Document:

Exhibit 10.5

 

U.S. Lighting Group, Inc.

34099 Melinz Parkway, Unit E

Eastlake, OH 44095

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

 

Ladies and Gentlemen:

 

U.S. Lighting
Group, Inc., a Florida corporation (the “Company”), intends to raise up to $750,000.00 in a private offering
(the “Offering”) of Convertible Promissory Notes (the “Notes” in the form annexed hereto)
to be offered and sold on a “private placement” basis to a limited number of persons who qualify as “accredited
investors” as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).
The Offering is made in reliance upon an exemption from registration under the federal securities laws provided by Rule 506(b)
of Regulation D of the Securities Act of 1933, as amended. The minimum subscription in the Offering is $25,000, which minimum may
be waived at the Company’s discretion. Additionally, the Company, in its sole discretion, may waive or increase the maximum
amount, without notice to prospective investors or Purchasers in the Offering.

 

Purchaser
understands that purchaser’s rights and responsibilities as an investor will be governed by the terms and conditions of,
and each person considering subscribing for the Notes should review, the following:

 

		●	this subscription agreement (the “Subscription
Agreement”);

		●	the Convertible Promissory Note (in the Form annexed hereto as Exhibit A”);

		●	risk factors attached as Exhibit B; and

		●	Unaudited Financial Statements of the Company for the quarter ended June
30, 2019 along with OTC Management Disclosure Statement filed by the Company with OTC Markets (as attached hereto as Exhibit C).

 

This Subscription
Agreement is one of a number of such subscriptions for Notes. By signing this Subscription Agreement and returning it to the Company
together with payment of the Purchase Price by wire transfer (in accordance with instructions attached hereto as Exhibit A),
Purchaser offers to purchase and subscribe from the Company the principal amount of Notes on the terms specified herein. The Company
reserves the right, in its complete discretion, to reject any subscription offer or to reduce the principal amount of Notes allotted
to a Purchaser. If this offer is accepted, the Company will execute a copy of this Subscription Agreement and return it, together
with Note being purchased. The Subscription proceeds must accompany this Agreement and shall be paid by wire transfer of immediately
available funds in U.S. dollars (or in the form of a personal or cashier’s check) in accordance with the wire and delivery
instructions attached hereto as Exhibit D.

 

     

     

    

 

The Notes are
being offered for sale on a “best efforts” basis. Accordingly, no minimum principal amount of Notes will need
to be subscribed for in order for the Company to consummate the sale of any of the Notes and utilize the proceeds therefrom.

 

The Notes will
be offered by executive officers and directors of the Company, who will not be compensated therefor. The Company may however, also
pay FINRA member firms and other qualified parties that assist the Company in the placement of the Shares, customary cash commissions
for Shares placed by them.

 

The Offering
will end on September 1, 2020 unless extended or earlier terminated by the Company at any time.

 

The Company also reserves
the right to withdraw, cancel or modify the Offering and to reject any subscriptions, in whole or in part, in its sole discretion.
In the event a subscription is rejected by the Company, all funds delivered with such subscription will be returned to the prospective
investor as soon as practicable without interest thereon or deduction therefrom

 

1. Representations
and Warranties of Purchaser. Purchaser represents and warrants to the Company that:

 

(a) 
Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities
Act because Purchaser qualifies within one of the following categories (please initial the appropriate category):

 

(i) A natural person
whose individual net worth, or joint net worth with that person’s spouse, at the date hereof exceeds $1,000,000 (Note:
For purposes of calculating “net worth” under this paragraph: (i) the person’s primary residence shall
not be included as an asset; (ii) indebtedness that is secured by the person’s primary residence, up to the estimated fair
market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that
if the amount of such indebtedness outstanding at the time of the sale of securities exceeds the amount outstanding sixty (60)
days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included
as a liability); and (iii) indebtedness that is secured by the person’s primary residence in excess of the estimated fair
market value of the primary residence at the time of the sale of securities shall be included as a liability); or

 

(ii) A natural person
who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s
spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current
year; or

 

(iii) Any entity in
which all of the equity owners meet the requirements for being “accredited investors;” or

 

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(iv) An individual or
entity that meets the requirements of one of the other categories of an “accredited investor” set forth in Rule
501(a) of Regulation D under the Securities Act (please specify category):

 

(b) Purchaser
(i) has adequate means of providing for Purchaser’s current needs and possible contingencies and Purchaser has no need for
liquidity of Purchaser’s investment in the Notes; (ii) can bear the economic risk of losing the entire amount of Purchaser’s
investment in the Notes:, and (iii) has such knowledge and experience that Purchaser is capable of evaluating the relative risks
and merits of this investment. The purchase of the Notes is consistent, in both nature and amount, with Purchaser’s overall
investment program and financial condition.

 

(c) Purchaser
is a sophisticated, experienced investor, capable of determining and understanding the risks and merits of this investment.

 

(d) Purchaser
has received and read, and is familiar with this agreement and all attachments. All other publicly available documents pertaining
to the Company and the Notes requested by Purchaser have been made available or delivered to Purchaser.

 

(e) Purchaser
understands that risks are implicit in the business of the Company, including without limitation, those set forth in this agreement
and all attachments. Among other things, Purchaser understands that there can be no assurance that the Company will be able to
obtain the funds necessary to fully implement its business plan or that the Company will ever be profitable.

 

(f) Other
than as set forth in this Subscription Agreement, no person or entity has made any representation or warranty whatsoever with respect
to any matter or thing concerning the Company and the offer and sale of the Notes and Purchaser is purchasing the Notes based solely
upon Purchaser’s own investigation and evaluation.

 

(g) Purchaser
understands that neither the Notes nor the shares of common stock underlying the Notes have been registered under the Securities
Act or applicable state securities laws.

 

(h) The
Notes are being acquired solely for Purchaser’s own account, for investment and are not being purchased with a view to or
for their resale or distribution.

 

(i) Purchaser
acknowledges that the net proceeds from the sale of the Notes are being used for the Company’s working capital and general
corporate purposes.

 

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(j) Purchaser
is aware of the following:

 

		(i)	The Notes are a speculative investment which involves a high degree or risk;

 

		(ii)	An investment in the Notes is not readily transferable and it may not be possible for Purchaser
to liquidate the investment;

 

		(iii)	Until registered under the Securities Act and applicable state securities laws, there are substantial
restrictions on the transferability of the shares of common stock underlying the Note under the Securities Act and applicable state
securities laws; and

 

		(iv)	No federal or state agency has made any finding or determination as to the fairness of the Notes
for public investment nor any recommendation or endorsement of the Notes.

 

(k) Purchaser
has the full right, power and authority to execute and deliver this Subscription Agreement and perform Purchaser’s obligations
hereunder.

 

(l) No
approval, authorization, consent, order of other action of, or filing with, any person, firm or corporation or any court, administrative
agency or other governmental authority is required in connection with the execution and delivery of this Subscription Agreement
by Purchaser or the consummation of the sale and purchase of the Notes.

 

(m) Non-reliance.

 

		(i)	The Purchaser represents that it is not relying on (and will not at any time rely on) any communication
(written or oral) of the Company, as investment advice or as a recommendation to purchase the Notes, it being understood that information
and explanations related to the terms and conditions of the Notes and the other transaction documents shall not be considered investment
advice or a recommendation to purchase the Notes.

 

		(ii)	The Purchaser confirms that the Company has not (A) given
any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial,
accounting or otherwise) an of investment in the Notes, or (B) made any representation to the Purchaser regarding the legality
of an investment in the Notes under applicable legal investment or similar laws or regulations. In deciding to purchase the Notes,
the Purchaser is not relying on the advice or recommendations of the Company and the Purchaser has made its own independent decision
that the investment in the Notes is suitable and appropriate for the Purchaser.

 

    4

     

    

 

(n) The Purchaser acknowledges
careful review of this Subscription Agreement and the Exhibits, and is familiar with the business and operations of the Company
all of which the undersigned acknowledges have been provided to the undersigned. The undersigned has been given the opportunity
to ask questions of, and receive answers from, the Company concerning the terms and conditions of this Offering and this Subscription
Agreement and the Exhibits, and to obtain such additional information, to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense, necessary to verify the accuracy of same as the undersigned reasonably desires
in order to evaluate the investment. The undersigned understands this Subscription Agreement and the Exhibits, and the undersigned
has had the opportunity to discuss any questions regarding any of this Subscription Agreement and the Exhibits, with its counsel
or other advisor. Notwithstanding the foregoing, the only information upon which the undersigned has relied is that set forth in
this Subscription Agreement and the Exhibits. The undersigned has received no representations or warranties from the Company, its
employees, agents or attorneys in making this investment decision other than as set forth in this Subscription Agreement and the
Exhibits. The undersigned does not desire to receive any further information.

 

(o) In
making the decision to invest in the Notes the Purchaser has relied solely upon the information provided by the Company in this
Subscription Agreement and the Exhibits. To the extent necessary, the Purchaser has retained, at its own expense, and relied upon
appropriate professional advice regarding the investment, tax and legal merits and consequences of this Subscription Agreement
and the purchase of the Notes hereunder. The Purchaser disclaims reliance on any statements made or information provided by any
person or in the course of Purchaser’s consideration of an investment in the Notes other than this Subscription Agreement
and the Exhibits.

 

(p) The
Purchaser hereby represents that, except as expressly set forth in this Subscription Agreement and the Exhibits, no representations
or warranties have been made to the Purchaser by the Company or any agent, employee or affiliate of the Company, and in entering
into this transaction the Purchaser is not relying on any information other than that contained in this Subscription Agreement
and the Exhibits and the results of independent investigation by the Purchaser.

 

(q) The
Purchaser acknowledges that the Offering may involve tax consequences and that the contents of this Subscription Agreement and
the Exhibits do not contain tax advice or information. The Purchaser acknowledges that it must retain its own professional advisors
to evaluate the tax and other consequences of an investment in the Notes.

 

3. Restrictions
on Transferability. Purchaser understands that Purchaser may sell or otherwise transfer the shares of common stock underlying
the Note only if registered under the Securities Act and applicable state securities laws or Purchaser provides the Company with
an opinion of counsel acceptable to the Company to the effect that such sale or other transfer may be made in absence of registration
under the Securities Act and applicable state securities laws. Any certificates or other documents evidencing the Shares will contain
a restrictive legend reflecting these restrictions. Purchaser acknowledges that the Company is under no obligation to register
the shares of common stock underlying the Note for resale under the Securities Act and applicable state securities laws. Purchaser
further acknowledges that Purchaser understands that in general, the shares of common stock underlying the Note will bear a restrictive
legend and be restricted from public resale pursuant to the exemption from registration afforded by Rule 144 under the Securities
Act.

 

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4. Indemnification. Purchaser
agrees to indemnify and hold harmless the Company and its members, managers and officers against and in respect of any and all
loss, liability, claim, damage, deficiency, and all actions, suits, proceedings, demands, assessments, judgments, costs and expenses
whatsoever (including, but not limited to, any and all expenses whatsoever, including attorneys’ fees, reasonably incurred
in investigating, preparing, or defending against any litigation commenced or threatened or any claim whatsoever through all appeals)
arising out of or based upon any false representation or warranty by Purchaser or breach or failure by Purchaser to comply with
any covenant or agreement made by Purchaser in this Subscription Agreement.

 

5. Jurisdictional
Notice. NEITHER THE NOTES NOR THE SHARES OF COMMON STOCK UNDERLYING THE NOTES HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OR APPLICABLE STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NEITHER THE NOTES NOR THE SHARES OF COMMON STOCK UNDERLYING THE NOTES
HAVE BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFER AND SALE OF THE NEITHER THE
NOTES NOR THE SHARES OF COMMON STOCK UNDERLYING THE NOTES OR THE ACCURACY OR ADEQUACY OF THE DISCLOSURE MADE TO PURCHASER. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

6. Forward
Looking Statements. This agreement and attachments contain forward-looking statements. These statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by the Company’s forward-looking statements.
Examples of forward-looking statements include projected financial information, statements of our plans and objectives for future
operations and statements concerning proposed products and services. In some cases, you can identify forward-looking statements
by the use of terminology such as “may,” “will,” “should,” “could,” “expects,”
“plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential” and other comparable terminology. Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, performance or achievements. Actual events or results may differ
materially. The Company undertakes no obligation to update any of the forward-looking statements after the date of this Subscription
Agreement and the Exhibits to conform them to actual results.

 

 7. Termination of Agreement. If
this Subscription Agreement is rejected by the Company, then this Subscription Agreement shall be null and void and of no further
force and effect, no party shall have any rights against any other party hereunder, and the Company shall promptly return to Purchaser
the funds delivered with this Subscription Agreement without interest thereon or deduction therefrom.

 

    6

     

    

 

8. Miscellaneous.

 

(a) This
Subscription Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. This
agreement supersedes all prior negotiations, letters and understandings relating to the subject matter hereof.

 

(b) This
Subscription Agreement may not be amended, supplemented or modified in whole or in part except by an instrument in writing signed
by the party or parties against whom enforcement of any such amendment supplement or modification is sought.

 

(c) This
Subscription Agreement will be interpreted, construed and enforced in accordance with the laws of the State of Ohio, without giving
effect to the application of the principles pertaining to conflicts of laws. Exclusive jurisdiction for any action arising under
this Agreement shall be in a Federal or state court of competent subject matter jurisdiction in Ohio.

 

(d) The
failure of any party at any time or times to require performance of any provision of this Subscription Agreement will in no manner
affect the right to enforce the same. The waiver by any party of any breach of any provision of this Agreement will not be construed
to be a waiver by any such party of any succeeding breach of that provision or a waiver by such party of any breach of any other
provisions.

 

(e) The
invalidity, illegality or unenforceability of any provision or provisions of this Subscription Agreement will not affect any other
provision of this Subscription Agreement, which will remain in full force and effect, nor will the invalidity, illegality or unenforceability
of a portion of any provisions of this Subscription Agreement affect the balance of such provision. In the event that any one or
more of the provisions contained in this Subscription Agreement or any portion thereof shall for any reason be held to be invalid,
illegal or unenforceable in any respect, this Subscription Agreement shall be reformed, construed and enforced as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

(f) Should
it become necessary for any party to institute legal action to enforce the terms and conditions of this Subscription Agreement,
the successful party will be awarded reasonable attorneys’ fees at all trial and appellate levels, expenses and costs.

 

(g) This
Subscription Agreement will be binding upon and will inure to the benefit of any successor or successors of the parties hereto.

 

(h) This
Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic transmission), each of
which will be deemed an original and all of which together will constitute one and the same instrument.

 

    7

     

    

 

● 
Ownership Information. Please print here the principal amount of Notes to be purchased, the Purchase Price and
the exact name(s) in which the Notes will be issued.

 

	Principal Amount of Note Being Purchased: $ 	 

 

	Purchaser Name(s): 	 
	 	 
	 	 

 

               Single
Person

 

               Husband
and Wife, as community property

 

               Joint
Tenants (with right of survivorship)

 

               Tenants
in Common

 

               Corporation
or limited liability company

 

               Partnership

 

               Trust

 

               IRA

 

               Tax-Qualified
Retirement Plan

 

	 	●  Trustee(s)/Custodian:	 

 

	 	●  Trust Date:	 

 

	 	●  Name of Trust:	 

 

	 	● For the Benefit of:	 

 

	Other:  	 
	 	(please explain)

 

	Social Security or Tax I.D.: 	 

 

	Residence Address: 	 

 

    8

     

    

 

Street Address (If P.O. Box, include address
for surface delivery if different than residence)

 

	City 	State/Province	Zip/Postal Code

 

Phone Numbers/Email Address:

 

	Home:  	(      )

 

	Cell:  	(      )

 

	Facsimile:  	(      )

 

	Email:  	    

 

	Shipping Address:	 

 

Street Address (If P.O. Box, include address
for surface delivery if different than residence)

 

	City 	State/Province	Zip/Postal Code

 

Purchaser(s) Counterpart Signature
Page

 

Date. 

 

	Signature(s).	 	Purchaser Name(s) (Print)
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

(Each co-owner or joint owner must sign.
Names must be signed exactly as listed under “Purchaser Name(s)”)

 

    9

     

    

 

Company Counterpart Signature Page

 

ACCEPTED:

 

U.S. LIGHTING GROUP, INC.

 

	By: 	 	 	Dated:  	 

 

    10

     

    

 

EXHIBIT A

Form of Convertible Promissory Note

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    11

     

    

 

EXHIBIT B

Risk Factors

The purchase of the
Notes involves a high degree of risk and should be considered only by persons who can bear the risk of the loss of their entire
investment.

 

The Company currently
does not have enough working capital to satisfy its capital needs. The Company is dependent upon its management team
to fund its ongoing operations, and cannot be certain that future financing will be available to it on acceptable terms when it
needs it. The company can give no assurances that it will be able to sell any portion of this offering or that management
will continue to fund its ongoing operations. This, along with the possibility of other factors and circumstances the
company cannot predict, may require it to seek additional financing faster than anticipated. If the company is unable
to obtain financing to meet its needs, the undersigned may lose of his investment.

 

Prospective investors
are not to construe the contents of this memorandum as legal, business or tax advice. Each prospective investor should consult
his own attorney, business advisor and tax advisor as to legal, business, tax and related matters concerning this offering.

 

The Company is not
making any representations to any offeree of the securities regarding the legality of investment therein by such offeree under
applicable legal investment or similar laws.

 

These securities have
not been qualified or otherwise approved or disapproved by the California department of corporations under the California corporations
code. These securities are offered in California in reliance upon an exemption from registration provided by sections 25100, 25102
or 25105 of the California Corporations Code. Accordingly, distribution of this memorandum and offers and sales of the securities
referred to herein are strictly limited to persons who the company determines to have met certain financial and other requirements.
This memorandum does not constitute an offer to sell or the solicitation of an offer to buy with respect to any other person.

 

The evolving nature
of a manufacturing based businesses increases these uncertainties. You must consider the company’s business prospects in
light of the risks, uncertainties, and problems frequently encountered by companies with limited operating histories.

 

The
Company’s success depends upon the services of a number of key employees, specifically Paul Spivak (sole executive officer
and director), and will depend upon certain other additional key employees who are expected to be hired after the offering. The
loss of the services of one or more of these key employees could harm the company’s business. The Company’s success
also depends upon its ability to attract highly skilled new employees. competition for such employees is intense in the industry
in which it operates. If the Company is unable to compete successfully for key employees, its results of operations, financial
condition, business and prospects could be adversely affected.

 

A
downturn in economic conditions in one or more of its markets could have a material adverse effect on the results of operations,
financial condition, business and prospects. Although the Company attempts to stay informed of consumer preferences, any sustained
failure to identify and respond to trends could have a material adverse effect on its results of operations, financial condition,
business and prospects.

 

    12

     

    

 

The Company’s ability
to manage its growth effectively will require it to continue to improve its operational, financial and management controls and
information systems to accurately forecast sales demand, to manage its operating costs, manage its marketing programs in conjunction
with an emerging market, and attract, train, motivate and manage its employees and sales force effectively. If management fails
to manage the expected growth, the Company’s results of operations, financial condition, business and prospects could be adversely
affected. In addition, the Company’s growth strategy may depend on effectively integrating future entities, which requires cooperative
efforts from the Manager and employees of the respective business entities. If the Company’s management is unable to effectively
integrate its various business entities, its results of operations, financial condition, business and prospects could be adversely
affected.

 

Although the Company
believes that it will provide a broad and competitive range of services, there can be no assurance of acceptance by the marketplace.
Continued growth may be dependent upon the current results achieved, upon pricing and operational considerations, as well
as the potential need for continuing improvement to existing services. Moreover, the markets for such services may not develop
as expected nor can there be any assurance that the Company will be successful in its marketing of any such services.

 

The Company is conducting
this Offering on a “best efforts” basis without a minimum amount required. If the Company is not successful in raising
at least a substantial portion of the gross amount it is seeking in this Offering, the Company will be required to seek additional
financing sooner than anticipated and will not be able to pursue its complete business strategy or meet its operating plan. If
additional capital is required, there is no assurance that the Company will be able to do so on commercially reasonable terms,
if at all. No commitment for any additional financings exists at the present. Even if the maximum gross proceeds are raised in
this Offering, the Company may require additional capital in the future to fully execute its business plan. There is no assurance
that the Company will be able to do so on commercially reasonable terms, if at all. No commitment for any additional financings
exists at the present.

 

Management will have
broad discretion in the application of the net proceeds from this Offering and could spend the proceeds in ways that do not necessarily
improve its results of operations or enhance the value of its Notes. The failure by management to apply these funds effectively
could result in financial losses that could have a material adverse effect on the Company’s results of operations, financial
condition, business and prospects.

 

The terms of the Note
were arbitrarily determined by the Company and bear no relationship to earnings, asset values, book value or any other recognized
criteria of value.

 

The Company has not
retained any independent professionals to review or comment on this offering or otherwise protect the interests of the investors
hereunder. Although the Company has its own counsel, neither such law firm nor any other law firm, has made, on behalf of the investors,
any investigation of the merits or the fairness of the offering or of any factual matters represented herein, and purchasers of
the Notes should not rely on the law firms so retained with respect to any matters described in this Agreement. Prior to making
an investment in our securities, all potential investors should consult with their own legal, financial and tax advisers.

 

There may be tax consequences
to investors in this Offering with respect to the sale of the Securities offered hereunder. This Agreement does not contain any
tax advice with respect to an investment in this Offering. It is the obligation of each investor to determine his or her individual
tax consequences under the laws of their respective country or countries of taxation, and all taxing authorities therein, to which
they may be subject.

 

    13

     

    

 

EXHIBIT C

Unaudited Financial Statements for the
quarter ended June 30, 2019 

OTC Management Disclosure Statement 

filed by the Company with OTC Markets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT D

 

Wire Transfer Instructions

 

 

DOMESTIC
WIRES

 

Huntington
National Bank

 

ABA#: 
044-000-024

Account:
01662535187

Swift
Code: HUNTUS33

 

Please
include the following information:

Beneficiary Name: U.S. Lighting Group, Inc.

Beneficiary Full Address : 34099
Melinz Parkway, Unit E, Eastlake, OH 44095

 

 

15Exhibit
4.1

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: October 30, 2020

 

$111,111
Principal

$100,000
Purchase Price

$11,111
Original Issue Discount

 

SENIOR
SECURED original issue discount

Convertible
PROMISSORY NOTE

 

THIS
SENIOR SECURED ORIGINAL ISSUE DISCOUNT CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued Senior Secured Original
Issue Discount Convertible Promissory Note issued at a 10% original issue discount by Adhera Therapeutics, Inc., a Delaware corporation
(the “Company”) (this “Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to Cavalry Fund I LP, or its permitted assigns (the “Holder”), the principal
sum of $111,111 on the date that is the six month anniversary of the Original Issue Date, or April , 2020
(the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder,
and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance
with the provisions hereof. This Note is subject to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, the following words and phrases shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company
or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company
or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or
proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or
any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the
Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any
of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

    	 	 	 

    	 

    

 

“Black
Scholes Value” means the value of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Maturity Date, (B) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Maturity Date.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 50% of the voting securities of the Company, (b) the Company merges into or consolidates with any other Person, or
any Person merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the
Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor
entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person, (d) a
replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is
not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those
individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved
by a majority of the members of the Board of Directors who are members on the date hereof),, or (e) the execution by the Company
of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses
(a) through (de) above.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms
hereof.

 

“Default
Conversion Price” shall have the meaning set forth in Section 4(b).

 

“Default
Interest Rate” shall have the meaning set forth in Section 2(a).

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“DWAC”
means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.

 

“Event
of Default” shall have the meaning set forth in Section 7(a).

 

“Exchange
Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $125,000 due under leases required to
be capitalized in accordance with GAAP.

 

    	 	2	 

     

    

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Mandatory
Default Amount” means the sum of (a) 125% of the aggregate of outstanding principal amount of this Note and the accrued
and unpaid interest thereon, including default interest, and (b) all other amounts, costs, expenses and liquidated damages due
in respect of this Note.

 

“Note
Register” shall have the meaning set forth in Section 3(b).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading
Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent
if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B)
the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

 

“Original
Issue Date” means the date of the first issuance of the Note, regardless of any transfers of any Note and regardless of
the number of instruments which may be issued to evidence such Note.

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Note, (b) capital lease obligations and purchase money indebtedness
incurred in connection with the acquisition of machinery and equipment and (c) the Indebtedness set forth on Schedule 1.

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a) and (b) thereunder, and Liens securing the Permitted
Indebtedness under clause (c) thereunder.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“SEC”
means the Securities and Exchange Commission.

 

    	 	3	 

     

    

 

“Securities
Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
the NYSE American, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding
to its functions of reporting prices), (b) if no volume weighted average price of the Common Stock is reported for the Trading
Market, the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority of the
outstanding principal amount of the Note then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.

 

Section
2. Interest.

 

(a)
Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this
Note at the rate of 10% per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the Original
Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued
and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During the existence
of an Event of Default, interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted
by law (the lesser of clause (i) or (ii), the “Default Interest Rate”).

 

(b)
Prepayment. The Note may be prepaid on or prior to 60 days from the Original Issue Date with no pre-payment premium. Thereafter,
the Note may be prepaid at an amount equal to 110% of the aggregate of the outstanding principal balance of the Note and accrued
and unpaid interest. In order to prepay the Note, the Company shall provide at least 20 days’ prior written notice to the
Holder, during which time the Holder may convert the Note in whole or in part.

 

Section
3. Registration of Transfers and Exchanges.

 

(a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Note of different authorized
denominations, as requested by the Holder surrendering the same. No service charge or other fees will be payable for such registration
of transfer or exchange.

 

(b)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

(a)
Conversion. This Note shall be convertible, in whole or in part, at any time, and from time to time, into Conversion Shares
at the option of the Holder. The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form
of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount
of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”).
If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other
type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall
not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued
and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal
amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing
the principal amount(s) converted in each conversion, the date of each conversion, and the Conversion Price in effect at the time
of each conversion. The Company may deliver an objection to any Notice of Conversion within two Trading Days of delivery of such
Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative
in the absence of manifest error. 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 may be less than the amount stated on the face hereof.

 

    	 	4	 

     

    

 

(b)
Conversion Price.

 

(i)
Initial Conversion Price. The “Conversion Price” shall be $0.07 per share (as adjusted for stock splits, stock
combinations and similar events).

 

(ii)
Event of Default Conversion Price. If an Event of Default has occurred, regardless of whether such Event of Default has
been cured or remains ongoing this Note shall be convertible at 70% of then Conversion Price.

 

All
such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transactions or events that proportionately decreases or increases the Common Stock. Additionally,
the Conversion Price shall be adjusted as provided for herein.

 

(c)
Mechanics of Conversion or Prepayment.

 

(i)
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price in effect at the time of such conversion.

 

(ii)
Delivery of Certificate Upon Conversion. Not later than two Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required to be
delivered by the Company under this Section 4(c) which shall be free of restrictive legends and trading restrictions except as
provided by the Securities Act and such shares shall be delivered electronically through the Depository Trust Company or another
established clearing corporation performing similar functions.

 

(iii)
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the
Company shall promptly return to the Holder any original Note delivered to the Company.

 

(iv)
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof, are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares. In the event the Holder of this Note shall
elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion based on any claim
that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for
any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part
of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder. The exercise
of any such rights shall not prohibit the Holder from seeking to collect damages under this Note, or under applicable law.

 

    	 	5	 

     

    

 

(v)
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall in addition to the Holder’s
other available remedies, (i) the Company shall pay to the Holder, in cash, as partial liquidated damages and not as a penalty,
for each $1,000 of the principal amount of the Note being converted, $10 per Trading Day for each Trading Day after the Legend
Removal Date (increasing to $20 per Trading Day after the fifth Trading Day) until such certificate is delivered without a legend.
Nothing herein shall limit the Holder’s right to pursue actual damages for the Company’s failure to deliver certificates,
and the Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief, and (ii) if after the Share Delivery Date, the Holder purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any
portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of
the number of shares of Common Stock that the Holder anticipated receiving from the Company without any restrictive legend, then,
the Company shall pay to the Holder, in cash, an amount equal to the excess of the Holder’s total purchase price (including
brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage
commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of
Shares that the Company was required to deliver to the Holder on the Share Delivery Date multiplied by (B) the highest closing
sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by the Holder to the
Company of the applicable Shares and ending on the date of such delivery and payment under this Section 4(c).

 

(vi)
In the event a Purchaser shall request delivery of unlegended shares as described in this Section 4 and the Company is required
to deliver such unlegended shares, (i) it shall pay all fees and expenses associated with or required by the legend removal and/or
transfer including but not limited to legal fees, transfer agent fees and overnight delivery charges and taxes, if any, imposed
by any applicable government upon the issuance of Common Stock; and (ii) the Company may not refuse to deliver unlegended shares
based on any claim that the Holder or anyone associated or affiliated with such Holder has not complied with the Holder’s
obligations under this Note, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice,
restraining and or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company
has posted a surety bond for the benefit of the Holder in the amount of the greater of (i) 150% of the amount of the aggregate
purchase price of the Shares (based on amount of principal and/or interest of the Note which was converted) which is subject to
the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock on the trading day before the issue date of
the injunction multiplied by the number of unlegended shares to be subject to the injunction, which bond shall remain in effect
until the completion of the litigation of the dispute and the proceeds of which shall be payable to the Holder to the extent Holder
obtains judgment in Holder favor.

 

(vii)
Reservation of Conversion Shares. The Company covenants that it will reserve and keep available out of its authorized and
unissued shares of Common Stock for the purpose of issuances upon conversion of this Note, free from preemptive rights or any
other actual contingent purchase rights of Persons other than the Holder, not less than six times the amount of shares underlying
this Note. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized,
validly issued, fully paid and nonassessable.

 

(viii)
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.

 

(ix)
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge
to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificates. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all
fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.

 

(x)
Attorneys’ Fees etc. The Company shall (A) pay the reasonable fees of the law firm of the Holder’s choice (in
an amount not to exceed $500 per opinion) in connection with the conversion of the Note, (B) cause its attorneys to promptly provide
any reliance opinion to the Transfer Agent, and (C) pay the Holder the sums required under Section 2(c)(iv). Simultaneously upon
the funding of this Note, the Company shall pay the legal fees of the Holder in the amount of $8,000 and UCC filing fees in an
amount not to exceed $750. The Holder may withhold the $8,750 to pay these legal and UCC filing fees from the purchase price of
this Note.

 

    	 	6	 

     

    

 

(d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not
have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together
with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder
and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which
such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion
of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.
Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the
limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other
securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be
in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination
of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which
principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that
such Notice of Conversion has not violated the restrictions set forth in this Section 4(d) and the Company shall have no obligation
to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above
shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent
periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public announcement by the Company, or (iii)
a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and
in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.
The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder,
upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of
this Section 4(d) to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon conversion of this Note held by the Holder. In all events, the provisions of this Section 4(d)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered
to the Company. The Holder may also decrease the Beneficial Ownership Limitation provisions of this Section 4(d) solely with respect
to the Holder’s Note at any time, which decrease shall be effectively immediately upon delivery of notice to the Company.
The Beneficial Ownership Limitation provisions of this Section 4(d) shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 4(d) to correct any portion which may be defective or inconsistent with the
intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this Section 4(d) shall apply to a successor holder of this Note.

 

Section
5. Certain Adjustments.

 

(a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of
the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this Section 5(a) shall become effective immediately
after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

    	 	7	 

     

    

 

(b)
Subsequent Equity Sales. (i) At any time, for so long as the Note or any amounts accrued and payable thereunder remain
outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right
to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),
any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the Conversion Price then in effect (such lower price, the “Base Conversion Price” and each
such issuance or announcement a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal
the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding
the preceding, the Company may close a registered public offering of securities for its own account at a Base Conversion Price
lower than the Conversion Price without triggering a Dilutive Issuance under this Note provided that the Company prepays the then
outstanding principal and interest under this Note.

 

(ii)
If any Common Stock Equivalent is amended or adjusted, and such price as so amended shall be less than the Conversion Price in
effect at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon each such issuance or amendment
as provided in this Section 5(b). In case any Common Stock Equivalent is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to
have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the
Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less
(II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued
or sold for cash, the amount of such consideration received by the Company will be deemed to be the net amount received by the
Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be
the VWAP of such public traded securities on the date of receipt. If any shares of Common Stock or Common Stock Equivalents are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be.

 

(iii)
If the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued after the Original
Issuance Date shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price then in
effect, such issuance shall be deemed to have occurred for less than the Conversion Price on such date and such issuance shall
be deemed to be a Dilutive Issuance.

 

(iv)
If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock
Equivalents at the lowest possible conversion price at which such securities may be converted or exercised under the terms of
such Variable Rate Transaction.

 

(v)
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.

 

(vi)
The provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long
as the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant
to this Section 5(b) shall be downward only.

 

    	 	8	 

     

    

 

(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company
grants, issues or sells any Common Stock, Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

(d)
Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other
than Common Stock, to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that
the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation
subject to Section 13(d) of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such
extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded
corporation subject to Section 13(d) of the Exchange Act).

 

    	 	9	 

     

    

 

(e)
Fundamental Transaction. (1) If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion
of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the conversion of this
Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation on the conversion of this Note). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. The Company shall not effect a Fundamental Transaction unless
it gives the Holder at least 10 Trading Days prior notice together with sufficient details so the Holder can make an informed
decision as to whether it elects to accept the Alternative Consideration. If a public announcement of the Fundamental Transaction
has not been made, the notice to the Holder may not be given until the Company files a Form 8-K or other report disclosing the
Fundamental Transaction. (2) Notwithstanding anything to the contrary, in the event of a Fundamental Transaction the proceeds
of which are not used to repay the principal and interest on the Note in full and that is (x) an all cash transaction, (y) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (z) a Fundamental Transaction involving a person
or entity not traded on a national securities exchange or trading market (with such exchange or market including, without limitation,
the Nasdaq Global Select Trading Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the New York Stock Exchange,
Inc., the NYSE American or any market operated by the OTC Markets, Inc.), the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, concurrently with the consummation of the Fundamental Transaction, purchase this Note from
the Holder by paying to the Holder the higher of (i) an amount of cash equal to the Black Scholes Value of the outstanding principal
of this Note on the date of the consummation of such Fundamental Transaction, or (ii) the product of (a) the number of Conversion
Shares issuable upon full conversion of this Note (without regard to any limitation on conversion of this Note) and (b) the positive
difference between the cash per share paid in such Fundamental Transaction minus the then in effect Conversion Price; (3) If Section
5(e)(1) and (2) are not applicable, the Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Note and the other Transaction Documents in accordance with the provisions of this Section 5(e) pursuant to written agreements
in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Note a security of
the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible
for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares
of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of
this Note) prior to such Fundamental Transaction, and with a conversion price which applies the Conversion Price hereunder to
such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being
for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction),
and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction,
the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to
the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein. .

 

(f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued
and outstanding.

 

(g)
Notice to the Holder.

 

(i)
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

 

    	 	10	 

     

    

 

(ii)
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on its Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common
Stock, (C) the Company shall authorize the granting to all holders of its Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall
be required in connection with any reclassification of its Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
its Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder
at its last address as it shall appear upon the Note Register, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of its Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of its Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined in
good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K.

 

Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 50%
(which must include the Lead Investor’s consent) in principal amount of the then outstanding Note shall have otherwise given
prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

(a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

(b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(c)
amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

(d)
acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents;

 

(e)
repay, or offer to repay, any Indebtedness other than the Note as provided in Section 2(c) or regularly scheduled principal payments
of Permitted Indebtedness set forth under clauses (a) and (b) of the definition thereof and the interest on indebtedness owed
pursuant to clause (c) thereof, as such terms Indebtedness and Permitted Indebtedness are in effect as of the Original Issue Date,
provided that such payments other than on the Note shall not be permitted if, at such time, or after giving effect to such payment,
any Event of Default exists or occurs or the Company is not be able to satisfy obligations owing to the Noteholders;

 

(f)
pay cash dividends or distributions on any equity securities of the Company;

 

(g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than
a quorum otherwise required for board approval);

 

(h)
issue any equity securities of the Company other an issuance of which the proceeds are used to repay the principal and interest
on the Note in full;

 

(i)
failure to use the proceeds from this Note other than as provided for on Annex B of this Note; or

 

(j)
enter into any agreement with respect to any of the foregoing.

 

    	 	11	 

     

    

 

Section
7. Events of Default.

 

(a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(i)
any default in the payment of (A) principal and interest payment under any Note or any other Indebtedness, or (B) late fees, liquidated
damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion
Date, or the Maturity Date, or by acceleration or otherwise), which default, solely in the case of a default under clause (B)
above, is not cured within three Trading Days;

 

(ii)
the Company shall fail to observe or perform any other covenant or agreement contained in the Note (other than a breach by the
Company of its obligations to deliver Conversion Shares, which breach is addressed in clause (x) below) or any Transaction Document
which failure is not cured, if possible to cure, within the earlier to occur of 10 Trading Days after notice of such failure is
sent by the Holder or by any other Holder to the Company and (B) five Trading Days after the Company has become aware of such
failure;

 

(iii)
the Company shall breach, or a default or Event of Default (subject to any grace or cure period provided in the applicable agreement,
document or instrument) shall occur or be declared, as applicable, under, (A) any of the Transaction Documents or (B) any other
material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated (and not covered by any
other clause of this Section 7) (and, with respect to individual items under this item (B), relate to the payment by the Company
of not less than $250,000), which default or Event of Default is not cured, if possible to cure, within the earlier to occur of
(i) 10 Trading Days after notice of such default sent by Holder or by any other holder to the Company and (ii) five Trading Days
after the Company has become aware of such default;

 

(iv)
any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made, which failure is not cured, if possible to cure, within
the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any other Holder to the Company;

 

(v)
the Company or any Subsidiary shall be subject to a Bankruptcy Event;

 

(vi)
the Company or any Subsidiary shall: (A) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator
of it or any of its properties; (B) admit in writing its inability to pay its debts as they mature; (C) make a general assignment
for the benefit of creditors; (D) be adjudicated as bankrupt or insolvent or be the subject of an order for relief under Title
11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute of any other jurisdiction or foreign country; or (E) file a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against
it in any proceeding under any such law, or (F) take or permit to be taken any action in furtherance of or for the purpose of
effecting any of the foregoing;

 

(vii)
if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part
of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 days;

 

(viii)
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company
or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in
the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within 45 days after the
date thereof;

 

(ix)
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $100,000 and not relating to any claims asserted by current or former officers
arising from employment or settlement agreements with the Company which shall not be more than $150,000 in the aggregate, and
such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of 10 days;

 

(x)
any Material Adverse Effect occurs;

 

    	 	12	 

     

    

 

(xi)
any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority
having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company or any Subsidiary
shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document;

 

(xii)
the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if possible
to cure, within the earlier to occur of five Trading Days after notice of such failure is sent by the Holder;

 

(xiii)
the Company’s Common Stock is subject to a “chill” by the Depository Trust Company or any successor;

 

(xiv)
the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of 50%
of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control
Transaction);

 

(xv)
the Company fails to have authorized and reserved (in the name of the Holder) an amount of shares equal to the amount of shares
issuable upon conversion of this Note (without regard to any limitations on conversion hereof, including without limitation, the
Beneficial Ownership Limitation) and fails to have the reservation letter in the form attached as Annex C in effect with
the Company’s Transfer Agent;

 

(xvi)
the Company shall fail for any reason, except if caused by the action or inaction of the Holder to deliver Conversion Shares to
the Holder prior to the third Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any
time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for
conversions of any Note in accordance with the terms hereof;

 

(xvii)
the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange Act within the time required
(including any applicable extension period) by the rules and regulations thereunder;

 

(xviii)
the Company breaches or fails to meet its obligations under Section 8.

 

(b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election,
immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the Mandatory Default Amount,
the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described
herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind,
and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder
receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.

 

(c)
Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate.

 

(d)
Conversion Price Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall be convertible at the Default Conversion Price.

 

Section
8. Security Interest. This Note also creates a first lien on and grants a security interest in all of the Company’s
(including its subsidiaries, MDRNA Research Inc., Cequent Pharmaceuticas, Inc. and Ithenapharma, Inc.) Accounts, Goods, Inventory,
Equipment, Investment Property, General Intangibles, Instruments, Documents, and all other assets and personal property of the
Company, wherever located, together with all the proceeds now or hereafter arising in connection therewith (the “Collateral”).
This Note shall also constitute a security agreement under the New York Uniform Commercial Code or other law applicable to the
creation of liens on personal property. Capitalized terms used in this Section 8 shall have the meanings that are given to them
under the New York Uniform Commercial Code. The Company acknowledges and agrees that the Holder shall have the right to file a
UCC-1 financing statement and any renewals and continuations thereof or other documents as the Holder may reasonably require with
respect to this security interest. If a default occurs under this Note, the Holder shall have all rights and remedies of a secured
party under the New York Uniform Commercial Code. The Company shall take all such action in order to cause the Holder to have
a first lien and priority security interest in accordance with this Section 8 while this Note is outstanding.

 

    	 	13	 

     

    

 

Section
9. Miscellaneous.

 

(a)
No Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 5.

 

(b)
Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted next day delivery, as
follows:

 

	 	If
    to the Company:	Adhera
    Therapeutics, Inc.
	 	 	P.O.
    Box 2161
	 	 	Wake
    Forest, NC 27588
	 	 	Attention:
    CEO

 

	 	with
    a copy to:	 
	 	(which
    shall not constitute	Pryor
    Cashman LLP 
	 	notice)	7
    Times Square
	 	 	New
    York, NY 10036
	 	 	Attention:
    Lawrence Remmel, Esq.

 

	 	If
    to Holder:	Cavalry
    Fund I LP
	 	 	61
    Kinderkamack Road
	 	 	Woodcliff
    Lake, New Jersey 07677
	 	 	Attention:
    Thomas Walsh

 

or
to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from,
as the case may be, the date of delivery.

 

(c)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late
fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a
direct debt obligation of the Company.

 

(d)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

(e)
Exclusive Jurisdiction; Governing Law; Prevailing Party Attorneys’ Fees. All questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all actions
concerning the interpretations, enforcement and defense of the transactions contemplated by this Note and any other (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts in New York County, New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any action, any claim that it is not personally subject to the jurisdiction of any such court,
that such action is improper or is an inconvenient venue for such action. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such action by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence
an action to enforce any provisions of this Note, then, in addition to the obligations of the Company elsewhere in this Note,
the prevailing party in such action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and prosecution of such action.

 

    	 	14	 

     

    

 

(f)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

 

(g)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.

 

(h)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach would be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note.

 

(i)
Next Trading Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Trading Day, such
payment shall be made on the next succeeding Trading Day.

 

(j)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.

 

(Signature
Pages Follow)

 

    	 	15	 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.

 

	 	ADHERA
    THERAPEUTICS, INC.
	 	 	 
	 	By:	/s/
    Andrew Kucharchuk
	 	Name:	Andrew
    Kucharchuk
	 	Title:	Chairman
    & CEO

 

Solely
with respect to Section 8:

 

MDRNA
RESEARCH, INC.

CEQUENT
PHARMACEUTICALS, INC.

ITHENAPHARMA,
INC.

 

	On
    behalf of each of the above entities:	 
	 	 	 
	By:		 
	Name:	Andrew
    Kucharchuk	 
	Title:	Chairman
    & CEO	 

 

    	 	16	 

     

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Original Issue Discount Convertible Note due April ___, 2021 of ADHERA
THERAPEUTICS, INC., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4(e) of this Note, as determined in accordance with Section 13(d) of
the Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

Conversion
calculations:

 

	 	Date
    to Effect Conversion:
	 	 
	 	Principal
    Amount of Note to be Converted:
	 	 
	 	Number
    of shares of Common Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	DWAC
    Instructions:
	 	 
	 	Broker
    No:_____________________
	 	Account
    No:___________________

 

    	 	17	 

     

    

 

ANNEX
B

 

Use
of Proceeds

 

The
proceeds of this Note shall be strictly used in accordance with that certain Escrow Agent Agreement dated the same date of the
Issuance Date among the Company, the Holde and Nason Yeager Gerson Harris & Fumero, P.A. and as described below.

 

    	 	18	 

     

    

 

ANNEX
C

 

Reservation
Letter

 

    	 	19	 

     

    

 

SCHEDULE
1

 

PERMITTED
INDEBTEDNESS

 

Permitted
Indebtedness:

 

	 	●	The
    indebtedness evidenced by the Secured Promissory Notes in the aggregate principal amount of approximately $5.7 million that
    the company issued between June 28, 2019 and August 5, 2019.
	 	●	The
    indebtedness evidenced by the note issued to Cavalry Fund I LP on or about February 6, 2020 and June 26, 2020.
	 	●	The
    indebtedness to be evidence by this Note.

 

    	 	20

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