Document:

Lithium Exploration Group,Inc.: Exhibit 10.153 - Filed by newsfilecorp.com

PURCHASE AGREEMENT 

THIS PURCHASE AGREEMENT, dated as of January 29, 2018, is
entered into by and among Lithium Exploration Group, Inc., a Nevada corporation
(the "Company"), and JDF Capital Inc. (the "Purchaser"). 

WITNESSETH: 

WHEREAS, the Company and the Purchaser are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration for offers and sales to accredited investors
afforded, inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the Securities Act of l 933, as amended (the "1933 Act"), and/or
Section 4(2) of the 1933 Act; and 

WHEREAS, the Purchaser wishes to purchase a 10% Original
Issue Discount (“OID) Convertible Promissory Note of the Company (the "Note"), in the original principal amount of $ 57,750.00,
subject to and upon the terms and conditions of this Agreement and acceptance of
this Agreement by the Company, on the terms and conditions referred to herein.

NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows: 

1.      AGREEMENT TO
PURCHASE; PURCHASE PRICE. 

a.      Purchase. 

(i)      Subject to
the terms and conditions of this Agreement and the other Transaction Documents,
the Purchaser hereby agrees to purchase a Note in the aggregate amount of
$52,500.00 (the "Purchase Amount"), which Note shall be funded on the Closing
Date as described therein. 

$52,500.00 of the Note shall be funded directly to the company
($52,500.00 minus $2,500.00 document prep fees) and issued by January 29, 2018
(the “Closing Date”) 

(ii)      The Note
referred to herein shall be in the form of Annex I annexed hereto. 

(iii)      The
purchase of the Note by the Purchaser and the other transactions contemplated
hereby are sometimes referred to herein and in the other Transaction Documents
as the purchase and sale of the Securities (as defined below), and are referred
to collectively as the "Transactions". 

(iv)      The
Purchaser shall deliver the Purchase Amount to counsel for the Company, which
Purchase Amount shall be held in trust until authorized for release to the
Company by written instruction of the Purchaser. The Purchase Amount shall be
promptly returned to the Purchaser if not authorized for release by the
Purchaser by the Closing Date. 

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b.      Certain
  Definitions. As used herein, each of the following terms has the meaning set
forth below, unless the context otherwise requires: 

"Affiliate" means, with respect to a specific Person referred
to in the relevant provision, another Person who or which controls or is
controlled by or is under common control with such specified Person. 

"Certificate" means the original signed Note duly executed by
the Company. 

"Closing Date" means the date of the closing of the issuance of
Note. 

"Common Stock Equivalents" means any securities of the Company
or the Subsidiaries which would entitle the holder thereof to acquire at any
time Common Stock, including without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock. 

"Company Control Person" means each director, executive
officer, promoter, and such other Persons as may be deemed in control of the
Company pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act
(as defined below). 

"Conversion Shares" means shares of Common Stock underlying and
issuable upon conversions of the Note funded herein and to be funded pursuant to
the second tranche in Section 1a.(v). 

"Exchange Act" means the Securities Exchange Act of 1934, as
amended. 

"Holder" means the Person holding the relevant Securities at the
  relevant time.

 "Last Audited Date" means November 14, 2017. 

"Purchaser Control Person" means each director, executive
officer, promoter, and such other Persons as may be deemed in control of the
Purchaser pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

"Material Adverse Effect" means an event or combination of
events, which individually or in the aggregate, would reasonably be expected to
(w) adversely affect the legality, validity or enforceability of the Securities
or any of the Transaction Documents, (x) have or result in a material adverse
effect on the results of operations, assets, prospects, or condition (financial
or otherwise) of the Company and its subsidiaries, taken as a whole, (y)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Documents or the transactions
contemplated thereby, or (z) materially and adversely affect the value of the
rights granted to the Purchaser in the Transaction Documents. 

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"Person" means any living person or any entity, such as, but
not necessarily limited to, a corporation, partnership or trust. 

"Principal Trading Market" means the Over the Counter Bulletin
Board or such other market on which the Common Stock is principally traded at
the relevant time. 

"Securities" means the Note, the Conversion Shares, the
Warrants and the Warrant Shares, and any shares of common stock of the Company
that may be issued to the Purchaser in connection with any other agreements
between the parties. 

"Shares" means the shares of representing any or all of the
Conversion Shares. 

"State of Incorporation" means Nevada. 

"Subsidiary" means any subsidiary of the Company. 

"Trading Day" means any day during which the Principal Trading
Market shall be open for business. 

"Transfer Agent" means, at any time, the transfer agent for the
Company's Common Stock. 

"Transaction Documents" means this Purchase Agreement and the
Note, and includes all ancillary documents referred to in those agreements. 

c.      Form of
Payment; Delivery of Certificates. 

(i)      The
Purchaser shall pay the Purchase Amount payable under the Note by delivering
immediately available good funds in United States Dollars to the Company on the
applicable Closing Date. 

(ii)      On the
applicable Closing Date, the Company shall deliver the Note duly executed on
behalf of the Company to the Purchaser. 

(iii)      By signing
this Agreement, each of the Purchaser and the Company agrees to all of the terms
and conditions of the Transaction Documents, all of the provisions of which are
incorporated herein by this reference as if set forth in full. 

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2.      PURCHASER
REPRESENTATIONS, ETC.; ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION.

The Purchaser represents and warrants to, and covenants and
agrees with, the Company as follows: 

a.      Without
limiting Purchaser's right to sell the Securities pursuant to an effective
registration statement or otherwise in compliance with the 1933 Act, the
Purchaser is purchasing the Securities for its own account for investment only
and not with a view towards the public sale or distribution thereof and not with
a view to or for sale in connection with any distribution thereof. 

b.      The Purchaser is (i) an
"accredited investor" as that term is defined in Rule 501 of the General Rules
and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced
in making investments of the kind described in this Agreement and the related
documents, (iii) able, by reason of the business and financial experience of its
officers (if an entity) and professional advisors (who are not affiliated with
or compensated in any way by the Company or any of its Affiliates or selling
agents), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and to evaluate the
merits and risks of an investment in the Securities, and (iv) able to afford the
entire loss of its investment in the Securities. 

c.      All
subsequent offers and sales of the Securities by the Purchaser shall be made
pursuant to registration of the relevant Securities under the 1933 Act or
pursuant to an exemption from registration. 

d.      The Purchaser
understands that the Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of the 1933 Act and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities. 

e.       The Purchaser and its advisors, if
  any, have been furnished with or have been given access to 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 req uested by
  the Purchaser, including those set forth on i n any annex attached hereto. The
  Purchaser and its advisors, if any, have been afforded the opportunity to ask
  questions of the Company and its management and have received complete and
  satisfactory answers to any such inquiries. Without limiting the generality of
  the foregoing, the Purchaser has also had the opportunity to obtain and to
  review the Company's filings on EDGAR (collectively, the "Company's SEC
  Documents"). 

f.      The Purchaser
understands that its investment in the Securities involves a high degree of
risk. 

g.      The Purchaser
hereby represents that, in connection with its purchase of the Securities, it has not relied on any statement or
representation by the Company or any of its officers, directors and employees or
any of their respective attorneys or agents, except as specifically set forth
herein. 

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h.     The Purchaser understands that no United States federal or
  state agency or any other government or governmental agency has passed on or
  made any recommendation or endorsement of the Securities. 

i.      This Agreement and the
other Transaction Documents to which the Purchaser is a party, and the
transactions contemplated thereby, have been duly and validly authorized,
executed and delivered on behalf of the Purchaser and are valid and binding
agreements of the Purchaser enforceable in accordance with their respective
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally. 

3.      COMPANY
REPRESENTATIONS, ETC. The Company represents and warrants to the Purchaser
as of the date hereof and as of the Closing Date. 

a.      Rights of
Others Affecting the Transactions. There are no preemptive rights of any
shareholder of the Company, as such, to acquire the Note, or any shares of the
Company's common stock that may be issued to the Purchaser in connection with
any other agreements between the parties, in the event such shares are issued.
No party other than a Purchaser has a currently exercisable right of first
refusal which would be applicable to any or all of the transactions contemplated
by the Transaction Documents. 

b.      Status.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Incorporation and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted. The Company is duly qualified as a foreign corporation to do business
and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary, other than
those jurisdictions in which the failure to so qualify would not have or result
in a Material Adverse Effect. The Company has registered its stock and is
obligated to file reports pursuant to Section 12 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act"). The Common Stock is, or immediately following
the Closing Date will be, quoted on the Principal Trading Market. The Company
has received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for such quotation on the Principal Trading
Market, and the Company has maintained all req uirements on its part for the
continuation of such quotation. 

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c.      Authorized
Shares. 

(i)      The
authorized capital stock of the Company consists of 1 0 , 0 00,000,000 shares of
Common Stock, $0.001 par value. 

(ii)      The Company
has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Shares on the Closing Date. 

(iii)      As of the
Closing Date, the Shares shall have been duly authorized by all necessary
corporate action on the part of the Company, and, when issued pursuant to the
relevant provisions of the Transaction Documents, in each case in accordance
with their respective terms, will be duly and validly issued, fully paid and
non-assessable and will not subject the Holder thereof to personal liability by
reason of being such Holder. 

d.      Transaction
Documents and Stock. This Agreement and each of the other Transaction
Documents, and the transactions contemplated thereby, have been duly and validly
authorized by the Company, this Agreement has been duly executed and delivered
by the Company and this Agreement is, and the Note and each of the other
Transaction Documents, when executed and delivered by the Company, will be,
valid and binding agreements of the Company enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally. 

e.     
Non-contravention. The execution and delivery of this Agreement and
each of the other Transaction Documents by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, each of the Notes and the other Transaction
Documents do not and will not conflict with or result in a breach by the Company
of any of the terms or provisions of, or constitute a default under (i) the
certificate of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which the Company is a party or by which it or any of its
properties or assets are bound, including any listing agreement for the Common
Stock except as herein set forth, or (ii i) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Company or any
of its properties or assets, except such conflict, breach or default which would
not have or result in a Material Adverse Effect. 

f.      Approvals.
No authorization, approval or consent of any court, governmental body,
regulatory agency, self-regulatory organization, or stock exchange or market or
the shareholders of the Company is required to be obtained by
the Company for the issuance and sale of the Securities to the Purchaser as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained. 

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g.      Filings.
  None of the Company's SEC Documents contained, at the time they were filed,
  any untrue statement of a material fact or omitted to state any material fact
  required to be stated therein or necessary to make the statements made therein
in light of the circumstances u nder which they were made, not misleading. 

h.      Absence of
Certain Changes. Since the Last Audited Date, there has been no material
adverse change and no Material Adverse Effect, except as disclosed in the
Company's SEC Documents. Since the Last Audited Date, except as provided in the
Company's SEC Documents, the Company has not (i) incurred or become subject to
any material liabilities (absolute or contingent) except liabilities incurred in
the ordinary course of business consistent with past practices; (ii) discharged
or satisfied any material lien or encumbrance or paid any material obligation or
liability (absolute or contingent), other than current liabilities paid in the
ordinary course of business consistent with past practices; (iii) declared or
made any payment or distribution of cash or other property to shareholders with
respect to its capital stock, or purchased or redeemed, or made any agreements
to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts owed to the Company
by any third party or claims of the Company against any third party, except in
the ordinary course of business consistent with past practices; (v) waived any
rights of material value, whether or not in the ordinary course of business, or
suffered the loss of any material amount of existing business; (vi) made any
increases in employee compensation, except in the ordinary course of business
consistent with past practices; or experienced any material problems with labor
or management in connection with the terms and conditions of their employment.

i.      Full
Disclosure. To the best of the Company's knowledge, there is no fact known
to the Company (other than general economic conditions known to the public
generally or as disclosed in the Company's SEC Documents) that has not been
disclosed in writing to the Purchaser that would reasonably be expected to have
or result in a Material Adverse Effect. 

j.      Absence of Litigation.
Except as disclosed in the SEC Reports, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board or
body pending or, to the knowledge of the Company, threatened against or
affecting the Company before or by any governmental authority or nongovernmental
department, commission, board, bureau, agency or instrumentality or any other
person, wherein an unfavorable decision, ruling or finding would have a Material
Adverse Effect or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations under,
any of the Transaction Documents. The Company is not aware of any valid basis
for any such claim that (either individually or in the aggregate with all other
such events and circumstances) could reasonably be expected to have a Material
Adverse Effect. There are no outstanding or unsatisfied judgments, orders,
decrees, writs, injunctions or stipulations to which the Company is a party or
by which it or any of its properties is bound, that involve the transaction
contemplated herein or that, alone or i n the aggregate, could reasonably be
expect to have a Material Adverse Effect. 

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k.      Absence of Events of
Default. Except as set forth in Section 3(e) and 3(g) hereof, (i) neither
the Company nor any of its subsidiaries is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust or other material
agreement to which it is a party or by which its property is bound, and (ii) no
Event of Default (or its equivalent term), as defined in the respective
agreement to which the Company or its subsidiary is a party, and no event which,
with the giving of notice or the passage of time or both, would become an Event
of Default (or its equivalent term) (as so defined in such agreement), has
occurred and is continuing, which would have a Material Adverse Effect. 

I.      No Undisclosed
Liabilities or Events. To the best of the Company's knowledge, the Company
has no liabilities or obligations other than those disclosed in the Transaction
Documents or the Company's SEC Documents or those incurred in the ordinary
course of the Company's business since the Last Audited Date, or which
individually or in the aggregate, do not or would not have a Material Adverse
Effect. No event or circumstances has occurred or exists with respect to the
Company or its properties, business, operations, condition (financial or
otherwise), or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (x) change the articles or certificate of
incorporation or other charter document or by-laws of the Company, each as
currently in effect, with or without shareholder approval, which change would
reduce or otherwise adversely affect the rights and powers of the shareholders
of the Common Stock or (y) materially or substantially change the business,
assets or capital of the Company, including its interests in subsidiaries. 

m.      No Integrated
Offering. Neither the Company nor any of its Affiliates nor any Person
acting on its or their behalf has, directly or indirectly, at any time since
December31,2007 , made any offer or sales of any security or solicited any
offers to buy any security under circumstances that would eliminate the
availability of the exemption from registration under Regulation D in connection
with the offer and sale of the Securities as contemplated hereby. 

n.      Dilution.
Any shares of the Company's common stock issued to the Purchaser in
connection with any agreements between the parties hereto, in the event such
shares are issued may have a dilutive effect on the ownership interests of the
other shareholders (and Persons having the right to become shareholders) of the
Company. The Company's executive officers and directors have studied and fully
understand the nature of the Securities being sold hereby and recognize that
they have such a potential dilutive effect. The board of directors of the
Company has concluded, in its good faith business judgment that such issuance is
in the best interests of the Company. 

o.      Confirmation.
The Company confirms that all statements of the Company contained herein
shall survive acceptance of this Agreement by the Purchaser. The Company agrees
that, if any events occur or circumstances exist prior to the Closing Date or
the release of the Purchase Amount to the Company which would make any of the
Company's representations, warranties, agreements or other information set forth
herein materially untrue or materially inaccurate as of such date, the Company
shall immediately notify the Purchaser (directly or through its counsel, if any)
in writing prior to such date of such fact, specifying which representation,
warranty or covenant is affected and the reasons therefor. 

p.     
  Authorization; Enforcement. The Company has the requisite corporate
  power and authority to enter into and to consummate the transactions
  contemplated by each of the Transaction Documents and otherwise to carry out its
  obligations thereunder. The execution and delivery of each of the Transaction
  Documents by the Company and the consummation by it of the transactions
  contemplated thereby have been duly authorized by all necessary action on the
  part of the Company and no further action is required by the Company in
  connection therewith. Each Transaction Agreement has been (or upon delivery will
  have been) duly executed by the Company and, when delivered in accordance with
  the terms hereof, will constitute the valid and binding obligation of the
  Company enforceable against the Company i n accordance with its terms except (i)
  as li mited by applicable bankruptcy, insolvency, reorganization, moratorium and
  other laws of general application affecting enforcement of creditors' rights
  generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. 

q.      SEC Reports;
Financial Statements. Other than as previously disclosed to the Purchaser,
the Company has filed all reports required to be filed by it under the Exchange
Act, including pursuant to Section l 3(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials, including the exhibits
thereto, being collectively referred to herein as the "SEC Reports") on a timely
basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, 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. The
financial statements of the Company comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved ("GAAP"), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments. 

r.     
Sarbanes-Oxley; Internal Accounting Controls. Except as disclosed in
the SEC Reports, the Company is in material compliance with all provisions of
the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing
Date. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient 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 GAAP 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. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company, including its Subsidiaries, is made known to the certifying
officers by others within those entities, particularly during the period in
which the Company's most recently filed periodic report under the Exchange Act,
as the case may be, is being prepared. The Company's certifying officers have
evaluated the effectiveness of the Company's controls and procedures as of the
date prior to the filing date of the most recently filed periodic report under
the Exchange Act (such date, the "Evaluation Date"). The Company presented in
its most recently filed periodic report under the Exchange Act the conclusions
of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company's
internal controls (as such term is defined in Item 307(b) of Regulation S-K u
nder the Exchange Act) or, to the Company's knowledge, in other factors that
could significantly affect the Company's internal controls. 

s.      Tax
  Status. Except for matters that would not, individually or in the aggregate,
  have or reasonably be expected to result in a Material Adverse Effect, the
  Company and each Subsidiary has filed all necessary federal, state and foreign
  income and franchise tax returns and has paid or accrued all taxes shown as due
  thereon, and the Company has no knowledge of a tax deficiency which has been
  asserted or threatened against the Company or any Subsidiary, has no knowledge
  of a tax deficiency which has been asserted or threatened against the Company or
any Subsidiary. 

t.      No Disagreements with
Accountants and Lawyers. There are no disagreements of any kind presently
existing, or reasonably anticipated by the Company to arise, between the
accountants and lawyers formerly or presently employed by the Company and the
Company is current with respect to any fees owed to its accountants and lawyers.
By making this representation the Company does not, in any manner, waive the
attorney/client privilege or the confidentiality of the communications between
the Company and its lawyers. 

4.      CERTAIN
COVENANTS AND ACKNOWLEDGMENTS. 

a.      Transfer
Restrictions. The Purchaser acknowledges that (I ) the Securities have not
been and are not being registered under the provisions of the 1933 Act and, the
Shares have not been and are not being registered under the 1933 Act, and may
not be transferred unless (A) subsequently registered thereunder or (B) the
Purchaser shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Securities made in
reliance on Rule 144 promulgated under the 1933 Act ("Rule 144") may be made
only in accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale 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 used in the 1933 Act, may req uire compliance with
some other exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (3) neither the Company nor any other Person is under any
obligation to register the Securities under the 1933 Act or to comply with the
terms and conditions of any exemption thereunder. 

b.      Restrictive Legend.
  The Purchaser acknowledges and agrees that the certificates and other
  instruments representing any of the Securities shall bear a restrictive legend
  in substantially the following form (and a stop-transfer order may be placed
  against transfer of any such Securities): 

"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED." 

c.      Filings. The
Company undertakes and agrees to make all necessary filings in connection with
the sale of the Securities to the Purchaser under any United States laws and
regulations applicable to the Company, or by any domestic securities exchange or
trading market, and to provide a copy thereof to the Purchaser promptly after
such fi ling. 

d.      Reporting
Status. So long as the Purchaser beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant to Section 13 or l 5(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to fi le reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock on the Principal Trading Market or a
listing on the NASDAQ/Small Cap or National Markets and, to the extent
applicable to it, will comply in all material respects with the Company's
reporting, filing and other obligations under the by-laws or rules of the
Principal Trading Market and/or the National Association of Securities Dealers,
Inc., as the case may be, applicable to it for so long as the Purchaser
beneficially owns any of the Securities. 

e.      Use of
Proceeds. The Company will use the proceeds received hereunder
(excluding amounts paid by the Company for legal fees in connection with the
sale of the Securities) for working capital. 

f.      Publicity, Filings,
Releases, Etc. Each of the parties agrees that it will not disseminate
any information relating to the Transaction Documents or the transactions
contemplated thereby, including issuing any press releases, holding any press
conferences or other forums, or filing any reports (collectively, "Publicity"),
without giving the other party reasonable advance notice and an opportunity to
comment on the contents thereof. Neither party will include in any such
Publicity any statement or statements or other material to which the other party
reasonably objects, unless i n the reasonable opinion of counsel to the party
proposing such statement, such statement is legally required to be included. In
furtherance of the foregoing, the Company will provide to the Purchaser drafts
of the applicable text of the first filing of a Current Report on Form 8-K or a
Quarterly or Annual Report on Form 10-Q or 10-K intended to be made with the SEC
which refers to the Transaction Documents or the transactions contemplated
thereby as soon as practicable (but at least two (2) Trading Days before such
filing will be made) will not include in such filing any statement or statements
or other material to which the other party reasonably objects, unless in the
reasonable opinion of counsel to the party proposing such statement, such
statement is legally required to be included. Notwithstanding the foregoing,
each of the parties hereby consents to the inclusion of the text of the
Transaction Documents in filings made with the SEC as well as any descriptive
text accompanying or part of such filing which is accurate and
reasonably determined by the Company's counsel to be legally required.
Notwithstanding, but subject to, the foregoing provisions of this Section 4(i),
the Company will, after the Closing Date, promptly file a Current Report on Form
8-K or, if appropriate, a quarterly or annual report on the appropriate form,
referring to the transactions contemplated by the Transaction Documents. 

5.      TRANSFER
AGENT INSTRUCTIONS. 

a.      The Company
warrants that, with respect to the Securities, other than the stop transfer
instructions to give effect to Section 4(a) hereof, it will give its transfer
agent no instructions inconsistent with instructions to issue the Shares to the
Holder as contemplated in the Transaction Documents. Nothing in this Section
shall affect i n any way the Purchaser's obligations and agreement to comply
with all applicable securities laws upon resale of the Securities. If the
Purchaser provides the Company with an opinion of counsel reasonably
satisfactory to the Company that registration of a resale by the Purchaser of
any of the Securities in accordance with clause ( 1)(B) of Section 4(a) of this
Agreement is not required under the 1933 Act, the Company shall (except as
provided in clause (2) of Section 4(a) of this Agreement) permit the transfer or
issue of the Shares represented by one or more certificates for Common Stock
without legend (or where applicable, by electronic registration) in such name
and in such denominations as specified by the Purchaser. 

b.      The Company will
authorize the Transfer Agent to give information relating to the Company
directly to the Holder or the Holder's representatives upon the request of the
Holder or any such representative, to the extent such information relates to (i)
the status of shares of Common Stock issued or claimed to be issued to the
Holder in connection with a Notice of Exercise, or (ii) the aggregate number of
outstanding shares of Common Stock of all shareholders (as a group, and not
individually) as of a current or other specified date. At the request of the
Holder, the Company will provide the Holder with a copy of the authorization so
given to the Transfer Agent. 

6.      CLOSING
DATE. 

a.      The respective
Closing Date shall occur as indicated in Section 1(a)(1) after each of the
conditions contemplated by Sections 7 and 8 hereof shall have either been
satisfied or been waived by the party in whose favor such conditions run. 

b.      The closing of the
Transactions shall occur on the respective Closing Date at the offices of the
Purchaser and shall take place no later than 3:00 P.M., PST, on such day or such
other time as is mutually agreed upon by the Company and the Purchaser. 

7.      CONDITIONS TO THE
COMPANY'S OBLIGATION TO SELL. 

The Purchaser understands that the Company's obligation to sell
the Note to the Purchaser pursuant to this Agreement on the Closing Date is
conditioned upon: 

	 	a. 	
      The execution and delivery of this Agreement by the
  Purchaser; and

	 	 	 
	 	b. 	
      Delivery by the Purchaser to the Company of good funds as
      payment in full of an amount equal to the Purchase Amount in accordance
  with this Agreement;

	 	c. 	
      The accuracy on such Closing Date of the representations
      and warranties of the Purchaser contained in this Agreement, each as if
      made on such date, and the performance by the Purchaser on or before such
      date of all covenants and agreements of the Purchaser by the Purchaser
  required to be performed on or before such date; and

	 	 	 
	 	d. 	
      There shall not be in effect any law, rule or regulation
      prohibiting or restricting the transactions contemplated hereby, or
      requiring any consent or approval which shall not have been
  obtained.

8.      CONDITIONS TO
THE PURCHASER’S OBLIGATION TO PURCHASE 

The Company understands that the Purchaser's obligation to
purchase any Notes and its acceptance of any shares of the Company's common
stock that may be issued in connection with any agreements between the parties
hereto on a Closing Date is conditioned upon: 

a.      The execution
and delivery of this Agreement and the other Transaction Documents by the
Company; 

b.      Delivery by the Company
to the Purchaser of the Note in accordance with this Agreement or any other
agreements between the parties; 

c.      The
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained in this Agreement, each as if made on such
date, and the performance by the Company on or before such date of all covenants
and agreements of the Company req uired to be performed on or before such date;

d.      The Company must be
current with all required Exchange Act filings. 

e.      There
shall not be in effect any law, rule or regulation prohibiting or restricting
the transactions contemplated hereby, or requiring any consent or approval which
shall not have been obtained; and 

f.      From and after the date
hereof to and including the Closing Date, each of the following conditions will
remain in effect: (i) the trading of the Common Stock shall not have been
suspended by the SEC or on the Principal Trading Market; (ii) trading in
securities generally on the Principal Trading Market shall not have been
suspended or limited; (iii ) no minim um prices shall been established for
securities traded on the Principal Trading Market; and (iv) there shall not have
been any Material Adverse Effect in regards to the Company. 

9.     
INDEMNIFICATION AND REIMBURSEMENT. 

a.                   (i)     The
Company agrees to indemnify and hold harmless the Purchaser and its officers,
directors, employees, and agents, and each Purchaser Control Person from and
against any losses, claims, damages, liabilities or expenses incurred
(collectively, "Damages"), joint or several, and any action in respect thereof
to which the Purchaser, its partners, Affiliates, officers, directors,
employees, and duly authorized agents, and any such Purchaser Control Person
becomes subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of Company contained in this Agreement, as
such Damages are incurred, except to the extent such Damages result primarily
from Purchaser's failure to perform any covenant or agreement contained in this
Agreement or the Purchaser's or its officer's, director's, employee's, agent's
or Purchaser Control Person's negligence, recklessness or bad faith in
performing its obligations under this Agreement. 

(ii)     The Company
hereby agrees that, if the Purchaser, other than by reason of its negligence,
illegal or willful misconduct (in each case, as determined by a non- appealable
judgment to such effect), (x) becomes involved in any capacity in any action,
proceeding or investigation brought by any shareholder of the Company, in
connection with or as a result of the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents, or if the
Purchaser is impleaded in any such action, proceeding or investigation by any
Person, or (y) becomes involved in any capacity in any action, proceeding or
investigation brought by the SEC, any self-regulatory organization or other body
having jurisdiction, against or involving the Company or in connection with or
as a result of the consummation of the transactions contemplated by this Agreement or the other Transaction
Documents, or (z) is impleaded in any such action, proceeding or investigation
by any Person, then in any such case, the Company shall indemnify, defend and
hold harmless the Purchaser from and against and in respect of all losses,
claims, liabilities, damages or expenses resulting from, imposed upon or
incurred by the Purchaser, directly or indirectly, and reimburse such Purchaser
for its reasonable legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith, as such
expenses are incurred. The indemnification and reimbursement obligations of the
Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any Affiliates of the Purchaser who are actually named in such action,
proceeding or investigation, and partners, directors, agents, employees and
Purchaser Control Persons (if any), as the case may be, of the Purchaser and any
such Affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Purchaser, any such Affiliate and any such Person. The Company also agrees that
neither the Purchaser nor any such Affiliate, partner, director, agent, employee
or Purchaser Control Person shall have any liability to the Company or any
Person asserting claims on behalf of or in right of the Company in connection
with or as a result of the consummation of this Agreement or the other
Transaction Documents, except as may be expressly and specifically provided in
or contemplated by this Agreement. 

b.      All claims
  for indemnification by any Indemnified Party (as defined below) under this
Section shall be asserted and resolved as follows: 

(i)      In the event
any claim or demand in respect of which any Person claiming indemnification
under any provision of this Section (an "Indemnified Party") might seek
indemnity under paragraph (a) of this Section is asserted against or sought to
be collected from such Indemnified Party by a Person other than a party hereto
or an Affiliate thereof (a "Third Party Claim"), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim for indemnification that is being asserted under any
provision of this Section against any Person (the "Indemnifying Party"),
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim (a "Claim Notice")
with reasonable promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party shall not be obligated to indemnify the Indemnified Party with respect to
such Third Party Claim to the extent that the Indemnifying Party's ability to
defend has been prejudiced by such failure of the Indemnified Party. The
Indemnifying Party shall notify the Indemnified Party as soon as practicable
within the period ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined
below) (the "Dispute Period") whether the Indemnifying Party disputes its
liability or the amount of its liability to the Indemnified Party under this
Section and whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third Party Claim. The
following provisions shall also apply. 

(ii)      If the
Indemnifying Party notifies the Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the Indemnified Party with respect to
the Third Party Claim pursuant to this paragraph (b) of this Section, then the
Indemnifying Party shall have the right to defend, with counsel reasonably
satisfactory to the Indemnified Party, at the sole cost and expense of the
Indemnifying Party, such Third Party Claim by all appropriate proceedings, which
proceedings shall be vigorously and diligently prosecuted by the Indemnifying
Party to a final conclusion or will be settled at the discretion of the
Indemnifying Party (but only with the consent of the Indemnified Party in the
case of any settlement that provides for any relief other than the payment of
monetary damages or that provides for the payment of monetary damages as to
which the Indemnified Party shall not be indemnified in full pursuant to
paragraph (a) of this Section). The Indemnifying Party shall have full control
of such defense and proceedings, including any compromise or settlement thereof; provided, however, that
the Indemnified Party may, at the sole cost and expense of the Indemnified
Party, at any time prior to the Indemnifying Party's delivery of the notice
referred to in the first sentence of this subparagraph (x), file any motion,
answer or other pleadings or take any other action that the Indemnified Party
reasonably believes to be necessary or appropriate protect its interests; and
provided further, that if requested by the Indemnifying Party, the Indemnified
Party will, at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any Third Party
Claim that the Indemnifying Party elects to contest. The Indemnified Party may
participate in, but not control, any defense or settlement of any Third Party
Claim controlled by the Indemnifying Party pursuant to this subparagraph (x),
and except as provided in the preceding sentence, the Indemnified Party shall
bear its own costs and expenses with respect to such participation.
Notwithstanding the foregoi ng, the Indemnified Party may take over the control
of the defense or settlement of a Third Party Claim at any time if it
irrevocably waives its right to indemnity under paragraph (a) of this Section
with respect to such Third Party Claim. 

(iii)      If the
  Indemnifying Party fails to notify the Indemnified Party within the Dispute
  Period that the Indemnifying Party desires to defend the Third Party Claim
  pursuant to paragraph (b) of this Section, or if the Indemnifying Party gives
  such notice but fails to prosecute vigorously and diligently or settle the Third
  Party Claim, or if the Indemnifying Party fails to give any notice whatsoever
  within the Dispute Period, then the Indemnified Party shall have the right to
  defend, at the sole cost and expense of the Indemnifying Party, the Third Party
  Claim by all appropriate proceedings, which proceedings shall be prosecuted by
  the I ndemnified Party in a reasonable manner and in good faith or will be
  settled at the discretion of the Indemnified Party (with the consent of the
  Indemnifying Party, which consent will not be unreasonably withheld). The
  Indemnified Party will have full control of such defense and proceedings,
  including any compromise or settlement thereof; provided, however, that if
  requested by the Indemnified Party, the Indemnifying Party will, at the sole
  cost and expense of the Indemnifying Party, provide reasonable cooperation to
  the Indemnified Party and its counsel in contesting any Third Party Claim which
  the Indemnified Party is contesting. Notwithstanding the foregoing provisions of
  this subparagraph (y), if the Indemnifying Party has notified the Indemnified
  Party within the Dispute Period that the Indemnifying Party disputes its
  liability or the amount of its liability hereunder to the Indemnified Party with
  respect to such Third Party Claim and if such dispute is resolved in favor of
the Indemnifying Party in the manner provided in subparagraph (z)
below, the Indemnifying Party will not be required to bear the costs and
expenses of the Indemnified Party's defense pursuant to this subparagraph (y) or
of the Indemnifying Party's participation therein at the Indemnified Party's
request, and the Indemnified Party shall reimburse the Indemnifying Party in
full for all reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation. The Indemnifying Party may participate in, but
not control, any defense or settlement controlled by the Indemnified Party
pursuant to this subparagraph (y), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation. 

(iv)      If the
  Indemnifying Party notifies the Indemnified Party that it does not dispute its
  liability or the amount of its liability to the Indemnified Party with respect
  to the Third Party Claim under paragraph (a) of this Section or fails to notify
  the Indemnified Party within the Dispute Period whether the Indemnifying Party
  disputes its liability or the amount of its liability to the Indemnified Party
  with respect to such Third Party Claim, the amount of Damages specified in the
  Claim Notice shall be conclusively deemed a liability of the Indemnifying Party
  under paragraph (a) of this Section and the Indemnifying Party shall pay the
  amount of such Damages to the Indemnified Party on demand. If the Indemnifying
  Party has timely disputed its liability or the amount of its liability with
  respect to such claim, the Indemnifying Party and the Indemnified Party shall
  proceed in good faith to negotiate a resolution of such dispute; provided,
  however, that if the dispute is not resolved within thirty (30) days after the
  Claim Notice, the Indemnifying Party shall be entitled to institute such legal
action as it deems appropriate. 

(v)     In the event
any Indemnified Party should have a claim under paragraph (a) of this Section
against the Indemnifying Party that does not involve a Third Party Claim, the
Indemnified Party shall deliver a written notification of a claim for indemnity
under paragraph (a) of this Section specifying the nature of and basis for such
claim, together with the amount or, if not then reasonably ascertainable, the
estimated amount, determined in good faith, of such claim (an "Indemnity
Notice") with reasonable promptness to the Indemnifying Party. The failure by
any Indemnified Party to give the Indemnity Notice shall not impair such party's
rights hereunder except to the extent that the Indemnifying Party demonstrates
that it has been irreparably prejudiced thereby. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim or the amount
of the claim described in such Indemnity Notice or fails to notify the
Indemnified Party within the Dispute Period whether the Indemnifying Party
disputes the claim or the amount of the claim described in such Indemnity
Notice, the amount of Damages specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under paragraph (a) of
this Section and the Indemnifying Party shall pay the amount of such Damages to
the Indemnified Party on demand. If the Indemnifying Party has timely disputed
its liability or the amount of its l iability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute; provided, however, that it the dispute
is not resolved within thirty (30) days after the Claim Notice, the I
ndemnifying Party shall be entitled to institute such legal action as it deems
appropriate. 

c.      The indemnity
agreements contained herein shall be in addition to (i) any cause of action or
similar rights of the indemnified party against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to. 

10.      JURY TRIAL
WAIVER. The Company and the Purchaser hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the Parties hereto
against the other in respect of any matter arising out or in connection with the
Transaction Documents. 

11.      GOVERNING
LAW: MISCELLANEOUS. 

a.                   (i)      This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of Nevada for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of laws.
Each of the parties consents to the exclusive jurisdiction of the federal courts
whose districts encompass any part of the state courts of the State of Nevada as
in connection with any dispute arising under this Agreement or any of the other
Transaction Documents and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens, to
the bringing of any such proceeding in such jurisdictions or to any claim that
such venue of the suit, action or proceeding is improper. To the extent
determined by such court, the Company shall reimburse the Purchaser for any
reasonable legal fees and disbursements incurred by the Purchaser in enforcement
of or protection of any of its rights under any of the Transaction Documents.
Nothing in this Section shall affect or limit any right to serve process in any
other manner permitted by law. 

(ii)      The Company
and the Purchaser acknowledge and agree that irreparable damage would occur in
the event that any of the provisions of this Agreement or the other Transaction
Documents were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and the other Transaction Documents and to enforce specifically
the terms and provisions hereof and thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity. 

b.      Failure of
any party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof. 

c.      This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto. 

d.      All pronouns
and any variations thereof refer to the masculine, feminine or neuter, singular
or plural, as the context may require. 

e.      An e m a i l
of this signed Agreement shall be legal and binding on all parties hereto. 

f.      This Agreement may be
signed in one or more counterparts, each of which shall be deemed an original.

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

h.      If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

i.      This
Agreement may be amended only by an instrument in writing signed by the party to
be charged with enforcement thereof. 

j.      This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof. 

13.      NOTICES. Any
notice required or permitted hereunder shall be given in writing (unless
otherwise specified herein) and shall be deemed effectively given on the
earliest of 

(a)      the date
delivered, if delivered by personal delivery as against written receipt therefor
or by confirmed email, 

(b)      the fifth
Trading Day after deposit, postage prepaid, in the United States Postal Service
by registered or certified mail, or 

(c)      the third
Trading Day after mailing by domestic or international express courier, with
delivery costs and fees prepaid,

in each case, addressed to each of the other parties thereunto
entitled at the following addresses (or at such other addresses as such party
may designate by ten (10) days' advance written notice similarly given to each
of the other parties hereto):

  	COMPANY: 	Lithium Exploration Group Inc. 
	  	4635 S Lakeshore Drive 
	  	Tempe, AZ 85282 
	  	Attn: Alex Walsh 
	  	  
	PURCHASER: 	JDF CAPITAL INC. 
	  	62 E Main Street 
	  	Freehold, NJ 07728 
	  	Attn: John Fierro 
	  	Telephone No.: 718-290-4058

14.     SURVIVAL OF
REPRESENTATIONS AND WARRANTIES. The Company's and the Purchaser's
representations and warranties herein shall survive the execution and delivery
of this Agreement and the delivery of the Certificates and the payment of the
Purchase Amount, and shall inure to the benefit of the Purchaser and the Company
and their respective successors and assigns. 

[Balance of page intentionally left blank] 

IN WITNESS WHEREOF, this Agreement has been duly
executed by the Purchaser and the Company as of the date set first above
written. 

	JDF CAPITAL INC 
	 
	 
	Name: John Fierro 
	Title: President 
	  
	 
	 
	LITHIUM EXPLORATION GROUP, INC. 
	 
	 
	By: 
	Alexander Walsh, Chief Executive OfficerLithium Exploration Group,Inc.: Exhibit 10.154 - Filed by newsfilecorp.com

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL IN THE FORM,
SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE MAY BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS. 

LITHIUM EXPLORATION GROUP, INC. 
10% OID Convertible
Promissory Note
Due February 28, 2019 

	February 28, 2018 	 	  
		Purchase Price:  	USD $52,500.00 
		Principal Price:  	$57,750.00 

For value received, Lithium Exploration Group, Inc., a
Nevada corporation (the "Company"), hereby promises to pay to the order of
JDF Capital Inc. (together with its successors, representatives, and
permitted assigns, the "Holder"), in accordance with the terms hereinafter
provided, up to an aggregate of $57,750.00(Fifty -Seven Thousand and Seven
Hundred and Fifty Dollars) the (the "Principal Amount"), which includes
the aggregate principal sum of $52,500.00 (Fifty-Two Thousand Five Hundred
Dollars) advanced by the Holder, $ 2 , 5 0 0 . 0 0 (Two Thousand Five Hundred
Dollars) document prep fees (deducted from the amount funded) and $5,250.00
(Five Thousand Two Hundred and Fifty Dollars) Original Issue Discount incurred
by the Holder shall be due and payable on February 28, 2019. 

The due dates of any outstanding principal balance are referred
to herein as the "Maturity Date". 

All payments under or pursuant to this Note refer to and shall
be made in United States Dollars in immediately available funds to the Holder at
the address of the Holder first set forth above or at such other place as the
Holder may designate from time to time in writing to the Company or by wire
transfer of funds to the Holder's account, instructions for which are attached
hereto as Exhibit A. 

ARTICLE 

Section 1.1     
Purchase Agreement. This Note has been executed and delivered
pursuant to the Security Purchase Agreement dated as of February 28, 2018 (the
"Purchase Agreement'') by and among the Company and the purchasers listed
therein. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement. 

Section 1.2     
Interest. 

(a)      Beginning on
the issuance date of this Note (the "Issuance Date"), the outstanding principal
balance of this Note shall bear interest at a rate per annum equal to 10 percent
(10%) accruing on a 12 month basis, which shall consist of the pre-paid interest
referred to above, which may be converted to shares of the Company's common
stock, par value $0.001 per share (the "Common Stock") at the option of the
Holder on the same terms as the Note. 

1 

Section 1.3     
Payment on Non-Business Days. Whenever any payment to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of Nevada, such payment may be due on the next succeeding business day and
such next succeeding day shall be included in the calculation of the amount of
accrued interest payable on such date. 

Section 1.4     
Transfer. This Note may be transferred or sold, subject to the
provisions of Section 4.8 of this Note, or pledged, hypothecated or otherwise
granted as security by the Holder. 

Section 1.5     
Replacement. Upon receipt of a duly executed, notarized and unsecured
written statement from the Holder with respect to the loss, theft or destruction
of this Note (or any replacement hereof), and without requiring an indemnity
bond or other security, or, in the case of a mutilation of this Note, upon
surrender and cancellation of such Note, the Company shall issue a new Note, of
like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated
Note. 

ARTICLE II 

EVENTS OF DEFAULT; REMEDIES 

Section 2.1     
Events of Default. The occurrence of any of the following events shall be
an "Event of Default" under this Note: 

(a)      the Company
shall fail to make the payment of any amount of principal outstanding on the
date such payment is due hereunder; 

(b)      the Company
shall fail to make any payment of interest in shares of Common Stock for a
period of three (3) days after the date such interest is due; 

(c)      the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, Nasdaq Small Cap Market, Nasdaq National Market, American Stock Exchange
or The New York Stock Exchange, Inc. for a period of five (5) consecutive
Trading Days; 

(d)      the
Company's notice to the Holder, including by way of public announcement, at any
time, of its inability to comply or its intention not to comply with proper
requests for conversion of this Note into shares of Common Stock;

(e)      the Company
shall fail to (i) timely deliver the shares of Common Stock upon conversion of
the Note or any accrued and unpaid interest, or (ii) make the payment of any
fees and/or liquidated damages under this Note or the Purchase Agreement, which
failure in the case of items (i) and (ii) of this Section 2.1(e) is not remedied
within three (3) business days after the incurrence thereof; 

(f)      default
shall be made in the performance or observance of (i) any material covenant,
condition or agreement contained in this Note (other than as set forth in clause
(e) of this Section 2.1) and such default is not fully cured within five (5)
business days after the occurrence thereof or (ii) any material covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document which is not covered by any other provisions of this
Section 2.1 and such default is not fully cured within five (5) business days
after the occurrence thereof; 

(g)      any material
representation or warranty made by the Company herein or in the Purchase Agreement or any other Transaction Document shall prove to have
been false or incorrect or breached in a material respect on the date as of
which made; 

 2 

(h)      the Company
  shall (A) default in any payment of any amount or amounts of principal of or
  interest on any Indebtedness (other than the Indebtedness hereunder) the
  aggregate principal amount of which Indebtedness is in excess of $50,000 or (B)
  default in the observance or performance of any other agreement or condition
  relating to any Indebtedness or contained in any instrument or agreement
  evidencing, securing or relating thereto, or any other event shall occur or
  condition exist, the effect of which default or other event or condition is to
  cause, or to perm it the holder or holders or beneficiary or beneficiaries of
  such Indebtedness to cause with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; 

(i)      the Company
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors'
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing; 

(j)      a proceeding
or case shall be commenced in respect of the Company, without its application or
consent, in any court of competent jurisdiction, seeking (i) the l iquidation,
reorganization, moratorium, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets in connection with the liquidation or dissolution of the Company or (iii)
similar relief in respect of it under any law providing for the relief of
debtors, and such proceeding or case described in clause (i), (ii) or (iii)
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) days or any order for relief shall be entered in an involuntary case under
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Company or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Company and shall continue
undismissed, or unstayed and in effect for a period of sixty (60) days; or 

(k)      the failure
of the Company to instruct its transfer agent to remove any legends from shares
of Common Stock eligible to be sold under Rule 144 of the Securities Act and
issue such unlegended certificates to the Holder within five (5) business days
of the Holder's request so long as the Holder has provided reasonable assurances
and opinions of counsel to the Company that such shares of Common Stock can be
resold pursuant to Rule 144; or 

(I)      the failure
of the Company to pay any amounts due to the Holder herein within three (3)
business days of receipt of notice to the Company. 

          Section 2.2     
Remedies Upon An Event of Default. If an Event of Default shall
have occurred and shall be continuing, the Holder of this Note may at any time
at its option, (a) declare the entire unpaid principal balance of this Note,
together with all interest accrued hereon, due and payable, and thereupon, the
same shall be accelerated and so due and payable, without presentment, demand,
protest, or notice, all of which are hereby expressly unconditionally and
irrevocably waived by the Company; provided, however, that upon the occurrence
of an Event of Default described in (i) Sections (k) or (I), the outstanding
principal balance and interest hereunder shall be automatically due and payable and (ii) Sections 2.1 (a)-(j) and 2.l (m)-(n),
demand the prepayment of this Note pursuant to Section 3.6 hereof, (b) subject
to Section 3.4 hereof, demand that the principal amount of this Note then
outstanding shall be converted into shares of Common Stock at a Conversion Price
(as defined in Section 3.2(a) hereof) per share calculated pursuant to Section
3.1 hereof assuming that the date that the Event of Default occurs is the
Conversion Date and demand that all accrued and unpaid interest under this Note
shall be converted into shares of Common Stock in accordance with Section 1 .2
hereof, or (c) exercise or otherwise enforce any one or more of the Holder's
rights, powers, privileges, remedies and interests under this Note, the Purchase
Agreement, other Transaction Document or applicable law. No course of delay on
the part of the Holder shall operate as a waiver thereof or otherwise prejudice
the right of the Holder. No remedy conferred hereby shall be exclusive of any
other remedy referred to herein or now or hereafter available at law, in equity,
by statute or otherwise. 

3 

ARTICLE III 

CONVERSION; ANTIDILUTION; PREPAYMENT 

Section 3.1     
Conversion Option. 

(a)      At any time
on or after the Issuance Date, this Note shall be convertible (in whole or in
part), at the option of the Holder (the "Conversion Option"), into such
number of fully paid and non- assessable shares of Common Stock (the
"Conversion Rate") as is determined by dividing that portion of the
outstanding principal balance under this Note as of such date that the Holder
elects to convert by the Conversion Price (as defined in Section 3.2(a) hereof)
then in effect on the date on which the Holder faxes a notice of conversion (the
"Conversion Notice"), duly executed, to the Company (the "Voluntary
Conversion Date"), provided, however, that the Conversion Price shall be
subject to adjustment as described in Section 3.5 below. The Holder shall
deliver this Note to the Company at the address designated in the Purchase
Agreement at such time that this Note is fully converted. With respect to
partial conversions of this Note, the Company shall keep written records of the
amount of this Note converted as of each Conversion Date. 

(b)      On any
Voluntary Conversion Date, the Holder may cause the any outstanding Principal
Amount of this Note plus all accrued and unpaid interest to convert into a
number of fully paid and non-assessable shares of Common Stock equal to the
quotient of the elected outstanding principal amount of this Note plus all
accrued interest on the elected outstanding on the Voluntary Conversion Date (as
described in this Section below) divided by the Conversion Price as described in
Section 3.2(a) below. 

Furthermore, upon the occurrence of an Event of Default
  (as defined in Section 2.1 hereof), then to the extent permitted by law, the
  Company will pay interest to the Holder, payable on demand, on the outstanding
  principal balance of the Note from the date of the Event of Default until such
  Event of Default is cured at the rate of the lesser of fifteen percent (15%) and
  the maximum applicable legal rate per annum. 

(B)          
Conversion Limitations; Holder's Restriction on Conversion. The
Company shall not effect any conversion of this Note, and the Holder shall not
have the right to convert any portion of this Note, to the extent that after
giving effect to such conversion, the Holder (together with the Holder's
affiliates), as set forth on the applicable Conversion Notice, would
beneficially own in excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to such conversion. For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by the Holder and its affiliates shall include the number of shares of Common
Stock issuable upon conversion of this Note with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of this Note beneficially owned by the Holder or
any of its affiliates and (B) Exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other Notes or the
Warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this
Section, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. To the extent that the limitation contained in this
section applies, the determination of whether this Note is convertible (in
relation to other securities owned by the Holder) and of which a portion of this
Note is convertible shall be in the sole discretion of such Holder. To ensure
compliance with this restriction, the Holder will be deemed to represent to the
Company each time it delivers a Conversion Notice that such Conversion Notice
has not violated the restrictions set forth in this paragraph and the Company
shall have no obligation to verify or confirm the accuracy of such
determination. For purposes of this Section, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form 10-Q or Form 10-K (or such related form), as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company's Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by
the Holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The provisions of this Section
may be waived by the Holder upon, at the election of the Holder, not less than
61 days' prior notice to the Company, and the provisions of this Section 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). 

 4 

 

Section 3.2     
Conversion Price. 

The Holder of this Note has the option, upon the issuance date
of the stock, to convert all or any amount of the principal face amount of this
Note then outstanding into shares of the Company's common stock (the "Common
Stock") at a price ("Conversion Price") for each share of Common
Stock equal to the lesser of $0.005 or 25% discount of the lowest trading
price of the Common Stock as reported on the National Quotations Bureau OTC
Markets exchange which the Company’s shares are traded or any exchange upon
which the Common Stock may be traded in the future ("Exchange"), for the
(i) twenty prior trading days, including the day
upon which a Notice of Conversion is received by the Company (provided such
Notice of Conversion is delivered by fax or other electronic method of
communication to the Company after 4 P.M. Eastern Standard or Daylight Savings
Time if the Holder wishes to include the same day closing price), or (ii) the
twenty prior trading days immediately preceding the issuance date
of this Note. The Notice of Conversion may be rescinded if the shares have not
been delivered within 3 business days. The Company shall deliver the shares of
Common Stock to the Holder within 3 business days of receipt by the Company of
the Notice of Conversion. The Holder shall surrender this Note to the Company
upon receipt of the shares of Common Stock, executed by the Holder. This will
make clear the Holder's intention to convert this Note or a specified portion
hereof, and accompanied by proper assignment hereof in blank. Accrued but unpaid
interest shall be subject to conversion. The number of issuable shares will be
rounded to the nearest whole share, and no fractional shares or scrip
representing fractions of shares will be issued on conversion. To the extent the
Conversion Price of the Company’s Common Stock closes below the par value per
share, the Company will take all steps necessary to solicit the consent of the
stockholders to reduce the par value to the lowest value possible under law. The
Company agrees to honor all conversions submitted pending this
increase. In the event the Company experiences a DTC “Chill” on its
shares, the conversion price shall be decreased by 10% while that “Chill” is in
effect. 

Section 3.3     
Mechanics of Conversion. 

(a)      Not later
than three (3) Trading Days after any Conversion Date, the Company or its designated transfer agent, as applicable, shall issue and
deliver to the Depository Trust Company ("DTC") account on the Holder's behalf
via the Deposit Withdrawal Agent Commission System ("DWAC") as specified in the
Conversion Notice, registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder shall be entitled. I n the alternative, not later than three (3) Trading Days after any Conversion
Date, the Company shall deliver to the applicable Holder by express courier a
certificate or certificates which shall be free of restrictive legends and
trading restrictions (other than those required by Section 5. l of the Purchase
Agreement) representing the number of shares of Common Stock being acquired upon
the conversion of this Note (the "Delivery Date"). Notwithstanding the
foregoing to the contrary, the Company or its transfer agent shall only be
obligated to issue and deliver the shares to the OTC on the Holder's behalf via
DWAC (or certificates free of restrictive legends) if such conversion is in
connection with a sale and the Holder has complied with the applicable
prospectus delivery requirements. lf in the case of any Conversion Notice such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the Delivery Date, the Holder shall be entitled by written
notice to the Company at any time on or before its receipt of such certificate
or certificates thereafter, to rescind such conversion, in which event the
Company shall immediately return this Note if tendered for conversion, whereupon
the Company and the Holder shall each be restored to their respective positions
immediately prior to the delivery of such notice of revocation, except that any
amounts described in Sections 3.3(b) and (c) shall be payable through the date
notice of rescission is given to the Company. 

5 

(b)      The Company
  understands that a delay in the delivery of the shares of Common Stock upon
  conversion of this Note beyond the Delivery Date could result in economic loss
  to the Holder. If the Company fails to deliver to the Holder such shares via
  DWAC or a certificate or certificates pursuant to this Section hereunder by the
  Delivery Date, the Company shall pay to such Holder, in cash, an amount per
  Trading Day for each Trading Day until such shares are delivered via DWAC or
  certificates are delivered, together with interest on such amount at a rate of l
  0% per annum, accruing until such amount and any accrued interest thereon is
  paid in full, equal to the greater of (A) (i) 1% of the aggregate principal
  amount of the Note requested to be converted for the first five (5) Trading Days
  after the Delivery Date and (ii) 2% of the aggregate principal amount of the
  Note requested to be converted for each Trading Day thereafter and (B) $2,000
  per day (which amount shall be paid as liquidated damages and not as a penalty).
  Nothing herein shall limit a Holder's right to pursue actual damages for the
  Company's failure to deliver certificates representing shares of Common Stock
  upon conversion within the period specified herein and such Holder shall have
  the right to pursue all remedies available to it at law or in equity (including,
  without limitation, a decree of specific performance and/or injunctive relief).
  Notwithstanding anything to the contrary contained herein, the Holder shall be
  entitled to withdraw a Conversion Notice, and upon such withdrawal the Company
  shall only be obligated to pay the liquidated damages accrued in accordance with
this Section 3.3(b) through the date the Conversion Notice is withdrawn. 

(c)      ln
addition to any other rights available to the Holder, if the Company fails
to cause its transfer agent to transmit to the Holder a certificate or
certificates representing the shares of Common Stock issuable upon conversion of
this Note on or before the Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
shares of Common Stock issuable upon conversion of this Note which the Holder
anticipated receiving upon such exercise (a "Buy- In"), then the
Company shall ( 1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by multi
plying (A) the number of shares of Common Stock issuable upon conversion of this
Note that the Company was required to deliver to the Holder in connection with
the conversion at issue times (B) the price at which the sell order giving rise
to such purchase obligation was executed, and (2) at the option of the Holder,
either reinstate the portion of the Note and equivalent number of shares of
Common Stock for which such conversion was not honored or deliver to the Holder
the number of shares of Common Stock that would have been issued had the Company
timely complied with its conversion and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted conversion of shares of
Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (1) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and other evidence
reasonably requested by the Company. Nothing herein shall limit a Holder's right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon conversion of this Note as
required pursuant to the terms hereof. 

6 

Section 3.4     
Ownership Cap and Certain Conversion Restrictions. 

Notwithstanding anything to the contrary set forth in Section 3
of this Note, at no time may the Holder convert all or a portion of this Note if
the number of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock owned by the
Holder at such time, the number of shares of Common Stock which would result in
the Holder beneficially owning (as determined in accordance with Section l3(d)
of the Exchange Act and the rules thereunder) more than 9.9% of all of the
Common Stock outstanding at such time; provided, however, that upon the Holder
providing the Company with sixty-one (61) days notice (pursuant to Section 4.1
hereof) (the "Waiver Notice") that the Holder would like to waive this Section
3.4 with regard to any or all shares of Common Stock issuable upon conversion of
this Note, this Section 3.4 will be of no force or effect with regard to all or
a portion of the Note referenced in the Waiver Notice; provided, further, that
this provision shall be of no further force or effect during the sixty-one (61)
days immediately preceding the Maturity Date. 

Section 3.5     
Adjustment of Conversion Price. 

(a)      The
Conversion Price shall be subject to adjustment from time to time as follows:

(i)     
Adjustments for Stock Splits and Combinations. If the Company shall at
any time or from time to time after the Issuance Date, effect a stock split of
the outstanding Common Stock, the applicable Conversion Price in effect
immediately prior to the stock split shall be proportionately decreased. If the
Company shall at any time or from time to time after the Issuance Date, combine
the outstanding shares of Common Stock, the applicable Conversion Price in
effect immediately prior to the combination shall be proportionately increased.
Any adjustments u nder this Section 3.5(a)(i) shall be effective at the close of
business on the date the stock split or combination occurs. 

(ii)     
Adjustments for Certain Dividends and Distributions. If the Company shall
at any time or from time to time after the Issuance Date, make or issue or set a
record date for the determination of holders of Common Stock entitled to receive
a dividend or other distribution payable in shares of Common Stock, then, and in
each event, the applicable Conversion Price in effect immediately prior to such
event shall be decreased as of the time of such issuance or, in the event such
record date shall have been fixed, as of the close of business on such record
date, by multiplying, the applicable Conversion Price then in effect by a
fraction: 

(1 )      the
numerator of which shall be the total n umber of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date; and 

(2)      the
denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date; plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution. 

 7 

(iii)     
  Adjustment for Other Dividends and Distributions. If the Company shall at
  any time or from time to time after the Issuance Date, make or issue or set a
  record date for the determination of holders of Common Stock entitled to receive
  a dividend or other distribution payable in other than shares of Common Stock,
  then, and in each event, an appropriate revision to the applicable Conversion
  Price shall be made and provision shall be made (by adjustments of the
  Conversion Price or otherwise) so that the holders of this Note shall receive
  upon conversions thereof, in addition to the number of shares of Common Stock
  receivable thereon, the number of securities of the Company which they would
  have received had this Note been converted into Common Stock on the date of such
  event and had thereafter, during the period from the date of such event to and
  including the Conversion Date, retained such securities (together with any
  distributions payable thereon during such period), giving application to all
  adjustments called for during such period under this Section 3.5(a)(iii ) with
  respect to the rights of the holders of this Note; provided, however, that if
  such record date shall have been fixed and such dividend is not fully paid or if
  such distribution is not fully made on the date fixed therefor, the Conversion
  Price shall be adjusted pursuant to this paragraph as of the time of actual
payment of such dividends or distributions. 

(iv)     
Adjustments for Reclassification, Exchange or Substitution. If
the Common Stock issuable upon conversion of this Note at any time or from time
to time after the Issuance Date shall be changed to the same or different n
umber of shares of any class or classes of stock, whether by reclassification,
exchange, substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends provided for in Sections 3.5(a)(i),
(ii) and (iii), or a reorganization, merger, consolidation, or sale of assets
provided for in Section 3.5(a)(v)), then, and in each event, an appropriate
revision to the Conversion Price shall be made and provisions shall be made (by
adjustments of the Conversion Price or otherwise) so that the Holder shall have
the right thereafter to convert this Note into the kind and amount of shares of
stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such Note might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein. 

(v)     
Adjustments for Reorganization, Merger, Consolidation or Sales of
Assets. If at any time or from time to time after the Issuance Date there
shall be a capital reorganization of the Company (other than by way of a stock
split or combination of shares or stock dividends or distributions provided for
in Section 3.5(a)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 3.5(a)(iv)), or a merger or
consolidation of the Company with or into another corporation where the holders
of outstanding voting securities prior to such merger or consolidation do not
own over fifty percent (50%) of the outstanding voting securities of the merged
or consolidated entity, immediately after such merger or consolidation, or the
sale of all or substantially all of the Company's properties or assets to any
other person (an "Organic Change"), then as a part of such Organic
Change an appropriate revision to the Conversion Price shall be made and
provision shall be made (by adjustments of the Conversion Price or otherwise) so
that the Holder shall have the right thereafter to convert such Note into the
kind and amount of shares of stock and other securities or property of the
Company or any successor corporation resulting from Organic Change. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 3.5(a)(v) with respect to the rights of the Holder after the
Organic Change to the end that the provisions of this Section 3.5(a)(v)
(including any adjustment in the applicable Conversion Price then in effect and
the number of shares of stock or other securities deliverable upon conversion of
this Note) shall be applied after that event in as nearly an equivalent manner
as may be practicable. 

8 

(vi)      Issuance
of Common Stock Equivalents. If the Company, at any time after the Issuance
Date, shall issue any securities convertible into or exchangeable for, directly
or indirectly, Common Stock ("Convertible Securities"), other than the
Note, or any rights or warrants or options to purchase any such Common Stock or
Convertible Securities, shall be issued or sold (collectively, the "Common
Stock Equivalents") and the aggregate of the price per share for which
Additional Shares of Common Stock may be issuable thereafter pursuant to such
Common Stock Equivalent, plus the consideration received by the Company for
issuance of such Common Stock Equivalent divided by the number of shares of
Common Stock issuable pursuant to such Common Stock Equivalent (the
"Aggregate Per Common Share Price") shall be less than the applicable
Conversion Price then in effect, or if, after any such issuance of Common Stock
Equivalents, the price per share for which Additional Shares of Common Stock may
be issuable thereafter is amended or adjusted, and such price as so amended
shall make the Aggregate Per Share Common Price be less than the applicable
Conversion Price in effect at the time of such amendment or adjustment, then the
applicable Conversion Price upon each such issuance or amendment shall be
adjusted as provided in the first sentence of subsection (vi) of this Section
3.5(a) on the basis that (1) the maximum number of Additional Shares of Common
Stock issuable pursuant to all such Common Stock Equivalents shall be deemed to
have been issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the earlier
of (A) the date on which the Company shall enter into a firm contract for the
issuance of such Common Stock Equivalent, or (B) the date of actual issuance of
such Common Stock Equivalent. No adjustment of the applicable Conversion Price
shall be made under this subsection (vii) upon the issuance of any Convertible
Security which is issued pursuant to the exercise of any warrants or other
subscription or purchase rights therefor, if any adjustment shall previously
have been made to the exercise price of such warrants then in effect upon the
issuance of such warrants or other rights pursuant to this subsection (vii). No
adjustment shall be made to the Conversion Price upon the issuance of Common
Stock pursuant to the exercise, conversion or exchange of any Convertible
Security or Common Stock Equivalent where an adjustment to the Conversion Price
was made as a result of the issuance or purchase of any Convertible Security or
Common Stock Equivalent. 

(vii)     
Consideration for Stock. In case any shares of Common Stock or
any Common Stock Equivalents shall be issued or sold: 

(1)      in
connection with any merger or consolidation in which the Company is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed to
or exchanged for the stock or other securities of another corporation), the
amount of consideration therefor shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board of Directors of the
Company, of such portion of the assets and business of the non-surviving
corporation as such Board may determine to be attributable to such shares of
Common Stock, Convertible Securities, rights or warrants or options, as the case
may be; or 

(2)      in the event
of any consolidation or merger of the Company in which the Company is not the
surviving corporation or in which the previously outstanding shares of Common
Stock of the Company shall be changed into or exchanged for the stock or other
securities of another corporation, or in the event of any sale of all or
substantially all of the assets of the Company for stock or other securities of
any corporation, the Company shall be deemed to have issued a number of shares
of its Common Stock for stock or securities or other property of the other
corporation computed on The basis of the actual exchange ratio on which the
transaction was predicated, and for a consideration equal to the fair market
value on the date of such transaction of all such stock or securities or other
property of the other corporation. If any such calculation results in adjustment
of the applicable Conversion Price, or the number of shares of Common Stock
issuable upon conversion of the Note, the determination of the applicable
Conversion Price or the number of shares of Common Stock issuable upon
conversion of the Note immediately prior to such merger, consolidation or sale,
shall be made after giving effect to such adjustment of the number of shares of
Common Stock issuable upon conversion of the Note. In the event Common Stock is
issued with other shares or securities or other assets of the Company for
consideration which covers both, the consideration computed as provided in this
Section 3.5(viii) shall be allocated among such securities and assets as
determined in good faith by the Board of Directors of the Company. 

9 

(b)      Record
  Date. In case the Company shall take record of the holders of its Common
  Stock for the purpose of entitling them to subscribe for or purchase Common
  Stock or Convertible Securities, then the date of the issue or sale of the
shares of Common Stock shall be deemed to be such record date. 

(c)      Certain
Issues Excepted Anything herein to the contrary notwithstanding, the Company
shall not be required to make any adjustment to the Conversion Price in
connection with (i) securities issued (other than for cash) in connection with a
merger, acquisition, or consolidation, (ii) securities issued pursuant to a bona
fide firm underwritten public offering of the Company's securities, (iii)
securities issued pursuant to the conversion or exercise of convertible or
exercisable securities issued or outstanding on or prior to the date hereof or
issued pursuant to the Purchase Agreement, (iv) the shares of Common Stock
issuable upon the exercise of Warrants, (v) securities issued i n connection
with strategic license agreements or other partnering arrangements so long as
such issuances are not for the purpose of raising capital, (vi) Common Stock
issued or options to purchase Common Stock granted or issued pursuant to the
Company's stock option plans and employee stock purchase plans as they now
exist, (vii) the payment of any accrued interest in shares of Common Stock
pursuant to this Note. 

(d)      No
Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith, assist in the carrying out of all the provisions of this Section 3.5 and
in the taking of all such action as may be necessary or appropriate in order to
protect the Conversion Rights of the Holder against impairment. In the event a
Holder shall elect to convert any Note as provided herein, the Company cannot
refuse conversion based on any claim that such Holder or anyo ne associated or
affiliated with such Holder has been engaged in any violation of law, violation
of an agreement to which such Holder is a party or for any reason whatsoever,
unless, an injunction from a court, or notice, restraining and or adjoining
conversion of all or of said Note shall have issued and the Company posts a
surety bond for the benefit of such Holder in an amount equal to one hundred
thirty percent ( 130%) of the amount of the Note the Holder has elected to
convert, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Holder in the event it obtains judgment. 

(e)     
Certificates as to Adjustments. Upon occurrence of each adjustment or
readjustment of the Conversion Price or n umber of shares of Common Stock
issuable upon conversion of this Note pursuant to this Section 3.5, the Company
at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Holder a certificate setting
forth such adjustment and readjustment, showing i n detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon written
request of the Holder, at any time, furnish or cause to be furnished to the
Holder a like certificate setting forth such adjustments and readjustments, the
applicable Conversion Price in effect at the time, and 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 the conversion of this Note. Notwithstanding the
foregoing, the Company shall not be obligated to deliver a certificate unless such certificate would reflect an increase or decrease of at
least one percent (1%) of such adjusted amount. 

10 

(f)      Issue
  Taxes. The Company shall pay any and all issue and other taxes, excluding
  federal, state or local income taxes, that may be payable in respect of any
  issue or delivery of shares of Common Stock on conversion of this Note pursuant
  thereto; provided, however, that the Company shall not be obligated to pay any
  transfer taxes resulting from any transfer requested by the Holder in connection
with any such conversion. 

(g)     
Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of this Note. In lieu of any fractional shares to which
the Holder would otherwise be entitled, the Company shall pay cash equal to the
product of such fraction multiplied by the average of the Closing Bid Prices of
the Common Stock for the five (5) consecutive Trading Days immediately preceding
the Conversion Date. 

(h)     
Reservation of Common Stock. The Company shall at all times when
this Note shall be outstanding, reserve and keep available out of its authorized
but unissued Common Stock, such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of this Note and all
interest accrued thereon; provided that the number of shares of Common
Stock so reserved shall at no time be less than one hundred twenty percent (
120%) of the number of shares of Common Stock for which this Note and all
interest accrued thereon are at any time convertible. The Company shall, from
time to time in accordance with Nevada corporate law, increase the authorized
number of shares of Common Stock if at any time the unissued number of
authorized shares shall not be sufficient to satisfy the Company's obligations
under this Section 3.5(h) . 

(i)     
Regulatory Compliance. If any shares of Common Stock to be
reserved for the purpose of conversion of this Note or any interest accrued
thereon require registration or listing with or approval of any governmental
authority, stock exchange or other regulatory body under any federal or state
law or regulation or otherwise before such shares may be validly issued or
delivered upon conversion, the Company shall, at its sole cost and expense, i n
good faith and as expeditiously as possible, endeavor to secure such
registration, listing or approval, as the case may be. 

Section 3.6     
Prepayment. 

(a)     
Prepayment Upon an Event of Default. Notwithstanding anything to
the contrary contained herein, upon the occurrence of an Event of Default
described i n Sections 2.1 (a)-(j)) and 2.1 (m)- (o) hereof, the Holder shall
have the right, at such Holder's option, to require the Company to prepay in
cash all or a portion of this Note at a price equal to one hundred twenty
percent (120%) of the aggregate principal amount of this Note plus all accrued
and unpaid interest applicable at the time of such request (the "Event of
Default Prepayment Price"). Nothing i n this Section 3.6(a) shall limit the
Holder's rights under Section 2.2 hereof. 

(b)     
Prepayment Option Upon Major Transaction. In addition to all
other rights of the Holder contained herein, simultaneous with the occurrence of
a Major Transaction (as defined in Section 3.6(e) hereof), the Holder shall have
the right, at the Holder's option, to require the Company to prepay all or a
portion of the Holder's Note at a price equal to one hundred ten percent (110%)
of the aggregate principal amount of this Note plus all accrued and unpaid
interest (the "Major Transaction Prepayment Price"). 

11 

(c)     
Prepayment Option Upon Triggering Event. In addition to all
other rights of the Holder contained herein, after a Triggering Event (as
defined below), the Holder shall have the right, at the Holder's option, to
require the Company to prepay all or a portion of this Note in cash at a price
equal to the sum of (i) the greater of (A) one hundred twenty percent (120%) of
the aggregate principal amount of this Note plus all accrued and un paid
interest and (B) in the event at such time the Holder is unable to obtain the
benefit of its conversion rights through the conversion of this Note and resale
of the shares of Common Stock issuable upon conversion hereof in accordance with
the terms of this Note and the other Transaction Documents, the aggregate
principal amount of this Note plus all accrued but unpaid interest hereon,
divided by the Conversion Price on (x) the date the Prepayment Price (as defined
below) is demanded or otherwise due or (y) the date the Prepayment Price is paid
in full, whichever is less, multiplied by the VWAP on (x) the date the
Prepayment Price is demanded or otherwise due, and (y) the date the Prepayment
Price is paid in full, whichever is greater, and (ii) all other amounts, costs,
expenses and liquidated damages due in respect of this Note and the other
Transaction Documents (the "Triggering Event Prepayment Price," and,
collectively with the "Major Transaction Prepayment Price," the "Prepayment
Price"). 

(d)      Major
Transaction. A "Major Transaction" shall be deemed to have occurred at such
time as any of the following events: 

(i)      the
consolidation, merger or other business combination of the Company with or into
another Person (other than (A) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or
(B) a consolidation, merger or other business combination in which holders of
the Company's voting power immediately prior to the transaction continue after
the transaction to hold, directly or indirectly, the voting power of the
surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such
entity or entities); or 

(ii)      the sale or
transfer of more than fifty percent (50%) of the Company's assets (based on the
fair market value as determined in good faith by the Company's Board of
Directors) other than inventory in the ordinary course of business in one or a
related series of transactions; or 

(iii)      closing of
a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted. 

(e)     
Triggering Event. A "Triggering Event" shall be deemed to have
occurred at such time as any of the following events: 

(i)      the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, Nasdaq SmallCap Market, Nasdaq National Market, American Stock Exchange
or The New York Stock Exchange, Inc. for a period of five (5) consecutive
Trading Days; 

(ii)      the
Company's notice to any holder of the Note, including by way of public
announcement, at any time, of its inability to comply (including for any of the
reasons described in Section 3.8) or its intention not to comply with proper
requests for conversion of any Note into shares of Common Stock; or

(iii) the
  Company's failure to comply with a Conversion Notice tendered in accordance with
  the provisions of this Note within ten (10) business days after the receipt by
  the Company of the Conversion Notice; or 

(iv)      the Company
deregisters its shares of Common Stock and as a result such shares of Common Stock are no longer publicly traded; or

12 

(v)      the Company
  consummates a ''going private" transaction and as a result the Common Stock is
no longer registered under Sections l 2(b) or 12(g) of the Exchange Act. 

(f)      Mechanics
of Prepayment at Option of Holder Upon Major Transaction. No sooner than
fifteen (15) days nor later than ten (10) days prior to the consummation of a
Major Transaction, but not prior to the public announcement of such Major
Transaction, the Company shall deliver written notice thereof via facsimile and
overnight courier ("Notice of Major Transaction") to the Holder of this Note. At
any time after receipt of a Notice of Major Transaction (or, in the event a
Notice of Major Transaction is not delivered at least ten (10) days prior to a
Major Transaction, at any time within ten (10) days prior to a Major
Transaction), any holder of the Notes then outstanding may require the Company
to prepay, effective immediately prior to the consummation of such Major
Transaction, all of the holder's Notes then outstanding by delivering written
notice thereof via facsimile and overnight courier ("Notice of Prepayment at
Option of Holder Upon Major Transaction") to the Company, which Notice of
Prepayment at Option of Holder Upon Major Transaction shall indicate (i) the
number of Notes that such holder is electing to prepay and (ii) the applicable
Major Transaction Prepayment Price, as calculated pursuant to Section 3.6(b)
above. 

(g)      Mechanics
of Prepayment at Option of Holder Upon Triggering Event. Within one (1)
business day after the occurrence of a Triggering Event, the Company shall
deliver written notice thereof via facsimile and overnight courier ("Notice of
Triggering Event") to each holder of the Notes. At any time after the earlier of
a holder's receipt of a Notice of Triggering Event and such holder becoming
aware of a Triggering Event, any holder of this Note may require the Company to
prepay all of the Notes on a pro rata basis by delivering written notice thereof
via facsimile and overnight courier ("Notice of Prepayment at Option of
Holder Upon Triggering Event") to the Company, which Notice of Prepayment at
Option of Holder Upon Triggering Event shall indicate (i) the amount of the Note
that such holder is electing to have prepaid and (ii) the applicable Triggering
Event Prepayment Price, as calculated pursuant to Section 3.6(c) above. A holder
shall only be permitted to require the Company to prepay the Note pursuant to
Section 3.6 hereof for the greater of a period of ten (10) days after receipt by
such holder of a Notice of Triggering Event or for so long as such Triggering
Event is continuing. 

(h)      Payment
of Prepayment Price. Upon the Company's receipt of a Notice(s) of Prepayment
at Option of Holder Upon Triggering Event or a Notice(s) of Prepayment at Option
of Holder Upon Major Transaction from any holder of the Notes, the Company shall
immediately notify each holder of the Notes by facsimile of the Company's
receipt of such Notice(s) of Prepayment at Option of Holder Upon Triggering
Event or Notice(s) of Prepayment at Option of Holder Upon Major Transaction and
each holder which has sent such a notice shall promptly submit to the Company
such holder's certificates representing the Notes which such holder has elected
to have prepaid. The Company shall deliver the applicable Triggering Event
Prepayment Price, in the case of a prepayment pursuant to Section 3.6(i), to
such holder within five (5) business days after the Company's receipt of a
Notice of Prepayment at Option of Holder Upon Triggering Event and, in the case
of a prepayment pursuant to Section 3.6(f), the Company shall deliver the
applicable Major Transaction Prepayment Price immediately prior to the
consummation of the Major Transaction; provided that a holder's original Note
shall have been so delivered to the Company; provided further that if the
Company is u nable to prepay all of the Notes to be prepaid, the Company shall
prepay an amount from each holder of the Notes being prepaid equal to such
holder's pro-rata amount (based on the number of Notes held by such holder
relative to the number of Notes outstanding) of all Notes being prepaid. If the
Company shall fail to prepay all of the Notes submitted for prepayment (other
than pursuant to a dispute as to the arithmetic calculation of the Prepayment
Price), in addition to any remedy such holder of the Notes may have under this
Note and the Purchase Agreement, the applicable Prepayment Price payable in
respect of such Notes not prepaid shall bear interest at the rate of two percent
(2%) per month (prorated for partial months) until paid in full. Until the
Company pays such unpaid applicable Prepayment Price in full to a holder of the
Notes submitted for prepayment, such holder shall have the option
(the "Void Optional Prepayment Option") to, in lieu of prepayment, require the
Company to promptly return to such holder(s) all of the Notes that were
submitted for prepayment by such holder(s) under this Section 3.6 and for which
the applicable Prepayment Price has not been paid, by sending written notice
thereof to the Company via facsimile (the "Void Optional Prepayment Notice").
Upon the Company's receipt of such Void Optional Prepayment Notice(s) and prior
to payment of the full applicable Prepayment Price to such holder, (i) the
Notice(s) of Prepayment at Option of Holder Upon Triggering Event or the
Notice(s) of Prepayment at Option of Holder Upon Major Transaction, as the case
may be, shall be null and void with respect to those Notes submitted for
prepayment and for which the applicable Prepayment Price has not been paid, (ii)
the Company shall immediately return any Notes submitted to the Company by each
holder for prepayment under this Section 3.6(h) and for which the applicable
Prepayment Price has not been paid and (iii) the Conversion Price of such
returned Notes shall be adjusted to the lesser of (A) the Conversion Price as in
effect on the date on which the Void Optional Prepayment Notice(s) is delivered
to the Company and (B) the lowest Closing Bid Price during the period beginning
on the date on which the Notice(s) of Prepayment of Option of Holder Upon Major
Transaction or the Notice(s) of Prepayment at Option of Holder Upon Triggering
Event, as the case may be, is delivered to the Company and ending on the date on
which the Void Optional Prepayment Notice(s) is delivered to the Company;
provided that no adjustment shall be made if such adjustment would result in an
increase of the Conversion Price then in effect. A holder's delivery of a Void
Optional Prepayment Notice and exercise of its rights following such notice
shall not effect the Company's obligations to make any payments which have
accrued prior to the date of such notice. Payments provided for in this Section
3.6 shall have priority to payments to other stockholders in connection with a
Major Transaction. 

13 

(i)      Company
  Prepayment Option upon Major Transaction. Upon the consummation of a Major
  Transaction, the Company may prepay in cash all or any portion of the
  outstanding principal amount of this Note together with all accrued and unpaid
  interest thereon upon at least thirty (30) days prior written notice to the
  Holder (the "Company's Prepayment Notice") at a price equal to one
  hundred twenty percent (120%) of the aggregate principal amount of this Note
  plus any accrued but unpaid interest (the "Company's Prepayment Price");
  provided, however, that if a holder has delivered a Conversion Notice to the
  Company or delivers a Conversion Notice within such thirty (30) day period
  following delivery of the Company's Prepayment Notice, the principal amount of
  the Notes plus any accrued but unpaid interest designated to be converted may
  not be prepaid by the Company and shall be converted in accordance with Section
  3.3 hereof; provided further that if during the period between delivery of the
  Company's Prepayment Notice and the Company's Prepayment Date (as defined
  below), a holder shall become entitled and elects to deliver a Notice of
  Prepayment at Option of Holder Upon Major Transaction or Notice of Prepayment at
  Option of Holder upon Triggering Event, then such rights of the holders shall
  take precedence over the previously delivered Company Prepayment Notice if the
  holder so elects. The Company's Prepayment Notice shall state the date of
  prepayment which date shall be the date of the consummation of the Major
  Transaction (the "Company's Prepayment Date"), the Company's Prepayment Price
  and the principal amount of Notes plus any accrued but unpaid interest to be
  prepaid by the Company. The Company shall deliver the Company's Prepayment Price
  on the Company's Prepayment Date, provided, that if the holder(s) delivers a
  Conversion Notice before the Company's Prepayment Date, then the portion of the
  Company's Prepayment Price which would be paid to prepay the Notes covered by
  such Conversion Notice shall be returned to the Company upon delivery of the
  Common Stock issuable i n connection with such Conversion Notice to the
  holder(s). On the Company's Prepayment Date, the Company shall pay the Company's
  Prepayment Price, subject to any adjustment pursuant to the immediately
  preceding sentence, to the holder(s) on a pro rata basis. If the Company fails
  to pay the Company's Prepayment Price by the third (3rd) business day after the
  Company's Prepayment Date, the prepayment will be declared null and void and the
  Company shall lose its right to serve a Company's Prepayment Notice pursuant to
  this Section 3.6(i) in the future. Notwithstanding the foregoing to the
  contrary, the Company may effect a prepayment pursuant to this Section 3.6(i)
  only if trading in the Common Stock shall not have been suspended by the
  Securities and Exchange Commission or the Nasdaq SmallCap Market (or other
exchange or market on which the Common Stock is trading), and and the Company is in material compliance with the terms and
conditions of this Note and the other Transaction Documents. 

14 

Section 3.7     
Inability to Fully Convert. 

(a)      Holder's
Option if Company Cannot Fully Convert. If, upon the Company's receipt of a
Conversion Notice, the Company cannot issue shares of Common Stock for any
reason, including, without limitation, because the Company (w) does not have a
sufficient number of shares of Common Stock authorized and available, or (x) is
otherwise prohibited by applicable law or by the rules or regulations of any
stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Company or any of its securities from
issuing all of the Common Stock which is to be issued to the Holder pursuant to
a Conversion Notice, then the Company shall issue as many shares of Common Stock
as it is able to issue in accordance with the Holder's Conversion Notice and,
with respect to the unconverted portion of this Note, the Holder, solely at
Holder's option, can elect to: 

(i)      require the
Company to prepay that portion of this Note for which the Company is unable to
issue Common Stock in accordance with the Holder's Conversion Notice (the
"Mandatory Prepayment") at a price per share equal to the
Triggering Event Prepayment Price as of such Conversion Date (the "Mandatory
Prepayment Price"); 

(ii)      void its
Conversion Notice and retain or have returned, as the case may be, this Note
that was to be converted pursuant to the Conversion Notice (provided that the
Holder's voiding its Conversion Notice shall not effect the Company's
obligations to make any payments which have accrued prior to the date of such
notice). 

In the event a Holder shall elect to convert any portion of its
Notes as provided herein, the Company cannot refuse conversion based on any
claim that such Holder or anyone associated or affiliated with such Holder has
been engaged in any violation of law, violation of an agreement to which such
Holder is a party or for any reason whatsoever, unless, an injunction from a
court, on notice, restraining and or adjoining conversion of all or of said
Notes shall have been issued and the Company posts a surety bond for the benefit
of such Holder in an amount equal to 130% of the principal amount of the Notes
the Holder has elected to convert, which bond shall remain i n effect until the
completion of arbitration/litigation of the dispute and the proceeds of which
shall be payable to such Holder in the event it obtains judgment. 

(b)      Mechanics
of Fulfilling Holder's Election. The Company shall immediately send via
facsimile to the Holder, upon receipt of a facsimile copy of a Conversion Notice
from the Holder which cannot be fully satisfied as described in Section 3.7(a)
above, a notice of the Company's inability to fully satisfy the Conversion
Notice (the "Inability to Fully Convert Notice"). Such Inability to Fully
Convert Notice shall indicate (i) the reason why the Company is unable to fully
satisfy such holder's Conversion Notice, (ii) the amount of this Note which
cannot be converted and (iii) the applicable Mandatory Prepayment Price. The
Holder shall notify the Company of its election pursuant to Section 3.7(a) above
by delivering written notice via facsimile to the Company ("Notice in
Response to Inability to Convert"). 

(c)      Payment
of Prepayment Price. If the Holder shall elect to have its Notes prepaid
pursuant to Section 3.7(a)(i) above, the Company shall pay the Mandatory
Prepayment Price to the Holder within thirty (30) days of the Company's receipt
of the Holder's Notice in Response to Inability to Convert, provided that prior
to the Company's receipt of the Holder's Notice in Response to Inability to
Convert the Company has not delivered a notice to the Holder stating, to the
satisfaction of the Holder, that the event or condition resulting i n the
Mandatory Prepayment has been cured and all Conversion Shares issuable to the
Holder can and will be delivered to the Holder in accordance with the terms of
this Note. If the Company shall fail to pay the applicable Mandatory Prepayment
Price to the Holder on a timely basis as described in this Section 3.7(c) (other than
pursuant to a dispute as to the determination of the arithmetic calculation of
the Prepayment Price), in addition to any remedy the Holder may have under this
Note and the Purchase Agreement, such unpaid amount shall bear interest at the
rate of two percent (2%) per month (prorated for partial months) until paid in
full. Until the full Mandatory Prepayment Price is paid in full to the Holder,
the Holder may (i) void the Mandatory Prepayment with respect to that portion of
the Note for which the full Mandatory Prepayment Price has not been paid, (ii)
receive back such Note, and (iii) require that the Conversion Price of such
returned Note be adjusted to the lesser of (A) the Conversion Price as in effect
on the date on which the Holder voided the Mandatory Prepayment and (B) the
lowest Closing Bid Price during the period beginning on the Conversion Date and
ending on the date the Holder voided the Mandatory Prepayment. 

15 

(d)      Pro-rata
  Conversion and Prepayment. In the event the Company receives a Conversion
  Notice from more than one holder of the Notes on the same day and the Company
  can convert and prepay some, but not all, of the Notes pursuant to this Section
  3.7, the Company shall convert and prepay from each holder of the Notes electing
  to have its Notes converted and prepaid at such time an amount equal to such
  holder's pro-rata amount (based on the principal amount of the Notes held by
  such holder relative to the principal amount of the Notes outstanding) of all
the Notes being converted and prepaid at such time. 

Section 3.8     
No Rights as Shareholder. Nothing contained in this Note shall
be construed as conferring upon the Holder, prior to the conversion of this
Note, the right to vote or to receive dividends or to consent or to receive
notice as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or of any other matter, or any other rights
as a shareholder of the Company. 

ARTICLE IV 

MISCELLANEOUS 

Section 4.1     
Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received), telecopy or facsimile at the address or number designated in the
Purchase Agreement (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 Company will give written notice to the Holder at least ten (10) days prior
to the date on which the Company takes a record (x) with respect to any dividend
or distribution upon the Common Stock, (y) with respect to any pro rata
subscription offer to holders of Common Stock or (z) for determining rights to
vote with respect to any Organic Change, dissolution, liquidation or winding-up
and in no event shall such notice be provided to such holder prior to such
information being made known to the public. The Company will also give written
notice to the Holder at least ten (10) days prior to the date on which any
Organic Change, dissolution, liquidation or winding-up will take place and in no
event shall such notice be provided to the Holder prior to such information
being made known to the public. 

Section 4.2     
Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of Nevada, without giving effect
to any of the conflicts of law principles which would result in the application
of the substantive law of another jurisdiction. This Note shall not be
interpreted or construed with any presumption against the party causing this
Note to be drafted. 

Section 4.3     
Headings. Article and section headings in this Note are included
herein for purposes of convenience of reference only and shall not
constitute a part of this Note for any other purpose. 

 16 

Section 4.4     
  Remedies, Characterizations, Other Obligations, Breaches and
    Injunctive Relief. The remedies provided in this Note shall be
  cumulative and in addition to all other remedies available under this Note, at
  law or in equity (including, without limitation, a decree of specific
  performance and/or other injunctive relief), no remedy contained herein shall be
  deemed a waiver of compliance with the provisions giving rise to such remedy and
  nothing herein shall limit a holder's right to pursue actual damages for any
  failure by the Company to comply with the terms of this Note. Amounts set forth
  or provided for herein with respect to payments, conversion and the like (and
  the computation thereof) shall be the amounts to be received by the holder
  thereof and shall not, except as expressly provided herein, be subject to any
  other obligation of the Company (or the performance thereof). The Company
  acknowledges that a breach by it of its obligations hereunder will cause
  irreparable and material harm to the Holder and that the remedy at law for any
  such breach may be inadequate. Therefore the Company agrees that, in the event
  of any such breach or threatened breach, the Holder shall be entitled, in
  addition to all other available rights and remedies, at law or in equity, to
  seek and obtain such equitable relief, including but not limited to an
  injunction restraining any such breach or threatened breach, without the
  necessity of showing economic loss and without any bond or other security being
required. 

Section 4.5     
Enforcement Expenses. The Company agrees to pay all costs and expenses of
enforcement of this Note, including, without limitation, reasonable attorneys'
fees and expenses. 

Section 4.6     
Binding Effect. The obligations of the Company and the Holder
set forth herein shall be binding upon the successors and assigns of each such
party, whether or not such successors or assigns are permitted by the terms
hereof. 

Section 4.7     
Amendments. This Note may not be modified or amended many manner
except in writing executed by the Company and the Holder. 

Section 4.8     
Compliance with Securities Laws. The Holder of this Note
acknowledges that this Note is being acquired solely for the Holder's own
account and not as a nominee for any other party, and for investment, and that
the Holder shall not offer, sell or otherwise dispose of this Note. This Note
and any Note issued in substitution or replacement therefor shall be stamped or
imprinted with a legend in substantially the following form: 

"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE
COMPANY OF AN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY
SATISFACTORY TO THE COMPANY THAT THIS NOTE MAY BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS." 

Section 4.9     
Consent to Jurisdiction. Each of the Company and the Holder (i) hereby
irrevocably submits to the exclusive jurisdiction of the State of Nevada for the
purposes of any suit, action or proceeding arising out of or relating to this
Note and (ii) hereby waives, and agrees not to assert in any such suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of such court, that the suit, action or proceeding is brought in an inconvenient
forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Holder
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under the Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing in this Section
4.9 shall affect or limit any right to serve process in any other manner
permitted by law. Each of the Company and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this Note shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party. 

17 

Section 4.10     
  Parties in Interest. This Note shall be binding upon, inure to
  the benefit of and be enforceable by the Company, the Holder and their
respective successors and permitted assigns. 

Section 4.1 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 privilege. 

Section 4.12     
Company Waivers. Except as otherwise specifically provided
herein, the Company and all others that may become liable for all or any part of
the obligations evidenced by this Note, hereby waive presentment, demand, notice
of nonpayment, protest and all other demands' and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, and do hereby
consent to any number of renewals of extensions of the time or payment hereof
and agree that any such renewals or extensions may be made without notice to any
such persons and without affecting their liability herein and do further consent
to the release of any person liable hereon, all without affecting the liability
of the other persons, firms or Company liable for the payment of this Note, AND
DO HEREBY WAIVE TRlAL BY JURY. 

(a)      No delay or
omission on the part of the Holder in exercising its rights under this Note, or
course of conduct relating hereto, shall operate as a waiver of such rights or
any other right of the Holder, nor shall any waiver by the Holder of any such
right or rights on any one occasion be deemed a waiver of the same right or
rights on any future occasion. 

18 

(b)      THE COMPANY
ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL
TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICA BLE LAW, HEREBY WAIVES ITS
RIGHT TO NOTICE AN D HEA R ING
WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS
SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 

	LITHIUM EXPLORATION GROUP, INC. 
	 	  
	 	  
	 	
	 By: 	 
	 Name: 	 Alexander Walsh 
	 	Title: Chief Executive Officer

FORM OF 

NOTICE OF CONVERSION 

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

The undersigned hereby irrevocably elects to convert $ of the
principal amount of the above Note No. ___ into shares of Common Stock of
Lithium Exploration Group, Inc. (the "Company") according to the conditions
hereof, as of the date written below. 

	the Date of Conversion:	 
	 	 
	ApplicableConversion Price:	 
	 	 
	Number of shares of Common Stock beneficially
      owned or deemed beneficially owned by the Holder on
    ________________________________________________________________________
	 
	Signature: 	 
	 	 
	Print Name: 	 
	 	 
	Address:

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