Document:

EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of January 22, 2019, by and between Velt International Group Inc.,
a Nevada corporation, with headquarters located at 1313 N. Grand Ave., #16, Walnut, CA 91789 (the “Company”), and
LABRYS FUND, LP, a Delaware limited partnership, with its address at 48 Parker Road, Wellesley, MA 02482 (the “Buyer”).

 

WHEREAS:

 

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

 

B. Buyer desires to
purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 12% convertible
note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$75,000.00 (together with
any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms
thereof, the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common
Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

 

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

 

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

 

1. PURCHASE AND SALE OF NOTE.

 

a. Purchase of Note.
On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from the
Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto,
subject to the express terms of the Note. In connection with the funding of the Note, the Company shall issue to Buyer on the
Closing Date, as a commitment fee, 92,500 shares of its common stock (the “Returnable Shares”), as further provided
in the Note. The Returnable Shares shall be deemed earned in full as of the Closing Date.

 

b. Form of Payment.
On or around the Closing Date (as defined below), the Buyer shall pay the purchase price of $67,500.00 (the “Purchase Price”)
for the Note, by wire transfer of immediately available funds, in accordance with the Company’s written wiring instructions,
against delivery of the Note, and (i) the Company shall deliver such duly executed Note on behalf of the Company, to the Buyer.

 

     

     

    

 

c. Closing Date.
Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 7 and Section 8 below, the date
and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon,
Eastern Standard Time on or about January 22, 2019, or such other mutually agreed upon time. The closing of the transactions contemplated
by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.

 

2. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Company that:

 

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

 

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

 

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

 

d. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale
of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for
so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding
the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information
unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries
nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or
affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that
may constitute a breach of any of the Company’s representations and warranties made herein.

 

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

 

f. Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel
in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to
an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred
to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”))
of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of
the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only
in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement. In the event that the Company does not accept the opinion of counsel provided
by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation
S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated damages
of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note, prorated for
partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer
elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion
Price (as defined in the Note) at the time of payment.

 

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

 

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

 

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

 

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

 

i. Residency.
The Buyer is a resident of the jurisdiction set forth in the preamble.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:

 

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

 

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

 

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c. Capitalization.
As of the date hereof, the authorized capital stock of the Company, and shares issued and outstanding, is as set forth in the
Company’s most recent periodic report filed with the SEC. Except as disclosed in the SEC Documents, no shares are reserved
for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other
than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,442,307 shares are reserved
for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive
rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions
or failure to act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there
are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii)
there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of
any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained
in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the
issuance of the Note, Returnable Shares, or the Conversion Shares. The Company has filed in its SEC Documents true and correct
copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company
shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of
the Company as of the Closing Date.

 

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

 

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

 

f. No Conflicts.
The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance of the Returnable Shares and the issuance
and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of
the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute
a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to
which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to
which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time
or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any,
are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or
stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the
Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue
the Returnable Shares and Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is not in violation of the listing requirements of the Over-the-Counter Bulletin Board (the “OTCBB”),
the OTCQB or any similar quotation system, and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB,
the OTCQB or any similar quotation system, in the foreseeable future nor are the Company’s securities “chilled”
by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

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g. SEC Documents;
Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the
“1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter
referred to herein as the (“SEC Documents”). The Company has delivered to the Buyer true and complete copies of the
SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended
or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material
respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to September 30, 2018, and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually
or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to
the reporting requirements of the 1934 Act. For the avoidance of doubt, filing of the documents required in this Section 3(g)
via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery
requirements of this Section 3(g).

 

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h. Absence of Certain
Changes. Since September 30, 2018, there has been no material adverse change and no material adverse development in the assets,
liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status
of the Company or any of its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

  

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

 

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

 

q. No Brokers.
The Company hereby represents and warrants that it has not hired, retained or dealt with any broker, finder, consultant, person,
firm or corporation in connection with the negotiation, execution or delivery of this Agreement or the transactions contemplated
hereunder. The Company covenants and agrees that should any claim be made against Purchaser for any commission or other compensation
by any broker, finder, person, firm or corporation, including without limitation, the Broker, based upon the Company’s engagement
of such person in connection with this transaction, the Company shall indemnify, defend and hold Purchaser harmless from and against
any and all damages, expenses (including attorneys’ fees and disbursements) and liability arising from such claim. The Company
shall pay the commission of the Broker, to the attention of the Broker, pursuant to their separate agreement(s) between the Company
and the Broker.

 

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r. Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since September 30, 2018, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

s. Environmental
Matters.

 

(i) There are, to the Company’s
knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations
of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions,
events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws
and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action
pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice
letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

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

 

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

 

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

 

u. Internal Accounting
Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain a system of internal
accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

 

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

 

w. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair
market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after
giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that
would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company
did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability
to continue as a “going concern” shall not, by itself, be a violation of this Section 3(w).

 

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

 

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

 

z. Bad Actor.
No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the basis of
being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance Guide published
by the SEC.

 

aa.Shell
Status. The Company represents that it is not a “shell” issuer and has never been a “shell”
issuer, or that if it previously has been a “shell” issuer that at least twelve (12) months have passed since the
Company has reported Form 10 type information indicating that it is no longer a “shell” issuer. Further, the
Company will instruct its counsel to either (i) write a 144-3(a)(9) opinion to allow for salability of the Returnable Shares
and/or Conversion Shares or (ii) accept such opinion from Holder’s counsel.

 

bb.No-Off Balance Sheet
Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

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cc. Manipulation
of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the Company.

 

dd. Sarbanes-Oxley
Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that
are effective as of the date hereof.

 

ee. Employee Relations.
Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union.
The Company believes that its and its Subsidiaries’ relations with their respective employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Subsidiary. To the knowledge of the Company, no executive
officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement,
or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or
other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign
laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and
wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

 

ff. Due Diligence
Questionnaire. The Company hereby represents and warrants to Buyer that all of the information furnished by the Company to
Holder on or around the date hereof, pursuant to the due diligence questionnaire form requested by Holder, is true and correct
in all material respects as of the date hereof.

 

gg. Breach of Representations
and Warranties by the Company. The Company agrees that if the Company breaches any of the representations or warranties set
forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement and it being
considered an Event of Default under Section 3.5 of the Note, the Company shall pay to the Buyer the Standard Liquidated Damages
Amount in cash or in shares of Common Stock at the option of the Company, until such breach is cured. If the Company elects to
pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price at
the time of payment.

 

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4. COVENANTS.

 

a. Best Efforts.
The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described in Section
7 and 8 of this Agreement.

 

b. Form D; Blue
Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing
pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to
obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior
to the Closing Date.

 

c. Use of Proceeds.
The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes and shall
not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise
or other person (except in connection with its currently existing direct or indirect Subsidiaries).

 

d. Notice of Subsequent
Transaction. While any amount remains outstanding under the Note, the Company shall, prior to the closing of any equity financing
(including debt with an equity component) (“Future Offering”), provide written notice to the Buyer describing the
proposed Future Offering, including the terms and conditions thereof. In the event the terms and conditions of a proposed Future
Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company
shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering. The foregoing
sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering.

 

e. Expenses.
The Company shall reimburse Buyer for any and all expenses incurred by them in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees
for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of
provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions
contemplated by the Documents. When possible, the Company must pay these fees directly, including, but not limited to, any and
all wire fees, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately
upon written notice by the Buyer or the submission of an invoice by the Buyer. At Closing, the Company’s initial obligation
with respect to this transaction is to reimburse Buyer’s legal expenses of $2,500.00 plus the cost of wire fees which shall
be considered a non-refundable, non-accountable sum.

 

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f. Financial Information.
The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases
issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders
of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the
avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via
a recognized wire service shall satisfy the delivery requirements of this Section 4(f).

 

g. Listing.
The Company shall promptly secure the listing of the Returnable Shares and Conversion Shares upon each national securities exchange
or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance)
and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Returnable Shares and Conversion Shares from time to time issuable upon conversion of the Note. The
Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock
on the OTCBB, OTCQB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap
Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all
respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry
Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer
copies of any material notices it receives from the OTCBB, OTCQB and any other exchanges or quotation systems on which the Common
Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.
The Company shall pay any and all fees and expenses in connection with satisfying its obligation under this Section 4(g).

 

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

 

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i. No Integration.
The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be
integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.

 

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

 

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

 

l. Restriction
on Activities. Commencing as of the date first above written, and until the sooner of the six month anniversary of the date
first written above or payment of the Note in full, or full conversion of the Note, the Company shall not, directly or indirectly,
without the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its
business; (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course of business;
or (c) solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other person or entity
in respect of any variable rate debt transactions (i.e., transactions were the conversion or exercise price of the security issued
by the Company varies based on the market price of the Common Stock) above $500,000, whether a transaction similar to the one
contemplated hereby or any other investment; or (d) file any registration statements with the SEC.

 

m. Legal Counsel
Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for promptly
supplying to the Company’s transfer agent and the Buyer a customary legal opinion letter of its counsel (the “Legal
Counsel Opinion”) to the effect that the sale of Returnable Shares and Conversion Shares by the Buyer or its affiliates,
successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided the requirements
of Rule 144 are satisfied and provided the Returnable Shares and Conversion Shares are not then registered under the 1933 Act
for resale pursuant to an effective registration statement). Should the Company’s legal counsel fail for any reason to issue
the Legal Counsel Opinion, the Buyer may (at the Company’s cost) secure another legal counsel to issue the Legal Counsel
Opinion, and the Company will instruct its transfer agent to accept such opinion.

 

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n. [Intentionally
Omitted].

 

o. Breach of Covenants.
The Company agrees that if the Company breaches any of the covenants set forth in this Section 4, and in addition to any other
remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under Section 3.4 of the
Note, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option
of the Buyer, until such breach is cured, or with respect to Section 4(d) above, the Company shall pay to the Buyer the Standard
Liquidated Damages Amount in cash or shares of Common Stock, at the option of the Buyer, upon each violation of such provision.
If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at
the Conversion Price at the time of payment.

 

5. [Intentionally
Omitted]. 

 

6. Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in
the name of the Buyer or its nominee, for the Returnable Shares and Conversion Shares in such amounts as specified from time to
time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer
Agent Instructions”). In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common
Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the
Returnable Shares and Conversion Shares under the 1933 Act or the date on which the Returnable Shares and Conversion Shares may
be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately
sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants
that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section, and stop transfer
instructions to give effect to Section 2(f) hereof (in the case of the Returnable Shares and Conversion Shares, prior to registration
of the Returnable Shares and Conversion Shares under the 1933 Act or the date on which the Returnable Shares and Conversion Shares
may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then
be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct
its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically
or in certificated form) any certificate for Returnable Shares and Conversion Shares to be issued to the Buyer upon conversion
of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will not fail to remove
(or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Returnable Shares and Conversion
Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement.
Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to
comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the
Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable
transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933
Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant
to Rule 144, the Company shall permit the transfer, and, in the case of the Returnable Shares and Conversion Shares, promptly
instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations
as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.

 

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7. CONDITIONS PRECEDENT
TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to the Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

 

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

 

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

 

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

 

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

 

8. CONDITIONS PRECEDENT TO THE BUYER’S
OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction,
at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole
benefit and may be waived by the Buyer at any time in its sole discretion:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

i. The Buyer shall have
received the amount of Returnable Shares, issued as of the Closing Date.

 

9. GOVERNING LAW; MISCELLANEOUS.

 

a. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada
without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby shall
be brought only in the state courts or federal courts located in the Commonwealth of Massachusetts. The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement
delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

 

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b.
Removal of Restrictive Legends. In the event that Purchaser has any shares of the Company’s Common Stock bearing
any restrictive legends, and Purchaser, through its counsel or other representatives, submits to the Transfer Agent any such shares
for the removal of the restrictive legends thereon in connection with a sale of such shares pursuant to any exemption to the registration
requirements under the Securities Act, and the Company and or its counsel refuses or fails for any reason (except to the extent
that such refusal or failure is based solely on applicable law that would prevent the removal of such restrictive legends) to
render an opinion of counsel or any other documents or certificates required for the removal of the restrictive legends, then
the Company hereby agrees and acknowledges that the Purchaser is hereby irrevocably and expressly authorized to have counsel to
the Purchaser render any and all opinions and other certificates or instruments which may be required for purposes of removing
such restrictive legends, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further
confirmation or instructions from the Company, issue any such shares without restrictive legends as instructed by the Purchaser,
and surrender to a common carrier for overnight delivery to the address as specified by the Purchaser, certificates, registered
in the name of the Purchaser or its designees, representing the shares of Common Stock to which the Purchaser is entitled, without
any restrictive legends and otherwise freely transferable on the books and records of the Company.

 

c. Filing Requirements.
From the date of this Agreement until the Notes are no longer outstanding, the Company will timely and voluntarily comply with
all reporting requirements that are applicable to an issuer with a class of shares registered pursuant to Section 12(g) of the
1934 Act, whether or not the Company is then subject to such reporting requirements, and comply with all requirements related
to any registration statement filed pursuant to this Agreement. The Company will use reasonable efforts not to take any action
or file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing obligations under said acts until the Notes are no longer
outstanding. The Company will maintain the quotation or listing of its Common Stock on the OTCBB, OTCQB, and OTC Pink, NYSE, or
NASDAQ Stock Market (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock (the
“Principal Market”), and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Principal Market, as applicable. The Company will provide Purchaser with copies of all notices
it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market. As of
the date of this Agreement and the Closing Date, the OTC Pink, is the Principal Market. Until the Note is no longer outstanding,
the Company will continue the listing or quotation of the Common Stock on a Principal Market and will comply in all respects with
the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market.

 

    23

     

    

 

d. 144
Default. In the event commencing twelve (12) months after the Closing Date and ending twenty-four (24) months
thereafter, the Purchaser is not permitted to resell any of the Conversion Shares without any restrictive legend or if such sales are
permitted but subject to volume limitations or further restrictions on resale as a result of the unavailability to Subscriber
of Rule 144(b)(1)(i) under the 1933 Act or any successor rule (a “144 Default”), for any reason except for
Purchasers’ status as an Affiliate or “control person” of the Company, or as a result of a change in
current applicable securities laws, then the Company shall pay such Purchaser as liquidated damages and not as a penalty an
amount equal to two percent (2%) of the value of Conversion Shares (based on the closing sale of the Common Stock) subject to
such 144 Default during the pendency of the 144 Default of each thirty day period thereafter (or portion thereof).

 

e. Usury. To the
extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time
hereafter in force, in connection with any claim, action or proceeding that may be brought by the Purchaser in order to enforce
any right or remedy under the Note. Notwithstanding any provision to the contrary contained in herein or under the Note, it is
expressly agreed and provided that the total liability of the Company under the Note for payments in the nature of interest shall
not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the
foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in
the nature of interest that the Company may be obligated to pay under the Note or herein exceed such Maximum Rate. It is agreed
that if the maximum contract rate of interest allowed by law and applicable to the Note is increased or decreased by statute or
any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will
be the Maximum Rate applicable to the Note from the effective date forward, unless such application is precluded by applicable
law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Purchaser with
respect to indebtedness evidenced by the Note, such excess shall be applied by the Purchaser to the unpaid principal balance of
any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.

 

f. Counterparts; Signatures
by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party
and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

g. Construction; Headings.
This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed against any person
as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect
the interpretation of, this Agreement.

 

    24

     

    

 

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

 

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

 

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

 

If to the Company, to:

 

Velt International Group Inc.

1313 N. Grand Ave., #16

Walnut, CA 91789

E-mail: patricia.yeoh@nhf-holdings.com

 

If to the Holder:

 

Labrys Fund, LP

48 Parker Road

Wellesley, MA 02482

E-mail: admin@equiluxgroup.com

 

    25

     

    

 

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

 

Anthony L.G., PLLC

625 N. Flagler Drive, Suite 600 

West Palm Beach, FL 33401 

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

E-mail: CFriend@AnthonyPLLC.com

 

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

 

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

 

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

 

m. Survival. The
representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing
hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify
and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of
or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in
this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

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

 

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

 

    26

     

    

 

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

 

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

 

r. Securities Laws
Disclosure. The Company shall comply with applicable securities laws by filing a Current Report on Form 8-K, within four (4)
Trading Days following the date hereof, disclosing all the material terms of the transactions contemplated hereby, if the Company
deems the transactions contemplated hereby to constitute material non- public information.

 

s. Indemnification.
In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder, and in
addition to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect,
indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder
is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Note
or any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or
claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement
or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the
status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by this
Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall
make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law

 

[signature page follows]

 

    27

     

    

  

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

 

VELT
INTERNATIONAL GROUP INC. 

 

	By:	/s/
    Ali Kasa	 

Name:
Ali Kasa

Title:
Chief Executive Officer

 

LABRYS
FUND, LP 

 

	By:	                     	 

Name:
Thomas Silverman

Title:
Managing Member

 

AGGREGATE
SUBSCRIPTION AMOUNT:

 

	Aggregate Principal Amount of Note:	 	US$	75,000.00 	 
	 	 	 	 	 
	Aggregate Purchase Price:	 	US$	67,500.00 	 

 

    28EXHIBIT
10.2

 

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

 

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

 

	Principal
    Amount: $75,000.00	Issue
    Date: January 22, 2019           
	Purchase
        Price: $67,500.00

        Original
        Issue Discount: $7,500.00
	 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, VELT INTERNATIONAL GROUP INC., a Nevada corporation (hereinafter called the “Borrower”
or “Company”) (Trading Symbol: VIGC), hereby promises to pay to the order of LABRYS FUND, LP, a Delaware limited
partnership, or registered assigns (the “Holder”) the sum of US$75,000.00, together with any interest as set forth
herein, on July 22, 2019 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the
rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until
the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. In connection with the
issuance of this convertible promissory note (the “Note”), the Borrower shall, on the Issue Date, issue 92,500 shares
of common stock (the “Returnable Shares”) to Holder as a commitment fee, provided, however, the Returnable
Shares must be returned to the Borrower’s treasury if the Note is fully repaid and satisfied prior to the date which is
one hundred eighty (180) days following the Issue Date, subject further to the terms and conditions of this Note.

 

This
Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest
on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum
or (ii) the maximum amount allowed by law from the due date thereof until the same is paid (the “Default Interest”).
Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year
and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value
per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States
of America.

 

     

     

    

 

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

 

This
Note carries an original issue discount of $7,500.00 (the “OID”), to cover the Holder’s accounting fees, due
diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Note, which
is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $67,500.00, computed as follows:
the Principal Amount minus the OID.

 

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

 

The
following terms shall also apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

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

 

    2

     

    

 

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

 

1.2
Conversion Price.

 

(a)
Calculation of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion
Price”) shall equal the lesser of (i) 65% multiplied by the lowest Trading Price (as defined below) (representing a discount
rate of 35%) during the previous twenty (20) Trading Day period ending on the latest complete Trading Day prior to the date of
this Note and (ii) the Alternate Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary
of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Alternate
Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%).
“Market Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any
security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “OTC
Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the
OTC Market is not the principal trading market for such security, the trading price of such security on the principal securities
exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any
of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink
sheets” by the National Quotation Bureau, Inc., or (ii) the lowest closing bid price on the OTC Market as reported by a
Reporting Service designated by the Holder or, if the OTC Market is not the principal trading market for such security, the closing
bid price of such security on the principal securities exchange or trading market where such security is listed or traded or,
if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of
any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be
the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted
for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Market or on the principal securities
exchange or other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the
fees of its transfer agent and all DTC fees associated with any such issuance. In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of manifest error. Holder shall be entitled to deduct
$850.00 from the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice
of Conversion.

 

    3

     

    

 

Each
time, while this Note is outstanding, the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd
party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise)
at a discount to market greater than the Alternate Conversion Price in effect at that time (prior to all other applicable adjustments
in the Note), then the Alternate Conversion Price shall be automatically adjusted to such greater discount percentage (prior to
all applicable adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding,
the Borrower enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of
a replacement promissory note), or Section 3(a)(10) transaction, in which any 3rd party has a look back period greater
than the look back period in effect under the Note at that time, then the Holder’s look back period shall automatically
be adjusted to such greater number of days until this Note is no longer outstanding. The Borrower shall give written notice to
the Holder, with the adjusted Alternate Conversion Price and/or adjusted look back period (each adjustment that is applicable
due to the triggering event), within one (1) business day of an event that requires any adjustment described in the two immediately
preceding sentences.

 

The
Conversion Price is subject to full ratchet anti-dilution in the event that the Company issues any common stock at a per share
price lower than the Conversion Price (each a “Dilutive Price”) then in effect, provided, however, that Holder shall
have the sole discretion in deciding whether to utilize such Dilutive Price instead of the Conversion Price otherwise in effect
at the time of the respective conversion.

 

    4

     

    

 

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

 

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

 

(d) [Intentionally
Omitted].

 

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

 

    5

     

    

 

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

 

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

 

1.3
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all
times to have authorized and reserved three (3) times the number of shares that is actually issuable upon full conversion of the
Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). Initially,
the Company will instruct the Transfer Agent to reserve 1,442,307 shares of common stock in the name of the Holder for
issuance upon conversion hereof. The Reserved Amount shall be increased from time to time in accordance with the Borrower’s
obligations pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change
to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at
the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be
a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding
Notes. If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section
3.2 of the Note, and the then outstanding principal due under this Note shall increase by Fifteen Thousand and No/100 United
States Dollars ($15,000).

 

    6

     

    

 

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

 

1.4
Method of Conversion.

 

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

 

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

 

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

 

    7

     

    

 

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

 

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

 

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

 

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

 

    8

     

    

 

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

 

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

 

    9

     

    

 

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

 

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

 

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

 

1.6
Effect of Certain Events.

 

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

 

    10

     

    

 

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

 

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

 

    11

     

    

 

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

 

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

 

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

 

    12

     

    

 

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

 

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

 

1.7
[Intentionally Omitted].

 

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

 

    13

     

    

 

1.9
Prepayment. Subject to the terms of this Note, and provided that an Event of Default has not occurred under this Note,
the Borrower may prepay the amounts outstanding hereunder pursuant to the following terms and conditions:

 

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

 

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

 

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

 

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

 

Article
II. CERTAIN COVENANTS

 

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

 

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

 

    14

     

    

 

2.3
Borrowings; Liens. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable
upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments
for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed
on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade
creditors financial institutions or other lenders incurred in the ordinary course of business, (c) borrowings, the proceeds of
which shall be used to repay this Note, or (ii) enter into, create or incur any liens, claims or encumbrances of any kind, on
or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom, securing any indebtedness occurring after the date hereof.

 

 

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

 

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

 

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

 

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

 

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

 

    15

     

    

 

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

 

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

 

Article
III. EVENTS OF DEFAULT

 

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

 

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

 

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

 

    16

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    18

     

    

 

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

 

3.19
OTC Marketplace Segments. If (i) the Common Stock of the Borrower or the Borrower itself has any notation on the OTC Markets
Group website (www.otcmarkets.com) other than “Current Information,” including but not limited to “Limited
Information” (Yield Sign) or “No Information” (Stop Sign), or if the Common Stock of the Borrower is shown only
as quoted on the “grey markets,” and (ii) by reason thereof, the Holder is unable to obtain a standard “144
legal opinion” from an attorney reasonably acceptable to The Holder, its brokerage firm, and the Company’s transfer
agent in order to facilitate the Holder’s conversion of any of the Borrower’s obligations hereunder into shares of
the Borrower’s Common Stock and thereupon deposit such shares into the Holder’s brokerage account.

 

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

 

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

 

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

 

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

 

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

 

    19

     

    

 

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

 

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

 

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

 

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

 

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

 

    20

     

    

 

Article
IV. MISCELLANEOUS

 

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

 

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

 

If
to the Borrower, to:

 

Velt
International Group Inc.

1313
N. Grand Ave., #16

Walnut,
CA 91789

E-mail:
patricia.yeoh@nhf-holdings.com

 

If
to the Holder:

 

Labrys
Fund, LP

48
Parker Road

Wellesley,
MA 02482

E-mail:
admin@equiluxgroup.com

 

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

 

Anthony
L.G., PLLC

625
N. Flagler Drive, Suite 600

West
Palm Beach, FL 33401

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

E-mail:
CFriend@AnthonyPLLC.com

 

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

 

4.4
Assignability. The Holder may assign or transfer this Note to any transferee at its sole discretion. This Note shall be
binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and
assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide
margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree
that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this
Note may be less than the amount stated on the face hereof. The Borrower shall not assign any of its rights or obligations under
this Note without the signed written consent of the Holder.

 

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

 

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

 

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

 

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

 

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

 

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

 

    23

     

    

 

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

 

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

 

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

 

    24

     

    

 

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

 

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

 

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

 

    25

     

    

 

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

 

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

 

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

 

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

 

[signature
page to follow]

 

    26

     

    

 

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

 

	 	VELT INTERNATIONAL GROUP INC.
	 	 	 
	 	By:	 
	 	 	Name: Ali Kasa
	 	 	Title: Chief Executive Officer

 

    27

     

    

 

EXHIBIT
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert $_________________principal amount of the Note (defined below) together with $________________
of accrued and unpaid interest thereto, totaling $_____________ into that number of shares
of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of
Velt International Group Inc., a Nevada corporation (the “Borrower”), according to the conditions of the convertible
note of the Borrower dated as of January 22, 2019 (the “Note”), as of the date written below. No fee will be charged
to the Holder for any conversion, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

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

 

Name
of DTC Prime Broker:

Account
Number:

 

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

 

Name:
Labrys Fund, LP

Address:
_________________________________

 

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

 

LABRYS
FUND, LP

 

By:_____________________________

Name:
_________________________

Title:
Principal

Date:
___________________________

 

    28

     

    

 

EXHIBIT
B

Affidavit of Confession of Judgment

 

COMMONWEALTH
OF MASSACHUSETTS

-----------------------------------------------------------------------
X

LABRYS
FUND, LP,

 

	 	Index No.
	 Plaintiff,	 
	 	AFFIDAVIT OF CONFESSION OF
	- against -	JUDGMENT

 

VELT
INTERNATIONAL GROUP INC.,

Defendant.

-----------------------------------------------------------------------
X

 

COMMONWEALTH
OF MASSACHUSETTS                        )

)
ss.:

 

Ali
Kasa, being duly sworn, hereby deposes and says:

 

1.
I am the Chief Executive Officer of defendant VELT INTERNATIONAL GROUP INC. (“Borrower”). As such, I am fully familiar
with all the facts and circumstances recited herein on personal knowledge. Borrower has its principal place of business at 1313
N. Grand Ave., #16, Walnut, CA 91789. On behalf of the Borrower, I hereby confess judgment in favor of Labrys Fund, LP (“Labrys
Fund”), residing at 48 Parker Road, Wellesley, MA 02482, in the amount of Seventy Five Thousand Dollars ($75,000.00), less
any payments made on or after the date of this affidavit of confession of judgment, plus interest at default interest rate of
twenty four percent (24%) percent per annum on said amount and all other applicable penalties under the Note (as defined herein).
In no event shall interest payable hereunder exceed the maximum permissible under applicable law.

 

2. I
hereby authorize the federal courts and/or state courts located in the Commonwealth of Massachusetts to enter judgment against
Borrower in the amount of in the amount of Seventy Five Thousand Dollars ($75,000.00), less any payments made on or after the
date of this affidavit of confession of judgment, plus interest at default interest rate of twenty four percent (24%) percent
per annum on said amount and all other applicable penalties under the Note, plus the costs and attorneys’ fees that are
set forth below, less any payments made on or after the date of this affidavit of confession of judgment, upon Borrower’s
failure for any reason to timely make any payment to Labrys Fund called for by the convertible promissory note between of the
parties, dated January 22, 2019 (the “Note”), due to the occurrence of an Event of Default (as defined in the Note)
under the Note.

 

    29

     

    

 

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

 

4. The
sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Labrys Fund under the following
circumstances: Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Labrys Fund the principal
sum of Seventy Five Thousand Dollars ($75,000.00) plus interest as provided for therein. The amounts confessed by this affidavit
represent a convertible promissory note investment by Labrys Fund in Borrower and arise out of Borrower’s breach of its
obligations under the Note.

 

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

 

    30

     

    

 

	 	VELT
    INTERNATIONAL GROUP INC.
	 	 	 
	 	By:	 
	 	 	Name: Ali Kasa
	 	 	Title: Chief Executive
    Officer

 

STATE
OF ______________ )

ss.:

COUNTY
OF ______________ )

 

ACKNOWLEDGMENT

 

On
__________, 2019 before me personally came ________________________________________, to me known, who, by me duly sworn, did depose
and say that deponent is an officer of VELT INTERNATIONAL GROUP INC., the corporation described in, and which executed the foregoing
affidavit of confession of judgment, that deponent knows the seal of the corporation, that the seal affixed to the affidavit of
confession of judgment is the corporation’s seal, that it was affixed by order of the board of directors of the corporation
and that deponent signed deponent’s name by like order.

 

 

_____________________________

Notary
Public

 

SEAL:

 

 

[Signature
Page to Affidavit of Confession of Judgment]

 

    31

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