Document:

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE
AGREEMENT (the
“Agreement”), dated
as of
November 11,
2013, by and between
NYXIO TECHNOLOGIES
CORPORATION,
a Nevada corporation,
with headquarters
located at
2156 NE
Broadway, Portland,
OR 97232 (the
“Company”), and
ASHER ENTERPRISES,
INC., a Delaware
corporation, with
its address
at 1 Linden
Place, Suite 207, Great Neck,
NY 11021 (the “Buyer”).

 

WHEREAS:

 

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

 

B.                
Buyer desires
to purchase
and the Company
desires to
issue and
sell, upon
the terms
and conditions
set forth
in this Agreement
an 8% convertible
note of
the Company,
in the form
attached hereto
as Exhibit
A, in the
aggregate principal
amount of $22,500.00
(together with any note(s) issued
in replacement thereof
or as a dividend thereon
or otherwise with respect
thereto in accordance
with the terms
thereof, the “Note”),
convertible into shares
of common stock,
$0.001 par value per
share, of the Company (the “Common
Stock”), upon the terms and
subject to the limitations and
conditions set forth in such
Note.

 

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

 

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

 

1.                 
Purchase and
Sale of Note.

 

a.                  
Purchase
of Note.
On the
Closing Date
(as defined
below), the
Company shall
issue and
sell to
the Buyer
and the
Buyer agrees
to purchase from
the Company such
principal amount
of Note as
is set
forth immediately
below the Buyer’s
name on the signature
pages hereto.

 

b.                 
Form
of Payment.
On the
Closing Date
(as defined
below), (i)
the Buyer
shall pay
the purchase
price for the
Note to
be issued
and sold
to it at
the Closing (as
defined below) (the
“Purchase Price”) by wire
transfer of immediately available
funds to the Company,
in accordance with
the Company’s
written wiring
instructions, against
delivery of the Note in the principal
amount equal to the Purchase
Price as is set
forth immediately below the Buyer’s name
on the signature pages hereto,
and (ii) the Company shall deliver
such duly executed Note on behalf
of the Company, to the
Buyer, against delivery of
such Purchase Price.

 

c.                  
Closing Date.
Subject to
the satisfaction
(or written
waiver) of
the conditions
thereto set
forth in Section
6 and
Section 7
below, the
date and
time of the
issuance and
sale of the
Note pursuant
to this Agreement
(the “Closing
Date”) shall be
12:00 noon, Eastern
Standard Time on or about November
13, 2013, or such other mutually agreed
upon time. The closing
of the transactions contemplated
by this Agreement (the “Closing”)
shall occur on the Closing Date
at such location
as may be agreed to by the parties.

 

2.                 
Buyer’s
 Representations 
and  Warranties.The
 Buyer
 represents
 and
warrants to the
Company that:

 

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

 

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

 

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

    	 

    	 

    

 

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

 

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

 

f.                  
Transfer
or Re-sale.
The Buyer
understands that
(i) the
sale or
re- sale
of the Securities
has not been
and is not
being registered
under the 1933
Act or
any applicable
state securities laws, and
the Securities may
not be transferred unless (a)
the Securities are sold
pursuant to
an effective registration
statement under the 1933 Act,
(b) the Buyer shall
have delivered to the Company,
at the cost of the Buyer,
an opinion of counsel that shall
be in form, substance and
scope customary for opinions of counsel
in comparable transactions to
the effect that the Securities
to be sold or transferred may be sold or transferred
pursuant to an exemption from
such registration, which
opinion shall be accepted by
the Company, (c) the
Securities are sold or transferred
to an “affiliate”
(as defined in Rule 144
promulgated under the 1933 Act
(or a successor rule) (“Rule
144”)) of the Buyer who
agrees to sell or otherwise
transfer the Securities
only in accordance
with this Section
2(f) and
who is an
Accredited Investor, (d) the
Securities are sold pursuant
to Rule 144, or (e) the Securities
are sold pursuant to Regulation
S under the 1933 Act (or
a successor rule) (“Regulation
S”), and the Buyer shall
have delivered to the Company,
at the cost of the Buyer,
an opinion of counsel that shall
be in form, substance and
scope customary for opinions of counsel
in corporate transactions, which
opinion shall be accepted by
the Company; (ii) any
sale of such Securities made
in reliance on Rule 144
may be
made only in
accordance with
the terms
of said Rule
and further, if said
Rule is not applicable, any
re-sale of such Securities
under circumstances in which
the seller (or the person
through whom the sale is made)
may be deemed
to be an underwriter
(as that term is defined
in the 1933 Act)
may require compliance
with some other
exemption under
the 1933 Act or
the rules and
regulations of the
SEC thereunder;
and (iii)
neither the Company
nor any other person
is under
any obligation to
register such
Securities under
the 1933 Act
or any state securities laws
or to comply with
the terms and conditions of any exemption thereunder
(in each case).
Notwithstanding the foregoing or anything
else contained herein to the contrary,
the Securities may
be pledged as collateral in connection
with a bona fide margin
account or other lending arrangement.

 

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

 

“NEITHER
THE ISSUANCE
AND SALE
OF THE SECURITIES
REPRESENTED BY THIS
CERTIFICATE NOR
THE SECURITIES
INTO WHICH
THESE SECURITIES
ARE EXERCISABLE
HAVE BEEN
REGISTERED UNDER
THE SECURITIES
ACT OF
1933, AS
AMENDED, OR
APPLICABLE STATE
SECURITIES LAWS.
THE SECURITIES
MAY NOT
BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED

(I)
IN THE ABSENCE
OF (A)
AN EFFECTIVE
REGISTRATION STATEMENT
FOR THE SECURITIES
UNDER THE
SECURITIES ACT
OF 1933, AS AMENDED,
OR (B)
AN OPINION OF
COUNSEL (WHICH
COUNSEL SHALL BE SELECTED
BY THE HOLDER),
IN A GENERALLY
ACCEPTABLE FORM,
THAT REGISTRATION IS
NOT REQUIRED
UNDER SAID ACT
OR (II) UNLESS SOLD
PURSUANT TO RULE
144 OR RULE 144A UNDER
SAID ACT.
NOTWITHSTANDING THE FOREGOING,
THE SECURITIES
MAY BE
PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED
BY THE
SECURITIES.”

 

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

 

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

    	2

    	 

    

 

i.                   
Residency.The
Buyer is
a resident
of the
jurisdiction set
forth immediately
below the Buyer’s name
on the signature pages hereto.

 

3.                 
Representations
 and 
Warranties  of 
the  Company.The
 Company
represents and warrants
to the Buyer that:

 

a.                  
Organization
and
Qualification.The
Company
and each
of its
Subsidiaries (as
defined below),
if any,
is a corporation
duly organized, validly
existing and
in good
standing under the laws
of the jurisdiction
in which
it is incorporated,
with full
power and authority
(corporate and
other) to own,
lease, use and
operate its properties
and to carry
on its business as
and where now owned, leased,
used, operated and conducted.
Schedule 3(a) sets forth
a list of all of the Subsidiaries
of the Company and the jurisdiction in which
each is incorporated. The
Company and
each of
its Subsidiaries
is duly qualified
as a foreign
corporation to do business and is in good standing in every jurisdiction
in which its ownership or use
of property or the
nature of the
business conducted
by it makes
such qualification
necessary except where the failure
to be so qualified
or in good
standing would not have
a Material Adverse
Effect. “Material Adverse
Effect” means any
material adverse
effect on
the business, operations,
assets, financial condition or prospects
of the Company or its Subsidiaries, if any,
taken as a whole,
or on the
transactions contemplated hereby or
by the agreements or
instruments to be entered
into in connection herewith.
“Subsidiaries” means
any corporation or
other organization,
whether incorporated
or unincorporated,
in which
the Company owns,
directly or indirectly, any
equity or other ownership interest.

 

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

 

c.                  
Capitalization.
As of
the date
hereof, the authorized
capital stock
of the Company
consists of:
(i) 500,000,000[to
be increased
to 1,000,000,000 shares
upon the effective
date of a
Definitive 14C] shares
of Common Stock,
$0.001 par
value per
share, of which
131,373,609 shares
are issued and
outstanding; and (ii)
1,100 shares
of Class A Convertible
Preferred Stock, $0.01 par value per share,
of which 1,100 shares are
issued and outstanding; (iii)
100 shares of Class B
Convertible Preferred Stock,
$0.01 par value per share, of which
100 shares are issued and
outstanding; and
no shares are reserved
for issuance pursuant to the
Company’s stock
option plans, no shares
are reserved for issuance pursuant
to securities (other than
shares reserved for the Note
and seven (7) prior convertible
promissory notes in favor of the
Buyer:

 

(a)  
prior convertible
promissory note
in favor
of the Buyer
dated November
13, 2012 in
the amount
of $40,000.00, the
principal of
which was
increased to
$60,000.00 but is
now reduced
after conversions to date to
$38,040.00; and

 

(b)  
prior convertible
promissory note
in favor
of the Buyer
dated January 31,
2013 in the
amount of $37,500.00, the
principal of which was
increased to $37,500.00 after default;
and

 

(c)
prior convertible
promissory note
in favor of
the Buyer
dated April
11, 2013 in
the amount of
$41,500.00;

 

(d)  
prior convertible
promissory note
in favor
of the
Buyer dated
June 27, 2013
in the amount
of $22,500.00;

 

(e)    
prior convertible
promissory note in
favor of the
Buyer dated August 12, 2013 in
the amount of $15,750.00;

 

(f)   
prior convertible
promissory note in
favor of the
Buyer dated September 13, 2013
in the amount of
$10,000.00;

 

(g)  
prior convertible promissory note
in favor of the
Buyer dated October
16, 2013 in the amount of
$2,500.00;

 

exercisable
for, or
convertible into
or exchangeable
for shares
of Common Stock
and an
aggregate total
of 850,000,000 [which
will become
available for
said reserve upon
the effective
date of
the Definitive
14C and
Amendment to
the Certificate
of Incorporating which
 will
increase the
number of
authorized shares
to 1,000,000,000] shares
are reserved
for issuance
upon conversion of the Note
as well as the seven (7) prior
notes referenced above. All
of such outstanding shares
of capital stock
are, or upon
issuance will
be, duly authorized,
validly issued, fully paid
and non-assessable. No
shares of
capital stock
of the
Company are subject to
preemptive rights or any other
similar rights of the
shareholders of the
Company or any liens or
encumbrances imposed through the actions or
failure to act of the Company. As of
the effective date of this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for any
shares of capital stock of the Company or any
of its Subsidiaries, or arrangements by which
the Company or
any of
its Subsidiaries is or may become bound
to issue additional shares of capital stock of the Company or
any of its Subsidiaries, (ii) there are
no agreements or arrangements under which
the Company or any
of its Subsidiaries is obligated to register the sale of any
of its or their securities under the 1933 Act and (iii) there are no anti- dilution
or price adjustment provisions contained in any
security issued by the Company (or in
any agreement providing rights to security holders)
that will be triggered by the issuance
of the Note or
the Conversion
Shares. The
Company has furnished
to the
Buyer true and
correct copies of the Company’s
Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as
in effect on
the date hereof (the
“By-laws”), and
the terms of all
securities convertible into or
exercisable for Common
Stock of the Company and
the material rights of the holders thereof in respect thereto. The Company shall
provide the Buyer with a written update
of this representation signed by the
Company’s Chief Executive on behalf
of the Company as of the Closing Date.

 

    	3

    	 

    

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

 

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

 

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

 

g.                 
SEC
Documents;
Financial
Statements.
The Company
has timely filed
all reports,
schedules, forms,
statements and
other documents
required to be
filed by
it with
the SEC
pursuant to
the reporting
requirements of
the Securities
Exchange Act
of 1934, as
amended (the “1934 Act”)
(all of the foregoing filed prior
to the date hereof and all
exhibits included therein
and financial statements
and schedules thereto
and documents (other than exhibits
to such documents) incorporated
by reference therein, being hereinafter
referred to herein as the “SEC
Documents”). Upon written
request the Company will deliver to
the Buyer true and
complete copies of
the SEC
Documents, except
for such
exhibits and
incorporated documents. As
of their respective dates,
the SEC Documents
complied in all
material respects
with the requirements of the 1934 Act
and the rules and regulations
of the SEC promulgated thereunder applicable
to the SEC
Documents, and
none of
the SEC
Documents, at the
time they
were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein
or necessary
in order
to make
the statements therein, in light of the circumstances under which they were
made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent
filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles, consistently applied, during the
periods involved and fairly present in all material respects the consolidated financial
position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for
the periods
then ended (subject, in the case of
unaudited statements,
to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the
SEC Documents, the Company
has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business subsequent to June 30, 2013, and

(ii)
obligations under
contracts and
commitments incurred
in the
ordinary course of
business and
not required
under generally
accepted accounting
principles to
be reflected
in such
financial statements,
which, individually or in the
aggregate, are not material
to the financial condition or
operating results of the Company. The
Company is subject to the reporting requirements
of the 1934 Act.

 

    	4

    	 

    

h.                 
Absence
of
Certain
Changes.
Since
June
30, 2013, there
has been no
material adverse
change and
no material
adverse development
in the assets,
liabilities, business,
properties, operations,
financial condition,
results of
operations, prospects
or 1934 Act
reporting status of
the Company or
any of its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	5

    	 

    

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

 

q.                 
No
Brokers.
The
Company has
taken no
action which
would give
rise to
any claim
by any
person for
brokerage commissions, transaction
fees or similar
payments relating
to this Agreement or the
transactions contemplated hereby.

 

r.                   
Permits;
Compliance.
The Company
and each
of its Subsidiaries is
in possession
of all
franchises, grants,
authorizations, licenses,
permits, easements,
variances, exemptions,
consents, certificates,
approvals and
orders necessary
to own,
lease and
operate its properties and
to carry on its
business as
it is now being
conducted (collectively, the “Company Permits”),
and there is no action pending or,
to the knowledge of the Company, threatened
regarding suspension or cancellation
of any of the Company Permits.
Neither the Company nor any of its Subsidiaries is
in conflict with, or in default
or violation of, any of the Company
Permits, except for any such
conflicts, defaults or violations which, individually or in the aggregate,
would not reasonably
be expected to
have a Material
Adverse Effect. Since June 30,
2013, neither the Company nor any of its Subsidiaries
has received any notification with
respect to possible conflicts, defaults
or violations of applicable laws,
except for notices relating to possible conflicts,
defaults or violations, which
conflicts, defaults
or violations would
not have a Material
Adverse Effect.

 

		s.	Environmental
                                                                                                                                                                                Matters.

 

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

 

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

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

 

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

 

    	6

    	 

    

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

 

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

 

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

 

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

 

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

 

z.                  
Breach
of Representations
and Warranties
by the
Company.
If
the
Company breaches
any of
the representations
or warranties
set forth
in this
Section 3,
and in
addition to any other remedies
available to the Buyer pursuant to this Agreement,
it will be considered an
Event of default under Section
3.4 of the Note.

 

		4.	COVENANTS.

 

a.                  
Best
Efforts.The
parties shall
use their best
efforts to satisfy
timely each of
the conditions described
in Section 6 and
7 of this Agreement.

 

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

 

c.                  
Use
of Proceeds.
The Company
shall use the
proceeds for
general working capital
purposes.

    	7

    	 

    

 

d.                 
Right
of First
Refusal.
Unless it
shall have
first delivered
to the Buyer,
at least
seventy two (72)
hours prior
to the closing
of such
Future Offering
(as defined
herein),  written 
notice  describing
 the  proposed 
Future  Offering,
 including  the 
terms  and conditions
thereof and
proposed definitive
documentation to
be entered into
in connection
therewith, and
providing the Buyer an
option during the seventy
two (72) hour period following
delivery of such notice to purchase
the securities being offered in the Future
Offering on the same terms
as contemplated by such
Future Offering (the limitations
referred to in
this sentence and
the preceding sentence are collectively referred
to as the “Right of First
Refusal”) (and subject to the exceptions
described below), the Company will not
conduct any equity financing
(including debt with an
equity component) (“Future
Offerings”) during the period beginning
on the Closing Date and ending
twelve (12) months following
the Closing Date. In the event the terms
and conditions of a proposed
Future Offering are amended
in any respect after delivery
of the notice to the Buyer
concerning the proposed Future
Offering, the Company shall deliver a new
notice to the Buyer describing the
amended terms and
conditions of the proposed Future
Offering and the Buyer
thereafter shall have an option
during the seventy two (72)
hour period following delivery of such new
notice to purchase its pro rata
share of the securities being offered
on the same terms as contemplated
by such proposed Future Offering,
as amended. The foregoing sentence
shall apply to successive amendments
to the terms and conditions of any proposed
Future Offering. The Right of
First Refusal shall
not apply to any transaction involving (i)
issuances of securities in a firm commitment
underwritten public offering (excluding
a continuous offering pursuant to Rule 415 under
the 1933 Act) or (ii) issuances of securities
as consideration for a merger,
consolidation or purchase of assets, or in connection
with any strategic partnership or joint venture
(the primary purpose of which
is not to raise equity capital), or
in connection with the disposition
or acquisition of a business,
product or license
by the Company. The Right of
First Refusal also
shall not apply to the issuance of securities upon exercise
or conversion of the Company’s
options, warrants or other convertible
securities outstanding as of the date
hereof or to the grant of additional
options or warrants, or the issuance
of additional securities,
under any Company stock
option or restricted
stock plan approved by the shareholders
of the Company. The Right of
First Refusal shall apply only to like
transactions (i.e. convertible debentures)
that are less than $100,000.00
in the aggregate.

 

e.                  
Expenses.
At the
Closing, the
Company shall
reimburse Buyer
for expenses
incurred by
them in connection
with the
negotiation, preparation,
execution, delivery
and performance
of this Agreement
and the other
agreements to be
executed in
connection herewith (“Documents”),
including, without limitation,
reasonable attorneys’ and
consultants’ fees and expenses,
transfer agent fees, fees for
stock quotation services, fees
relating to any amendments or modifications
of the Documents or any consents
or waivers of provisions
in the Documents, fees
for the preparation of opinions
of counsel, escrow fees,
and costs of restructuring the
transactions contemplated by the Documents.
When possible, the Company must pay
these fees
directly, otherwise
the Company must make immediate
payment for reimbursement
to the Buyer for all fees
and expenses immediately upon written
notice by the Buyer or the submission
of an invoice by the Buyer.
The Company’s obligation
with respect to this transaction
is to reimburse Buyer’ expenses
shall be $2,500.

 

f.                  
Financial
Information.
Upon
written
request
the
Company agrees to
send or
make available
the following
reports to
the Buyer
until the Buyer
transfers, assigns,
or sells all of the
Securities: (i)
within ten (10)
days after
the filing with the SEC,
a copy of its Annual
Report on Form
10-K its Quarterly Reports
on Form
10-Q and any
Current Reports on Form
8-K; (ii) within one (1) day
after release, copies
of all press releases
issued by the Company or any of its Subsidiaries; and
(iii) contemporaneously with the making
available or giving to the shareholders
of the Company, copies of any notices or other
information the Company makes available
or gives to such shareholders.

 

		g.	[INTENTIONALLY
                                                                                                                                                                                DELETED]

 

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

 

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

    	8

    	 

    

 

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

 

k.                 
Breach
 of  Covenants.If
the Company breaches
any of
the covenants
set forth
in this Section
4, and
in addition
to any other
remedies available
to the Buyer
pursuant to this
Agreement, it
will be
considered an
event of
default under Section
3.4 of
the Note.

 

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

 

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

 

5.                 
Transfer
 Agent 
Instructions.The
Company shall
issue irrevocable
instructions to
its transfer
agent to
issue certificates,
registered in
the name of
the Buyer
or its nominee,
for the Conversion
Shares in such
amounts as
specified from
time to time
by the
Buyer to the Company upon conversion
of the Note in accordance with
the terms thereof (the
“Irrevocable Transfer Agent
Instructions”). In the
event that
the Borrower
proposes to
replace its transfer agent,
the Borrower shall provide,
prior to the effective date of
such replacement, a fully
executed Irrevocable
Transfer Agent
Instructions in a form as
initially delivered pursuant to the Purchase
Agreement (including but not limited
to the provision to irrevocably reserve
shares of Common Stock in the Reserved
Amount) signed by the successor
transfer agent to Borrower
and the Borrower. Prior
to registration of the Conversion Shares
under the 1933 Act or the date
on which the Conversion Shares
may be sold pursuant to Rule 144 without
any restriction as to the number
of Securities as of a particular
date that can
then be immediately sold, all
such certificates shall
bear the restrictive legend specified
in Section 2(g) of
this Agreement. The Company warrants
that: (i) no instruction other
than the Irrevocable Transfer
Agent Instructions referred
to in this
Section 5, and
stop transfer
instructions to
give effect
to Section
2(f) hereof
(in the case of the Conversion Shares,
prior to registration of the Conversion Shares
under the 1933 Act or the date on which
the Conversion Shares may be
sold pursuant to Rule 144 without
any restriction as to the number of
Securities as of a particular
date that can then be immediately
sold), will be given
by the Company to its transfer
agent and that the Securities
shall otherwise be freely transferable
on the books and records of the
Company as and to the extent provided
in this Agreement and the Note;
(ii) it will not direct its transfer
agent not to transfer or delay,
impair, and/or
hinder its transfer
agent in transferring
(or issuing)(electronically or
in certificated form)
any certificate
for Conversion
Shares to be issued to the Buyer
upon conversion of or otherwise
pursuant to the Note as and
when required by the Note
and this Agreement; and
(iii) it will not fail to remove
(or directs its transfer
agent not to remove or impairs, delays,
and/or hinders its
transfer agent from
removing) any restrictive
legend (or to
withdraw any
stop transfer instructions in respect
thereof) on any certificate for
any Conversion Shares issued
to the Buyer upon conversion
of or otherwise pursuant to the Note
as and when required
by the Note and this Agreement.
Nothing in this Section shall
affect in any way the Buyer’s
obligations and agreement set
forth in Section 2(g) hereof
to comply with all applicable
prospectus delivery requirements, if any,
upon re-sale of the Securities. If
the Buyer provides the Company, at
the cost of the Buyer, with
(i) an opinion of counsel in form, substance and
scope customary for opinions in comparable transactions,
to the effect that a public sale or
transfer of such Securities
may be made without registration
under the 1933 Act and such sale
or transfer is effected or (ii)
the Buyer
provides reasonable assurances
that the Securities can
be sold pursuant to Rule 144, the Company shall
permit the transfer, and, in the case of the Conversion Shares,
promptly instruct its transfer
agent to issue one
or more certificates, free
from restrictive legend, in such
name and in such denominations as specified
by the Buyer. The Company acknowledges
that a breach by it of its obligations
hereunder will cause irreparable
harm to the Buyer, by vitiating the intent
and purpose of the transactions contemplated
hereby. Accordingly, the Company acknowledges
that the remedy at law for a
breach of its obligations under
this Section 5 may be inadequate
and agrees, in the event of a breach
or threatened breach by the Company
of the provisions of this Section, that
the Buyer shall be entitled,
in addition to all other
available remedies, to an injunction restraining
any breach and requiring
immediate transfer, without the necessity of
showing economic loss and without
any bond or other security being
required.

 

    	9

    	 

    

6.                 
Conditions to the
Company’s Obligation
to Sell.
The obligation
of
the Company hereunder
to issue and
sell the Note
to the Buyer
at the Closing
is subject
to the satisfaction,
at or before
the Closing Date of
each of the
following conditions
thereto, provided that
these conditions are for the
Company’s sole benefit and
may be waived by the Company at
any time in its sole discretion:

 

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

 

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

 

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

 

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

 

7.                 
Conditions to The
Buyer’s Obligation to Purchase.
 The
obligation of
the Buyer
hereunder to purchase
the Note
at the
Closing is subject
to the satisfaction,
at or before
the Closing Date of
each of
the following conditions,
provided that these
conditions are for the Buyer’s
sole benefit and
may be
waived by the
Buyer at any
time in its sole discretion:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	10

    	 

    

 

		8.	Governing
                                                                                                                                                                               Law;
                                                                                                                                                                               Miscellaneous.

 

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

 

b.                 
Counterparts.
This Agreement
may
be
executed in one
or more
counterparts, each
of which shall
be deemed
an original
but all
of which
shall constitute
one and
the same
agreement and
shall become
effective when
counterparts have
been signed
by each
party and delivered to the
other party.

 

 

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

 

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

 

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

 

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

 

    	11

    	 

    

If
to the Company, to:

NYXIO
TECHNOLOGIES CORPORATION

2156
NE Broadway

Portland,
OR 97232

Attn:
GIORGIO JOHNSON, Chief Executive
Officer

facsimile:
[enter fax number]

 

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

[enter
name of law
firm] 

Attn:
[attorney name]

[enter
address line 1]
[enter city, state, zip]

facsimile:
[enter fax number]

 

If
to the Buyer:

ASHER
ENTERPRISES, INC.

1
Linden Pl., Suite 207

Great
Neck, NY. 11021 

Attn:
Curt Kramer, President

facsimile:
516-498-9894

 

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

Naidich
Wurman Birnbaum & Maday
LLP

80
Cuttermill Road, Suite
410 

Great
Neck, NY 11021

facsimile:
516-466-3555

 

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

 

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

 

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

 

i.                   
Survival.
The representations
and warranties
of
the Company and
the agreements
and covenants
set forth
in this Agreement
shall survive
the closing hereunder
notwithstanding any
due diligence investigation
conducted by or on
behalf of the Buyer. The Company
agrees to indemnify and hold harmless
the Buyer and all
their officers, directors, employees
and agents for loss or damage arising as
a result of or related to
any breach or alleged breach by the
Company of any of its representations,
warranties and covenants set
forth in this Agreement or any
of its covenants and
obligations under this Agreement,
including advancement of expenses
as they are incurred.

 

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

 

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

    	12

    	 

    

 

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

 

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

 

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

 

 

NYXIO
TECHNOLOGIES CORPORATION

 

By;
/s/ Giorgio Johnson

GIORGIO
JOHNSON

Chief
Executive Officer

 

ASHER
ENTERPRISES, INC.

 

By:
/s/ Curt Kramer

Name:
Curt Kramer

Title:
President

1
Linden Pl., Suite 207
Great Neck, NY. 11021

 

 

	AGGREGATE
    SUBSCRIPTION AMOUNT:	 
	Aggregate
    Principal Amount of Note:	$22,500.00
	Aggregate
    Purchase Price:	$22,500.00
	3748(10)
        11-11-13

        giorgioj503@gmail.com
        Giorgio@nyxio.com
	 

 

    	13NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount: $13,000.00	Purchase
    Price: $13,000.00
	Issue
    Date: May 20, 2013	 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, NYXIO TECHNOLOGIES CORP., a Nevada corporation (hereinafter called the “Borrower”), hereby
promises to pay to the order of CONTINENTAL EQUITIES, LLC, a New York limited liability Corporation,
or registered assigns (the “Holder”) the sum of Thirteen Thousand Dollars ($13,000.00) together with any interest
as set forth herein, on May 31, 2014 the “Maturity Date”), and to pay interest on the unpaid principal
balance hereof at the rate of ten percent (10%) (the “Interest Rate”) per annum from the date hereof (the “Issue
Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This
Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest
on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date
thereof until the same is paid (“Default Interest”). Interest shall commence accruing on
the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days
elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments
shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the
provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business
day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day”
shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized
or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have
the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note
was originally issued (the “Purchase Agreement”).

 

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

 

    	 

    	 

    

The
following terms shall apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

1.1 
 Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the
date hereof ( the “Issuance Date”) and ending on the later of: (i) the Maturity Date and (ii) the date of payment
of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining
outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note
into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital
stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion
price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however,
that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon
conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other
than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes
or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise
analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the
portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership
by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G there under, except as otherwise provided
in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived
by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions
of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as
may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note
shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on
the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted
by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00
p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts
referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

1.2
Conversion Price. The conversion price (the “Conversion Price”) shall equal the Variable
Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by
the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price" shall mean
57.5% multiplied by the Market Price (as defined herein) (representing a discount rate of 42.5%). 
“Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during
the thirty (30) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price”
means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market
(the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the closing bid price of such security
on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of
such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such
security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be
calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually
determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of
the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any
day on which the Common Stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.

 

    	2

    	 

    

 

1.3
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from
its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all
times to have authorized and reserved two times the number of shares that is actually issuable upon full conversion of the Note
(based on the Conversion Price of the Notes in effect from time to time)(the “Reserved Amount”). The Reserved Amount
shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g) of the Purchase
Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and
(ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with
the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note.

 

If,
at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of
the Note.

 

1.4
Method of Conversion.

 

(a)   
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or
other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

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

 

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

 

    	3

    	 

    

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

 

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

 

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

 

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

 

    	4

    	 

    

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

 

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

 

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

 

1.6
Effect of Certain Events.

 

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

 

    	5

    	 

    

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

 

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

 

(d)
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells,
or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration
or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances
in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares
of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be
reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

 

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

 

    	6

    	 

    

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

 

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

 

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

 

1.7
Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal
securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of
or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number
of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on
which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding
on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits,
stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date
hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law
or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction
over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum
Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3
of the Note.

 

1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the
shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a
Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect
to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the
Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance
with Section 1.3) for the Borrower’s failure to convert this Note.

    	7

    	 

    

1.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the
Issue Date and ending on the date which is sixty (60) days following the issue date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full, in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower
is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days
from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”),
the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower
exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional
Prepayment Amount”) equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional
Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower
shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

Notwithstanding
anything to the contrary contained in this Note, at any time during the period beginning on the date which is sixty-one (61) days
following the issue date and ending on the date which is eight-nine (89) days following the issue date, the Borrower shall have
the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding
Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered
to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay
the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment
Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment Amount (as defined
below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day
prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment
to the Holder of an amount in cash (the “Second Optional Prepayment Amount”) equal to 140%, multiplied by the sum
of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses
(w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers
an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder of the Note within two
(2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant
to this Section 1.9.

 

Notwithstanding
anything to the contrary contained in this Note, at any time during the period beginning on the date which is ninety (90) days
following the issue date and, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written
notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with
this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and
shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not
more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower
shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower
exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Third Optional
Prepayment Amount”) equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Third
Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date,
the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

    	8

    	 

    

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

 

1.10
DTC Status.  The Company’s Common Stock are currently eligible for DTC book-entry delivery, settlement and depository
services and accordingly are not subject to a deposit transfer restriction (“Deposit Chill”). In the event, the Company’s
Common Stock becomes subject to a Deposit Chill, the Variable Conversion Rate shall be amended to 35% multiplied by the Market
Price (as defined herein) (representing a discount rate of 65%).

 

Article
II. CERTAIN COVENANTS

 

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

 

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

 

2.3 
Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase
or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement
of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings
in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof,
(b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the
proceeds of which shall be used to repay this Note.

 

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

 

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

Article
III.  EVENTS OF DEFAULT

 

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

 

3.1 
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest
thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

    	9

    	 

    

3.2 
Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder
(or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its
transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its
transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically
or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs,
delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend
to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement,
statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder
shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer
agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a
balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s
transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty
eight (48) hours of a demand from the Holder.

 

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

 

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

 

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

 

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

 

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

 

3.8 
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB
or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or
the American Stock Exchange.

 

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

 

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

 

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

 

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

 

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

 

3.14  Reverse
Splits.The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the
Holder.

    	10

    	 

    

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

 

3.16Cross-Default. 
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all
applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the
Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the
Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other
Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the
benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however,
the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions
will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon
the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to
pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum
(as defined herein).  UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE
NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS
HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during
the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof
or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration),
3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Borrower
by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections
of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section
3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date
of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to
in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then
outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z)
shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be
prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant
to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date
as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event
arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion
Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first
occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”)
and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all
of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection,
and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 

 

    	11

    	 

    

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

 

Article
IV. MISCELLANEOUS

 

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

 

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

 

If
to the Borrower, to:

 

Nyxio
Technologies Corp.

2156
NE Broadway

Portland,
Oregon 97232

Attn:
Giorgio Johnson, CEO

 

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

 

[enter
name of law firm]

Attn:
[attorney name]

[enter
address line 1]

[enter
city, state, zip]

facsimile:
[enter fax number]

 

 

If
to the Holder:

 

Continental
Equities, LLC

331
W. 57th Street, Suite 206

New
York, NY 10019

Attn:
Alan Masley

 

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

 

Sommer
& Schneider, LLP

Attn:
Joel Schneider

1205
Franklin Avenue, Suite 110

Garden
City, New York 11530

 

    	12

    	 

    

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	13

    	 

    

 IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this May __, 2013.

 

NYXIO
TECHNOLOGIES CORP.

 

By:
/s/ Giorgio Johnson

Giorgio
Johnson

Chief
Executive Officer

    	14

    	 

    

 

EXHIBIT A

NOTICE
OF CONVERSION 

 

The
undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth
below, of NYXIO TECHNOLOGIES CORP., a Nevada corporation (the “Borrower”) according to the conditions of the convertible
note of the Borrower dated as of May 20, 2013 (the “Note”), as of the date written below. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

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

 

Name
of DTC Prime Broker:

Account
Number:

 

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

 

Continental
Equities, LLC

331
W. 57th Street, Suite 206 

New
York, NY 10019

Attention:
Certificate Delivery 

(212)
292-7455

 

Date
of Conversion:  _____________

Applicable
Conversion Price: $____________

Number
of Shares of Common Stock to be Issued

Pursuant
to Conversion of the Notes: ______________

Amount
of Principal Balance Due remaining

Under
the Note after this conversion: ______________

 

Continental
Equities, LLC

 

By:_____________________________

Name:

Title:
President

Date:
______________ 

331
W. 57th Street, Suite 206 

New
York, NY 10019

    	15

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