Document:

Exhibit 10.3

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: $25,000.00

	
Issue Date: September 16, 2016

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, Liberated Energy, Inc. a Nevada corporation (hereinafter called the "Borrower"), hereby promises to pay to the order of CAREBOURN CAPITAL, L.P., a Delaware limited partnership, or registered assigns (the "Holder") the sum of $25,000.00 together with any interest as set forth herein, on September 16, 2017 (the "Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of 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. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest"). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the "Common Stock") in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise 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").

In addition, the Borrower agrees to pay $3,000.00 to the Holder, or the Holder's designee, to cover the Holder's legal fees, accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Note (the "Transactional Expense Amount"), all of which amount is included in the initial principal balance of this Note.

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

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1            Conversion Right. The Holder shall have the right from time to time, and at any time following Ninety (90) days after the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion"); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to

2

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

1.2            Conversion Price.

Calculation of Conversion Price. The conversion price (the "Conversion Price") shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 50% multiplied by the Market Price (as defined herein) (representing a discount rate of 50%). In the case that shares of the Borrower's common stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional Five Percent (5%) discount shall be added to the amount being converted at such time. In the event that the Borrower's shares of common stock are chilled for deposit into the DTC system and only eligible for Xclearing deposit, an additional Ten percent (10%) discount shall be added to the amount being converted at such time. "Market Price" means the average of the lowest three (3) Trading Prices (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 lowest price on the OTC Markets OTCQB Marketplace, or applicable trading market (the "OTCQB") as reported by a reliable reporting service ("Reporting Service") designated by the Holder (i.e. Bloomberg) or, if the OTCQB 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 OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then being traded.

1.3            Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the "Reserved Amount"). The Reserved Amount shall be increased from time to time in accordance with the Borrower's obligations pursuant to Section 4(g) 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

3

shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note. However, upon receipt of written notice from the Holder of Borrower's failure to maintain the Reserved Amount, the Borrower shall have three (3) days to cure any deficiencies in the Reserved Amount.

1.4            Method of Conversion.

(a)  Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after One Hundred Eighty Days 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 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

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

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

4

account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the "Deadline") (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

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

(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the

5

fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified.

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

6

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

1.6            Effect of Certain Events.

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

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, or an exchange of shares, recapitalization or reorganization pursuant to a merger or consolidation, 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 or more than 50% of the total outstanding shares 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

7

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.

(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 of a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7            Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which shall be 9.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower's ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

1.8            Status as Shareholder. Upon submission of a Notice of Conversion by a

8

Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower's failure to convert this Note.

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

(a)            At any time during the period beginning on the Issue Date and ending on the date which is thirty (30) days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 125%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(b) At any time during the period beginning the day which is thirty one (31) days following the Issue Date and ending on the date which is sixty (60) days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(c) At any time during the period beginning the day which is sixty one (61) days following the Issue Date and ending on the date which is ninety (90) days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by

9

making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(d)            At any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 140%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(e)            At any time during the period beginning the day which is one hundred twenty one (121) days following the Issue Date and ending on the date which is one hundred fifty (150) days following the Issue Date, the Borrower shall have the right, exercisable on not less than twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(f)            At any time during the period beginning the day which is one hundred fifty one (151) days following 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 twenty (20) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest.

(g)            After the expiration of one hundred eighty (180) 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 twenty (20) 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. 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

10

Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9. Notwithstanding anything to the contrary in this Note, the Borrower's right to prepay the amounts outstanding under this Note, in accordance with the terms and conditions of this Note, is expressly conditional upon the Holder's written acceptance, in Holder's sole discretion, of such applicable prepayment during the time that the Borrower is exercising their right to prepay this Note.

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.

2.3            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.

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

ARTICLE III. EVENTS OF DEFAULT

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

3.1            Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise, following a five (5) day cure period.

3.2            Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued

11

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

3.3            Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.

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

3.5            Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

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

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

3.8            Delisting of Common Stock.   The Borrower shall fail to maintain the

12

listing of the Common Stock on at least one of the OTCQB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

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

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

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

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

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

3.14        Reverse Splits. The Borrower effectuates a reverse split of its Common

Stock without twenty (20) days prior written notice to the Holder.

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

3.16        Cross-Default. Notwithstanding anything to the contrary contained in this Note or other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained any other financial instrument, including but not limited to all convertible promissory notes, already issued, or issued in the future, by the Borrower, to the Holder or any other 3rd party, 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.

3.17        Event of Default. Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations

13

hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, 3.15 and/or 3.16 exercisable through the delivery of written notice to the Borrower by such Holders (the "Default Notice"), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

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

ARTICLE IV. MISCELLANEOUS

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

14

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:

Liberated Energy, Inc.

2 Coleman Court

Southampton, NJ 08088

Attention: Brian P. Conway / CEO

Email: bconway1@warwick.net

If to the Holder:

CAREBOURN CAPITAL, L.P.

8700 Black Oaks Lane N

Maple Grove, Minnesota 55311

Attn: Chip Rice, Managing Member

Email: info@carebourncapital.com

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

4.4            Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

4.5            Cost of Collection. If default is made in the payment of this Note, the

15

Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys' fees.

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

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

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

4.9            Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower's shareholders (and copies of proxy materials 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

16

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

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

4.11        Reverse Split Penalty. If at any time while this Note is outstanding, the Borrower effectuates a reverse split with respect to the Common Stock, then a liquidated damages charge of 25% of the outstanding balance of this Note at that time, will be assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.

4.12        Right of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or financing from any 3rd party, 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 15 days from 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 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 complete such transaction within such time period, then the Borrower must again offer the capital or financing opportunity to the Holder on the same terms, and the process detailed above shall be repeated.

4.13        In the event that the Borrower fails to maintain the Reserved Amount as of the 115th day following the issue date of this Note, the Borrower shall issue a new note (identical in terms to the Note) which contains a principal value equal to 25% multiplied by the aggregated total principal and accrued interest owed under the Note as of that 115th day (the Penalty Note"), to the Holder, as a penalty. The issuance of the Penalty Note shall be in addition to all other applicable penalties contained herein.

17

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this September 16, 2016.

	 	
Liberated Energy, Inc.

	 	 
	 	 	 
	 	 	 
	 	
By:

	
BRIAN P. CONWAY

	 	
Name:

	
Brian P. Conway

	 	
Title:

	
CEO

	 

19

EXHIBIT A: NOTICE OF CONVERSION

The undersigned hereby elects to convert $_______________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note ("Common Stock") as set forth below, of Liberated Energy, Inc., a Nevada corporation (the "Borrower") according to the conditions of the convertible note of the Borrower dated as of September 16, 2016 (the "Note"), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

		[ ]	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

Name of DTC Prime Broker:

Account Number:

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

CAREBOURN CAPITAL, L.P.

8700 Black Oaks Lane N

Maple Grove, Minnesota 55311

Attention: Certificate Delivery

612.889.4671

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:                                                                                          ____________

CAREBOURN CAPITAL, L.P.

By: ____________________________

Name:      Chip Rice

Title:            Managing Member

8700 Black Oaks Lane N

Maple Grove, Minnesota 55311

20Exhibit 10.1

 

NON-QUALFIED STOCK OPTION AGREEMENT

 

UNDER THE SENESTECH, INC.

 

2008-2009 STOCK OPTION PLAN

 

THIS STOCK OPTION AGREEMENT is
entered into this ___day of ______, 20xx between SenesTech, Inc., a Nevada corporation (the “Corporation” or “Grantor”)
and ____________________________ (the “Grantee”), with respect to the following facts:

 

Pursuant and subject in all respects to
the Corporation's 2008-2009 Non-Qualified Stock Option Plan, a copy of which is attached hereto as Exhibit “A” and
incorporated herein by this reference (the “Plan”), the Corporation's Board of Directors has determined that it is
to the advantage and interest of the Corporation and its stockholders to grant the option provided for herein to Grantee. The
parties agree as follows:

 

1. GRANT OF OPTION:
For value received, the Corporation hereby grants to Grantee the right and option to purchase, on the terms and conditions hereinafter
set forth, an aggregate of ____shares of the Corporation's Common Stock.

 

2. TIME AND MANNER OF EXERCISE:
You have been granted an option to purchase shares of common stock, par value $.001 per share, of SenesTech, Inc. (the “Shares”),
subject to the terms and conditions of the Plan. The terms of your option grant are set forth below:

 

	Date of Grant:	 	 
	 	 	 
	Vesting Commencement Date: 	 	 
	 	 	 
	Exercise Price per Share:	 	 
	 	 	 
	Total Number of Shares Subject to Option:	 	 
	 	 	 
	Total Exercise Price:	 	 
	 	 	 
	Type of Option:	 	Non-Qualified Stock Option
	 	 	 
	Term/Expiration Date:	 	 

 

The options granted hereunder shall only
be exercised by utilization of the form attached hereto as Exhibit “B.”

 

3. INVESTMENT UNDERTAKING; NONASSIGNABILITY:
This Option may be exercised only by Grantee during his or her lifetime. Grantee will hold this Option and the rights arising
hereunder for investment and not with a view to distribution, and upon exercise will deliver a letter confirming Grantee's non-distributive
intent with respect to the shares of Common Stock received. Grantee will not transfer or assign this Option, except by will or
the laws of intestate succession.

 

    	 	1	 

     

    

 

4. EXPIRATION: This
Option shall terminate and expire at midnight on the date that is five (5) years after the date of this Agreement or under the
terms of the Plan. However, if Grantee dies while still eligible to participate in the Plan, his or her executor(s) or administrator(s),
or any person or persons who acquired the Option from the Grantee by bequest or inheritance, shall, during the 12-month period
commencing on the date of the Grantee's death, have the right to exercise this Option with respect to the shares that remain subject
to this Option on that date, subject to the conditions that this Option (i) shall in no event be exercisable after its expiration
in accordance with this Section 4 and (ii) it shall be exercisable by such representative(s) or successor(s) only to the extent
that the Grantee's right to exercise this Option had accrued pursuant to Paragraph 2 hereof at the time of the Grantee's death
and had not previously been exercised. Any options not exercisable or not exercised prior to the end of such 12-month period shall
be automatically null and void.

 

5. REPRESENTATIONS OF GRANTOR:
So long as this Option remains outstanding and unexpired, Grantor will reserve for issuance upon the exercise of this Option
the number of shares of Grantor's Common Stock that are subject to this Option. The shares of Common Stock of Grantor subject
to this Option shall, when issued, be validly issued, fully paid and nonassessable. Grantor will pay, when due and payable, any
and all federal and state taxes or fees that may be payable by Grantor with respect to the grant of this Option or the issuance
of any shares of Common Stock or certificates therefore subject to this Option. However, this does not include any federal, state
or other personal income tax payable by the Grantee by virtue of (i) the grant of this Option; (ii) the issuance of any share
of Common Stock upon exercise thereof; or (iii) any subsequent disposition of such shares which shall remain the obligation of
the Grantee.

 

6. WITHHOLDING TAXES:
If the Corporation determines that it is required to withhold federal, state or local tax as a result of the exercise of this
Option, the Grantee, as a condition to the exercise of this Option, shall make arrangements satisfactory to the Corporation to
enable it to satisfy such withholding requirements.

 

7. NOTICE: Any notice,
request, or instructions given in connection with this Option shall be in writing and shall be delivered in person or by certified
mail as follows:

 

(a) If to Grantor, at SenesTech,
Inc., Attention: Chief Executive Officer, 3140 N. Caden Ct., Ste. 1, Flagstaff, AZ 86004

 

(b) If to Grantee, at:

 

or at such other address as either of
the parties shall have given notice to the other in accordance with the provisions hereof.

 

    	 	2	 

     

    

 

8. COMMITTEE DETERMINATION FINAL:
The interpretation and construction of the Plan and this Stock Option Agreement, including any inconsistency between the two
documents, shall be reserved to and made by the Committee of the Board of Directors provided for under the Plan. The Committee's
determinations shall be final as between the parties hereto unless otherwise determined by the Board of Directors of Grantor.

 

9. GRANTEE’S REPRESENTATIONS:
In connection with the purchase of the above-listed Shares, the undersigned Grantee represents to the Corporation the following:

 

a)    Investment
Intent. Grantee is acquiring the Shares for investment purposes only, for the account of Grantee, and not as nominee or agent
for any other person, firm or corporation and not for resale in connection with any distribution or public offering thereof within
the meaning of the Securities Act.

 

b)    Unregistered
Securities. Grantee understands that the Shares have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Grantee’s investment intent
as expressed herein. Grantee further understands that the Shares constitute “restricted securities” under the Securities
Act and that, accordingly, such Shares will not be transferable except pursuant to an exemption from the registration and prospectus
delivery requirement of the Securities Act or upon satisfaction of such requirement. Grantee acknowledges that the Corporation
has no obligation to register or qualify the Shares for resale. Grantee further acknowledges that the Shares will be subject to
the transfer restrictions set forth in that certain Non-Qualified Stock Option Agreement dated December 24, 2008 between
the Corporation and Grantee.

 

c)    No
Public Market; Rule 144. Grantee understands that no public market now exists for the Shares and that the Corporation has
made no assurances that a public market will ever exist for the Shares. Grantee understands that the Shares must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from such registration is available. Grantee is aware
of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the Corporation, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale being effected through a “broker’s
transaction” or in a transaction directly with a “market maker” and the number of shares being sold during any
three-month period not exceeding specified limitations.

 

    	 	3	 

     

    

 

d)    Disclosure
of Information. Grantee has reviewed and had all of his/her/its questions answered concerning the Corporation’s 2008-2009
non-Qualified Stock Option Plan. Grantee believes it has received all the information it considers necessary or appropriate for
deciding whether to purchase the Shares. Grantee further represents that it has had an opportunity to ask questions and receive
answers from the Corporation regarding the terms and conditions of the offering of the Shares and the business, properties, prospects
and financial condition of the Corporation and to obtain additional information (to the extent the Corporation possessed such
information or could acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information furnished
to Grantee or to which it had access. Grantee is experienced in evaluating and investing in securities of companies in the development
stage, and Grantee acknowledges to the Corporation that he/she is able to fend for himself/herself, can bear the economic risk
of an investment in the Corporation, and has such knowledge and experience in financial or business matters that it is capable
of evaluating the merits and risks of an investment in the Shares.

 

e)    Restrictions
on Transferability; Legends. Grantee understands that the certificate evidencing the Shares will be imprinted with a legend
which prohibits the transfer of the Shares unless they are registered or such registration is not required and any other legend
required under applicable state securities laws. Grantee understands that it may be required to provide an opinion of counsel
satisfactory to the Corporation in connection with any such transfer. Grantee will cause any proposed transferee of the Shares
to agree to take and hold such securities subject to the provisions and upon the conditions applicable to Grantee.

 

f)    Income
tax implications. Grantee understands and agrees that the Corporation has not undertaken to provide Grantee with any advice
regarding the income tax implications or consequences to Grantee of the acceptance of the options granted hereunder or the exercise
of said options and that Grantee is fully and personally responsible for any such income tax implications or consequences.

 

10. GOVERNING LAW: This
Option is granted and delivered in the State of California and is intended to be construed and enforced under the laws thereof.

 

IN WITNESS WHEREOF, this Option
is executed on behalf of Grantor and its duly authorized officers and by Grantee as of DATE .

 

	SenesTech, Inc. (“Grantor”)	 	“Grantee”
	 	 	 
	By:	 	 
	 	 	 
	 	 	 
	Signature	 	Signature
	 	 	 
	Its: CEO	 	 
	 	 	Print Name

 

    	 	4	 

     

    

 

EXHIBIT A

 

SENESTECH, INC.

 

2008-2009 NON-QUALIFIED STOCK OPTION
PLAN

 

1. PURPOSE: This Non-Qualified
Stock Option Plan (the “Plan”) is intended to serve as an incentive to and to encourage stock ownership by certain
directors, officers, employees of and certain persons rendering service to SenesTech, Inc., a Nevada corporation (the “Corporation”),
so that they may acquire or increase their proprietary interest in the success of the Corporation, and to encourage them to remain
in the Corporation's service.

 

2. ADMINISTRATION: The Plan
shall be administered by a committee appointed by the Corporation's Board of Directors (the “Committee”). The Committee
shall consists of not less than three (3) members who shall be appointed by, and serve at the pleasure of, the Corporation's Board
of Directors. The Board of Directors may from time to time remove members from, or add members to, the Committee. Vacancies on
the Committee, however caused, shall be filled only by the Board of Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it may determine. Acts by a majority of the Committee in a meeting
at which a quorum is present and acts approved in writing by a majority of the members of the Committee shall be the valid acts
of the Committee. No member of the Committee shall vote on any matter concerning his or her own participation in the Plan, except
that the Board of Directors as a whole may act on options granted to directors.

 

The Committee shall be authorized to grant
options under the Plan to such directors, officers, employees of and other persons rendering service to the Corporation or any
parent or subsidiary corporation of the Corporation, as defined for purposes of Internal Revenue Code Section 422A (“Parent
or Subsidiary”), at such times and in such amounts as it may decide.

The interpretation and construction by
the Committee of any provisions of the Plan or of any option granted under it shall be final unless otherwise determined by the
Board of Directors. No member of the Committee or Board of Directors shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted under it.

3. ELIGIBILITY 

 

3.1 General: Any person
who is an Employee, as that term is defined herein, of the Corporation or any Parent or Subsidiary thereof, shall be eligible
to receive options under the Plan. The selection of options recipients shall be within the sole and absolute discretion of the
Committee, or the Board of Directors.

 

    	 	5	 

     

    

 

3.2 Definition of Employee. 
The term “Employee” as used herein means,

 

(a) Any employee,
director, general partner, trustee (where an Affiliate is a business trust), officer, or consultant or advisor. An advisor or
consultant is an employee only if:

 

(i) they are natural persons;

 

(ii) they provide bona fide
services to the Corporation or an Affiliate; and

 

(iii) the services are not in
connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the Corporation’s securities.

 

(b) Insurance agents
who are exclusive agents of the registrant, its subsidiaries or parents, or derive more than 50% of their annual income from those
entities.

 

(c) Former employees
are Employees as defined herein if such persons were employed by or providing services to the Corporation or an Affiliate at the
time the options were offered.

 

(d) Executors, administrators
or beneficiaries of the estates of deceased employees, guardians or members of a committee for incompetent former employees, or
similar persons duly authorized by law to administer the estate or assets of former employees. The inclusion of all individuals
described in the preceding sentence in the term “Employee” is only if:

 

(i) the exercise of employee
benefit plan stock options and the subsequent sale of the securities, if these exercises and sales are permitted under the terms
of the plan; and

 

(ii) the acquisition of Corporation
securities pursuant to intra-plan transfers among plan funds, if these transfers are permitted under the terms of the plan.

 

(e) An Employee’s
family member who has acquired the options from the employee through a gift or a domestic relations order. For purposes of this
plan, “family member” includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the employees household (other than a tenant or employee), a trust in which these persons
have more than fifty percent of the beneficial interest, a foundation in which these persons (or the employee) control the management
of assets, and any other entity in which these persons (or the employee) own more than fifty percent of the voting interests.

 

(f) No transferee
for value can be an Employee unless in the case of,

 

(i) a transfer under a domestic
relations order in settlement of marital property rights; and

 

    	 	6	 

     

    

 

(ii) a transfer to an entity
in which more than fifty percent of the voting interests are owned by family members (or the employee) in exchange for an interest
in that entity.

 

(f)          Any
person who is terminated for cause by the Corporation or any of its Affiliates shall cease to be an Employee as of the date of
the cause event. “Cause” shall mean the occurrence of any one or more of the following: (i) employee’s conviction
by, or entry of a plea of guilty or nolo contendere in, a court of competent jurisdiction for any felony involving moral turpitude;
(ii) employee’s misappropriation of funds from or commission of an act of fraud, whether prior or subsequent to the date
hereof, upon the Corporation; (iii) gross active negligence by employee in the scope of services to the Corporation; (iv) a breach
by employee of a material provision of the employment contract or option grant; (v) performing an act of race, sex, national origin,
religion, disability, age-based or other illegal discrimination or an act of sexual harassment; or (vi) employee’s failure
to substantially perform his/her duties within 15 days after written notice of such failure has been provided to employee provided
that, in the exclusive good faith discretion of the Corporation, such failure of performance can be cured.

 

3.3 Termination of Eligibility:
Any option granted hereunder shall expire if, for any reason other than his or her death, the optionee ceases to be an
Employee of the Corporation or a Parent or Subsidiary thereof. The expiration will take effect at the earliest of the following
times: four (4) months from the date of the occurrence causing termination of eligibility (twelve (12) months if the optionee's
eligibility ceases because of his or her disability), provided the optionee retains his or her status as an Employee as defined
herein, or upon the date the option expires by its terms. During such four-month period, the option may be exercised in accordance
with its terms, but only in respect of the number of shares for which the right to exercise has accrued on the date of termination
of employment, or status as a director or independent contractor. The Committee shall decide whether an authorized leave of absence
or absence for military or governmental service, or absence for any other reason, shall constitute termination of eligibility
for purposes of this Section. This determination shall be subject to review by the Board of Directors.

 

3.3 Death of Optionee and Transfer
of Option: If the optionee dies while eligible to participate in the Plan, or within four (4) months after the termination
of his or her eligibility, and shall not have fully exercised the option, the option may be exercised at any time within twelve
(12) months after the optionee's death by the optionee's executors or administrators or by any person or persons who acquired
the option directly from the optionee by bequest or inheritance. However, no option shall be exercisable after it expires; and
options may be exercised only to the extent that the optionee's right to exercise the option had accrued at the time of his or
her death and had not been previously exercised.

 

No option shall be transferable by the
optionee otherwise than by will or the laws of intestate succession.

 

    	 	7	 

     

    

 

4. IDENTIFICATION OF STOCK:
The stock subject to the options shall be shares of the Corporation's authorized but unissued or acquired or reacquired $.001
par value Common Stock (the “Stock”). The aggregate sales price or amount of options during any consecutive 12-month
period (subject to adjustment as provided in Section 5.6) must not exceed the greatest of the following:

 

(a)   $1,000,000;

 

		(b)	15% of the total
                                         assets of the Corporation measured at the Corporation’s most recent annual balance
                                         sheet date (if no older than its last fiscal year end); or

 

		(c)	15% of the outstanding
                                         amount of the class of securities being offered and sold measured at the Corporation’s
                                         most recent annual balance sheet date (if no older than its last fiscal year end).

 

5. TERMS AND CONDITIONS OF OPTIONS:
Any option granted pursuant to the Plan shall be evidenced by an agreement in such form as the Committee shall from time
to time determine, which agreement shall comply with and be subject to the following terms and conditions:

 

5.1 Number of Shares:
Each option shall state the number of shares to which it pertains.

 

5.2 Option Exercise Price:
Each option shall state the option price, which shall be not less than $3.00 per share or 100% of the fair market value of the
Stock subject to the option on the date of granting the option, unless otherwise determined at the Committee's discretion.

 

5.3 Method of Exercise:
An option shall be exercised by written notice to the Corporation stating the number of shares with respect to which the option
is being exercised and designating a time for the delivery thereof, which shall be at least fifteen (15) days after notice is
given unless an earlier date was mutually agreed upon. At the time specified in the notice, the Corporation shall deliver to the
optionee at the Corporation's principal office, or other appropriate place the Committee determines, a certificate(s) for such
shares of previously authorized but unissued shares or acquired or reacquired shares of Stock as the Corporation may elect. Notwithstanding
the foregoing, the Corporation may postpone delivery of any certificate(s) after notice of exercise for any reasonable period
required to comply with any applicable listing requirements of any national or other securities exchange. In the event an option
shall be exercisable by any person other than the optionee, the required notice under this section shall be accompanied by appropriate
proof of such person's right to exercise the option.

 

5.4 Medium and Time Payment:
The option price shall be payable in full upon the exercise of the option by certified or bank cashier's check, the promissory
note of the optionee, or any equivalent form of payment acceptable to the Corporation.

 

5.5 Term of Option: The
term of an option granted hereunder shall be determined by the Committee at the time of grant, but shall not exceed ten (10) years
from the day of the grant. In no event shall any option be exercisable after the expiration of its term.

 

    	 	8	 

     

    

 

5.6 Adjustments Upon Changes In
Capitalization: Subject to any required shareholder action, the number of shares of stock covered by each outstanding
option and the price per share in each such option shall be proportionately adjusted for any increase or decrease in the number
of issued shares of Stock of the Corporation resulting from: (i) a subdivision or consolidation of shares; (ii) the payment of
a stock dividend (but only on the Stock); (iii) any other increase or decrease in the number of such shares effected without receipt
of consideration by the Corporation; (iv) or, as to Stock issued other than pursuant to a stock option granted to a director,
officer, employee of a person rendering services as an independent contractor to the Corporation or any Parent or Subsidiary,
any increase or decrease in the number of shares made for per share consideration less than the option price of such option. Any
fraction of a share subject to option that would otherwise result from an adjustment pursuant to this subparagraph shall be rounded
downward to the next full number of shares without other compensation or consideration to the holder of the option.

 

Subject to any required shareholder action,
if the Corporation shall be the surviving corporation in any merger or consolidation, each outstanding option shall pertain and
apply to the securities to which a holder of the number of shares of Stock subject to the option would have been entitled. The
Corporation's Board of Directors may grant each optionee the right to exercise his or her option in whole or in part immediately
prior to the Corporation's dissolution or liquidation, or merger or consolidation in which the corporation is not the surviving
corporation. If the Corporation is consolidated with or merged into any other corporation, or if the Corporation sells or transfers
all or substantially all of its assets, or if any other similar event affecting shares of Stock of the Corporation should occur,
and if the exercisability of the options is not accelerated by the Board of Directors and the acquiring Corporation assumes the
Corporation's obligations under the options granted under this Plan, then each optionee shall be entitled thereafter to purchase
shares of stock and other securities and property in the kind and amount, and at the price, which the optionee would have been
entitled had his or her option been exercised prior to such event. The Corporation shall make lawful provision therefore as part
of any such transaction.

 

To the extent that the foregoing adjustments
relate to stock or securities of the Corporation, they shall be made by the Committee, whose determinations shall be final, binding
and conclusive.

 

The grant of an option pursuant to the
Plan shall not affect in any way the Corporation's right or power to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any
part of its business or assets.

 

Whenever the Corporation takes any action
resulting in any adjustment provided for in this Section 5.6, the Corporation shall forthwith deliver notice of the action to
optionee. The notice shall set forth the number of shares subject to this Option and the purchase price thereof resulting from
the adjustment.

 

    	 	9	 

     

    

 

5.7 Rights as a Shareholder:
An optionee or a transferee of an option shall have no rights as a shareholder with respect to any shares underlying his or her
option until the date the optionee is issued a certificate for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in Section 5.6 above.

 

5.8 Modification, Extension and
Renewal of Options: Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify,
extend or renew outstanding options granted under the Plan, or accept the surrender of outstanding options (to the extent not
theretofore exercised) and authorize the granting of new options in substitution therefore (to the extent not theretofore exercised).

 

5.9 Other Provisions: The
option agreements authorized under the Plan shall contain such other provisions, including without limitation, restrictions upon
the exercise of the option, as the Committee and the Board of Directors of the Corporation shall deem advisable. Thus, for example,
the Committee and the Board of Directors may require that all or any portion of an option granted hereunder not be exercisable
until a specified period of time has passed or some other event has occurred.

 

6. TERM OF PLAN: Options
may be granted pursuant to the Plan from time to time within a period of ten (10) years from the date the Plan is adopted by the
Corporation's Board of Directors or is approved by the Corporation's shareholders, whichever occurs earlier. Termination of the
Plan shall not affect any option previously granted.

 

7. AMENDMENT OF THE PLAN:
To the extent permitted by law and subject to any required approval by the Corporation's shareholders, the Board of Directors
may suspend or discontinue the Plan or revise or amend it in any way with respect to any shares not subject to options at that
time.

 

8. APPLICATION OF FUNDS:
The proceeds received by the Corporation from the sale of Stock pursuant to options may be used for general corporate purposes.

 

9. NO OBLIGATION TO EXERCISE OPTION:
The granting of an option shall impose no obligation upon the optionee to exercise such option.

 

10. APPROVAL: The Plan shall
not take effect until approved by the Board of Directors or its Executive Committee.

 

    	 	10	 

     

    

 

11. SECURITIES LAWS COMPLIANCE:
Notwithstanding anything contained herein, the Corporation shall not be obligated to grant any option under this Plan,
or to sell or issue any share pursuant to any option agreement executed pursuant to the Plan, unless the grant or sale is effectively
registered or exempt from registration under the Securities Act of 1933, as amended, and is qualified or exempt from qualification
under the California Corporate Securities Law of 1968, as amended.

 

As adopted by the Board of Directors on
December 24, 2008.

 

[Balance of this
page intentionally left blank]

 

    	 	11	 

     

    

 

EXHIBIT B

SENESTECH, INC.

NOTICE OF EXERCISE

SenesTech, Inc.

2901 W. Shamrell Blvd.

Suite 101

Flagstaff, AZ 86001

Attention: Secretary

 

1.          Exercise
of Option and Delivery of Payment. Effective as of today, __________, 20___, the undersigned (“Optionee”) hereby
elects to exercise Optionee’s option to purchase _________ shares of the Common Stock (the “Shares”) of SenesTech,
Inc. (the “Corporation”) under and pursuant to the 2008-2009 Non-Qualified Stock Option Agreement of which this Notice
of Exercise is Exhibit B (the “Option Agreement”). Optionee herewith delivers to the Corporation the full Exercise
Price for the Shares, as well as any applicable withholding tax as may be required by the Corporation.

 

2.          Optionee’s
Representations. Optionee acknowledges that it has received, read and understood the Option Agreement, which is incorporated
herein by this reference. Optionee agrees to abide by and be bound by its terms and conditions.

 

3.          Tax
Consultation. Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee’s purchase
or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable
in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Corporation for any tax advice.

 

	 	 
	Sign Name	 
	 	 
	 	 
	Print Name	 

 

    	 	12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00262-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00262-of-00352.parquet"}]]