Document:

Exhibit 10.1 

SECURITIES
PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of December 10, 2014, by and between POCKET GAMES, INC.,
a Florida corporation, with headquarters located at 909 Plainview Avenue, Far Rockaway, Ny
11691 (the “Company”), and KBM WORLDWIDE, INC., a New York corporation,
with its address at 80 Cuttermill Road, Suite 410, 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 $33,000.00 (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, $0.0001 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. 

    	 

    	 

    

 

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 12, 2014, 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 (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

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conducted
by Buyer or any of its advisors or representatives shall modify, amend or 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): 

 

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“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 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 (as defined in the Note), 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:

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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) 499,000,000
authorized shares of Common Stock, $0.0001 par value per share, of which 15,540,000
shares are issued and outstanding; and (ii) 1,000 authorized shares of Series A shares
of Preferred Stock, $0.0001 par value per share, of which 1,000 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 and twp (2) prior convertible
promissory note(s) in favor of the Buyer: 

 

(i)Prior
convertible promissory note in favor of the Buyer dated October 6, 2014 in the amount
of $48,000.00 for which 7,000,000 shares of Common Stock are presently reserved; and

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(ii)Prior
convertible promissory note in favor of the Buyer dated November 7, 2014 in the amount
of $43,000.00 for which 7,000,000 shares of Common Stock are presently reserved;
and exercisable for, or convertible into or exchangeable for shares of Common Stock
and maintain present reserve of 14,000,000 shares for issuance upon conversion of
the Note as well as the two (2) prior notes referenced above. 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, greements,
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) there are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act 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

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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 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. If the Company is listed on the OTCBB,
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, as amended, of the SEC Documents, except for such exhibits
and

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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 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 July 31, 2014,
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 July 31, 2014, 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 

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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 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. 

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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 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

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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 July 31, 2014, 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 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

    	11

    	 

    

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 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, 

    	12

    	 

    

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. Unless the Company believes it is exempt, 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 Buyer
promptly after such filing. Unless the Company believes it is exempt, 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.[INTENTIONALLY
DELETED].

 

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 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 $3,000. 

    	13

    	 

    

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 or electronic quotation system (including but not limited to the
Pink Sheets electronic quotation system) 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 electronic quotation systems on which the
Common Stock is then traded 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 Pink Sheets, OTCQX, 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 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. 

    	14

    	 

    

 

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 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 

    	15

    	 

    

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 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.

    	16

    	 

    

 

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 or PinkSheets
and trading in the Common Stock on the OTCBB or PinkSheets 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.

 

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

    	17

    	 

    

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. 

 

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

    	18

    	 

    

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: 

 

POCKET GAMES,
INC. 

909 Plainview
Avenue

Far Rockaway,
Ny 11691 

Attn:
DAVID LOVATT, Chief Executive Officer facsimile: [enter fax number] 

 

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

 

[enter
name of law firm] 

Attn:
[attorney name] 

[enter
address line 1] 

[enter
city, state, zip] 

facsimile:
[enter fax number] 

 

If to the
Buyer: 

 

KBM WORLDWIDE,
INC. 

80
Cuttermill Road - Suite 410 Great Neck, NY 11021 

Attn:
Seth Kramer, President 

e-mail:
info@kwbmlaw.com 

 

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

 

Naidich
Wurman Birnbaum & Maday LLP 

Attn: Judah
A. Eisner, Esq. 

Attn:
Bernard S. Feldman, Esq. 

facsimile:
516-466-3555 

e-mail:
dyork@nwbmlaw.com 

 

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

 

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 

    	19

    	 

    

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, 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

    	20

    	 

    

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. 

POCKET
GAMES, INC. 

 

By:________________________________

DAVID
LOVATT 

Chief
Executive Officer 

 

KBM
WORLDWIDE, INC. 

 

By:
_________________________________ Name: Seth Kramer 

Title:
President 

80
Cuttermill Road - Suite 410 Great Neck, NY 11021 

AGGREGATE
SUBSCRIPTION AMOUNT: 

 

Aggregate
Principal Amount of Note:$33,000.00

Aggregate
Purchase Price:$33,000.00

 

 

 

 

 

    	21Exhibit 10.2

 

NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THATREGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE144A 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: $33,000.00	 	Issue Date: December 10, 2014
	Purchase Price: $33,000.00	 	 

 

CONVERTIBLE
PROMISSORY NOTE

FOR
VALUE RECEIVED, POCKET GAMES, INC., a Florida corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order of  KBM WORLDWIDE, INC.,
a New York corporation, or registered assigns (the “Holder”) the sum of $33,000.00
together with any interest as set forth herein, on September 12, 2015 (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, $0.0001 par value per share (the
“Common Stock”) in accordance with the terms hereof) shall be made in lawful
money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which
is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any
interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall
not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term
“business day” shall mean any day other than a Saturday, Sunday or a day on which
commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.
Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed
thereto 

    	 

    	 

    

in
that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the
“Purchase Agreement”). 

 

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

 

The
following terms shall apply to this Note: 

 

ARTICLE
I. CONVERSION
RIGHTS

 

1.1
 Conversion Right. The Holder shall
have the right 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 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 

    	2

    	 

    

“Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted
in such conversion plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount
at the interest rates provided in this Note to the Conversion Date, 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 58% multiplied by the Market Price (as defined
herein) (representing a discount rate of 42%). “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, Pink
Sheets electronic quotation system or applicable trading market (the “OTC”)
as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTC 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”. If the Trading Price cannot be calculated
for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading
Price is required in order to determine the Conversion Price of such Notes. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period
on the OTC, 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 

    	3

    	 

    

the Adjusted Conversion Price
Termination Date, the Conversion Price shall be 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 five 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 hereunder. 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 

    	4

    	 

    

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 three (3) business days after such receipt (the “Deadline”)
(and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with
the terms hereof and the Purchase Agreement. 

 

(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 

    	5

    	 

    

termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise
limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion
Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the
Borrower before 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 through willful or deliberate hindrances on the part
of the Borrower. 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 

    	6

    	 

    

under
the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares of Common Stock
issuable upon conversion of this Note that has not been so included in an effective
registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate: 

 

“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS ERTIFICATE 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 Holder 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 

    	7

    	 

    

defined in Article III) or (ii)
be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company,
partnership, association, trust or other entity or organization. 

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

 

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

(d)
Purchase Rights. If, at any time when any Notes are issued
and outstanding, the Borrower issues any convertible securities or rights to purchase stock,
warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common
Stock, then the Holder of this Note will be entitled to acquire, upon the terms

    	8

    	 

    

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. 

 

(e)
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 of Common Stock 

    	9

    	 

    

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 periods set forth on the table immediately following this paragraph (the “Prepayment Periods”),
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 Holder, 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 the percentage (“Prepayment Percentage”) as set forth in the table immediately following this
paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of
this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and (x) plus (z) 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.

 

	Prepayment Period	Prepayment Percentage
	 	 
	
        1.
        The period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date.

         
	110%
	
        2.
        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

         
	115%
	
        3.
        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

         
	120%
	

    	10

    	 

    

	
        4.
        The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred twenty (120days following
        the Issue Date

         
	125%
	
        5.
        The period beginning on the date that is one hundred twenty-one (121) day from the Issue Date and ending one hundred fifty (150)
        days following the Issue Date

         
	130%
	
        6.
        The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180)
        days following the Issue Date

         
	135%

 

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, (a) create, incur, assume guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the obligation of any other person, firm, partnership, joint venture
or corporation, except by the endorsement of negotiable instruments for deposit or collection,
or (b) suffer to exist any liability for borrowed money, except any borrowings that does not render the Borrower a "Shell"
company as defined in Rule 12b-2 under the Securities Exchange Act of 1934. 

 

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 except when any sale, lease or disposition is done for fair consideration and does not
render the 

    	11

    	 

    

Borrower a "Shell"
company as defined in Rule 12b-2 under the Securities Exchange Act of 1934. Any consent to
the disposition of any assets may be conditioned on a specified use of the proceeds
of disposition. 

 

2.5
Advances and Loans. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not, without the Holder’s written consent,
lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation,
officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence
or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the
ordinary course of business, (c) that do not render the Borrower a "Shell" company as defined in Rule 12b-2
under the Securities Exchange Act of 1934 that do or (d) 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 through willful
or deliberate hindrances, 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. 

    	12

    	 

    

 

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 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 OTC (which specifically includes the Pink Sheets electronic quotation system) 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. 

    	13

    	 

    

 

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.

 

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 

    	14

    	 

    

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)
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. 

    	15

    	 

    

 

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

 

If
to the Borrower, to: 

POCKET
GAMES, INC. 

909 Plainview Avenue 

Far Rockaway, Ny 11691 

Attn:
DAVID LOVATT, Chief Executive Officer facsimile: 

 

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

[enter
name of law firm] 

Attn:
[attorney name]

[enter
address line 1] 

[enter
city, state, zip] 

facsimile:
[enter fax number] 

 

If
to the Holder: 

KBM
WORLDWIDE, INC. 

80 Cuttermill
Road - Suite 410 

Great Neck, NY 11021 

Attn: Seth Kramer, President 

e-mail: info@kbmworldwide.com 

 

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

Naidich
Wurman Birnbaum & Maday, LLP 

Att: Judah
A. Eisner, Esq. 

Attn: Bernard
S. Feldman, Esq. 

facsimile:
516-466-3555

e-mail: dyork@nwbmlaw.com

    	16

    	 

    

 

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. 

 

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 

    	17

    	 

    

Common Stock acquired upon conversion
of this Note at a price in excess of the price paid for such shares pursuant to this Note.
The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible
loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares
of Common Stock. 

 

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

 

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

 

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. 

 

    	18

    	 

    

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly
authorized officer this December 10, 2014. 

 

POCKET GAMES,
INC. 

By:
_______________________________ 

DAVID
LOVATT 

Chief
Executive Officer 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	19

    	 

    

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 POCKET GAMES, INC., a Florida corporation (the “Borrower”) according to the
conditions of the convertible note of the Borrower dated as of December 10, 2014 (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: 

KBM WORLDWIDE,
INC. 

80
Cuttermill Road - Suite 410 Great Neck, NY 11021 

Attention:
Certificate Delivery 

e-mail: info@kbmworldwide.com

 

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: ______________

KBM WORLDWIDE,
INC. 

 

By:_____________________________

Name:
Seth Kramer 

Title:
President 

Date:

 

 

 

 

 

 

 

 

 

    	20

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