Document:

Exhibit 10.6

 

CONVERTIBLE
NOTE PURCHASE AGREEMENT

 

This
Convertible Note Purchase Agreement (this “Agreement”) is dated as of ________________, among Pueblo Agriculture
Supply and Equipment, LLC (“PASE”), Notis Global, Inc. (“Notis”), and EWSD I, LLC (“EWSD”),
(each of the foregoing entities sometimes referred to as, a “Company” and collectively as the “Companies”)
and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

 

WHEREAS,
pursuant to those certain letter agreements, Senior Secured Convertible Promissory Notes, and Security Agreements, each dated
respectively, January 6, 2017, January 13, 2017, January 27, 2017, February 1, 2017, and February 3, 2017, among others, by, between,
or among as applicable, Notis, the Companies, Redwood Management, LLC (“Redwood”), and the other signatories
thereto (collectively, the “Prior Advances”), Redwood has previously advanced to or on behalf of Notis substantial
amounts;

 

WHEREAS,
the parties hereto desire that Redwood make additional advances to Notis and the Companies and such new advances and the Prior
Advances be combined and used to purchase the securities to be sold under this Agreement; and

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of
1933, as amended (the “Securities Act”), and/or Rule 506 promulgated thereunder, PASE and Notis each desire
to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from such Companies securities
of such Companies as more fully described in this Agreement, and

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE
I. 

DEFINITIONS

 

1.1          Definitions.  In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth
in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.6.

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of Notis.

 

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“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Closing
Date(s)” means the Trading Day(s) on which all of the Transaction Documents have been executed and delivered by the
applicable parties thereto in connection with a Closing, and all conditions precedent to (i) each Purchaser’s obligations
to pay the Subscription Amount as to such Closing and (ii) the Company’s obligations to deliver the Securities as to
such Closing, in each case, have been satisfied or waived.

 

“Closing(s)”
means the one or more closings of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Company
Counsel” means Baker & Hostetler LLP.

 

“Note”
means the 10% Senior Secured Convertible Promissory Note due, subject to the terms therein, twelve (12) months from its date of
issuance, issued by PASE and Notis to each Purchaser hereunder, in the form of Exhibit A attached hereto.

 

“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.

 

“Equity
Incentive Plan” means a Company’s existing equity incentive plan, as amended.

 

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(q).

 

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

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Guarantee”
means that certain guarantee executed and delivered for the benefit of the Purchasers.

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $150,000 (other than trade accounts payable or
for services provided incurred in the ordinary course of business); (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $150,000
due under leases required to be capitalized in accordance with GAAP.

 

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“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

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

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.

 

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

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.13(b).

 

“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature
pages hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s
Subscription Amount as to the applicable Closing.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.9.

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

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“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Security
Agreement” means the Amended and Restated Security Agreement, dated the date hereof, between the Company and the Purchasers,
in the form of Exhibit B attached hereto.

 

“Securities”
means the Notes.

 

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

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Notes purchased hereunder as specified below
such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

 

“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any
direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

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

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; the
New York Stock Exchange; OTC Markets; or the OTC Bulletin Board; or as reported by OTC Markets Group Inc. (formerly Pink Sheets
LLC) (or any successors to any of the foregoing).

 

“Tranche(s)”
shall have the meaning ascribed to such term in Section 2.1.

 

“Transaction
Documents” means this Agreement, the Notes, the Security Agreement, the Guarantee, all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

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ARTICLE
II. 

PURCHASE
AND SALE 

 

2.1          Purchase.  The
Purchasers may purchase an aggregate of up to $3,600,000 in Subscription Amount of Notes in one or more tranches (each, a “Tranche”)
at one or more closings (each, a “Closing”). The first five Tranches have already been advanced and are reflected
in the Prior Advances, which Prior Advances shall be incorporated hereunder at the Initial Closing. The Closing with respect to
each Tranche is contingent upon, among other things, that all matters are satisfactory to the Purchasers in their sole discretion,
and that the Companies are in full compliance with their respective obligations and are not in default under this Agreement, any
Note, the other Transaction Documents, or any agreement with or for the benefit of the Purchasers on the Closing Date of such
tranche.

 

2.2          Closing.  On
each Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser,
severally and not jointly, agrees to purchase, such Purchaser’s Closing Subscription Amount as set forth on the signature
page hereto executed by such Purchaser.  At the applicable Closing, unless otherwise agreed, each Purchaser shall have
delivered funds to Notis for release as set forth in Section 4.8-Use of Proceeds, via wire transfer or a certified check, immediately
available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such
Purchaser and the Company shall deliver to each Purchaser its respective Note, as determined pursuant to Section 2.3(a),
and the Company each Purchaser shall deliver the other items set forth in Section 2.3 deliverable at the Closing.  Upon
satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4 for the Closing, the Closing shall occur at
the offices of Purchasers’ Counsel or such other location as the parties shall mutually agree.

 

2.3
          Deliveries.

 

(a)          On
or prior to each Closing Date (except as noted), each Company as applicable, shall deliver or cause to be delivered to each Purchaser
the following:

 

(i)           this
Agreement duly executed by each Company;

 

(ii)          the
Security Agreement duly executed by each Company;

 

(iii)         a
Note with a principal amount equal to such Purchaser’s Principal Amount as to the applicable Closing, registered in the
name of such Purchaser;

 

(iv)         the
Guarantee

 

(v)          reserved;

 

(vi)         reserved;
and

 

(vii)        such
other documents, certificates, instruments and other writings as Purchasers’ counsel may reasonably request.

 

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(b)          On
or prior to each Closing Date, each Purchaser shall deliver or cause to be delivered to the Companies, as applicable, the following:

 

(i)           this
Agreement duly executed by such Purchaser;

 

(ii)          the
Security Agreement duly executed by such Purchaser;

 

(iii)         such
Purchaser’s Subscription Amount as to the applicable Closing by wire transfer to the escrow account specified in writing
by the Companies and such Purchaser;

 

(iv)         reserved;
and

 

(v)          such
other documents, certificates, instruments and other writings as Notis’ counsel may reasonably request.

 

2.4          Closing
Conditions.

 

(a)          The
obligations of each Company hereunder in connection with each Closing are subject to the following conditions being met:

 

(i)           the
accuracy in all material respects on the applicable Closing Date of the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);

 

(ii)          all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the applicable Closing Date shall
have been performed; and

 

(iii)         the
delivery by each Purchaser of the items set forth in Section 2.3(b) of this Agreement.

 

(b)          The
respective obligations of each Purchaser hereunder in connection with each Closing are subject to the following conditions being
met:

 

(i)           the
accuracy in all material respects when made and on the applicable Closing Date of the representations and warranties of each Company
contained herein (unless as of a specific date therein); provided, however, the Company shall have one hundred twenty (120) days
from the Initial Closing to obtain waivers for any defaults set forth in the disclosure schedules for Section 3 hereto by the
Company;

 

(ii)          all
obligations, covenants and agreements of each Company required to be performed at or prior to the applicable Closing Date shall
have been performed;

 

(iii)         the
delivery by each Company of the items set forth in Section 2.3(a) of this Agreement;

 

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(iv)         there
is no existing Event of Default (as defined in the Notes, the other Transaction Documents or any agreement with or for the benefit
of the Purchasers) and no existing event which, with the passage of time or the giving of notice, would constitute an Event of
Default;

 

(v)          there
shall have been no Material Adverse Effect with respect to the Companies since the date hereof; and

 

(vi)         from
the date hereof to the applicable Closing Date, trading in the Common Stock shall not have been suspended by the Commission or
Notis’s principal Trading Market and, at any time prior to the applicable Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either
by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, and without regard to any factors unique to such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the applicable Closing.

 

ARTICLE
III. 

REPRESENTATIONS
AND WARRANTIES 

 

3.1          Representations
and Warranties of each Company. Except as set forth in the “Disclosure Schedules,” which Disclosure Schedules
shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, PASE, Notis, and EWSD hereby make the following representations and
warranties to each Purchaser as of the date hereof. References to the “Company” and the “Companies”
in this Section 3.1 shall apply to PASE, Notis, EWSD, and when applicable.

 

(a)          Subsidiaries.  All
of the direct and indirect subsidiaries of each Company are set forth on Schedule 3.1(a). Each Company owns, directly
or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the
issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. If each Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

 

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(b)          Organization
and Qualification. Each Company and each of such Company’s Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with
the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified
or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect
on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a
whole; or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and
no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification.

 

(c)          Authorization;
Enforcement.  Each Company has the requisite power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by each Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of such Company and no further action is required by such Company, its Board of Directors, stockholders, or members,
as applicable, in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement
and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by such Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of such
Company enforceable against that Company in accordance with its terms, except: (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.

 

(d)          No
Conflicts.  The execution, delivery and performance by each Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any provision of that Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any
Lien (except Liens in favor of the Purchasers) upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding
to which such Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound
or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or
a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.

 

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(e)          Filings,
Consents and Approvals.  Each Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal (except for any federal consents, etc.,
concerning cannabis), state, local or other governmental authority or other Person in connection with the execution, delivery
and performance by such Company of the Transaction Documents, other than: the filing of Form D and 8-K with the Commission, to
the extent such Company is required to file with the Commission, and such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).

 

(f)           Issuance
of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents.  

 

(g)          Capitalization.  The
capitalization of each Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include
the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The
respective Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other
than pursuant to the exercise of employee stock options under any applicable Equity Incentive Plan, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or
exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act. Other than with regard to Exempt Issuances, no Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and securities issued to employees, officers or directors, or former employees, officers or directors
and other service providers or former service providers of each Company pursuant to such Equity Incentive Plan or otherwise, there
are no outstanding options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The issuance and
sale of the Securities will not obligate any Company to issue shares of Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder of that Company’s securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No
further approval or authorization of any stockholder or other equityholder, as applicable, the Board of Directors or others is
required for the issuance and sale of the Securities.  Other than as set forth on Schedule 3.1(g), there
are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock
to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

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(h)          SEC
Reports; Financial Statements.  Except as set forth in Schedule 3.1(h), Notis has filed all reports, schedules,
forms, statements and other documents required to be filed by Notis under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as Notis was required
by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”).  As of their respective
dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as
applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.  Notis has never been an issuer subject to Rule 144(i) under the Securities
Act. Except as set forth in Schedule 3.1(h), the financial statements of Notis included in the SEC Reports comply
in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Notis and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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(i)          Material
Changes; Undisclosed Events, Liabilities or Developments.  Since the filing of Notis’ Form 10-Q for the period
ended June 30 2016: (i) there has been no event, occurrence or development that has had or that could reasonably be expected
to result in a Material Adverse Effect; (ii) Neither Notis, nor any other Company has incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission; (iii) the Company has not altered its method of accounting; (iv) the
Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its capital stock; and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to the Equity Incentive Plan or as set forth in the SEC Reports.  Except
for the issuance of the Securities contemplated by this Agreement, or the Exempt Issuances no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its
Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to
be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not
been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(j)          Litigation.
Except as set forth in the SEC Reports, or, if applicable, Schedule 3.1(j), there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”), which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could,
if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect, and neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  Other than
as set forth in the SEC Reports, there has not been, and to the knowledge of Notis, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former director or officer of the Company that is likely
to lead to action that can reasonably be expected to result in a Material Adverse Effect. Other than as set forth in the SEC Reports,
there has not been, and to the knowledge of Notis, there is not pending or contemplated, any investigation by the Commission involving
Notis or any current or former director or officer of Notis. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by Notis or any Subsidiary under the Exchange Act or the Securities Act.

 

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(k)          Labor
Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the
employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company,
no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The
Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(l)          Compliance.  Except
as set forth in Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation
of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.

 

(m)          Regulatory
Permits.  Each Company and its respective Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate federal (except for any federal certificates, etc., concerning cannabis), state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the SEC Reports, as applicable or on Schedule
3.1(m), except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse
Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

 

(n)          Title
to Assets.  Each Company and its respective Subsidiaries have good and marketable title in fee simple to all real
property owned by them and good and marketable title in all personal property owned by them that is material to the business of
the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect
the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have
been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.

 

    	 12

     

    

 

(o)          Intellectual
Property.  Each Company and its respective Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses as presently conducted and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this Agreement.  No Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not
have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all
of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

(p)          Transactions
with Affiliates and Employees.  Except as set forth in Schedule 3.1(p) and for the Exempt Issuances, none
of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (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 providing for the borrowing of money from or lending
of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company,
any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee,
stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees
for services rendered; (ii) reimbursement for expenses incurred on behalf of the Company; and (iii) other employee benefits,
including stock option or stock award agreements under the Equity Incentive Plan.

 

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(q)          Sarbanes-Oxley;
Internal Accounting Controls.  Except as set forth in Schedule 3.1(q), the Company and the Subsidiaries are
in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof,
and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof
and as of the applicable Closing Date. Other than as disclosed in the SEC Reports, the Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets
is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The
Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since
the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the
Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial
reporting of the Company and its Subsidiaries.

 

(r)          Certain
Fees.  Other than as set forth on Schedule 3.1(r), no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The
Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.

 

(s)          Private
Placement.  Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section
3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to each Purchaser
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.

 

(t)          Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that it will not become an “investment company”
subject to registration under the Investment Company Act of 1940, as amended.

 

    	 14

     

    

 

(u)          Registration
Rights.  Other than with regard to the Exempt Issuances, no Person has any right to cause any Company to effect
the registration under the Securities Act of any securities of the Company or any Subsidiaries.

 

(v)          Listing
and Maintenance Requirements.  Notis’ Common Stock is registered pursuant to Section 12(b) or 12(g) of
the Exchange Act, and Notis has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has Notis received any notification that the Commission is contemplating
terminating such registration.  Notis has not, in the twelve (12) months preceding the date hereof, received notice
from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Trading Market. Notis is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

(w)          Application
of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and each Purchaser’s ownership of the Securities.

 

(x)          Disclosure.  Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, Notis confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any
information that it believes constitutes or might constitute material, non-public information. Notis understands and confirms
that the Purchasers will rely on the foregoing representation in effecting transactions in securities of Notis.  All
of the disclosure furnished by or on behalf of each Company to the Purchasers regarding the Notis and its Subsidiaries, their
respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true
and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in light of the circumstances under which they were made, not misleading.  Each
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

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(y)          No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
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 of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would
require the registration of any such securities under the Securities Act or (ii) any applicable stockholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.

 

(z)          No
General Solicitation. No Company nor any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers
and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(aa)        Foreign
Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds
for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity;
(ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company or any Subsidiary
(or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated
in any material respect any provision of FCPA.

 

(bb)        Accountants.  Notis’
accounting firm is set forth on Schedule 3.1(bb) of the Disclosure Schedules.  To the knowledge and belief
of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.

 

(cc)        No
Disagreements with Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the
Company.

 

(dd)        Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each Purchaser is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any
advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents
and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company
further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

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(ee)        Regulation
M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid
to the Company’s placement agent in connection with the placement of the Securities.

 

(ff)        Stock
Option Plans. Each stock option granted by each Company under the Equity Incentive Plan was granted (i) in accordance
with the terms of the Equity Incentive Plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Equity Incentive Plan has been backdated.  The Company has not knowingly granted, and there is no and has
been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of
stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

 

(gg)        Office
of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

(hh)        U.S.
Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon a Purchaser’s
request.

 

(ii)          Bank
Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
(25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

    	 17

     

    

 

(jj)        Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) 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 and (iii) has set aside on its books provision reasonably adequate for the payment of all
material 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.

 

(kk)        Seniority.
As of each Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment, whether
with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security
interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as
to the property covered thereby).

 

(ll)           [Reserved].

 

(mm)       Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.

 

(nn)        Related
Party Transactions. All related party transactions have been consummated in accordance with all applicable laws and governing
agreements, including, without limitation, those laws applicable to the diversion of a corporate opportunity of each Company or
any of Affiliate of such Company or any Affiliate of any principal of that Company. In each instance, the particular related party
transaction has been approved by a majority of the disinterested directors of the applicable Company, after full disclosure has
been made to each board member of the pertinent facts of the proposed transaction. Each such related party transaction has been
consummated on terms and conditions that are equal or more favorable to the applicable Company than a transaction with an unaffiliated
third party knowing all the facts and under no compulsion to consummate such transaction.

 

Each
Purchaser acknowledges and agrees that the representations contained in Section 3.1 shall not modify, amend or affect the Company’s
and each Subsidiary’s rights to indemnification or to rely on such Purchaser’s representations and warranties contained
in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument
executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.

 

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3.2          Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a)          Organization;
Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each
Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally; (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)          Own
Account.  Such Purchaser understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its
own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the
Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state
securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities in compliance
with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities hereunder in the ordinary
course of its business.

 

(c)          Purchaser
Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

(d)          Experience
of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

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(e)          General
Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(f)          Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares
to borrow in order to effect Short Sales or similar transactions in the future.

 

The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s
rights to indemnification or to rely on the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.

 

ARTICLE
IV. 

OTHER
AGREEMENTS OF THE PARTIES 

 

4.1          Transfer
Restrictions.

 

(a)          The
Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer
of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser
or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.

 

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(b)          The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:

 

THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Notis
acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees
or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice
shall be required of such pledge.  At the Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the
Securities.

 

(c)          [Reserved].

 

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(d)          In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, $1,000 per Trading Day for each Trading Day after the third Trading Date after such Purchaser has
duly requested the removal of the above legend (the “Legend Removal Date”) until such certificate is delivered
without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure
to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the
right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.

 

4.2          [Reserved].

 

4.3          Furnishing
of Information; Public Information.

 

(a)          Until
the earliest time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under
Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required or permitted to be filed by the Company after the date hereof pursuant to the Exchange Act
even if the Company is not then subject to the reporting requirements of the Exchange Act.

 

(b)          At
any time during the period commencing from the six (6)-month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such Purchaser’s
other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by
reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%)
of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every
thirtieth (30th) day (pro-rated for periods totaling less than thirty (30) days) thereafter until the earlier of (a)
the date such Public Information Failure is cured and (b) such time that such public information is no longer required for a seller
to transfer shares of Common Stock pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to
this Section 4.3(b) are referred to herein as “Public Information Failure Payments.”  Public Information
Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information
Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to
the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated
for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the
Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.

 

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4.4          Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require stockholder approval
prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

4.5          [Reserved].

 

4.6          Stockholder
Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.7          Non-Public
Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser
or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.

 

4.8          Use
of Proceeds.  Each Company shall use the net proceeds hereunder as set forth on Schedule 4.8 attached hereto.
To this end, each Company agrees that the net proceeds have been deposited with the Escrow Agent to be held in accordance with
the provisions of the Schedule 4.8.

 

    	 23

     

    

 

4.9          Indemnification
of Purchasers.  Subject to the provisions of this Section 4.9, each Company, jointly and severally, will indemnify
and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title),
each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons
(each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach
of any of the representations, warranties, covenants or agreements made by each Company in this Agreement or in the other Transaction
Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates,
by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties
or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder
or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party
in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company
in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to such Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position
of such Purchaser Party, in which case the Companies shall be responsible for the reasonable fees and expenses of no more than
one such separate counsel.  No Company will be liable to any Purchaser Party under this Agreement (y) for any settlement
by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed;
or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents.  The indemnification required by this Section 4.9 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.  The
indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against
any Company or others and any liabilities any Company may be subject to pursuant to law.

 

4.10        [Reserved].

 

4.11        Equal
Treatment of Purchasers.  No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration
is also offered to all of the parties to this Agreement. Further, no Company shall make any payment of principal or interest on
the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable
time.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by each Company
and negotiated separately by each Purchaser, and is intended for each Company to treat the Purchasers as a class and shall not
in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting
of Securities or otherwise.

 

    	 24

     

    

 

4.12        [Reserved]. 

 

4.13        [Reserved].

 

4.14        Securities
Laws Disclosure; Publicity. Notis shall (a) by 9:30 a.m. (New York City time) on the second (2nd) Trading Day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby and (b)
by the fourth (4th) Trading Day immediately following the date hereof, file a Current Report on Form 8-K, including
the form of Transaction Documents as exhibits thereto (if required pursuant to the Exchange Act), with the Commission. The Company
represents to the Purchasers that, as of the issuance of such 8-K, it shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchasers
shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Purchasers shall issue any such press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of the Purchasers, or without the prior consent of the Purchaser, with
respect to any press release of the Company, which consent shall not unreasonably be withheld, delayed, denied, or conditioned
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchasers, or include the name of the Purchasers in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchasers, except: (a) as required by federal securities law in connection
with any registration statement contemplated by this Agreement and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide such Purchasers with prior notice of such disclosure permitted under
this clause (b).

 

4.15        Form
D; Blue Sky Filings. Notis, for itself and the other Companies, agrees to timely file a Form D with respect to the Securities
as required under Regulation D and to provide a copy thereof, promptly upon request of the Purchasers. Notis shall take such action
as it shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at the applicable Closing under applicable securities or “Blue Sky” laws of the states of the United States,
and shall provide evidence of such actions promptly upon request of the Purchasers.

 

ARTICLE
V. 

MISCELLANEOUS

 

5.1          Reserved.

 

5.2          Fees
and Expenses.  Each Company shall deliver to the Purchaser, prior to each Closing, a completed and executed copy
of the Closing Statement, attached hereto as Annex A.  Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this
Agreement; provided that, at the Closing the Company shall pay the Purchaser $1,000 for Purchaser’s legal fees. The Company
shall pay all stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.

 

    	 25

     

    

 

5.3          Entire
Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral
or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4          Notices.  Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 12:00 noon (New York City time)
on a Trading Day; (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00
noon (New York City time) on any Trading Day; (iii) the second (2nd) Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is
required to be given.  The address for such notices and communications shall be as set forth on the signature pages
attached hereto.

 

5.5          Amendments;
Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by each Company and the Purchasers holding at least two-thirds (2/3rds) in interest
of the Securities then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision
is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right.

 

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

 

5.7          Successors
and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns.  No Company may assign this Agreement or any rights or obligations hereunder without the prior
written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8          No
Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

    	 26

     

    

 

5.9          Governing
Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to
the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  If either
party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

5.10         Survival.  The
representations and warranties contained herein shall survive the Closings and the delivery of the Securities.

 

5.11         Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

5.12         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

    	 27

     

    

 

5.13         Rescission
and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to each Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.

 

5.14         Replacement
of Securities.  If any certificate or instrument evidencing any of the Securities is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the
case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement Securities.

 

5.15         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each Purchaser
and each Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

 

5.16         Payment
Set Aside. To the extent that a Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to a Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then, to the extent of any such restoration, the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

    	 28

     

    

 

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

 

5.18         Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by
the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents.

 

5.19         Liquidated
Damages.  Each Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages
and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.

 

5.20         Saturdays,
Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

5.21         Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

    	 29

     

    

 

5.22         WAIVER
OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(Signature
Pages Follow) 

 

    	 30

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Convertible Note Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.

 

Pueblo
                           Agriculture Supply and Equipment, LLC

 

	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	NOTIS GLOBAL, INC.	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	EWSD I, LLC	 
	 	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS] 

 

    	 31

     

    

 

[PURCHASER
SIGNATURE PAGES TO 

CONVERTIBLE
NOTE PURCHASE AGREEMENT] 

 

IN
WITNESS WHEREOF, the undersigned have caused this Convertible Note Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.

 

Name
of

Purchaser:

Signature
of Authorized Signatory of Purchaser: ____________________________________ 

 

Name
of Authorized Signatory: ____________________________________      

 

Title
of Authorized Signatory: ____________________________________       

 

Email
Address of Authorized Signatory: ____________________________________       

 

Facsimile
Number of Authorized
Signatory: ____________________________________        

 

Address
for Notice to Purchaser:

 

Address
for Delivery of Securities to Purchaser (if not same as address for notice):

 

Closing
Principal Amount:

 

Closing
Subscription Amount (Inclusive of the Magic Farms Note Subscription Amount):

 

EIN
Number: _______________________ 

 

    	 32

     

    

 

Annex
A 

 

CLOSING
STATEMENT

 

Pursuant
to the attached Purchase Agreement, dated as of the date hereto, the purchasers shall purchase Notes from Pueblo Agriculture Supply
and Equipment, LLC and Notis Global, Inc. (collectively, the “Company”). All funds will be wired into an account
maintained by the Company. All funds will be disbursed in accordance with this Closing Statement.

 

Disbursement
Date:        December 4, 2017

 

 

 

	I.             PURCHASE
                    PRICE

         
	 
	 	Gross
    Proceeds to be Received 	$88,000.00
	 	 
	II.           DISBURSEMENTS

         
	 
	 	 	$
	 	 	$
	 	 	$
	 	 	$
	 	 	$
	 	 
	Total
    Amount Disbursed:	$88,000.00
	 	 
	WIRE
                    INSTRUCTIONS:

         
	 
	Duly
                    executed this ___ day of __________, 2017:

         

        Notis
Global, Inc., on behalf of itself and Pueblo Agriculture Supply and Equipment, LLC
	 
	 	 	 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

    	 33

     

    

 

Schedule
4.8

Use
of Proceeds

 

	As
                                 set forth in schedules delivered by the Purchaser to the Company.

         

        The
net proceeds from the aggregate Subscription Amount for the Notes, unless otherwise agreed shall be deposited with the Escrow
Agent to be held under and released pursuant to the agreement of the parties

 

    	 34Exhibit 10.7

 

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

 

	Original Issue Date: ______________	Principal Amount: $

 

10%
SENIOR SECURED 

CONVERTIBLE
PROMISSORY NOTE

DUE
______________

 

THIS 10% SENIOR SECURED CONVERTIBLE
PROMISSORY NOTE is a duly authorized and validly issued 10% Senior Secured Convertible Promissory Note of Notis Global, Inc., a
Nevada corporation, (the “Company”) having its principal place of business at ______________________________________,
and Pueblo Agriculture Supply and Equipment, LLC, a Delaware limited liability company (“PASE” and together
with Notis sometimes collectively referred to as the “Companies”), having its principal place of business at
____________________________, designated as its 10% Senior Secured Convertible Promissory Note, due _______________ (this
Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED, the Companies,
severally and jointly promise, to pay to Redwood Management, LLC or its registered assigns (the “Holder”), or
shall have paid pursuant to the terms hereunder, the principal sum of $___________ on _________________ (the “Maturity
Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest
to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions
hereof. This Note is subject to the following additional provisions:

 

Section 1.          Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

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

 

     1

     

    

 

 

“Bankruptcy
Event” means any of the following events: (a) the Companies or any Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Companies or
any Subsidiary thereof, (b) there is commenced against the Companies or any Subsidiary thereof any such case or proceeding that
is not dismissed within 60 days after commencement, (c) the Companies or any Subsidiary thereof is adjudicated insolvent or bankrupt
or any order of relief or other order approving any such case or proceeding is entered, (d) the Companies or any Subsidiary thereof
suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed
within 60 calendar days after such appointment, (e) the Companies or any Subsidiary thereof makes a general assignment for the
benefit of creditors, (f) the Companies or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts or (g) the Companies or any Subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose
of effecting any of the foregoing.

 

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

 

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

 

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

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Companies, by contract or otherwise) of
in excess of thirty-three percent (33%) of the voting securities of the Companies (other than by means of conversion or exercise
of the Notes and the Securities issued together with the Notes); (b) the Companies merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Companies and, after giving effect to such transaction, the stockholders of
the Companies immediately prior to such transaction own less than sixty-six percent (66%) of the aggregate voting power of the
Companies or the successor entity of such transaction; (c) the Companies sell or transfer all or substantially all of its assets
to another Person and the stockholders of the Companies immediately prior to such transaction own less than sixty-six percent (66%)
of the aggregate voting power of the acquiring entity immediately after the transaction; (d) a replacement at one time or within
a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those
individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members
of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the
Board of Directors who are members on the date hereof); or (e) the execution by the Companies of an agreement to which the Companies
is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 

     2

     

    

 

“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

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

 

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

 

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

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

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

 

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

 

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

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC Eligible”
means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including
without limitation transfer through DTC’s DWAC system, (b) the Companies have been approved (without revocation) by the DTC’s
underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are
otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of
the Conversion Shares via DWAC.

 

“Equity
Conditions” means, during the period in question, (a) no Event of Default shall have occurred, (b) the Companies have
timely filed (or obtained extensions in respect thereof and filed within the applicable grace period) all reports other than Form
8-K reports required to be filed by the Companies after the date hereof pursuant to the Exchange Act and the Company has met the
current public information requirements of Rule 144(c) under the Securities Act as of the end of the period in question, (c) on
any date that the Company desires to make a payment of interest and/or principal in shares of Common Stock instead of cash, the
average daily dollar volume of the Company’s common stock for the previous twenty (20) trading days must be greater than
$10,000, and (d) the Company’s shares of common stock must be DWAC Eligible and not subject to a “DTC chill”.

 

     3

     

    

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

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

 

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

 

“Late Fees”
shall have the meaning set forth in Section 2(c).

 

“Mandatory
Default Amount” means the payment of 150% of the outstanding principal amount of this Note and accrued and unpaid interest
hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.

 

“New York
Courts” shall have the meaning set forth in Section 7(d).

 

“Note Register”
shall have the meaning set forth in Section 2(b).

 

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

 

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

 

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

 

“Purchase
Agreement” means the Convertible Note Purchase Agreement, dated as of ______________, between the Companies (as well
the Co-Obligors) and the original Holder, as amended, modified or supplemented from time to time in accordance with its terms.

 

“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to this Note, including any Conversion Shares issuable upon conversion in full of this Note (including Conversion
Shares issuable as payment of interest on this Note), ignoring any conversion limits set forth therein, and assuming that the Fixed
Conversion Price is at all times on and after the date of determination 100% of the then Fixed Conversion Price on the Trading
Day immediately prior to the date of determination.

 

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

 

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

 

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

 

     4

     

    

 

“Variable
Rate Transaction” means, collectively, an “Equity Line of Credit” or similar agreement, or a Variable Priced
Equity Linked Instrument. For purposes hereof, “Equity Line of Credit” means any transaction involving a written agreement
between the Companies and an investor or underwriter whereby the Companies have the right to “put” its securities to
the investor or underwriter over an agreed period of time and at future determined price or price formula (other than customary
“preemptive” or “participation” rights or “weighted average” or “full-ratchet”
anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions that are not Variable Priced
Equity Linked Instruments), and “Variable Priced Equity Linked Instruments” means: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either
(1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a conversion, exercise
or exchange price that is subject to being reset on more than one occasion at some future date at any time after the initial issuance
of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance
(other than customary “preemptive” or “participation” rights or “weighted average” or “full-ratchet”
anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions), and (B) any amortizing convertible
security which amortizes prior to its maturity date, where the Companies is required or has the option to (or any investor in such
transaction has the option to require the Companies to) make such amortization payments in shares of Common Stock which are valued
at a price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial
issuance of such debt or equity security (whether or not such payments in stock are subject to certain equity conditions).

 

“VWAP”
means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading
Market is not the principal trading market for such security, then on the principal securities exchange or securities market on
which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New
York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Companies and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, recapitalization or other similar transaction during such period.

 

     5

     

    

 

Section 2.          Interest.

 

a)        Payment
of Interest in Cash or Kind. The Companies shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of 10% per annum. All interest payments hereunder will be payable in cash, or subject
to the Equity Conditions, in cash or Common Stock in the Companies’ discretion. Accrued and unpaid interest shall be due
on payable on each Conversion Date, prepayment date, and on the Maturity Date, or as otherwise set forth herein.

 

b)       Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve (12) thirty (30) calendar day
periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest
hereunder will be paid to the Person in whose name this Note is registered on the records of the Companies regarding registration
and transfers of this Note (the “Note Register”).

 

c)        Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall accrue
daily from the date such interest is due hereunder through and including the date of actual payment in full.

 

d)       Prepayment.
At any time upon ten (10) days written notice to the Holder, but subject to the Holder’s conversion rights set forth herein,
the Companies may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. If the Companies
exercises its right to prepay the Note, the Companies shall make payment to the Holder of an amount in cash equal to the sum of
the then outstanding principal amount of this Note and interest multiplied by 130%. The Holder may continue to convert the Note
from the date notice of the prepayment is given until the date of prepayment.

 

Section 3.          Registration
of Transfers and Exchanges.

 

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

 

b)       Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder and may be
transferred or exchanged only in compliance with applicable federal and state securities laws and regulations.

 

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

 

     6

     

    

 

Section 4.          Conversion.

 

a)        Voluntary
Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible,
in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the
conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to the Companies a
Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”),
specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such
date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To
effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Companies unless the entire
principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The
Holder and the Companies shall maintain a Conversion Schedule showing the principal amount(s) converted and the date of such conversion(s).
The Companies may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion.
In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may
be less than the amount stated on the face hereof.

 

b)        Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to $0.0001 (the “Fixed Conversion Price”).
Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default, the Holder may require
the Companies to, at such Holder’s option and otherwise in accordance with the provisions for conversion herein, convert
all or any part of this Note into Common Stock at the Alternate Conversion Price. All such foregoing determinations will be appropriately
adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases
or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual
damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.

 

		c)	Mechanics of Conversion.

i.          Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall
be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and any accrued
and unpaid interest to be converted by (y) the Fixed Conversion Price.

 

     7

     

    

 

ii.         Delivery
of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Companies shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing
the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule 144 without
the need for current public information and the Companies have received an opinion of counsel to such effect reasonably acceptable
to the Companies (which opinion the Companies will be responsible for obtaining at the cost of the Holder) shall be free of restrictive
legends and trading restrictions, representing the number of Conversion Shares being acquired upon the conversion of this Note.
All certificate or certificates required to be delivered by the Companies under this Section 4(d) shall be delivered electronically
through the Depository Trust Companies or another established clearing corporation performing similar functions. If the Conversion
Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public
information the Conversion Shares shall bear a restrictive legend 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.”

 

Notwithstanding the foregoing,
commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information requirements,
the Companies, upon request and at the expense of the Companies, shall obtain a legal opinion to allow for such sales under Rule
144.

 

iii.        Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Companies at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Companies shall promptly return to the Holder any original Note delivered to the Companies and the Holder shall promptly return
to the Companies the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.

 

     8

     

    

 

iv.        Obligation
Absolute; Partial Liquidated Damages. The Companies’ obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Companies or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Companies to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Companies of any such action the Companies may have against the Holder. In the event the Holder
of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Companies may not refuse
conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining
conversion of all or part of this Note shall have been sought. If the injunction is not granted, the Companies shall promptly comply
with all conversion obligations herein. If the injunction is obtained, the Companies must post a surety bond for the benefit of
the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond
shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall
be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction, the Companies shall issue
Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Companies fails for any reason to deliver
to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Companies shall pay
to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share
Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Companies’ failure to
deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.

 

     9

     

    

 

v.         Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Companies fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating
to such Share Delivery Date (a “Buy-In”), then the Companies shall (A) pay in cash to the Holder (in addition
to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase
price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number
of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale
price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B)
at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the
attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of
Common Stock that would have been issued if the Companies had timely complied with its delivery requirements under Section 4(c)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Companies shall be required to pay the Holder $1,000. The Holder shall provide the Companies written notice indicating the
amounts payable to the Holder in respect of the Buy-In and, upon request of the Companies, evidence of the amount of such loss.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Companies’ failure to timely
deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

vi.        Reservation
of Shares Issuable Upon Conversion. The Companies covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 200% of the Required Minimum
(the “Reserve Amount”) for the sole purpose of issuance upon conversion of this Note and payment of interest on this
Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than
the Holder (and the other holders of the Notes). The Companies covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

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

 

     10

     

    

 

viii.      Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Companies shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note
so converted and the Companies shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Companies the amount of such tax or shall have established to the satisfaction
of the Companies that such tax has been paid. The Companies shall pay all Transfer Agent fees required for same-day processing
of any Notice of Conversion.

 

d)       Holder’s
Conversion Limitations. The Companies shall not effect any conversion of principal and/or interest of this Note, and a Holder
shall not have the right to convert any principal and/or interest of this Note, to the extent that after giving effect to the conversion
set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting
as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note
with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its
Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Companies subject
to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other
Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of
this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination
of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which
principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion
shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned
by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the
Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Companies
each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this
paragraph and the Companies shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 4(e), in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i)
the Companies’ most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public
announcement by the Companies, or (iii) a more recent written notice by the Companies or the Companies’ transfer agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Companies shall within
two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Companies, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note held by the Holder. The Holder, upon not less than sixty-one (61) days’ prior notice to the Companies, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section 4(e), provided that the Beneficial Ownership Limitation
in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of
this Section 4(e) shall continue to apply. Any such increase or decrease will not be effective until the sixty-first (61st)
day after such notice is delivered to the Companies. The Beneficial Ownership Limitation provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein
or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Note.

 

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Section 5.         Certain Adjustments.

 

a)       Stock
Dividends and Stock Splits. If the Companies, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Companies upon conversion of, or payment
of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event
of a reclassification of shares of the Common Stock, any shares of capital stock of the Companies, then the Fixed Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury
shares of the Companies) outstanding immediately before such event, and of which the denominator shall be the number of shares
of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b)       Dilution.
The Company specifically acknowledges that its obligation to issue the Common Stock is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company. The Common Stock
owned by the Holder will be subject to a full ratchet adjustment in the event that the Company issues additional equity securities
at a purchase price less than the applicable purchase price per share (the “Share Price”). In the event of an issuance
of equity involving tranches or other multiple closings, the antidilution adjustment shall be calculated as if all equity was issued
at the first closing. The Share Price will also be subject to proportional adjustment for stock splits, stock dividends, combinations,
recapitalizations and the like.

 

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c)       Subsequent
Equity Sales. If, at any time while this Note is outstanding, the Companies or any Subsidiary, as applicable, enters into (without
the prior written consent of the Holder) a Variable Rate Transaction involving the sale or grant of any option to purchase or sells
or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other
disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at a determinable
effective price per share that is lower than the then Fixed Conversion Price (such lower price, the “Base Conversion Price”
and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock
Equivalents so issued as part of such Variable Rate Transaction shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares of Common Stock at a determinable effective price
per share that is lower than the Fixed Conversion Price, such issuance shall be deemed to have occurred for less than the Fixed
Conversion Price on such date of the Dilutive Issuance), then the Fixed Conversion Price shall be reduced to equal the Base Conversion
Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued and the Base Conversion
Price is determinable. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt
Issuance. The Companies shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Companies provides a Dilutive Issuance Notice pursuant to this Section 5(b),
upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base
Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base
Conversion Price in the Notice of Conversion.

 

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

 

     13

     

    

 

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

 

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f)        Fundamental
Transaction. If, at any time while this Note is outstanding, (i) the Companies, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Companies with or into another Person, (ii) the Companies, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all
of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Companies or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%)
or more of the outstanding Common Stock, (iv) the Companies, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Companies, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making
or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to
any limitation in Section 4(e) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring
corporation or of the Companies, if it is the surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common
Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in
Section 4(d) on the conversion of this Note). For purposes of any such conversion, the determination of the Fixed Conversion Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Companies shall apportion the Fixed Conversion
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. The Companies shall cause any successor entity in a Fundamental
Transaction in which the Companies is not the survivor (the “Successor Entity”) to assume in writing all of
the obligations of the Companies under this Note and any document ancillary hereto, in accordance with the provisions of this Section
5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder
in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard
to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies
the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital
stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Companies”
shall refer instead to the Successor Entity), and may exercise every right and power of the Companies and shall assume all of the
obligations of the Companies under this Note and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Companies herein.

 

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

 

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h)       Notice
to the Holder.

 

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

 

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

 

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Section 6.        Events of Default.

 

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

 

i.          any
default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing to a
Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is
not cured within three (3) Trading Days;

 

ii.         the
Companies shall fail to observe or perform any other covenant, provision, or agreement contained in this Note (and other than a
breach by the Companies of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) three (3) Trading Days
after notice of such failure sent by the Holder or by any other Holder to the Companies and (B) five (5) Trading Days after the
Companies have become or should have become aware of such failure;

 

iii.        a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Companies or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.        any
representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made; provided, however, if any representation or warranty
made in the disclosure schedules of the Transaction Document set forth a matter that constitutes an event of default, the Company
shall have one hundred twenty (120) days from the Original Issue Date to (i) obtain a waiver of such disclosed default or (ii)
cure such disclosed default;

 

v.         the
Companies or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

 

vi.        the
Companies or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $100,000 whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

     17

     

    

 

vii.       the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock through the Depository
Trust Companies System is no longer available or “chilled”;

 

viii.      the
Companies shall be a party to any Change of Control Transaction or Fundamental Transaction (A) without first giving the Holder
ten (10) days’ prior written notice of the closing of such Change of Control Transaction or Fundamental Transaction and (B)
prior to or simultaneous with the closing of such Change of Control Transaction or Fundamental Transaction, the Holder is not repaid
in accordance with Section 2(d) herein;

 

ix.         the
Companies does not meet the current public information requirements under Rule 144;

 

x.         the
Companies shall fail for any reason to deliver certificates to a Holder prior to the third (3rd) Trading Day after a
Conversion Date pursuant to Section 4(c) or the Companies shall provide at any time notice to the Holder, including by way of public
announcement, of the Companies’ intention to not honor requests for conversions of this Note in accordance with the terms
hereof;

 

xi.        the
Companies fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is
not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 

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

 

xiii.      if
any order, judgment or decree shall be entered, without the application, approval or consent of the Companies or any Subsidiary,
by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Companies or any Subsidiary,
or appointing a receiver, trustee, custodian or liquidator of the Companies or any Subsidiary, or of all or any substantial part
of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;

 

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xiv.      the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Companies or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

xv.       the
Companies shall fail to maintain the Reserve Amount;

 

xvi.      any
monetary judgment, writ or similar final process shall be entered or filed against the Companies, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days;

 

xvii.     The
Companies shall fail to comply with the “use of proceeds” of this Note as set forth in Section 7(k); or

 

xviii.    The
Companies fails, or fails to cause the requisite Person(s) to meet the following conditions:

 

		1.	the Companies shall allow the Holder to complete due diligence satisfactory to Holder and the Companies
shall comply with all requests made by Holder in connection therewith;

 

		2.	within thirty (30) days from the Original Issue Date, the Board of Directors of the Company shall
consist of seven (7) directors, which shall include two (3) members of management and four (4) independent directors (“independent
directors” shall be determined using the definition of “independent director” contained in Rule 5605(a)(2) of
the Marketplace Rules of the NASDAQ Stock Market);

 

		3.	within ninety (90) days of the Original Issue Date, the Companies shall not make any cash or equity
compensation payments to any member of the Board of Directors (or thereafter) without the prior written consent of the Holder (which
such consent shall not be unreasonably withheld);

 

		4.	the Companies shall allow the Holder to exchange, at any time, all debt instruments in Holder’s
favor and warrants held by Holder, for shares of convertible preferred stock of the Companies that is convertible into shares of
Common Stock of the Company.

 

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b)       Remedies
Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(d), if any Event of Default
occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts
owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable
at the Holder’s option, in cash or in shares of Common Stock (subject to the Equity Conditions), at the Mandatory Default
Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate
on this Note shall accrue at an additional interest rate equal to the lesser of two percent (2%) per month (twenty-four percent
(24%) per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount in
cash or in shares of Common, the Holder shall promptly surrender this Note to or as directed by the Companies. In connection with
such acceleration described herein, the Holder need not provide, and the Companies hereby waives, any presentment, demand, protest
or other notice of any kind (other than the Holder’s election to declare such acceleration), and the Holder may immediately
and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available
to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and
the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant
to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.

 

Section 7.         Miscellaneous.

 

a)       Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by email or facsimile, or sent by a nationally recognized
overnight courier service, addressed to the Companies, at 633 West 5th Street, 28th Floor, Los Angeles, California
90071, or such other email address, facsimile number, or address as the Companies may specify for such purposes by notice to the
Holder delivered in accordance with this Section 7(a). Any and all notices or other communications or deliveries to be provided
by the Companies hereunder shall be in writing and delivered personally, by email or facsimile, or sent by a nationally recognized
overnight courier service addressed to each Holder at the email address, facsimile number, or address of the Holder appearing on
the books of the Companies, or if no such email address, facsimile number, or address appears on the books of the Companies, at
the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00 p.m. (New York City time)
on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

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b)       Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Companies,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note
at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Companies.
This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.

 

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

 

d)       Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 

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

 

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

 

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

 

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j)        Security
Interest. The obligations of the Companies under this Note shall be secured by that certain Amended and Restated Security and
Pledge Agreement, dated _____________, by and among the Companies, EWSD, and the Holder.

 

Notwithstanding
anything to the contrary contained in any of the Transaction Documents or any other transaction document between any Company and
the Holder or any Affiliate of the Holder, to the extent there be an allocation of cash flow to pay off any obligation any Company,
such cash flow shall be first allocated to pay off the Companies’ obligations under this Note.

 

k)       Use
of Proceeds. The gross proceeds of the funding to the Companies related to this Note shall be used as agreed.

 

l)        Co-Obligor.
EWSD, shall, jointly and severally, and with the Companies, be and remain subject to all terms, conditions and obligations to which
the Companies is subject pursuant to this Note (the “Co-Obligor Obligations”). The Co-Obligor Obligations shall
in no respect modify or replace any obligations of the Companies arising hereunder.

 

*********************

 

(Signature Pages Follow)

 

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

	 	 	 	 
	 	NOTIS GLOBAL, INC.
	 	 
	 	By:	 
	 	 	Name:
Title:
	 	Facsimile No. for delivery of Notices:	 
	 	 	 	 

	 	PUEBLO AGRICULTURE SUPPLY AND EQUIPMENT, LLC
	 	 
	 	By:	 
	 	 	Name:
Title:
	 	Facsimile No. for delivery of Notices:	 
	 	 	 	 

	 	As
co-obligor:
	 	 
	 	EWSD I, LLC
	 	 
	 	By:	 
	 	 	Name:
Title:
	 	Facsimile No. for delivery of Notices:	 
	 	 	 	 

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ANNEX A

 

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert principal under the 10% Senior Secured Convertible Promissory Note, due ______________ of Notis Global, Inc.,
a Nevada corporation (the “Company”) and Pueblo Agriculture Supply and Equipment, LLC, into shares of common
stock (the “Common Stock”) of the Company according to the conditions hereof, as of the date written below.
If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Companies
in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

 

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

 

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

Conversion calculations:

 

	 	Date to Effect Conversion:
	 	 
	 	Principal Amount of Note to
be Converted:
	 	 
	 	Payment of Interest in Common
Stock __ yes __ no
	 	If yes, $_____ of Interest Accrued
on Account of Conversion at Issue.
	 	 
	 	Number of shares of Common Stock
to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	Delivery Instructions:

 

     25

     

    

 

Schedule 1

 

CONVERSION SCHEDULE

 

This 10% Senior Secured
Convertible Promissory Note, due on _____________, in the original principal amount of $__________ is issued by Notis Global, Inc.,
a Nevada corporation (the “Company”) and Pueblo Agriculture Supply and Equipment, LLC. This Conversion Schedule
with respect to the Common Stock of the Company reflects conversions made under Section 4 of the above referenced Note.

Dated:

 

	Date
    of Conversion (or

 for first entry, Original 

Issue Date)	Amount
    of 

Conversion	Aggregate
    

Principal 

Amount 

Remaining 

Subsequent to 

Conversion (or

 original Principal 

Amount)	Companies
    Attest
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 
	 

                                                                                 
	 	 	 

 

     26

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