Document:

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of July [●], 2016, by and between JPX GLOBAL, INC., a Nevada
corporation, with headquarters located at 9864 E Grand River, Suite 110-301, Brighton, MI 48116 (the “Company”), and
AUCTUS FUND, LLC, a Delaware limited liability company, with its address at 101 Arch Street, 20th Floor, Boston, MA 02110
(the “Buyer”).

 

WHEREAS:

 

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

 

B.                 
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions
set forth in this Agreement an 10% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate
principal amount of US$166,000 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise
with respect thereto in accordance with the terms thereof, the “Note”), convertible into shares of common stock, $0.001
par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions
set forth in such Note.

 

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

 

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

 

1.                 
PURCHASE AND SALE OF NOTE.

 

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

 

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

 

c.      
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto
set forth in Section 7 and Section 8 below, the date and time of the issuance and sale of the Note pursuant to this Agreement
(the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on or about July [●], 2016, or such other mutually
agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the
Closing Date at such location as may be agreed to by the parties.

 

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

 

a.      
Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the
shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional
shares of Common Stock, if any, as are issuable (i) on account of interest on the Note (ii) as a result of the events
described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined
in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion
Shares” and, collectively with the Note, the “Securities”) for its own account and not with a present view towards
the public sale or distribution thereof, except 

    	 	 	 

    	 

    

 

pursuant to sales registered
or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does
not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities
at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act.

 

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

 

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

 

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

 

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

 

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

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transfer of Securities pursuant
to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion
to the Company, the Company shall pay to the Buyer liquidated damages of five percent (5%) of the outstanding amount of the Note
per day plus accrued and unpaid interest on the Note, prorated for partial months, in cash or shares at the option of the Buyer
(“Standard Liquidated Damages Amount”). If the Buyer elects to be pay the Standard Liquidated Damages Amount in shares
of Common Stock, such shares shall be issued at the Conversion Price (as defined in the Note) at the time of payment.

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

c.      
Capitalization. As of the date hereof, the authorized capital stock of the Company
consists of: (i) 500,000,000 shares of Common Stock, of which approximately 167,000,000 shares are issued and outstanding; and
(ii) 40,000,000 shares of preferred stock, of which approximately 10,001,000 shares are issued and outstanding. Except as disclosed
in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved
for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common
Stock and 42,254,545 shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock
are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances
imposed through the actions or failure to act of the Company. Except as disclosed in the SEC Documents, as of the effective date
of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents true and
correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company
shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of
the Company as of the Closing Date.

 

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

 

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

 

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

 

g.      
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the 

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“SEC Documents”).
The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents,
at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended
or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except
as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2016, and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial
condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act. For the avoidance
of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval
system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).

 

h.     
Absence of Certain Changes. Since March 31, 2016, there has been no material adverse
change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition,
results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

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

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

r.     
Permits; Compliance. The Company and each of its Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals
and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively,
the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension
or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default
or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect. Since March 31, 2016, neither the Company nor any
of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws,
except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have
a Material Adverse Effect.

 

s.     
Environmental Matters.

 

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

 

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

 

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

    	 	8	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	 	9	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

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

 

4.                 
COVENANTS.

 

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

    	 	10	 

    	 

    

 

 

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

 

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

 

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

 

e.      
Expenses. The Company shall reimburse Buyer for any and all expenses incurred by them
in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith (“Documents”), including, without limitation, reasonable attorneys’ and
consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments
or modifications of the Documents or any consents or waivers of provisions in the Documents, fees for the preparation of opinions
of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Documents. When possible, the Company
must pay these fees directly, including, but not limited to, any and all wire fees, otherwise the Company must make immediate
payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission
of an invoice by the Buyer. At Closing, the Company’s initial obligation with respect to this transaction is to reimburse
Buyer’s legal expenses shall be $2,750 plus the cost of wire fees.

    	 	11	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

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

l.       
Restriction on Activities. Commencing as of the date first above written, and until
the sooner of the six month anniversary of the date first written above or payment of the Note in full, or full conversion of
the Note, the Company shall not, directly or indirectly, without the Buyer’s prior written consent, which consent shall
not be unreasonably withheld: (a) change the nature of its business; (b) sell, divest, acquire, change the structure of any material
assets other than in the ordinary course of business; or (c) solicit any offers for, respond to any unsolicited offers for, or
conduct any negotiations with any other person or entity in respect of any 

    	 	12	 

    	 

    

 

variable rate debt transactions
(i.e., transactions were the conversion or exercise price of the security issued by the Company varies based on the market price
of the Common Stock) above $500,000, whether a transaction similar to the one contemplated hereby or any other investment; or
(d) file any registration statements with the SEC.

 

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

 

n.     
Par Value.  If the closing bid price at any time the Note is outstanding falls
below $0.001, the Company shall cause the par value of its Common Stock to be reduced to $0.0001 or less.

 

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

 

5.                 
Transaction Expense Amount.  Upon Closing, the Company shall pay Thirteen Thousand
Seven Hundred Fifty and No/100 United States Dollars (US$13,250) to Auctus Fund Management, Inc. (“Auctus Management”)
to cover  the Holder's due diligence, monitoring, and other transaction costs incurred for services rendered in connection
herewith (the “Transaction Expense Amount”).  The Transaction Expense Amount shall be offset against the proceeds
of the Note and shall be paid to Auctus Management upon the execution hereof.

 

6.                 
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its
transfer agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts
as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the
“Irrevocable Transfer Agent Instructions”).  In the event that the Borrower proposes to replace its transfer
agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to
irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the
Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be
sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately
sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement.  The Company warrants
that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section, and stop transfer
instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion
Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to its
transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to
the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair,
and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Conversion
Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this
Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in 

    	 	13	 

    	 

    

 

respect thereof) on any
certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required
by the Note and this Agreement.  Nothing in this Section shall affect in any way the Buyer’s obligations and agreement
set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. 
If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary
for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration
under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities
can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct
its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as
specified by the Buyer.  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby.  Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition
to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity
of showing economic loss and without any bond or other security being required.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	 	14	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

9.                 
GOVERNING LAW; MISCELLANEOUS.

 

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

    	 	15	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

If to the Company,
to:

JPX Global, Inc.

9864 E Grand
River, Suite 110-301

Brighton,
MI 48116

Attn: James
Foran

E-mail: jim.foran@jpxglobal.net

 

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

 

John D. Thomas
PC

11650 South State Street, Suite 240

Draper, UT
84020

E-mail: [●]

    	 	16	 

    	17 

    

 

If to the
Buyer:

 

Auctus Fund,
LLC

101 Arch Street,
20th Floor

Boston, MA 02110

Attn: Lou Posner

Facsimile:
(617) 532-6420

 

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

Lucosky Brookman
LLP

101 Wood Avenue
South, 5th Floor

Woodbridge,
NJ 08830

Attn: Joseph
M. Lucosky, Esq.

Facsimile:
(732) 395-4401

 

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

 

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

 

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

 

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

 

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

 

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

 

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

    	 	18	 

    	 

    

 

 

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

 

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

 

 

 

[signature page follows]

    	 	19	 

    	 

    

 

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

 

 

JPX
GLOBAL INC.

 

 

By:________________________________

Name: James Foran

Title: Chief Executive Officer

 

 

 

AUCTUS FUND, LLC

 

 

By:______________________________________

Name: Lou Posner

Title: Managing Director

 

 

 

 

AGGREGATE SUBSCRIPTION AMOUNT:

 

	Aggregate
    Principal Amount of Note:	US$166,000
	 	 
	Aggregate
    Purchase Price:	US$166,000

 

    	 	20Exhibit 10.2

 

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

 

 

	Principal Amount: US$166,000	Issue Date: July [●], 2016
	Purchase Price: US$166,000	 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED,
JPX GLOBAL, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order
of AUCTUS FUND, LLC, a Delaware limited liability company, or registered assigns (the “Holder”) the sum of US$166,000
together with any interest as set forth herein, on April [●], 2017 (the “Maturity Date”), and to pay interest
on the unpaid principal balance hereof at the rate of ten percent (10%) (the “Interest Rate”) per annum from the date
hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment
or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein with the written
consent of the Holder which may be withheld for any reason or for no reason. Any amount of principal or interest on this Note which
is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the
same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and
shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder (to the extent
not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with the terms hereof)
shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding
day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full,
the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on
such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day
on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.
Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

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

    	 	 	 

    	 

    

 

The following terms shall
apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

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

 

1.2 
Conversion Price.

 

(a)   
Calculation of Conversion Price. Subject to the adjustments described herein, and provided
that no Event of Default (as defined in Article III) has occurred, the conversion price (the “Conversion Price”) shall
equal the lesser of (i) 55% multiplied by the lowest Trading Price (as defined below) (representing a discount rate of 45%) during
the previous twenty-five (25) Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (ii)
the Variable 

    	 	2	 

    	 

    

 

Conversion Price (as defined
herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The “Variable Conversion Price” shall mean 55% multiplied by the Market
Price (as defined herein) (representing a discount rate of 45%). “Market Price” means the lowest Trading Price (as
defined below) for the Common Stock during the twenty-five (25) Trading Day period ending on the latest complete Trading Day prior
to the Conversion Date. “Trading Price” means, for any security as of any date, the lesser of: (i) the lowest trade
price on the Over-the-Counter Bulletin Board (the “OTCBB”), OTCQB or applicable trading market as reported by a reliable
reporting service (“Reporting Service”) designated by the Holder or, if the OTCBB is not the principal trading market
for such security, the trading price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no trading price of such security is available in any of the foregoing manners, the average of the trading
prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau,
Inc., or (ii) the closing bid price on the OTCBB, OTCQB or applicable trading market as reported by a Reporting Service designated
by the Holder or, if the OTCBB is not the principal trading market for such security, the closing bid price of such security on
the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security
that are listed in the “pink sheets” by the National Quotation Bureau, Inc. To
the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take
all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law.
The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may be
adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common
Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the Borrower’s
Common Stock have not been delivered within three (3) business days to the Borrower, the Notice of Conversion may be rescinded.
At any time after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable by DWAC (including
if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock
specified in a Notice of Conversion), an additional 10% discount will apply for all future conversions under all Notes. If in the
case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing
deposit, an additional 15% discount shall apply for all future conversions under all Notes while the “chill” is in
effect.  If in the case of both of the above, an additional cumulative 25% discount shall apply. Additionally,
if the Company ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares
after one hundred eighty-one (181) days from the Issue Date, an additional 15% discount will be attributed to the Conversion Price.
If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall
be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted
for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTCBB, OTCQB or on the principal securities
exchange or other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees
of its transfer agent and all DTC fees associated with any such issuance.

 

(b)  
Conversion Price During Major Announcements. Notwithstanding anything contained in
Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge
with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital
stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity
(including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock 

    	 	3	 

    	 

    

 

(or any other takeover scheme)
(the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”),
then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination
Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring
on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion
Price Termination Date, the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted
Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme)
for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the
case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the
termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to
become operative.

 

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

 

1.3 
Authorized Shares. The Borrower covenants that during the period the conversion right
exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement.
The Borrower is required at all times to have authorized and reserved seven times the number of shares that is actually issuable
upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved
Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant
to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure
which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion
Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i)
acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion
of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who
are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common
Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount
be lower than the initial Reserved Amount, regardless of any prior conversions.

 

If, at any time the Borrower
does not maintain or replenish the Reserved Amount within three (3) business days of the request of the Holder, the principal amount
of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s and Borrower’s
expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

    	 	4	 

    	 

    

 

 

1.4 
Method of Conversion.

 

(a)   
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the
Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice
of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 5:00
p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

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

 

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

 

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

 

(e)   
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice
of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless
the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note 

    	 	5	 

    	 

    

 

being so converted shall
forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to
issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to
the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation
of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall
be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 5:00 p.m., New York, New York time,
on such date.

 

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

 

(g)              
DTC Eligibility & Sub-Penny. If the Borrower fails to maintain its status as “DTC
Eligible” for any reason, or, if the Conversion Price is less than $0.01, the principal amount of the Note shall increase
by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any
principal amount increase will tack back to the Issue Date). In addition, the Variable Conversion Price shall be redefined to mean
forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note.

 

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

    	 	6	 

    	 

    

 

 

(i)                
Rescindment of a Notice of Conversion.  If (i) the Borrower fails to respond to
Holder within one (1) business day from the Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails
to provide any of the shares of the Borrower’s Common Stock requested in the Notice of Conversion within three (3) business
days from the date of receipt of the Note of Conversion, (iii) the Holder is unable to procure a legal opinion required to have
the shares of the Borrower’s Common Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower’s
standing, (iv) the Holder is unable to deposit the shares of the Borrower’s Common Stock requested in the Notice of Conversion
for any reason related to the Borrower’s standing, (v) at any time after a missed Deadline, at the Holder’s sole discretion,
or (vi) if OTC Markets changes the Borrower's designation to ‘Limited Information’ (Yield), ‘No Information’
(Stop Sign), ‘Caveat Emptor’ (Skull & Crossbones), ‘OTC’, ‘Other OTC’ or ‘Grey Market’
(Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder maintains the
option and sole discretion to rescind the Notice of Conversion (“Rescindment”) with a “Notice of Rescindment.”

 

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

 

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

    	 	7	 

    	 

    

 

 

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

 

1.6 
Effect of Certain Events.

 

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

 

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

    	 	8	 

    	 

    

 

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

 

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

 

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

 

Additionally, the
Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the
price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect,
then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount,
if any, received or receivable by

    	 	9	 

    	 

    

the Borrower as consideration
for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities.

 

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

 

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

 

1.7 
Trading Market Limitations. Unless permitted by the applicable rules and regulations
of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum
number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market
on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding
on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits,
stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date
hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law
or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction
over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum
Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.2
of the Note.

 

1.8 
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the
shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s
allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii)
the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right
to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in

    	 	10	 

    	 

    

 

equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to
such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder
or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion
Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section
1.3) for the Borrower’s failure to convert this Note.

 

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

 

(a)   
At any time during the period beginning on the Issue Date and ending on the date which is
thirty (30) days following the Issue Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days
prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making
a payment to the Holder of an amount in cash equal to 125%, multiplied by the sum of: (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default
Interest, if any. 

 

(b)  
At any time during the period beginning the day which is thirty one (31) days following the
Issue Date and ending on the date which is sixty (60) days following the Issue Date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of:
(w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note plus (y) Default Interest, if any. 

 

(c)   
At any time during the period beginning the day which is sixty one (61) days following the
Issue Date and ending on the date which is ninety (90) days following the Issue Date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of:
(w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note plus (y) Default Interest, if any. 

 

(d)  
At any time during the period beginning the day which is ninety one (91) days following the
Issue Date and ending on the date which is one hundred twenty (120) days following the Issue Date, the Borrower shall have the
right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding
Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 140%, multiplied
by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid
principal amount of this Note plus (y) Default Interest, if any. 

    	 	11	 

    	 

    

 

 

(e)   
At any time during the period beginning the day which is one hundred twenty one (121) days
following the Issue Date and ending on the date which is one hundred fifty (150) days following the Issue Date, the Borrower shall
have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the
outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 145%,
multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note plus (y) Default Interest, if any. 

 

(f)   
At any time during the period beginning the day which is one hundred fifty one (151) days
following the Issue Date and ending on the date which is one hundred eighty (180) days following the Issue Date, the Borrower shall
have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the
outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 150%,
multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note plus (y) Default Interest, if any. 

 

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

 

Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses
and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be
not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder
as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note
within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the
Note pursuant to this Section 1.9.

 

Article
II. CERTAIN COVENANTS

 

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

 

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

    	 	12	 

    	 

    

 

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	13	 

    	 

    

 

Article
III. EVENTS OF DEFAULT

 

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

 

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

 

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

 

3.3 
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction
Expense Amount (as defined in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.

 

3.4 
Breach of Covenants. The Borrower breaches any material covenant or other material
term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such
breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.

 

3.5 
Breach of Representations and Warranties. Any representation or warranty of the Borrower
made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including,
without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or
the Purchase Agreement.

    	 	14	 

    	 

    

 

 

3.6 
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors or commence proceedings for its dissolution, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed
for the Borrower or for a substantial part of its property or business without its consent and shall not be discharged within sixty
(60) days after such appointment.

 

3.7 
Judgments. Any money judgment, writ or similar process shall be entered or filed against
the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.

 

3.8 
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted
by or against the Borrower or any subsidiary of the Borrower, or the Borrower admits in writing its inability to pay its debts
generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws
as applicable or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against
it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.

 

3.9 
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common
Stock on at least one of the OTCBB. OTCQB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap
Market, the New York Stock Exchange, or the NYSE MKT.

 

3.10         
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the
Exchange Act.

 

3.11         
Liquidation.Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business.

 

3.12         
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits
it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s
ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become
due.

 

3.13         
Maintenance of Assets. The failure by Borrower to maintain any material intellectual
property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.14         
Financial Statement Restatement.The restatement of any financial statements filed
by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is
no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted
a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement. 

    	 	15	 

    	 

    

 

 

3.15         
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without
twenty (20) days prior written notice to the Holder.

 

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

3.17Cessation of Trading.
Any cessation of trading of the Common Stock on at least one of the OTCBB, OTCQB or an equivalent replacement exchange, the Nasdaq
National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT, and such cessation of trading shall
continue for a period of five consecutive (5) Trading Days.

 

3.18Cross-Default. 
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable
notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements,
in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the
terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder.
“Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower,
and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes;
provided, however, the term “Other Agreements” shall not include the agreements and instruments defined as the Documents.
Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt
of Borrower to the Holder.

 

3.19Bid Price.
The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on
the “Ask” with zero market makers on the “Bid” per Level 2) and/or a market (including the OTCBB,
OTCQB or an equivalent replacement exchange).

 

3.20OTC Markets Designation.
OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’
(Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign).

 

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein).  UPON THE OCCURRENCE
AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE
AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT
SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified
in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon acceleration),
3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16. 3.17, 3.18, 3.19 and/or 3.20 exercisable through the delivery of written
notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified
the remaining sections of Article III (other than failure to pay the principal hereof or interest thereon at the

    	 	16	 

    	 

    

 

Maturity Date specified in Section 3,1 hereof),
the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment
Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the
date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default
Sum”) or (ii) at the option of the Holder, the “parity value” of the Default Sum to be prepaid, where parity
value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default
Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion
Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of
a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied
by (b) the highest Trading Price for the Common Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable
hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or
3.19 occurs or is continuing after the six (6) month anniversary of this Note, then the principal amount of the Note shall increase
by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any
principal amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest Trading Price during
the delinquency period as a base price for the conversion with the Variable Conversion Price shall be redefined to mean forty percent
(40%) multiplied by the Market Price, subject to adjustment as provided in this Note. For example, if the lowest Trading Price
during the delinquency period is $0.01 per share and the conversion discount is 50%, then the Holder may elect to convert future
conversions at $0.005 per share. If this Note is not paid at Maturity Date, then the outstanding principal due under this Note
shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).

 

If the Borrower fails to pay the Default Amount
within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any
time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect. This requirement by the Borrower
shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any notice or take
any other action.

 

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

 

Article
IV. MISCELLANEOUS

 

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

    	 	17	 

    	 

    

 

 

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

 

If to the Borrower,
to:

 

JPX Global, Inc.

9864 E Grand
River, Suite 110-301

Brighton, MI
48116

Attn: James
Foran

E-mail: jim.foran@jpxglobal.net

 

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

 

John D. Thomas
PC

11650 South State Street, Suite 240

Draper, UT
84020

E-mail: [●]

 

If to the Holder:

 

Auctus Fund, LLC

101 Arch Street,
20th Floor

Boston, MA 02110

Attn: Lou Posner

Facsimile: (617)
532-6420

 

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

 

Lucosky Brookman LLP

101 Wood Avenue
South, 5th Floor

Woodbridge, NJ
08830

Attn: Joseph
M. Lucosky, Esq.

Facsimile: (732)
395-4401

    	 	18	 

    	 

    

 

 

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

 

4.4 
Assignability. This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an
“accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary,
this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder
and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid
and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

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

 

4.6 
Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Note shall be brought only in the state courts of Massachusetts or in the federal
courts located in the Commonwealth of Massachusetts. The parties to this Note hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon
forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably
waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law.

 

4.7 
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an
amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and
unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder
from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents
stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this
Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a 

    	 	19	 

    	 

    

 

price in excess of the price
paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is
not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.

 

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

 

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

 

4.10         
Usury. If it shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable provision shall automatically be revised to equal the maximum rate
of interest or other amount deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully
do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all
or a portion of the principal or interest on this Note.

 

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

    	 	20	 

    	 

    

 

 

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

 

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

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

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

[signature page follows]

    	 	21	 

    	 

    

 

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

 

JPX GLOBAL, INC.

 

 

By: _______________________________

Name: James Foran

Title:
Chief Executive Officer

 

    	 	22	 

    	 

    

EXHIBIT A

NOTICE OF
CONVERSION 

 

The undersigned hereby elects
to convert $_________________principal amount of the Note (defined below) together with $________________ of accrued and unpaid
interest thereto, totaling $_____________ into that number of shares of Common Stock to be
issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of JPX Global, Inc., a Nevada
corporation (the “Borrower”), according to the conditions of the convertible note of the Borrower dated as of July
[●], 2016 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion,
except for transfer taxes, if any.

 

Box Checked as to applicable
instructions:

 

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

 

Name of DTC Prime Broker:

Account Number:

 

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

 

Name: [NAME]

Address: [ADDRESS]

 

Date of Conversion: _____________

Applicable Conversion Price: $____________

Number of Shares of Common Stock to
be Issued

Pursuant to Conversion
of the Notes: ______________

Amount of Principal Balance Due remaining

Under the Note
after this conversion: ______________

Accrued and unpaid interest remaining:
______________

 

[HOLDER]

 

 

By:_____________________________

Name:[NAME]

Title: [TITLE]

Date: [DATE]

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