

 

13.6       Non-Waiver of Claims. Neither HOA’s consent to any proposed Transfer of any Interest nor HOA’s election not
to exercise its option to purchase any Interest shall be deemed to constitute a waiver of any claims HOA may have against the transferor,
nor shall it be deemed a waiver of HOA’s right to demand exact compliance with this Agreement or any future rights or options
of HOA.

 

14.         DEFAULT
AND TERMINATION

 

14.1       Bankruptcy. HOA shall have the right to immediately terminate this Agreement with notice to Franchisee, if Franchisee becomes
insolvent or makes a general assignment for the benefit of creditors; or if a petition in bankruptcy is filed by Franchisee or
such a petition is filed against and not opposed by Franchisee; or if Franchisee files for judicial or extrajudicial recuperation
(“recuperação judicial ou extrajudicial”); or if Franchisee is adjudicated a bankrupt or insolvent; or
if a proceeding for the appointment of a receiver of Franchisee or other custodian for Franchisee’s business or assets is
filed and consented to by Franchisee; or if a receiver or other custodian (permanent or temporary) of Franchisee’s assets
or property, or any part thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with
creditors under any Law should be instituted by or against Franchisee; or if a final judgment remains unsatisfied or of record
for thirty (30) days or longer (unless unappealed or a supersedeas bond is filed); or if Franchisee is dissolved; or if execution
is levied against Franchisee’s business or property; or if suit to foreclose any lien or mortgage against Franchisee’s
Restaurant premises or equipment is instituted against Franchisee and not dismissed within thirty (30) days.

 

14.2       With Notice. Franchisee shall be in default of this Agreement, and HOA may, at its option, terminate this Agreement and
all rights granted hereunder, without affording Franchisee any opportunity to cure the default, effective immediately upon the
delivery of written notice to Franchisee by HOA (in the manner set forth in Section 21 below), upon the occurrence of any of the
following events:

 

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14.2.1   If
Franchisee fails to acquire or lease a site for Franchisee’s Restaurant, or to submit to HOA at least one (1) location for
site approval, within the time specified under Section

1.4 of this Agreement;

 

14.2.2   If
Franchisee fails to open Franchisee’s Restaurant by the later of: (i) the Opening Date prescribed in Section 1.5.1 of this
Agreement; or (ii) the last extension of time, if any, that HOA grants to Franchisee to open Franchisee’s Restaurant;

 

14.2.3   Except
as otherwise provided in this Agreement, if Franchisee at any time ceases to operate or otherwise abandons Franchisee’s Restaurant
for five (5) consecutive days, or otherwise forfeits the right to do or transact business in the jurisdiction where Franchisee’s
Restaurant is located;

 

14.2.4   If
Franchisee, or any Principal Owner is convicted of or elects not to contest a crime punishable by imprisonment of 1 year or more,
fraud, sale of illegal drugs, crime involving moral turpitude, crime that is directly related to Franchisee’s Restaurant,
or any other crime that HOA determines to have an adverse effect on Franchisee’s Restaurant, the Hooters System, the Proprietary
Marks, the goodwill associated with the Proprietary Marks, or HOA’s interest in the Proprietary Marks;

 

14.2.5   If
Franchisee, any Principal Owner or Owner purports to transfer any rights or obligations under this Agreement or any interest to
any third party in a manner that is contrary to the terms of Section 13 above;

 

14.2.6   If
Franchisee fails to: (i) comply with the in-term covenants set forth in this Agreement (including the covenants set forth in Sections
6, 8 and 16); or (ii) obtain execution of the Individual Non-Disclosure and Non-Competition Agreement in a form acceptable to HOA;

 

14.2.7   If
Franchisee knowingly maintains false books or records, or submits any false reports (including, but not limited to, information
provided as part of Franchisee’s application for this Franchise) to HOA;

 

14.2.8   If
Franchisee commits two (2) or more defaults under this Agreement in any fifty-two (52) week period, whether or not each such default
has been cured after notice;

 

14.2.9   If
Franchisee engages in any conduct or practice that is fraudulent, unfair, unethical, or a deceptive practice;

 

14.2.10 If
the Franchisee’s interest in the lease or sublease for the Accepted Location is terminated or expires; or

 

14.2.11  If
Franchisee misuses or makes any unauthorized use of the Proprietary Marks or otherwise materially impairs the goodwill associated
with the Proprietary Marks or HOA’s rights in the Proprietary Marks.

 

14.3       With
Notice and Ten Day Opportunity to Cure. Upon the occurrence of any of the following events of default, HOA may, at its option,
terminate this Agreement by giving written notice of termination (in the manner set forth under Section 21 below) stating the nature
of the default to Franchisee at least ten (10) days prior to the effective date of termination; provided, however, that Franchisee
may avoid termination by immediately initiating a remedy to cure such default, curing it to the satisfaction of HOA, and by promptly
providing proof thereof to HOA within the ten (10) day period. If any such default is not cured within the specified time, or such
longer period as Law may require, this Agreement shall terminate without further notice to Franchisee, effective immediately upon
the expiration of the ten (10) day period or such longer period as Law may require.

 

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14.3.1   If Franchisee fails, refuses, or neglects promptly
to pay any monies owing to HOA or its affiliates when due;

 

14.3.2   If
Franchisee fails, refuses, or neglects promptly to pay any monies owing to third parties, lessors, or lenders or creditors of the
Accepted Location;

 

14.3.3   If
a threat or danger to public health or safety results from the maintenance or operation of Franchisee’s Restaurant;

 

14.3.4   If
Franchisee sells products not previously approved by HOA, or purchases any product from a supplier not previously approved by HOA;

 

14.3.5   If Franchisee fails to comply with Laws;

 

14.3.6   If Franchisee or Owner defaults under any other
agreement with HOA;

 

14.3.7   If
Franchisee refuses to permit HOA to inspect the Accepted Location, or the books, records, or accounts of Franchisee upon demand;

 

14.3.8   If
an inspection of the Franchisee’s books and records discloses an understatement in any payment to HOA of four percent (4%)
or more;

 

14.3.9   If
Franchisee fails to operate Franchisee’s Restaurant during such days and hours specified in the Manuals;

 

14.3.10  If
Franchisee is unable or unwilling to provide individuals who can complete the manager training program to HOA’s reasonable
satisfaction, or if HOA reasonably determines that the individuals whom Franchisee has presented for manager training lack the
skills to operate Franchisee’s Restaurant successfully, pursuant to Section 5.6 of this Agreement;

 

14.3.11 If
Franchisee fails, refuses, or neglects promptly to submit certificates of insurance to HOA when due as required under Section 12;
or

 

14.3.12  If
Franchisee fails to maintain or observe any of the health and sanitation standards and procedures prescribed by HOA in this Agreement,
the Manuals, by Laws, or otherwise in writing; or

 

14.3.13  If
Franchisee fails to operate Franchisee’s Restaurant in compliance with the standards and specifications in HOA’s Manuals.

 

14.4         With Notice and Thirty Day Opportunity to Cure. Except as otherwise provided in Sections 14.1, 14.2 and 14.3 above, upon
any other default by Franchisee or its obligations hereunder, HOA may terminate this Agreement by giving written notice of termination
(in the manner set forth under Section 21 below) setting forth the nature of such default to Franchisee at least thirty (30) days
before the effective date of termination; provided, however, that Franchisee may avoid termination by immediately initiating a
remedy to cure such default, curing it to HOA’s satisfaction, and by promptly providing proof thereof to HOA, all within
the thirty (30) day period. If any such default is not cured within the specified time, or such longer period as Law may require,
this Agreement shall terminate without further notice to Franchisee effective immediately upon the expiration of the thirty (30)
day period or such longer period as Law may require.

 

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14.5         The foregoing rights to terminate are without prejudice to all other rights and remedies provided for hereunder or at law or equity.
The parties acknowledge and agree that a judicial, arbitral or administrative order shall not be required to give effect to any
termination of this Agreement.

 

14.6         Limitations on Actions. Any and all claims (except for monies due HOA) arising out of or related to: (i) the offer for sale,
sale, negotiation, administration, or termination of the Franchise or this Agreement; (ii) the development, opening, operation,
or closure of Franchisee’s Restaurant; or (iii) the relationship between the parties to this Agreement, shall be barred unless
an action at law or in equity is properly filed in a court of competent jurisdiction within one (l) year after the date Franchisee
on the one hand, or HOA on the other hand, knows or should have known of the facts giving rise to such claim, except to the extent
any Law provides for a shorter period of time to bring a claim.

 

15.         OBLIGATIONS
ON TERMINATION OR EXPIRATION

 

On termination
or expiration of this Agreement for any reason, all rights granted to Franchisee under this Agreement shall immediately terminate,
and:

 

15.1         Franchisee shall immediately cease to operate the business franchised under this Agreement, and shall not thereafter, directly
or indirectly, represent to the public or hold itself out as a present or former franchisee of HOA.

 

15.2         Franchisee shall immediately and permanently cease to use, in any manner whatsoever, any or all of: (i) HOA’s Confidential
Information or Trade Secrets; and (ii) the Proprietary Marks. Without limiting the generality of the foregoing, Franchisee shall
cease to use all signs, advertising materials, displays, stationery, forms, and any other articles that display the Proprietary
Marks; provided, however, that this Section 15.2 shall not apply to the operation by Franchisee of any other franchise under the
Hooters System that HOA may separately and independently have granted to Franchisee and that HOA has not terminated. Franchisee
shall return to HOA the Manuals, all other materials containing Confidential Information or Trade Secrets, equipment and other
property owned by HOA, and all copies thereof and all signage bearing any Proprietary Marks and other materials, though owned by
Franchisee, which bear the Proprietary Marks and or utilize the trade dress, designs or colors of HOA. Franchisee shall retain
no copy or record of any of the foregoing; provided Franchisee may retain its copy of this Agreement, any correspondence between
the parties, and any other document which Franchisee needs for compliance with any applicable provision of Law.

 

15.3         Franchisee shall remove or change all signs, displays, furniture, fixtures, equipment, and other trade dress, and shall change
all colors of buildings and other structures, to the extent required to distinguish Franchisee’s Restaurant from its former
appearance and from any other Hooters restaurants, and shall comply with HOA’s restaurant de-identification requirements
(collectively, to “De-Identify” Franchisee’s Restaurant), so that Franchisee’s Restaurant is fully
De-Identified by the end of ten (10) days after the termination or expiration of this Agreement.

 

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15.3.1           If
Franchisee fails to fully De-Identify Franchisee’s Restaurant by the end of ten (10) days after the termination or expiration
of this Agreement, HOA and its agents shall have the right to enter onto the premises of Franchisee’s Restaurant without
prior notice to Franchisee, and without liability for trespass, and to De-Identify Franchisee’s Restaurant at Franchisee’s
expense, which amounts Franchisee agrees to pay so that HOA actually receives such payment by the end of ten (10) days after demand
therefor.

 

15.3.2           Franchisee
will provide HOA with photographic or other evidence of the De- Identification satisfactory to HOA. If Franchisee fails to provide
HOA with satisfactory photographic or other evidence of De-Identification so that HOA actually receives such evidence by the end
of ten (10) days after the by the end of ten (10) days after the termination or expiration of this Agreement, HOA shall have the
right to enter onto the premises of Franchisee’s Restaurant without prior notice to Franchisee, and without liability for
trespass, to inspect Franchisee’s Restaurant at Franchisee’s expense, which amounts Franchisee agrees to pay so that
HOA actually receives such payment by the end of ten (10) days after demand therefor.

 

15.3.3           Franchisee
shall take such appropriate steps needed to transfer the telephone number for the business to HOA.

 

15.4        Franchisee shall: (i) comply with its obligations for Web Sites and Internet Listings as set forth in this Agreement at Section
9.5; and, (ii) take such action as may be necessary to cancel any assumed name or equivalent registrations of Franchisee that contain
the mark “Hooters” or any other Proprietary Mark. Franchisee shall furnish HOA with confirmation that Franchisee has
fulfilled such obligations by the end of thirty (30) days after termination or expiration of this Agreement.

 

15.5        Franchisee
shall not, in connection with any other business, use any reproduction, counterfeit, copy, or colorable imitation of the Proprietary
Marks, either in connection with such other business or the promotion of such other business or otherwise, that may cause or constitute
confusion, mistake, or deception, or that is likely to dilute HOA’s rights in or to the Proprietary Marks, and further shall
not use any designation of origin or description or representation that falsely suggests or represents an association or former
association with HOA or the Hooters System.

 

15.6      
Payments.

 

15.6.1    Franchisee
shall pay to HOA and HOA’s affiliates, so that HOA and its affiliates actually receive such payment by the end of ten (10)
days after the termination or expiration of this Agreement, all sums owing to HOA and its affiliates accrued through the effective
date of termination or expiration.

 

15.6.2    Liquidated
Damages. If HOA terminates this Agreement prior to the expiration of the Initial Term, Franchisee shall pay to HOA, so that
HOA actually receives such payment by the end of ten (10) days after such termination:

 

(a)          An
amount equal to the Fees payable by Franchisee for the lesser of: (i) the balance of the Initial Term remaining; or (ii) the twenty-six
(26) months prior to the effective date of HOA’s termination of this Agreement;

 

(b)          If
HOA terminates this Agreement and Franchisee’s Restaurant has not been open for business for twenty-six (26) months, the
amount of Fees payable by Franchisee for the periods Franchisee was obligated to pay Fees prior to the effective date of HOA’s
termination of this Agreement, projected to twenty-six (26) months; or

 

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(c)          If
HOA terminates this Agreement before Franchisee’s obligation to pay Fees has commenced, the average amount of Fees payable
by Hooters Restaurants in the Country generally (or, if there are less than five (5) Hooters Restaurants in the Country at the
time, in the United States), for the twenty-six (26) months prior to the effective date of HOA’s termination of this Agreement.

 

(d)          Franchisee
acknowledges and agrees, and hereby directs any party construing this Agreement, including without limitation any court, mediator,
master, or other party acting as a trier of fact or law, to conclusively presume, that the damages set forth in this Section 15.6.2.:
(i) are true liquidated damages; (ii) are intended to compensate HOA for the harm HOA will suffer as a result of the premature
termination of this Agreement; (iii) are not a penalty; (iv) are a reasonable estimate of HOA’s probable loss resulting from
the premature termination of this Agreement, viewed as of the date of this Agreement; (v) shall be in lieu of, and not in addition
to, actual damages for loss of the benefit of the bargain that HOA is entitled to receive; and (vi) shall, subject to clause (v)
above, be in addition to all other rights HOA may have to legal or equitable relief.

 

15.6.3   Without
prejudice to the liquidated damages set for in Section 15.6.2 above, if HOA terminates this Agreement as a result of Franchisee’s
default of this Agreement, Franchisee shall pay to HOA all costs and expenses HOA may incur related to such default and termination,
including without limitation attorneys’ fees and costs that HOA incurs related to: (i) drafting notices, demands, and other
documents related to such default and termination; (ii) obtaining decrees for specific performance; (iii) obtaining injunctive
or other relief; (iv) collection of amounts owed; and (v) appeal; so that HOA actually receives such payments by the end of ten
(10) days after demand therefor.

 

15.6.4    The
obligations set forth in this Section 15.6, until paid in full, shall be and constitute a lien in favor of HOA against any and
all of Franchisee’s personal property, furnishings, fixtures, equipment, signage, inventory, and other assets.

 

15.7         Franchisee
shall immediately deliver to HOA all manuals, including the Manuals; all records, files, instructions, correspondence, and other
materials related to the operation of Franchisee’s Restaurant, including without limitation brochures, agreements, and invoices,
in Franchisee’s possession or under Franchisee’s control, and all copies thereof (all of which Franchisee acknowledges
are HOA’s property), and shall retain no copy or record of any of the foregoing, except Franchisee’s copy of this Agreement
and of any correspondence between the parties and any other documents that Franchisee reasonably needs for compliance with any
provision of Law.

 

15.8         HOA’s
Purchase Option.

 

15.8.1   Upon
termination or expiration (without renewal) of this Agreement, HOA shall have the right, exercisable by giving notice thereof (“Appraisal
Notice”) within ten (10) days after the date of such termination or expiration, to require that a determination be made
of the “Agreed Value” (as defined below) of all the assets and personal property (as a going concern) used in Franchisee’s
Restaurant, including the Restaurant building (if owned by Franchisee) inventories of Menu Items, materials, supplies, furniture,
equipment, signs, but excluding any cash and short-term investments and any items not meeting HOA’s specifications (the “Purchased
Assets”). Such Purchased Assets shall exclude items bearing Proprietary Marks as described in Section 15.2, above. Upon
such notice, Franchisee may not sell or remove any of the personal property of Franchisee’s Restaurant and must give HOA,
its designated agents and the “Appraiser” (as defined below) full access to such Restaurant and all of Franchisee’s
books and records at any time during customary business hours in order to conduct inventories and determine the purchase price
for the Purchased Assets. At HOA’s sole discretion, HOA may opt to purchase all of the ownership interest in Franchisee (the
“Purchased Equity”), rather than the Purchased Assets, and the provisions below in Section 15.8.2 through Section
15.8.5 shall also apply, mutatis mutandis, to the Purchased Equity.

 

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15.8.2           The
Agreed Value shall be determined by consultation between Franchisee and HOA. If Franchisee and HOA are unable to agree on
the Agreed Value of the Purchased Assets within fifteen (15) days after the Appraisal Notice, then the Agreed Value shall be the
Fair Market Value (as defined below).

 

15.8.3           The
“Fair Market Value” shall be the amount that an arm’s length purchaser would be willing to pay for the
Purchased Assets (for the avoidance of doubt, Fair Market Value shall include going concern value or terminal value for the business
based on a historical value of the relevant business at the relevant location, but shall not include goodwill associated with the
Proprietary Marks or the Hooters System). The Fair Market Value will be determined by a member of an accounting firm (other than
a firm which conducts audits of HOA’s financial statements) selected by HOA who has experience in the valuation of retail
businesses (the “Appraiser”). HOA will notify Franchisee of the identity of the Appraiser, who will make his
determination and submit a written report (“Appraisal Report”) to Franchisee and HOA as soon as practicable,
but in no event more than sixty (60) days after his appointment. Franchisee agrees to promptly provide the Appraiser with such
books and records as he or she may require, which Franchisee represents and warrants to be complete and accurate. In absence of
such books and records or if the Appraiser is not satisfied with their completeness or accuracy, the Appraiser may make the determination
of Fair Market Value on the basis of other sources and information he or she deems appropriate. HOA and Franchisee shall also be
permitted to submit additional information or positions for the consideration of the Appraiser. The Appraiser’s determination
shall be final and binding on the parties hereto.

 

15.8.4           HOA
shall have the option, exercisable by delivering notice thereof within 30 days after submission of the Appraisal Report (or the
date that an agreement is reached, if the parties agree to the Agreed Value), to elect to purchase any or all of the Purchased
Assets at the Agreed Value for such assets. HOA shall have the unrestricted right to assign this option to purchase separate and
apart from the remainder of this Agreement.

 

15.8.5           If
HOA exercises its option to purchase, the purchase price for the selected Purchased Assets will be paid in cash at the closing,
which will occur at the place, time and date HOA designates, but not later than sixty (60) days after the exercise of HOA option
to purchase the Purchased Assets. At the closing, HOA will be entitled to all agreements, covenants, representations and warranties,
and other closing documents and post-closing indemnifications as HOA may reasonably require, including: (a) instruments transferring
good and merchantable title to the Purchased Assets, free and clear of all liens, encumbrances, and liabilities, to HOA or its
designee, with all sales, value added and other transfer taxes paid by Franchisee; (b) the right to conduct a physical inventory
of Menu Items; and (c) an assignment of all leases of personal property and real estate used in the operation of the Franchisee
Restaurants, including land, building and/or equipment (or if an assignment is prohibited, a sublease to HOA or HOA’s designee
for the full remaining term and on the same terms and conditions as Franchisee’s lease, including renewal and/or purchase
options), provided, however, that if any of Franchisee’s affiliates directly or indirectly owns the land and/or building
of a Franchisee Restaurant, Franchisee will, at HOA’s option, cause such affiliate to grant to HOA a lease at reasonable
and customary rental rates and other terms prevailing in the community where Franchisee’s Restaurant is located. Any dispute
concerning the rental rates and terms of such lease shall be resolved by the Appraiser.

 

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15.8.6           If
Franchisee cannot deliver clear title to all of the assets, or if there are other unresolved issues, the closing of the sale may,
at HOA’s option, be accomplished through an escrow on such terms and conditions as HOA deems appropriate, including the making
of payments, to be deducted from the purchase price, directly to third parties in order to obtain clear title to any of the Purchased
Assets. Further, Franchisee shall comply with all Laws and local tax notification and/or escrow procedures. HOA shall have the
right to set off against and reduce the purchase price by any and all amounts owed by Franchisee or any of Franchisee’s affiliates
to HOA or any of HOA’s affiliates.

 

15.8.7           Upon
delivery of the Appraisal Notice and pending (a) determination of Agreed Value, (b) HOA’s option period, and (c) the closing
of the purchase, Franchisee shall, unless otherwise directed by HOA, continue temporary operations of the Franchisee Restaurants
to be purchased pursuant to the terms of this Agreement, subject to the supervision and control of one or more of HOA’s appointed
managers.

 

15.9         Any
right or interest Franchisee, any Principal Owner, any affiliate, or any person or entity otherwise under Franchisee’s direction
or control (collectively, a “Licensed Party”) has in any license necessary or required to operate the Restaurant
(collectively, the “Operating Licenses”) shall automatically transfer to HOA or its designee. Franchisee shall
have five (5) days after HOA’s delivery of written notice of termination or expiration of this Agreement to commence all
procedures necessary to transfer or relocate all Operating Licenses to HOA; or, if HOA designates another party to receive such
Operating Licenses, to such designee, and to notify HOA in writing of such commencement. Licensed Party shall promptly use all
commercially reasonable efforts to obtain the necessary approvals from any applicable authority for the prompt transfer or relocation
of the Operating License.

 

15.9.1           If
Laws do not permit the transfer or relocation of the Operating Licenses, Licensed Party shall have five (5) days after HOA’s
delivery of written notice of termination or expiration of this Agreement to contact all applicable authorities regarding, and
to initiate, all procedures necessary to apply for a new Operating Licenses in the name of HOA or its designee in all applicable
jurisdictions, and shall notify HOA in writing of such initiation. Licensed Party shall join and cooperate with HOA in promptly
procuring a replacement Operating Licenses. Both Licensed Party and HOA shall immediately fulfill any directives or requirements
from all applicable authorities in order to expedite the transfer or relocation of the existing Operating Licenses or acquisition
of a new Operating Licenses.

 

15.9.2           Franchisee
shall pay or promptly arrange for the full payment of all taxes of any kind or nature whatsoever, including without limitation
property taxes, personal property taxes, sales, use, withholding, and any other taxes, that may affect title or the rights to any
Operating Licenses in any way.

 

15.9.3           Franchisee
shall indemnify and hold HOA harmless for any and all of any Licensed Party’s liabilities and obligations related to the
rights of HOA or its designee to own, possess, and use any Operating Licenses.

 

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16.         COVENANTS

 

16.1         Franchisee
covenants, warrants, represents, and agrees that Franchisee shall devote its full time, energy, and best efforts to the management
and operation of Franchisee’s Restaurant.

 

16.2         Franchisee
covenants, warrants, represents, and agrees that, during the term of this Agreement, except as HOA may otherwise approve in writing,
Franchisee shall not, either directly or indirectly, for itself or through, on behalf of, or in conjunction with, any person or
other entity, employ or seek to employ any person who is at that time, or who has been within the immediately-preceding one hundred
eighty (180) days, employed by HOA or by any other franchisee or affiliate of HOA as a salaried employee, or otherwise directly
or indirectly induce such person to leave his or her employment. If Franchisee chooses to hire such person despite the provisions
of this Section 16.2, Franchisee shall pay to HOA, within ten (10) days of such hire, fifty percent (50%) of such person’s
most recent annualized salary.

 

16.3         Franchisee
specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable specialized training and confidential
information, including, without limitation, information regarding the operational, sales, promotional, and marketing methods and
techniques of HOA and the Hooters System. Franchisee covenants that during the term of this Agreement, except as otherwise approved
in writing by HOA, Franchisee shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction
with any person, persons, partnership, corporation, or entity, divert or attempt to divert any business or customer of Franchisee’s
Restaurant or of any Restaurant using the Hooters System to any competitor, by direct or indirect inducement or otherwise, or do
or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with HOA’s Proprietary
Marks and the Hooters System.

 

16.4         Covenants
Not to Compete.

 

16.4.1    The
following definitions are applicable to this Section 16.4:

 

(a)          Competing
Activity. “Competing Activity” means: (i) developing, opening, or operating any Competing Business; or (ii)
authorizing, assisting, or inducing another to develop, open, or operate a Competing Business.

 

(b)          Competing
Business. “Competing Business” means a restaurant or bar concept, other than a business Franchisee operates
pursuant to an agreement with HOA, that: (i) features female sex appeal; or (ii) focuses on the sale of chicken wings. Without
limiting the generality of the foregoing, all of the following businesses shall conclusively be deemed to be Competing Businesses:
(a) Tilted Kilt, Winghouse, Twin Peaks, Bikinis, and any other restaurant or bar concept that features female sex appeal; and (b)
Buffalo Wild Wings, Buffalo’s, and any other restaurant concept that focuses on the sale of chicken wings.

 

(c)          Immediate
Family Member. “Immediate Family Member” means an individual’s spouse, children, parents and siblings.

 

16.4.2     In-Term
Covenant Not to Compete. Franchisee covenants, warrants, represents, and agrees that it will not, during the term of this Agreement,
individually or jointly with others, directly or indirectly, by, through, on behalf of, or in conjunction with, any other person
or entity (including any Immediate Family Member): (i) engage in a Competing Activity; (ii) act as a director, officer, shareholder,
partner, member, employee, independent contractor, consultant, principal, agent, or proprietor, or participate or assist in the
establishment or operation of, directly or indirectly, any business engaged in a Competing Activity, except that Franchisee may
purchase or hold less than five percent (5%) of the shares of any publicly- traded business engaged in a Competing Activity; or
(iii) divert or attempt to divert any business from Franchisee’s Restaurant or the Hooters System.

 

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16.4.3           Post-Term
Covenant Not to Compete. Franchisee covenants, warrants, represents, and agrees that it will not, beginning at the expiration
or termination of this Agreement and continuing for two (2) years thereafter or two (2) year after a court of competent jurisdiction
enters an order enforcing this Section 16.4, whichever occurs last, individually or jointly with others, directly or indirectly,
by, through, on behalf of, or in conjunction with, any other person or entity (including any Immediate Family Member), (i) engage
in a Competing Activity; (ii) act as a director, officer, shareholder, partner, member, employee, independent contractor, consultant,
principal, agent, or proprietor, or participate or assist in the establishment or operation of, directly or indirectly, any business
engaged in a Competing Activity, except that Franchisee may purchase or hold less than five percent (5%) of the shares of any publicly-
traded business engaged in a Competing Activity; or (iii) divert or attempt to divert any business from Franchisee’s Restaurant
or the Hooters System, within: (a) Franchisee’s Protected Territory; (b) any of Franchisee’s Protected Territories
or former Protected Territories under any other agreement with HOA or its affiliates; or (c) a protected territory of any other
franchisee or affiliate of HOA.

 

16.4.4           Directives.
In the event of any dispute related to this Section 16.4, Franchisee hereby directs any third party construing this Section 16.4,
including without limitation any court, mediator, master, or other party acting as trier of fact or law:

 

(a)          To
conclusively presume that the restrictions set forth in this Section 16.4 are reasonable and necessary in order to protect: (i)
HOA’s legitimate business interests, including without limitation the interests of HOA’s other franchisees; (ii) the
confidentiality of HOA’s Confidential Information and the secrecy of HOA’s Trade Secrets; (iii) the integrity of the
Hooters System; (iv) HOA’s investment in the System; (v) the investment of HOA’s other franchisees in their franchised
businesses; and (vi) the goodwill associated with the System.

 

(b)          To
conclusively presume that this Section 16.4 was made freely and voluntarily by Franchisee, as an independent business operator
to which HOA delivered good and valuable consideration, in an arms-length commercial transaction between skilled and experienced
business professionals.

 

(c)          To
conclusively presume that the restrictions set forth in this Section 16.4 will not unduly burden Franchisee’s ability to
earn a livelihood.

 

(d)          To
construe this Section 16.4 under Laws governing franchise and general commercial contracts between commercial entities in an arms-length
business transaction, and not under Laws governing contracts of employment.

 

(e)          To
conclusively presume that any violation of any of the terms of this Section 16.4: (i) was accompanied by the misappropriation and
inevitable disclosure of HOA’s Confidential Information, Trade Secrets, and other methods and procedures; and (ii) constitutes
a deceptive and unfair trade practice and unfair competition.

 

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16.4.5           Individual
Covenants.  Franchisee shall require and obtain execution of covenants similar to those set forth in Sections 6.2, 8, 13,
15, and this Section 16 (as modified to apply to an individual) from all of the following persons: Owners, General Manager
(or a person in a managerial position with Franchisee), and employees. The covenants required by this Section 16.4.5 shall be
in a form acceptable to HOA. Failure by Franchisee to obtain execution of a covenant required by this Section 16.4.5 shall
constitute a default under Section 14.2.6, above.

 

16.5         Covenant
as to Anti-Terrorism and Anti-Corruption Laws. Franchisee agrees to comply with, and/or to assist HOA to the fullest extent
possible in HOA’s efforts to comply with, (a) the USA PATRIOT Act, and all other present and future U.S., E.U., and United
Nations laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority addressing or in
any way relating to terrorist acts and acts of war; and (b) the Foreign Corrupt Practices Act and all other applicable anti-corruption
and anti-money laundering Laws.

 

16.6         The
parties agree that each of the foregoing covenants shall be construed as independent of any other covenant or provision of this
Agreement. If all or any portion of a covenant in this Section 16 is held unreasonable or unenforceable by a court or agency having
valid jurisdiction in an unappealed final decision to which we are a party, you expressly agree to be bound by any lesser covenant
subsumed within the terms of such covenant that imposes the maximum duty permitted by Law, as if the resulting covenant were separately
stated in and made a part of this Section 16.

 

16.7         We
Can Reduce Application of Covenants. You understand and acknowledge that we shall have the right, in our sole discretion, to
reduce the scope of any covenant set forth in Sections 16.3 and 16.4 above, or any portion of this Agreement, without your consent,
effective immediately upon receipt by you of written notice thereof; and you agree that you shall comply forthwith with any covenant
as so modified, which shall be fully enforceable notwithstanding the provisions of Section 25.4.3 below.

 

16.8         Franchisee
expressly agrees that the existence of any claims it may have against HOA, whether or not arising from this Agreement, shall not
constitute a defense to the enforcement by HOA of the covenants in this Section 16. Franchisee agrees to pay all damages, costs,
and expenses (including reasonable attorneys’ fees) HOA may incur in connection with the enforcement of this Section 16.

 

17.         TAXES,
PERMITS, AND INDEBTEDNESS

 

17.1         Franchisee
shall pay when due all taxes levied or assessed, including, without limitation unemployment and sales taxes, and all accounts payable
and other indebtedness of every kind Franchisee incurs in the conduct of Franchisee’s Restaurant.

 

17.2         In
the event of any bona fide dispute as to Franchisee’s liability for taxes assessed or other indebtedness, Franchisee may
contest the validity or the amount of the tax or indebtedness in accordance with the procedures of the taxing authority or Law;
however, in no event shall Franchisee permit a tax sale or seizure by levy or execution or similar writ or warrant, or attachment
by a creditor, including without limitation foreclosure, eviction, or repossession, to occur against the premises of Franchisee’s
Restaurant, or any improvements to such premises, or any furnishings, fixtures, equipment, or other assets of Franchisee’s
Restaurant.

 

17.3         Franchisee
shall notify HOA in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of
any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, arising out of or related
to Franchisee’s Restaurant.

 

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18.         INDEPENDENT
CONTRACTOR

 

18.1         HOA
and Franchisee acknowledge and agree that: (i) this Agreement does not create a fiduciary relationship between the parties hereto
or any affiliated or related parties or entities; (ii) Franchisee is an independent contractor; and (iii) nothing in this Agreement
is intended to or shall be construed to constitute either party as an agent, legal representative, subsidiary, joint venturer,
partner, employee, or servant of the other for any purpose whatsoever.

 

18.2         Franchisee
shall hold itself out to the public as an independent contractor operating Franchisee’s Restaurant pursuant to a franchise
from HOA. Franchisee will take all such actions as may be required to notify all interested persons or entities of such independent
contractual relationship by exhibiting a notice of such relationship in a conspicuous place in Franchisee’s Restaurant, the
content and form of which notice HOA shall have the right to specify.

 

18.3         Franchisee
acknowledges and agrees that nothing in this Agreement authorizes Franchisee, and that Franchisee shall have no authority, to make
any contract, agreement, warranty, or representation on behalf of HOA, or to incur any debt or other obligation in HOA’s
name; and that HOA shall in no event assume liability for, or be deemed liable hereunder or thereunder as a result of any such
action; nor shall HOA be liable by reason of any act or omission of Franchisee in its conduct of Franchisee’s Restaurant
or for any claim or judgment arising out of or related to Franchisee’s Restaurant against Franchisee or HOA.

 

18.4         Franchisee
acknowledges and agrees that: (i) HOA’s business is the business of developing the System, granting franchises to independent
business operators to use the System, and servicing independent operators of franchised businesses in the System; (ii) Franchisee’s
Franchised Business is the business of operating Franchisee’s Restaurant; and (iii) the business HOA operates and the business
Franchisee operates are separate and distinct businesses engaged in separate and distinct activities.

 

18.5        Enforcement.

 

18.5.1           Franchisee,
for itself, its Principals, and its employees, hereby covenants, warrants, represents, and agrees that neither it nor they nor
any of them will: (i) make or raise any claim, counterclaim, crossclaim, affirmative defense, or demand; (ii) commence, or cause
or permit to be commenced; (iii) prosecute, or cause or permit to be prosecuted; or (iv) assist or cooperate in the commencement
or prosecution of, any suit or action, any arbitration or like proceeding, or any administrative or agency proceeding, against
or related to HOA, HOA’s affiliates, or HOA’s or such affiliates’ directors, officers, shareholders, partners,
members, employees, agents, or attorneys (collectively, the “HOA Parties”), alleging any matter contrary to
any acknowledgment or agreement set forth in this Section 18 of this Agreement.

 

18.5.2           Franchisee,
for itself, its Principal Owners, and its employees, hereby acknowledges and agrees that in the event of any breach of Section
18.5.1 of this Agreement, the HOA Parties would be irreparably injured and without adequate remedy at law. Therefore, in the event
of a breach or a threatened or attempted breach of any provision of Section 18.5.1, Franchisee, for itself, its Principals, and
its employees, agrees that HOA and the other HOA Parties will be entitled, in addition to any other remedies such HOA Parties may
have, to a preliminary and permanent injunction and a decree for specific performance of the terms of Section 18.5.1 in accordance
with Articles 461, 461-A, 466-A to 466-C, 632 et seq, 642 et seq and 646 et seq
of the Brazilian Civil Procedure Code.

 

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18.5.3 Franchisee
hereby covenants, warrants, represents, and agrees that it has the authority to bind its Principals and employees to this Section
18 of this Agreement.

 

19.         INDEMNIFICATION

 

19.1       As
used in this Section 19, the term “Losses and Expenses” shall include, without limitation, any and all obligations,
debts, claims, demands, rights, actions, causes of action, loss, losses, damage, damages, expenses, costs, liability, and liabilities
of any nature or kind; including without limitation reasonable accountants’, attorneys’, and expert witness fees and
costs; costs of investigation and proof of facts; court costs and other expenses of litigation; and travel and living expenses,
together with compensation for damages to HOA’s reputation and goodwill, costs of or resulting from delays, financing, costs
of advertising material and media time or space, and costs of changing, substituting, or replacing such advertising material and
media time or space, and any and all expenses of recalls, refunds, compensation, public notices, and other amounts arising out
of or related to such matters.

 

19.2       Franchisee
shall, at all times, fully indemnify and hold harmless HOA and its affiliates, and HOA’s and such affiliates’ directors,
officers, shareholders, partners, members, employees, agents, and attorneys, and the predecessors, successors, heirs, and assigns
of any and all of the foregoing (collectively, the “Indemnitees”), from all Losses and Expenses arising out
of or related to Franchisee, Franchisee’s Restaurant, the Accepted Location, and the development, opening, operation, or
closure of Franchisee’s Restaurant. Such obligations shall include, without limitation, Losses and Expenses incurred by any
Indemnitees in connection with:

 

19.2.1           Any
action, suit, proceeding, claim, demand, investigation, or inquiry (formal or informal), or any settlement thereof (whether or
not a formal proceeding or action has been instituted) that arises out of Franchisee’s operation of the Franchisee’s
Restaurant or is related to any of the foregoing;

 

19.2.2 Franchisee’s
default of any covenant, warranty, representation, agreement, or obligation set forth in this Agreement or any schedule, exhibit,
addendum, attachment, or amendment to this Agreement;

 

19.2.3           Franchisee’s
default or alleged default of any other agreement;

 

19.2.4           Franchisee’s
violation or alleged violation of any Law, any standard or directive, or any industry standard, including without limitation violations
resulting from Franchisee’s use of the Hooters System;

 

19.2.5           Libel,
slander, or any other form of defamation by Franchisee; and

 

19.2.6           Acts,
errors, or omissions of Franchisee or any of Franchisee’s directors, officers, shareholders, partners, members, employees,
agents, and attorneys.

 

19.2.7           This
indemnification shall include losses alleging the negligence of any Indemnitee, including without limitation negligence in the
supervision and inspection of Franchisee’s Restaurant, the training of an employee of Franchisee’s Restaurant, and
the Hooters System standards, but excluding any case in which the Indemnitee is determined by a court of competent jurisdiction
to have engaged in grossly negligent or willful misconduct. The indemnification set forth in this Section 19 shall survive the
termination or expiration of this Agreement.

 

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19.3         Franchisee
shall promptly notify HOA of any action, suit, proceeding, claim, demand, inquiry, investigation, or default described in Section
19.2. If HOA is or may be named as a party in any action, suit, or proceeding, HOA may elect to undertake, but shall not be obligated
to undertake, the defense or settlement thereof, at Franchisee’s cost and expense. No such undertaking by HOA shall, in any
manner or form, diminish Franchisee’s obligation to indemnify HOA and to hold it harmless.

 

19.4         With
respect to any action, suit, proceeding, claim, demand, inquiry, or investigation, HOA may, at any time and without notice, in
order to protect persons or property or the reputation or goodwill of HOA or others, order, consent, or agree to any settlement
or take any remedial or corrective action that HOA deems expedient; if, in HOA’s sole judgment, there are reasonable grounds
to believe that:

 

19.4.1           Any
of the acts, omissions, or circumstances giving rise to the action, suit, proceeding, claim, demand, inquiry, or investigation,
in fact occurred; or

 

19.4.2           Any
act, error, or omission of Franchisee may result directly in or indirectly in damage, injury, or harm to any person or any property.

 

19.5         All
Losses and Expenses incurred under this Section 19 shall be chargeable to and paid by Franchisee pursuant to Franchisee’s
obligations of indemnity under this Agreement.

 

19.6         Under
no circumstances shall the Indemnitees be required or obligated to seek recovery from third parties or to otherwise mitigate their
losses in order to maintain a claim against Franchisee. Franchisee agrees that the failure to pursue such recovery or to mitigate
loss shall in no way reduce the amounts the Indemnitees may recover from Franchisee.

 

19.7         The
Indemnitees assume no liability whatsoever for any acts, errors, or omissions of any persons with whom Franchisee may contract,
regardless of the purpose. Franchisee shall hold harmless and indemnify the Indemnitees and each of them for all Losses and Expenses
that may arise out of any acts, errors, or omissions of persons with whom Franchisee may contract.

 

20.         APPROVALS
AND WAIVERS

 

20.1         Whenever
this Agreement requires the prior approval or consent of HOA, Franchisee shall make a timely written request to HOA for such approval
or consent, and such approval or consent shall only be valid if made in writing.

 

20.2         HOA
makes no representations, warranties, or guaranties on which Franchisee may rely, and assumes no liability or obligation to Franchisee,
by providing any waiver, approval, consent, or suggestion to Franchisee or in connection with any consent, or by reason of any
neglect, delay, or denial of any request therefor.

 

20.3         No
failure of HOA to exercise any power reserved to it in this Agreement, or to insist on compliance by Franchisee with any obligation
or condition in this Agreement, and no custom or practice of the parties at variance with the terms of this Agreement, shall constitute
a waiver of HOA’s rights to demand exact compliance with any of the terms of this Agreement. Waiver by HOA of any particular
default shall not affect or impair HOA’s right with respect to any subsequent default of the same or of a different nature;
nor shall any delay, forbearance, or omission by HOA to exercise any power or right arising out of any breach or default by Franchisee
of any of the terms, provisions, or covenants of this Agreement affect or impair HOA’s rights; nor shall such delay, forbearance,
or omission constitute a waiver by HOA of any rights under this Agreement or any right to obtain relief for any subsequent breach
or default.

 

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21.         NOTICES

 

Any and all notices required
or permitted under this Agreement shall be in writing and shall be effective the earlier of: (i) the day that it is personally
delivered; (ii) the day it is sent by facsimile or email with a confirmation of receipt; (iii) the intended recipient’s
failure or refusal to accept delivery; or (iii) the third business day after it is sent by a commercially recognized international
delivery service (e.g. UPS, Federal Express, or DHL) to the respective parties at the following addresses unless and until a different
address has been designated by written notice to the other party. Except for notices of actions to be taken pursuant to Section
14, it is agreed that each party can send communications to the other party by facsimile or email for the purpose of delivering
notices under this Agreement, including this Section 21.

Notices to HOA:

Hooters of America, LLC

1815 The Exchange

Atlanta, Georgia 30339

Attention: Legal Department

Facsimile: ___________

Email: _____________

 

Notices to Franchisee:

 

See Exhibit A

 

22.         ENTIRE
AGREEMENT

 

22.1         This
Agreement, including the exhibits, attachments, and amendments to it, and further including the Franchise Disclosure Document,
is a complete integration that sets forth the entire agreement between HOA and Franchisee, fully superseding any and all prior
negotiations, agreements, representations, or understandings between HOA and Franchisee, whether oral or written, related to the
subject matter of this Agreement. HOA and Franchisee hereby expressly confirm that there are no other oral or written agreements,
“side-deals,” arrangements, or understandings between HOA and Franchisee except as expressly set forth in this Agreement
or in a duly-executed written amendment to this Agreement. No course of dealing, whether occurring before or after the Effective
Date of this Agreement, shall operate to amend, modify, terminate, or waive any express written provision of this Agreement.

 

22.2         Except
for those acts that this Agreement permits HOA to take unilaterally, no amendment, change, or variance from this Agreement will
be binding on HOA unless such amendment, change, or variance is set forth with particularity in a written agreement duly executed
by HOA’s authorized officer and by Franchisee.

 

22.3         Franchisee
hereby covenants, warrants, represents, and agrees that it will not: (i) make or raise any claim, counterclaim, crossclaim, affirmative
defense, or demand; (ii) commence, or cause or permit to be commenced; (iii) prosecute, or cause or permit to be prosecuted; or
(iv) assist or cooperate in the commencement or prosecution of, any suit or action at law or in equity or otherwise, alleging or
asserting any matter contrary to Sections 22.1 or 22.2 of this Agreement.

 

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23.         SEVERABILITY
AND CONSTRUCTION

 

23.1         No
Implied Covenant. HOA and Franchisee have negotiated the terms of this Agreement and agree that neither party shall claim the
existence of an implied covenant of good faith and fair dealing to contravene or limit any express written term or provision of
this Agreement.

 

23.2         Partial
Invalidity. If any term or provision of this Agreement is declared invalid or unenforceable for any reason, such provision
will be modified to the minimum extent necessary to make it valid and enforceable; or, if it cannot be so modified, then severed,
and the remaining provisions of this Agreement will remain in full force and effect. The parties agree that they would have signed
the Agreement as so modified.

 

23.3         Interpretation.
The table of contents and section headings in this Agreement are inserted for convenience only and will not affect the meaning
or construction of this Agreement. Except as otherwise set forth in this Agreement, the language of this Agreement will be construed
simply according to its fair meaning and not strictly for or against either party. Both parties have had the opportunity to be
represented by skilled and experienced counsel in the transaction resulting in the execution of this Agreement, and both parties
are skilled and experienced business professionals; and as a result, both parties shall be deemed to have drafted this Agreement
and in no event will any adverse construction of this Agreement be attributed to HOA as the drafting party. The Recitals of this
Agreement are a material part of this Agreement, and shall in no event be considered mere prefatory material or surplusage. “Herein,”
“hereof,” and “hereunder” refer to this Agreement as a whole and not to any particular part. Words importing
the singular number only shall include the plural and vice-versa, and words importing the masculine gender shall include the feminine
and neuter genders and vice-versa. The word “including” means “including without limiting the scope or generality”
of any description preceding such word, and the word “or” means, and is used in the inclusive sense of, “and/or.”
References to documents, instruments, or agreements shall be deemed to refer as well to all addenda, exhibits, schedules, or amendments
thereto. Any reference to any English language legal term or concept (including for any action, remedy, method of judicial proceeding,
document, legal status, statute court, official governmental authority or agency) shall, in respect of any jurisdiction other than
the United States of America, be interpreted to mean the nearest and most appropriate analogous term to the English term in the
legal language in that jurisdiction as the context reasonably requires so as to produce as nearly as possible the same effect in
relation to that jurisdiction as would be the case in relation to the United States of America.

 

23.4         Survival
of Obligations. All obligations of this Agreement, whether HOA’s or Franchisee’s, that expressly or by their terms
require performance after the termination or expiration of this Agreement, or that by their nature would reasonably be expected
to continue in full force and effect until they are satisfied in full or by their nature expire, will be deemed to be self-executing
and will continue in full force and effect subsequent to and notwithstanding the termination, expiration, setting aside, cancellation,
rescission, unenforceability or otherwise of this Agreement (including without limitation the Personal Guaranty of Franchisee’s
Principal Owners, Individual Non-Disclosure and Non- Competition Agreement, and Collateral Assignment of Leases). The provisions
of Section 25, below, will survive and will govern any claim for rescission or otherwise and will apply to and govern any claim
against, or with respect to, the Global Advertising Fund.

 

23.5         Calculation
of Days. Except where this Agreement expressly requires “business days” in any calculation of time, all references
to “days” shall mean “calendar days.”

 

23.6         Submission
of Agreement. Submission of this Agreement to Franchisee does not constitute an offer to enter into a contract. This Agreement
will become effective only on its execution by HOA and Franchisee, and will not be binding on HOA unless and until it is signed
by HOA’s authorized officer and delivered to Franchisee.

 

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23.7         Counterparts.
This Agreement may be executed in multiple counterparts, and each copy so executed shall be deemed an original.

 

23.8         Further
Assurances. Franchisee shall execute and deliver all documents and agreements that HOA may require in order to further the
intent of this Agreement, promptly on HOA’s request. Without limiting the foregoing, with respect to any power of attorney
granted by this Agreement which would be required to be in a specific form, translated into another language or executed in a particular
manner for it to be binding and enforceable in any country, Franchisee agrees to execute, or to cause its affiliates to execute,
in the required form and manner a separate power of attorney meeting all such legal requirements to ensure enforceability.

 

23.9         Language.
This Agreement is entered into in the English language. If a translation of this Agreement into any other language is required
or desired for any reason, it is understood that in all matters involving interpretations of this Agreement, the English text shall
control. If a translation is required, Franchisee will prepare the translation at its cost, provided that HOA retains the right
to approve such translation.

 

24.         FORCE
MAJEURE

 

24.1         Except
for: (i) the covenants and obligations of the Franchisee set forth in Section 1 of this Agreement; and (ii) monetary obligations
under this Agreement, and (iii) except as otherwise specifically provided in this Agreement, if either party to this Agreement
shall be delayed or hindered in or prevented from the performance of any act required under this Agreement by reason of strikes,
lock- outs, labor troubles, inability to procure materials, failure of power, war, acts of terror, riots, insurrection, or other
causes beyond the reasonable control of the party required to perform such work or act under the terms of this Agreement not the
fault of such party (a “Force Majeure”), then performance of such act shall be excused during the period of
such Force Majeure. The party whose performance is affected by a Force Majeure shall give prompt, written notice to the other party
of such Force Majeure. If there shall be a Force Majeure that HOA deems economically harmful or otherwise detrimental to HOA or
the Hooters System, then HOA shall be entitled to terminate this Agreement on ninety (90) days’ written notice to Franchisee;
provided, however, that HOA may withdraw such notice if, within such ninety (90) day period, HOA determines that the economically
harmful or otherwise detrimental effects have ceased.

 

25.         APPLICABLE
LAW; DISPUTE RESOLUTION

 

25.1         Notice
of Dispute. Franchisee shall give HOA advance written notice of Franchisee’s intent to institute legal action against
HOA, stating with specificity the basis for such proposed action, and shall grant HOA thirty (30) days from HOA’s receipt
of such notice to cure the alleged act on which such legal action is to be based.

 

25.2         Governing
Law. All matters related to this Agreement, including without limitation all matters related to the making, existence, construction,
enforcement, and sufficiency of performance of this Agreement, shall be determined exclusively in accordance with, and governed
exclusively by, the laws of the state where HOA’s principal business office is located (applicable to agreements made and
to be entirely performed in the state where HOA’s principal business office is located), currently the State of Georgia (USA),
which laws shall prevail in the event of any conflict of laws.

 

 

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25.3         Arbitration.

 

25.3.1           In
the event of any dispute arising out of or in connection with this Agreement, including its validity or a breach thereof (each
a “Dispute”), the parties shall use their best efforts to settle the Dispute by consulting and negotiating with
each other in good faith to attempt to reach a satisfactory solution. If they do not reach a solution within thirty (30) days of
the written notice of the existence of a Dispute, then, upon written notice by any party to the other, any such Disputes shall
be finally settled under the Rules of Arbitration of the International Centre for Dispute Resolution (“ICDR”)
by (a) one arbitrator if the amount of claim is US$5 million or less, or (b) three (3) arbitrators if the amount of claim is more
than US$5 million.

 

25.3.2           If
there is one arbitrator, such shall be appointed by the ICDR. If there are three arbitrators, each party shall appoint one (1)
arbitrator. If a party fails to appoint an arbitrator within (30) thirty days of the commencement of the arbitration, such appointment
shall be made by the ICDR. The two arbitrators so appointed shall appoint the third arbitrator, who shall be the chairman of the
tribunal. If the two arbitrators fail to appoint the third arbitrator within (30) days of the appointment of the second of the
arbitrators, the appointment of the third arbitrator shall be made by the ICDR.

 

25.3.3           For
purposes of appointing arbitrators, Franchisee and all Principal Owners shall be considered to be the same party and shall together
have the right to appoint only one arbitrator. All arbitrators must be fluent in English and at least one arbitrator must be a
lawyer licensed to practice in a state of the United States of America.

 

25.3.4           The
place of the arbitration shall be Atlanta, GA (USA), and the language of the arbitration shall be English.

 

25.3.5           15.3.5
Subject to the limitations set forth in Section 25.4, the arbitrators shall have the power to grant any remedy or relief that they
deem appropriate, including injunctive relief, whether interim or final, and any provisional measures ordered by the arbitrators
may be specifically enforced by any court of competent jurisdiction. The arbitrators are not empowered, however, to act ex aequo
et bono or as amiable compositeurs. HOA retains the right to seek interim measures from a judicial authority or other governmental
authority, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.

 

25.3.6           The
arbitrators may award to the prevailing party, if any, as determined by the arbitrators, its costs and expenses, including attorneys’
fees. Judgment upon any award rendered by the arbitrators may be entered in and enforced by any court of competent jurisdiction.

 

25.3.7           No
information concerning an arbitration, beyond the names of the parties and the relief requested, may be unilaterally disclosed
to a third party by any party unless required by applicable law. Any documentary or other evidence given by a party or witness
in the arbitration shall be treated as confidential by any party whose access to such evidence arises exclusively as a result of
its participation in the arbitration, and shall not be disclosed to any third party (other than a witness or expert), except as
may be required by applicable law.

 

25.3.8           An
arbitral tribunal constituted under this Agreement may, unless consolidation would prejudice the rights of any party, consolidate
an arbitration hereunder with an arbitration under any development agreement and franchise agreement between HOA (or its affiliate)
and Franchisee (or its affiliate) if the arbitration proceedings raise common questions of law or fact. If two or more arbitral
tribunals under these agreements issue consolidation orders, the order issued first shall prevail.

 

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25.4         Waiver
of Punitive Damages. HOA and Franchisee hereby waive any right to or claim for punitive, exemplary, consequential, multiplied,
enhanced, or speculative damages.

 

25.5         Liquidated
Damages. In the event Franchisee, directly or indirectly, commits any breach of Section 8 or 16.4 of this Agreement, then in
addition to and not in lieu of HOA’s right to terminate under Section 14 hereof, Franchisee shall pay HOA the sum of Five
Hundred Thousand U.S. dollars (US$500,000) for each breach of the duties set forth therein. In the event the breach occurs with
respect to one or more Competitive Businesses, each such Competitive Business shall constitute a separate breach, obligating Franchisee
to pay HOA the sum of Five Hundred Thousand U.S. dollars (US$500,000) for each such Competitive Business. In the event a Competitive
Business consists of multiple units, outlets or locations, each such unit, outlet or location shall constitute a separate Competitive
Business. Franchisee acknowledges that the damages HOA will incur as a result of any breach of Section 8 or 16.4 are difficult
to ascertain and that the foregoing is a reasonable estimate of these damages and not a penalty or forfeiture of any kind.

 

25.6         No
Limitation. No right or remedy conferred on or reserved to HOA or Franchisee by this Agreement is intended to be, nor shall
be deemed, exclusive of any other right or remedy set forth in this Agreement or by law provided or permitted, but each shall be
cumulative of every other right or remedy.

 

25.7         Costs
of Enforcement. If HOA files a claim in a judicial or arbitration proceeding for amounts Franchisee or any of its affiliates
owes HOA or any of its affiliates, or if HOA seeks to enforce this Agreement in a judicial or arbitration proceeding, Franchisee
agrees to reimburse HOA for all of its costs and expenses incurred from Franchisee’s failure to comply with this Agreement,
including reasonable accounting, paralegal, expert witness and attorneys’ fees. If HOA is required to engage legal counsel
in connection with Franchisee’s failure to comply with this Agreement, Franchisee must reimburse HOA for any legal fees HOA
incurs.

 

26.         ACKNOWLEDGMENTS

 

26.1         Reasonable
Business Judgment. HOA acknowledges and agrees that it will, and Franchisee acknowledges and agrees that HOA may, use Reasonable
Business Judgment in the exercise of HOA’s rights, discharge of its obligations, and exercise of its discretion, and in all
circumstances where HOA is required to give its consent, unless this Agreement expressly provides some other standard. “Reasonable
Business Judgment” shall mean that HOA’s determinations or choices will prevail, even if other alternatives are
also reasonable or arguably preferable, if HOA intends to benefit, or is acting in a way that could benefit, the Hooters System
(by, for example, enhancing the value of the Proprietary Marks, increasing franchisee or guest satisfaction, or increasing HOA’s
financial strength). Franchisee agrees to this concept of Reasonable Business Judgment in acknowledgment of the fact that HOA should
have at least as much discretion in administering the Hooters System as a corporate board of directors has in directing a corporation
and because the long-term interests of the Hooters System, all franchisees and owners of franchised businesses in the Hooters System,
and HOA and its owners, taken together, require that HOA have the latitude to exercise Reasonable Business Judgment. HOA shall
not be required to consider a Franchisee’s particular economic or other circumstances or to slight HOA’s own economic
or other business interests when HOA exercises its Reasonable Business Judgment. Franchisee acknowledges and agrees that: (i) HOA
has a legitimate interest in seeking to maximize the return to its equityholders; and (ii) the fact that HOA or its affiliates
benefit economically from an action will not be relevant to showing that HOA did not exercise Reasonable Business Judgment. Neither
Franchisee nor any third party (including without limitation any third party acting as a trier of fact or law) shall substitute
Franchisee’s, his, her, or its judgment for HOA’s Reasonable Business Judgment. In a given situation, Franchisee shall
have the burden of establishing, by clear and convincing proof, that HOA failed to exercise Reasonable Business Judgment.

 

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26.2         Nature
of Obligations.

 

26.2.1           Franchisee
acknowledges and agrees that: (i) all obligations HOA owes under this Agreement HOA owes to Franchisee alone; and (ii) no other
person or entity, including without limitation Franchisee’s affiliates, and Franchisee’s and such affiliates’
directors, officers, shareholders, partners, members, employees, and agents, and the predecessors, successors, heirs, and assigns
of any of them, shall be entitled to rely on, enforce, or obtain relief for breach of, any of HOA’s obligations arising out
of or related to this Agreement, whether directly, indirectly, by subrogation, as an intended third-party beneficiary, or otherwise.

 

26.2.2           Franchisee
acknowledges and agrees that: (i) all obligations of HOA under this Agreement are owed by HOA alone; and (ii) no other person or
entity, including without limitation HOA’s officers, members, employees, and agents, and HOA’s affiliates and their
directors, officers, shareholders, partners, members, employees, and agents, and the predecessors, successors, heirs, and assigns
of any of them, shall be subject to liability under this Agreement.

 

26.3         Business
Risks. Franchisee acknowledges and agrees that: (i) it has conducted an independent investigation of the business contemplated
by this Agreement; (ii) it understands that such business involves business risks; and (iii) it understands that making a success
of Franchisee’s Restaurant depends largely on Franchisee’s business skill, effort, and business acumen.

 

26.4         Review
of Documents. Franchisee acknowledges and agrees that: (i) HOA’s review of any lease, loan agreement, purchase agreement,
sale agreement, assignment, transfer agreement, site plan, or other agreement or document Franchisee proposes to enter into or
provides is intended solely to ensure that HOA’s interests are adequately protected; (ii) HOA is not undertaking any such
review on Franchisee’s behalf or for Franchisee’s benefit; (iii) HOA’s review will not replace review by Franchisee’s
accountant, attorney, architect, and other business and professional advisors; and (iv) HOA will have no responsibility or liability
related to such review.

 

26.5         Variances.
Franchisee acknowledges and agrees that: (i) HOA may from time to time approve exceptions or changes to the standards and specifications
of the Hooters System (including, without limitation, the amount and payment terms of any fee) that HOA deems necessary or desirable
under particular circumstances (the “Variances”); (ii) Franchisee will have no right to require HOA to disclose
any Variances to Franchisee or to grant Franchisee the same or similar Variances; and (iii) other franchisees, whether existing
now or in the future, will operate under different forms of agreements, and that as a result their rights and obligations may differ
materially from Franchisee’s rights and obligations.

 

26.6         No
Unauthorized Representations or Commitments. Franchisee acknowledges and agrees that: (i) HOA does not permit any agreements
or commitments, and does not approve any changes in this Agreement, except by means of a written amendment signed by the parties
to this Agreement; and (ii) if any representations or commitments, or any promises of changes in this Agreement, have been made
to Franchisee that are not in an amendment signed by HOA’s authorized officer and delivered to Franchisee, such representations,
commitments, and promises will not be enforceable.

 

26.7         Employees.
Under no circumstances shall Franchisee’s managerial personnel or other employees be deemed to be employees of HOA. Franchisee
acknowledges that it is the sole employer of the employees in Franchisee’s Restaurant and is solely responsible for the labor
relations and employment practices in Franchisee’s Restaurant. Franchisee agrees to indemnify and hold HOA harmless from
any and all liability, including costs, attorneys’ fees or other damages which result directly or indirectly from Franchisee’s
employees or independent contractors.

 

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26.8         Receipt.
Franchisee hereby represents and warrants that it received from HOA, more than ten (10) days prior to the Effective Date, the HOA
Offering Circular for the Federative Republic of Brazil with respect to the Hooters System, and that Franchisee fully analyzed
and understood such Offering Circular.

 

26.9         Special
Stipulations. Set forth on  Exhibit C attached hereto are special stipulations that are
made a part hereof by reference, In the event such stipulations conflict with any of the foregoing provisions, the special stipulations
shall control.

 

26.10         Travel
Restrictions. Notwithstanding anything to the contrary contained in this Agreement or the Manuals, any obligation HOA may have
to provide training or assistance that involves personnel traveling to the Country is subject to HOA’s determination, in
its sole discretion and based on such information as HOA deems appropriate, including U.S. State Department travel advisories,
that it is safe to travel to the proposed destination.

 

26.11         Delegation
of HOA’s Duties. Franchisee acknowledges and agrees that any designee, affiliate, employee, regional/branch offices,
contractor or agent of HOA’s may perform any duty or obligation imposed on HOA by this Agreement, as HOA may designate.

 

27.         REGISTRATION
OF AGREEMENT

 

27.1         Promptly
following the execution of this Agreement by both parties, but in no event more than fifteen (15) days after such execution, Franchisee
shall submit this Agreement for registration with INPI and the Central Bank of Brazil. The expenses related to such registrations
shall be borne by Franchisee.

 

27.2         Franchisee
shall immediately inform HOA upon issuance of the registration certificate of the Agreement by INPI and shall, immediately after
such issuance, make any payments due hereunder to HOA as set forth herein.

 

[SIGNATURES
CONTAINED ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties
hereto have duly executed and delivered this Agreement as of the Effective Date set forth above.

 

	Witnesses:	 	Date and Place:	 
	1.	 	 	 	 	 	 
	Name:	 	 	HOOTERS OF AMERICA, LLC
	ID No.	 	 	 	 	 
	 	 	 	 	 	 	 
	2.	 	 	 	By:	 	 
	Name:	 	 	Name:  Terry Marks, CEO
	ID No.	 	 	ID No.:	 	 

 

	STATE OF _________	§	 
	 	 	 
	COUNTY OF _________	§	 

 

BEFORE ME, the undersigned authority, personally
appeared ___________________, known to be to be the person whose name is subscribed to the foregoing instrument, and swore and
acknowledged that he/she executed the same for the purposes and consideration herein expressed and that he is an authorized representative
of HOOTERS OF AMERICA, LLC, and is authorized to execute this Agreement on its behalf.

 

TO CERTIFY WHICH WITNESS MY HAND AND SEAL OF OFFICE
on this ______ day of ______________, 20 ___.

 

	 	 	 
	 	 	Notary Public
	 	 	 
	My Commission Expires:	 	 
	 	 	 
	 	 	 

 

    	 

    	 

    

 

	Witnesses:	 	Date and Place:	 
	1.	 	 	 	 	 	 
	Name:	 	 	FRANCHISEE:
	ID No.	 	 	 	 	 
	 	 	 	 	 	 	 
	2.	 	 	 	By:	 	 
	Name:	 	 	Name:
	ID No.	 	 	ID No.:	 	 

 

[SIGNATURE OF FRANCHISEE TO BE NOTARIZED BEFORE BRAZILIAN
NOTARY PUBLIC]

 

    	 

    	 

    

 

With the consent and approval of HI LIMITED PARTNERSHIP,
the owner of the Proprietary Marks.

 

	Witnesses:	 	Date and Place: 	 
	1.	 	 	 	 	 	 
	Name:	 	 	HI LIMITED PARTNERSHIP
	ID No.	 	 	 	 	 
	 	 	 	 	 	 	 

	2.	 	 	 	By:	 	 
	Name:	 	 	Name:  	 
	ID No.	 	 	ID No.:	 	 

 

 

	STATE OF _________	§	 
	 	 	 
	COUNTY OF _________	§	 

 

BEFORE ME, the undersigned authority, personally
appeared __________________, known to be to be the person whose name is subscribed to the foregoing instrument, and swore and acknowledged
that he/she executed the same for the purposes and consideration herein expressed and that he is an authorized representative of
HOOTERS OF AMERICA, LLC, and is authorized to execute this Agreement on its behalf.

 

TO CERTIFY WHICH WITNESS MY HAND AND SEAL
OF OFFICE on this _______ day of __________________, 20__.

 

	 	 	 
	 	 	Notary Public
	 	 	 
	My Commission Expires:Exhibit 10.17

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”),
dated as of December 14, 2012, by and between FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation, with headquarters
located at 709 South Harbor City Boulevard - Suite 250, Melbourne, FL 32901 (the “Company”), and ASHER ENTERPRISES,
INC., a Delaware corporation, with its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the “Buyer”).

 

WHEREAS:

 

A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the
United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933
Act”);

 

B. Buyer desires to purchase and the Company desires to issue
and sell, upon the terms and conditions set forth in this Agreement an 8% convertible note of the Company, in the form attached
hereto as Exhibit A, in the aggregate principal amount of $203,500.00 (together with any note(s) issued in replacement thereof
or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible
into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject
to the limitations and conditions set forth in such Note.

 

C. The Buyer wishes to purchase, upon the terms and conditions
stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto;
and

 

NOW THEREFORE, the Company and the Buyer severally (and
not jointly) hereby agree as follows:

 

1. Purchase and Sale of Note.

 

a. Purchase of Note. On the Closing Date (as defined below),
the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the Company such principal amount of Note as
is set forth immediately below the Buyer’s name on the signature pages hereto.

 

b. Form of Payment. On the Closing Date (as defined below),
(i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined below) (the “Purchase
Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring
instructions, against delivery of the Note in the principal amount equal to the Purchase Price as is set forth immediately below
the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the
Company, to the Buyer, against delivery of such Purchase Price. 2

 

c. Closing Date. Subject to the satisfaction (or written waiver)
of the conditions thereto set forth in Section 6 and Section 7 below, the date and time of the issuance and sale of the Note pursuant
to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about December 18, 2012, or
such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2. Buyer’s Representations and Warranties. The Buyer represents
and warrants to the Company that:

 

a. Investment Purpose. As of the date hereof, the Buyer is purchasing
the Note and the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation,
such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note, (ii) as a result of the
events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined
in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion
Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act;
provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

    	 

    	 

    

 

b. Accredited Investor Status. The Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D promulgated under (an “Accredited Investor”).

 

c. Reliance on Exemptions. The Buyer understands that the Securities
are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with,
the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

d. Information. The Buyer and its advisors, if any, have been,
and for so long as the Note remain outstanding will continue to be, furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer
or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue to
be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the
Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public
prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted
by Buyer or any of its advisors or representatives shall modify, amend or 3

 

affect Buyer’s right to rely on the Company’s representations
and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant
degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's representations and warranties
made herein.

 

e. Governmental Review. The Buyer understands that no United
States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement
of the Securities.

 

f. Transfer or Re-sale. The Buyer understands that (i) the sale
or re-sale of the Securities has not been and is not being registered under the 1933 Act or any applicable state securities laws,
and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under
the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be
in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to
be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted
by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144,
or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”),
and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any
sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if
said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

 

g. Legends. The Buyer understands that the Note and, until such
time as the Conversion Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without
any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares
may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of
the certificates for such Securities):

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE 4

 

    	 

    	 

    

 

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 Company
shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required
by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under
the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b) such holder provides the Company with 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 Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so
that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that
the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to
an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant
to Section 3.2 of the Note.

 

h. Authorization; Enforcement. This Agreement has been duly
and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes
a valid and binding agreement of the Buyer enforceable in accordance with its terms.

 

i. Residency. The Buyer is a resident of the jurisdiction set
forth immediately below the Buyer’s name on the signature pages hereto.

 

3. Representations and Warranties of the Company. The Company
represents and warrants to the Buyer that:5

 

a. Organization and Qualification. The Company and each of its
Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate
its properties and to carry on its business as and where now owned, leased, used, operated and conducted. Schedule 3(a) sets forth
a list of all of the Subsidiaries of the Company and the jurisdiction in which each is incorporated. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the
failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect”
means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries,
if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in
connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated,
in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b. Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated
hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery
of this Agreement, the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon
conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization
of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered
by the Company by its authorized representative, and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and
(iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute,
a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

 

    	 

    	 

    

 

c. Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of: (i) 100,000,000 shares of Common Stock, $0.001 par value per share, of which 12,706,795 shares
are issued and outstanding; and (ii) 1,000,000 shares of Preferred Stock, $0.01 par value per share, of which no shares are issued
and outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved
for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common
Stock and 585,000 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock
are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances
imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, 6

 

agreements, understandings, claims or other commitments or rights
of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock
of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound
to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) other than 500,000 shares set aside
for employee stock option plans; and (iii) there are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the
Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate
of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as
in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common
Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with
a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing
Date.

 

d. Issuance of Shares. The Conversion Shares are duly authorized
and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not
be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon
the holder thereof.

 

e. Acknowledgment of Dilution. The Company understands and acknowledges
the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The
Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this
Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

 

f. No Conflicts. The execution, delivery and performance of
this Agreement, the Note by the Company and the consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with
or result in a violation of any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture,
patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations
of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate
of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries 7

 

    	 

    	 

    

 

is in default (and no event has occurred which with notice
or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party
or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults
as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries,
if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any
law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required
under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self regulatory organization
or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement,
the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and
to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.
The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”) and
does not reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

g. SEC Documents; Financial Statements. The Company has timely
filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior
to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits
to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”).
Upon written request the Company will deliver to the Buyer true and complete copies of the SEC Documents, except for such exhibits
and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to
be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior
the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial
position of the Company and its 8

 

consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent
to September 30, 2012, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in
the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting
requirements of the 1934 Act.

 

h. Absence of Certain Changes. Since September 30, 2012, there
has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations,
financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

    	 

    	 

    

 

i. Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries,
or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete
list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the
Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries
owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how,
trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual
Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated
in the future); there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge
threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to
enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of
the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes
do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of their Intellectual Property.

 

k. No Materially Adverse Contracts, Etc. Neither the Company
nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule
or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse
Effect. Neither the Company nor any of 9

 

its Subsidiaries is a party to any contract or agreement which
in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

 

l. Tax Status. The Company and each of its Subsidiaries has
made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

 

m. Certain Transactions. Except for arm’s length transactions
pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable
than the Company or any of its Subsidiaries could obtain from third parties and other than the grant of stock options disclosed
on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.

 

n. Disclosure. All information relating to or concerning the
Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise
in connection with the transactions contemplated hereby is true and correct in all material respects and the Company has not omitted
to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed
(assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration
statement filed by the Company under the 1933 Act).

 

    	 

    	 

    

 

o. Acknowledgment Regarding Buyer’ Purchase of Securities.
The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length 10

 

purchasers with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by
the Buyer or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated
hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further
represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent
evaluation of the Company and its representatives.

 

p. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or
solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance
of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the
Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company
or its securities.

 

q. No Brokers. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the
transactions contemplated hereby.

 

r. Permits; Compliance. The Company and each of its Subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted
(collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened
regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict
with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Since September 30, 2012, neither the
Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations
would not have a Material Adverse Effect.

 

s. Environmental Matters.

 

(i) There are, to the Company’s knowledge, with respect
to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws
(as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents,
or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the
Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or,
to the 11

 

Company’s knowledge, threatened in connection with any
of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution
or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

    	 

    	 

    

 

(ii) Other than those that are or were stored, used or disposed
of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased
or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously
owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

 

(iii) There are no underground storage tanks on or under any
real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

 

t. Title to Property. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them
which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3(t) or such as would not have a Material Adverse Effect. Any real property and
facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as would not have a Material Adverse Effect.

 

u. Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company
nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies
of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial
general liability coverage.

 

v. Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors,
to provide reasonable assurance that (i) transactions are executed 12

 

in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

w. Foreign Corrupt Practices. Neither the Company, nor any of
its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary
has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

 

x. Solvency. The Company (after giving effect to the transactions
contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its
probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that
would lead it to reasonably conclude that the Company would not, after giving effect to the transaction contemplated by this Agreement,
have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred
in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to
its most recent fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate
or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

 

    	 

    	 

    

 

y. No Investment Company. The Company is not, and upon the issuance
and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered
under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment
Company.

 

z. Breach of Representations and Warranties by the Company.
If the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an Event of default under Section 3.4 of the Note.

 

4. COVENANTS.

 

a. Best Efforts. The parties shall use their best efforts to
satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.

 

b. Form D; Blue Sky Laws. The Company agrees to file a Form
D with respect to the Securities as required under Regulation D and to provide a copy thereof to the 13

 

Buyer promptly after such filing. The Company shall, on or before
the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to
the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the
states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action
so taken to the Buyer on or prior to the Closing Date.

 

c. Use of Proceeds. The Company shall use the proceeds for general
working capital purposes.

 

d. Right of First Refusal. Unless it shall have first delivered
to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice
describing the proposed Future Offering, including the terms and conditions thereof and proposed definitive documentation to be
entered into in connection therewith, and providing the Buyer an option during the seventy two (72) hour period following delivery
of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future
Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right
of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including
debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve
(12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any
respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice
to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an
option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities
being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply
to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply
to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous
offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger, consolidation
or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to
raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company. The
Right of First Refusal also shall not apply to the issuance of securities upon exercise or conversion of the Company’s options,
warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or
the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of
the Company.

 

e. Expenses. At the Closing, the Company shall reimburse Buyer
for expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement
and the other agreements to be executed in connection herewith (“Documents”), including, without limitation, reasonable
attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating
to any amendments or modifications of the Documents or any consents or waivers of provisions in the 14

 

    	 

    	 

    

 

Documents, fees for the preparation of opinions of counsel,
escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these
fees directly, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately
upon written notice by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this
transaction is to reimburse Buyer’ expenses shall be $3,500.

 

f. Financial Information. Upon written request the Company agrees
to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities:
(i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly Reports on Form
10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases issued by the Company
or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company,
copies of any notices or other information the Company makes available or gives to such shareholders.

 

g. [INTENTIONALLY DELETED]

 

h. Listing. The Company shall promptly secure the listing of
the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable
upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing
and trading of its Common Stock on the OTCBB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”),
the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the American Stock
Exchange (“AMEX”) and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable.
The Company shall promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or quotation
systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges
and quotation systems.

 

i. Corporate Existence. So long as the Buyer beneficially owns
any Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s
assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where
the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements
and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for
trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

 

j. No Integration. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered
or sold hereunder under the 1933 Act or cause the offering of the 15

 

Securities to be integrated with any other offering of securities
by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

 

k. Breach of Covenants. If the Company breaches any of the covenants
set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an event of default under Section 3.4 of the Note.

 

l. Failure to Comply with the 1934 Act. So long as the Buyer
beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue
to be subject to the reporting requirements of the 1934 Act.

 

m. Trading Activities. Neither the Buyer nor its affiliates
has an open short position in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its
affiliates not to, engage in any short sales of or hedging transactions with respect to the common stock of the Company.

 

    	 

    	 

    

 

5. Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion
Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with
the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Borrower proposes to replace
its transfer agent, the Borrower shall 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. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares 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, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants
that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop transfer
instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion
Shares under the 1933 Act or the date on which the Conversion Shares 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), will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder
its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion Shares to
be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement;
and (iii) it will not fail 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 Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the
Note and this 16

 

Agreement. Nothing in this Section shall affect in any way the
Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements,
if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Buyer, with (i) an opinion of counsel
in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of
such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.

 

6. Conditions to the Company’s Obligation to Sell. The
obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion:

 

a. The Buyer shall have executed this Agreement and delivered
the same to the Company.

 

b. The Buyer shall have delivered the Purchase Price in accordance
with Section 1(b) above.

 

c. The representations and warranties of the Buyer shall be
true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or
complied with by the Buyer at or prior to the Closing Date.

 

    	 

    	 

    

 

d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority
of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits
the consummation of any of the transactions contemplated by this Agreement.

 

7. Conditions to The Buyer’s Obligation to Purchase. The
obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction, at or before the 17

 

Closing Date of each of the following conditions, provided that
these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

a. The Company shall have executed this Agreement and delivered
the same to the Buyer.

 

b. The Company shall have delivered to the Buyer the duly executed
Note (in such denominations as the Buyer shall request) in accordance with Section 1(b) above.

 

c. The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered to and acknowledged in writing by the
Company’s Transfer Agent.

 

d. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except
for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed
by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Certificate
of Incorporation, By-laws and Board of Directors’ resolutions relating to the transactions contemplated hereby.

 

e. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority
of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits
the consummation of any of the transactions contemplated by this Agreement.

 

f. No event shall have occurred which could reasonably be expected
to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the
Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

 

g. The Conversion Shares shall have been authorized for quotation
on the OTCBB and trading in the Common Stock on the OTCBB shall not have been suspended by the SEC or the OTCBB.

 

h. The Buyer shall have received an officer’s certificate
described in Section 3(c) above, dated as of the Closing Date.18

 

8. Governing Law; Miscellaneous.

 

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

 

    	 

    	 

    

 

b. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party.

 

c. Headings. The headings of this Agreement are for convenience
of reference only and shall not form part of, or affect the interpretation of, this Agreement.

 

d. Severability. In the event that any provision of this Agreement
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 provision hereof
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in
writing signed by the majority in interest of the Buyer.19

 

f. 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 Company, to:

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

 

709 South Harbor City Boulevard - Suite 250

 

Melbourne, FL 32901

 

Attn: CHRISTIAN CHARLES ROMANDETTI, President/Chief Executive
Officer

 

facsimile: [enter fax number]

 

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

 

Sichenzia Ross Friedman Ference LLP

 

Attn: Andrea Cataneo, Esq.

 

61 Broadway, 32nd Floor New York, NY 10006

 

    	 

    	 

    

 

facsimile: 212-930-9725

 

If to the Buyer:

 

ASHER ENTERPRISES, INC.

 

1 Linden Pl., Suite 207

 

Great Neck, NY. 11021

 

Attn: Curt Kramer, President

 

facsimile: 516-498-9894

 

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

 

Naidich Wurman Birnbaum & Maday LLP

 

80 Cuttermill Road, Suite 410

 

Great Neck, NY 11021

 

Attn: Bernard S. Feldman, Esq.

 

facsimile: 516-466-3555

 

Each party shall provide notice to the other party of any change
in address.20

 

g. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement
or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to
Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the
Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

 

h. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may
any provision hereof be enforced by, any other person.

 

i. Survival. The representations and warranties of the Company
and the agreements and covenants set forth in this Agreement shall survive the closing hereunder notwithstanding any due diligence
investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer and all their
officers, directors, employees and agents for loss or damage arising as a result of or related to any breach or alleged breach
by the Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and
obligations under this Agreement, including advancement of expenses as they are incurred.

 

j. Publicity. The Company, and the Buyer shall have the right
to review a reasonable period of time before issuance of any press releases, SEC, OTCBB or FINRA filings, or any other public statements
with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or SEC, OTCBB (or other applicable trading market) or FINRA filings with respect
to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in
connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity
to comment thereon).

 

k. Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

l. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will
be applied against any party.

 

    	 

    	 

    

 

m. Remedies. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will
be inadequate and agrees, 21

 

in the event of a breach or threatened breach by the Company
of the provisions of this Agreement, that the Buyer 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 Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic
loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, the undersigned Buyer and the Company have
caused this Agreement to be duly executed as of the date first above written.

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC. 

 

By:/s/ CHRISTIAN CHARLES ROMANDETTI

 

CHRISTIAN CHARLES ROMANDETTI

 

President/Chief Executive Officer

 

ASHER ENTERPRISES, INC. 

 

By:/s/ Curt Kramer

 

Name: Curt Kramer

 

Title: President

 

1 Linden Pl., Suite 207

 

Great Neck, NY. 11021

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

Aggregate Principal Amount of Note: $203,500.00

 

Aggregate Purchase Price: $203,500.00

 

    	 

    	 

    

 

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: $203,500.00                                                                                                                             Issue Date: December 14,
2012 

 

Purchase Price: $203,500.00 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, FIRST CHOICE HEALTHCARE SOLUTIONS,
INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of ASHER
ENTERPRISES, INC., a Delaware corporation, or registered assigns (the “Holder”) the sum of $203,500.00 together
with any interest as set forth herein, on September 18, 2013 (the “Maturity Date”), and to pay interest on the unpaid
principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the
“Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or
otherwise. This Note 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 twenty two percent (22%) per annum from
the due date thereof until the same is paid (“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, $0.001 par value per share (the “Common Stock”) in accordance
with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address
as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than
a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed. Each capitalized term used herein, and not otherwise 2

 

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 from time
to time, and at any time during the period beginning on the date which is one hundred eighty (180) days 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 (the “Conversion Price”) determined
as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any
portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of
the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number
of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the issued and
outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall
be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that
the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior
notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later
date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of
Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to
the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion
Amount” means, with 3

 

    	 

    	 

    

 

respect to any conversion of this Note, the sum of (1) the principal
amount of this Note to be converted in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any,
on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Holder’s option,
Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s
option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

1.2 Conversion Price.

 

(a) Calculation of Conversion Price. The conversion price (the
“Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments
for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities
of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).
The "Variable Conversion Price" shall mean 61% multiplied by the Market Price (as defined herein) (representing a discount
rate of 39%). “Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common
Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable
trading market (the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder (i.e. Bloomberg) or, if the OTCBB 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 OTCBB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.

 

(b) Conversion Price During Major Announcements. Notwithstanding
anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends
to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation
and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person,
group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common
Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to
as the “Announcement Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through
the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would
have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in
effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be 4

 

    	 

    	 

    

 

determined as set forth in this Section 1.2(a). For purposes
hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender
offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon
which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates
or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused
this Section 1.2(b) to become operative.

 

1.3 Authorized Shares. The Borrower covenants that during the
period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number
of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued
pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved 3.75 times the number
of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from
time to time)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the
Borrower’s obligations pursuant to to the provisions of the Note. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make
any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible
at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall
be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding
Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common
Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to
its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower does not maintain the Reserved
Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

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 from time to time after 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 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office
of the Borrower.

 

(b) Surrender of Note Upon Conversion. Notwithstanding anything
to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required
to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder
and the Borrower shall 5

 

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

 

    	 

    	 

    

 

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

 

(d) Delivery of Common Stock Upon Conversion. Upon receipt by
the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of
Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause
to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within
five (5) 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..

 

(e) 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 6

 

obligation to the Borrower, and irrespective of any other circumstance
which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date
specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower
before 6:00 p.m., New York, New York time, on such date.

 

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

 

(g) Failure to Deliver Common Stock Prior to Deadline. Without
in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties
agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a
failure due to the circumstances described in Section 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. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at
the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued),
shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms
of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note.
The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt
to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge
that the liquidated damages provision contained in this Section 1.4(g) are justified

 

    	 

    	 

    

 

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 7

 

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 accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon
conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under
the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold. In the event that the Company does not accept 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. 8

 

    	 

    	 

    

 

“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, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable
expenses or commissions or 9

 

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 10

 

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 Trading Market Limitations. Unless permitted by the applicable
rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall
the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement
more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United
States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99%
of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from
time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common
Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions
under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization
with jurisdiction over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in
excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default
under Section 3.3 of the Note.

 

    	 

    	 

    

 

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 tenth (10th) business day
after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the
Holder otherwise elects to retain its status as a holder 11

 

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, at any time during the period beginning on the Issue Date and ending on the date which is thirty (30) 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 (principal and accrued interest), in full, in accordance with this Section
1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note
at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date
of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date
fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount
(as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business
day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment
to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to 115%, multiplied by the sum of: (w)
the then outstanding principal amount of this Note plus (x) Default Interest, if any, on the amounts referred to in clauses (w)
and (x) plus (y) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following
the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

Notwithstanding anything to the contrary contained in this Note,
at any time during the period beginning on the date which is thirty-one (31) days following the issue date and ending on the date
which is sixty (60) 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 (principal and accrued interest), in full, in
accordance with this Section 1.9. Any 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 Optional Prepayment Date,
the Borrower shall make payment of the Second Optional Prepayment Amount (as defined below) to or upon the order of the Holder
as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Second
Optional Prepayment Amount”) equal to 120%, multiplied by the sum of: (w) the then 12 outstanding principal amount of this
Note plus (x) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (y) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Second
Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the
Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

    	 

    	 

    

 

Notwithstanding anything to the contrary contained in this Note,
at any time during the period beginning on the date which is sixty-one (61) days following the issue date and ending on the date
which is ninety (90) 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 (principal and accrued interest), in full, in
accordance with this Section 1.9. Any 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 Optional Prepayment Date,
the Borrower shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as
specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Third
Optional Prepayment Amount”) equal to 123%, multiplied by the sum of: (w) the then outstanding principal amount of this Note
plus (x) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (y) any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment
Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to prepay the Note pursuant to this Section 1.9.

 

Notwithstanding any to the contrary stated elsewhere herein,
at any time during the period beginning on the date that is one ninety-one (91) day from the issue date and ending 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 (principal and accrued interest), in full, in accordance
with this Section 1.9. Any 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 Optional Prepayment Date, the Borrower
shall make payment of the Fourth Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Fourth Optional Prepayment
Amount”) equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) Default
Interest, if any, on the amounts referred to in clauses (w) and (x) plus (y) any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional 13

 

Prepayment Amount due to the Holder of the Note within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant
to this Section 1.9. .

 

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

 

ARTICLE II. CERTAIN COVENANTS

 

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

 

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

 

2.3 Borrowings. 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 or financial institutions incurred in the ordinary course
of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

 

    	 

    	 

    

 

2.4 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
14

 

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.

 

ARTICLE III. EVENTS OF DEFAULT

 

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

 

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

 

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

 

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

 

3.4 Breach of Representations and Warranties. Any representation
or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection
herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made
and the breach of 15

 

    	 

    	 

    

 

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 apply for or consent to the appointment of a receiver or trustee
for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

 

3.6 Judgments. Any money judgment, writ or similar process shall
be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than
$50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the
Holder, which consent will not be unreasonably withheld.

 

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

 

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

 

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

 

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

 

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

 

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

 

3.13 Financial Statement Restatement. The restatement of any
financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note
and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial
statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.16

 

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

 

3.15 Replacement of Transfer Agent. In the event that the Borrower
proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully
executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to 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.

 

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

 

    	 

    	 

    

 

Upon the occurrence and during the continuation of any Event
of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at
the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION
OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY
TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN);
MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely
with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment
Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable
through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence
of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest
thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower
shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the
sum of (w) the then outstanding principal amount of this Note plus (x) 17

 

accrued and unpaid interest on the unpaid principal amount of
this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then
outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall
collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid,
where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to
such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as
the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event
arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion
Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence
of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other
amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder
shall be entitled to exercise all other rights and remedies available at law or in equity.

 

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

 

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 18

 

    	 

    	 

    

 

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:

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

 

709 South Harbor City Boulevard - Suite 250

 

Melbourne, FL 32901

 

Attn: CHRISTIAN CHARLES ROMANDETTI

 

President/Chief Executive Officer

 

facsimile:

 

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

 

Sichenzia Ross Friedman Ference LLP

 

Attn: Andrea Cataneo, Esq.

 

61 Broadway, 32nd Floor New York, NY 10006

 

facsimile: 212-930-9725

 

If to the Holder:

 

ASHER ENTERPRISES, INC.

 

1 Linden Pl., Suite 207

 

Great Neck, NY. 11021

 

Attn: Curt Kramer, President

 

facsimile: 516-498-9894

 

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

 

Naidich Wurman Birnbaum & Maday, LLP

 

80 Cuttermill Road, Suite 410

 

Great Neck, NY 11021

 

Attn: Bernard S. Feldman, Esq.

 

facsimile: 516-466-3555

 

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. 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.19

 

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

 

4.6 Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either
party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of New
York or in the federal courts located in the state and county of Nassau. 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 Borrower and Holder waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note
or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

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 20

 

and other information sent to shareholders). In the event of
any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive
payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger,
consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive
any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale,
lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding
up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified
therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which
any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding
the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall
make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification
to the Holder in accordance with the terms of this Section 4.9.

 

    	 

    	 

    

 

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

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed
in its name by its duly authorized officer this December 14, 2012.

 

FIRST CHOICE HEALTHCARE SOLUTIONS, INC. 

 

By: /s/ CHRISTIAN CHARLES ROMANDETTI

 

CHRISTIAN CHARLES ROMANDETTI

 

President/Chief Executive Officer21

 

    	 

    	 

    

 

EXHIBIT A: NOTICE OF CONVERSION

 

The undersigned hereby elects to convert $_________________
principal amount of the Note (defined below) 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 FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation
(the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of December 14, 2012
(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
Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

 

Account Number:

 

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

 

ASHER ENTERPRISES, INC.

 

1 Linden Pl., Suite 207

 

Great Neck, NY. 11021

 

Attention: Certificate Delivery

 

(516) 498-9890

 

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: ______________

 

ASHER ENTERPRISES, INC.

 

By:_____________________________

 

Name: Curt Kramer

 

Title: President

 

Date: ______________

 

1 Linden Pl., Suite 207

 

Great Neck, NY. 11021

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