Document:

EX-10.5

 Exhibit 10.5 

EXECUTION VERSION 

EMPLOYMENT AND NON-COMPETITION AGREEMENT 

EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement’) dated as of
May 28, 2019 (the “Effective Date”), between PetIQ, LLC, an Idaho limited liability company (the “Company”), and Michael Smith (the “Employee”). 

WHEREAS, the Company and the Employee desire to enter into this Agreement in order to set forth the respective rights and obligations
of the parties with respect to the Employee’s employment with the Company. 
 NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

Section 1. Employment Period. 

Pursuant to the terms and subject to the conditions of this Agreement, the Company hereby agrees to employ the Employee, and the Employee
hereby agrees to be employed by the Company for the period commencing on May 28, 2019 (the “Start Date”) and ending on the first (1st) anniversary of the Start Date, unless earlier terminated in accordance with the terms
hereof (the “Employment Period”). The Employment Period shall be automatically extended for a twelve-month period unless either party gives notice to the other party of its intention to terminate this Agreement no later than
sixty (60) days prior to the end of the then-existing Employment Period. From and after the expiration of the Employment Period, the Employee will not be entitled to any rights or benefits (including, without limitation, any severance pursuant
to this Agreement or any Company program, policy or otherwise) other than payment of any earned but unpaid wages. 
 Section 2.
Terms of Employment. 
 (a) Position. During the Employment Period, the Employee shall serve as Executive Vice President,
Product Division of the Company and shall report to the Chief Executive Officer of the Company (the “CEO”). The Employee shall, subject to the direction and supervision of the CEO, have supervision and control over, and
responsibility for, such management and operational functions of the Company currently assigned to such position and shall have such other powers and duties (including holding officer positions with the Company and one or more subsidiaries of the
Company) as may from time to time be prescribed by the CEO consistent with the Employee’s position as Executive Vice President, Product Division of the Company. 

(b) Full Time. During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the
Employee agrees to devote his full business time and efforts, to the best of his ability, experience and talent, to the business and affairs of the Company. 

(c) Compensation. 

(i) Base Salary. During the Employment Period, the Employee shall receive an annual base salary of $400,000, less
applicable withholdings, which annual base salary shall be subject to adjustment as determined by the Compensation Committee of the Board of Directors of PetIQ, Inc. (the “Compensation Committee”) (as so adjusted, the
“Annual Base Salary”). The Annual Base Salary shall be paid in accordance with the customary payroll practices of the Company, subject to applicable withholding and other payroll taxes. 

 (ii) Annual Bonuses. During the Employment Period, the Employee shall
be eligible to participate in the Company’s annual cash bonus plan as determined by the Compensation Committee in its sole discretion (the “Annual Bonus”). It is anticipated that Employee’s Annual Bonus initially
would be targeted as 75% of Employee’s Annual Base Salary, based upon personal performance and the Company meeting EBITDA targets. The Annual Bonus shall be pro-rated for the 2019 fiscal year based on the
date of the Employee’s commencement of employment with the Company and paid as, when and if determined by the Compensation Committee, subject to applicable withholding and other payroll taxes, and subject to Employee’s continued employment
through the Annual Bonus payment date. 
 (iii) Sign On Bonus. The Company shall pay to the Employee a sign on bonus
equal to $500,000 (the “Sign On Bonus”) in a cash lump sum, subject to applicable withholding and other payroll taxes, within thirty (30) days following the Start Date. In the event that the Employee’s employment
with the Company is terminated for any reason other than by the Company without Cause prior the third anniversary of the Effective Date, the Employee will promptly repay a portion of the Sign On Bonus to the Company
pro-rated for the percentage of days Employee was employed prior to the third anniversary of the Effective Date. 

(iv) Equity-Based Compensation. During the Employment Period, the Employee shall be eligible to participate in, and
receive awards of equity-based compensation on an annual basis (the “Annual Equity Award”) under, the PetIQ, Inc. Amended and Restated 2017 Omnibus Incentive Plan or applicable successor plan (the
“Plan”), as determined by the Compensation Committee in its discretion, with a target opportunity equal to 100% of Employee’s Annual Base Salary. The Annual Equity Award shall be
pro-rated for the 2019 fiscal year based on the Start Date and made as, when and if determined by the Compensation Committee, subject to Employee’s continued employment through the applicable grant date.

 (v) Initial Equity Awards. On the Start Date, the Employee shall be issued the following awards under the Plan:
(A) an award of stock options to purchase 100,000 shares of Class A common stock of PetIQ, Inc. with an exercise price per share equal to the fair market value per share on the Start Date (the “Initial Option
Award”) and (B) an award of restricted stock units with an aggregate grant date fair value equal to $415,000 (the “Initial RSU Award”). The Initial Option Award and the Initial RSU Award are subject to
approval of the Plan at the 2019 Annual Meeting of Stockholders of PetIQ, Inc. and shall be subject to the terms and conditions set forth in the Plan and the written award agreements, substantially in the forms attached hereto as Exhibit A.

 (vi) Expenses. During the Employment Period, the Employee shall be entitled to receive reimbursement for all
reasonable and documented expenses incurred by the Employee in connection with the performance of his duties hereunder, in accordance with the policies, practices and procedures of the Company as in effect from time to time. 

  
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 (vii) Relocation Expenses. The Company will cover or reimburse the
reasonable costs and expenses relating to the relocation of the Employee’s primary residence to Boise, Idaho, including (A) reasonable real estate commissions and closing costs associated with the sale of the Employee’s current
primary residence and (B) shipment of the Employee’s personal property to the Boise, Idaho area. The foregoing relocation coverage shall be subject to substantiation and approval of such expenses in accordance with applicable Company
policy. 
 (viii) Vacation and Holidays. During the Employment Period, the Employee shall be entitled to paid holidays
and four (4) weeks’ paid vacation in accordance with the policies of the Company applicable to other employees of the Company generally. 

(ix) Benefits. The Employee shall be entitled to participate in such employee benefit plans or programs in accordance with the
policies of the Company applicable to other executive-level employees of the Company. 
 Section 3. Termination of Employment.

 (a) Death or Disability. The Employee’s employment shall terminate automatically upon the Employee’s death. The Company
may also terminate the Employee’s employment due to Disability. For purposes of this Agreement, the Employee shall be deemed “Disabled” and shall be subject to termination due to Disability, if the Employee is unable to
perform the essential functions of his position, with or without reasonable accommodation, for any ninety (90) days during a period of one hundred eighty (180) consecutive days (excluding any days of paid vacation used by the Employee in
accordance with the Company’s paid time off policy), due to mental or physical disability as determined by a physician selected by the Company and reasonably acceptable to the Employee. If the Employee is Disabled, the Company may elect to
terminate the Employee’s employment hereunder by giving Notice of Termination (as defined below) to the Employee (such termination to be effective upon receipt of such notice); provided, however, that the Company may not terminate
the Employee’s employment unless, at the time the Company gives the Notice of Termination, the Employee continues to have a physical or mental disability that, in the opinion of a physician selected by Company and reasonably acceptable to the
Employee, may be expected to prevent the Employee from performing any of his duties hereunder for any period of time in excess of the ninety (90) days rendering him Disabled. The parties acknowledge and agree that the Company will suffer an
undue hardship under the circumstances set forth in the previous provision. 
 (b) Cause. The Employee’s employment may be
terminated at any time by the Company for Cause (as defined below) or Without Cause (as defined below). For purposes of this Agreement, “Cause” shall mean: (i) a breach by the Employee of any material provision of this
Agreement, which, if curable, is not cured within ten (10) days after the Employee’s receipt from the Company of written notice of such breach; (ii) any conduct, action or behavior by the Employee, whether or not in connection with
the Employee’s employment, including, without limitation, the commission of any felony or a lesser crime involving dishonesty, fraud, 

  
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misappropriation, theft, wrongful taking of property, embezzlement, bribery, forgery, extortion or other crime of moral turpitude, that has or may reasonably be expected to have a material
adverse effect on the reputation or business of the Company, Holdings, or their respective subsidiaries and affiliates (the “Company Group”) or which results in gain or personal enrichment of the Employee to the detriment of
the Company Group; (iii) a governmental authority, including, without limitation, the Environmental Protection Agency or the Food and Drug Administration, has prohibited the Employee from working or being affiliated with the Company Group or
the business conducted thereby; (iv) the commission of any act by the Employee of gross negligence or malfeasance, or any willful violation of law, in each case, in connection with the Employee’s performance of his duties with the Company
Group; (v) performance of the Employee’s duties in an unsatisfactory manner after a written warning and a ten (10) day opportunity to cure or failure to observe material policies generally applicable to employees after a written
warning and a ten (10) day opportunity to cure; (vi) breach of the Employee’s duty of loyalty to the Company Group; (vii) chronic absenteeism; (viii) substance abuse, illegal drug use or habitual insobriety; or
(ix) violation of obligations of confidentiality to any third party in the course of providing services to the Company Group. “Without Cause” shall mean a termination by the Company of the Employee’s employment
during the Employment Period for any reason or under any circumstances other than a termination based upon Cause, death or Disability. 
 (c)
Notice of Termination. Any termination by the Company for Cause, Without Cause or for Disability or by the Employee for any reason, shall be communicated by Notice of Termination to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated and (iii) if the date of termination is other than the date of receipt of such notice, specifies the termination date
(the “Termination Date”); provided, however, that in the event of a termination by the Employee for any reason, the Notice of Termination need only indicate the Termination Date, which shall not be less than thirty
(30) days after the date of receipt of the Notice of Termination. 
 (d) Post-Termination Cooperation. The Employee agrees and
covenants that, following the Employment Period, he shall, to the extent reasonably requested in writing by the Company, cooperate in good faith with and assist the Company Group in the pursuit or defense of any claim, administrative charge, or
cause of action by or against the Company Group as to which the Employee, by virtue of his employment with the Company, has relevant knowledge or information, including by acting as the Company’s representative in any such proceeding and,
without the necessity of a subpoena, providing truthful testimony in any jurisdiction or forum, excluding any claim, charge or cause of action brought by the Company Group against the Employee. The Company shall reimburse the Employee for his
reasonable out-of-pocket expenses in complying with this Section 3(d). 

(e) Post-Termination Nonassistance. The Employee agrees and covenants that, following the Employment Period, he shall not voluntarily
assist, support, or cooperate with, directly or indirectly, any other person or entity alleging or pursuing or defending against any claim, administrative charge, or cause or action against or by the Company, as the case may be, including by
providing testimony or other information or documents, except under compulsion of 

  
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law. Should the employee be compelled to testify, nothing in this Agreement is intended to, or shall prohibit the Employee from, providing complete and truthful testimony. Nothing in this
Agreement shall in any way prevent the Employee from cooperating with any investigation by any federal, state, or local governmental agency. 

Section 4. Obligations of the Company upon Termination. 

(a) Without Cause. If the Company shall terminate the Employee’s employment during the Employment Period Without Cause, then the
Company shall provide the Employee with the following payments and/or benefits: 
 (i) the Company shall pay to the Employee,
in each case through the Termination Date: (A) a lump sum in the amount of the Employee’s earned but unpaid Annual Base Salary, subject to applicable withholding and payroll taxes, which shall be paid no later than the next pay date
following the Termination Date (in accordance with the Company’s customary payroll practices), and (B) reimbursement for any unpaid reimbursable expenses incurred by the Employee, which shall be paid in accordance with the Company’s
policies, practices and procedures in effect as of the Termination Date, (collectively, “Accrued Obligations”); and 

(ii) subject to Section 4(c), the Company shall continue to pay the Employee his Annual Base Salary in accordance with
customary payroll practices (and subject to customary withholding and payroll taxes) for twelve (12) months from the Termination Date (the “Severance Payment”); provided, that no installment or portion of the Severance
Payment shall be payable or paid prior to the expiration of the applicable revocation period for the general release described in Section 4(c) below. 

(b) Cause; Death; Disability; By the Employee for Any Reason; Expiration of Employment Period. If the Employee’s employment shall
be terminated due to the Employee’s death or Disability, by the Company for Cause, by the Employee for any reason or upon the expiration of the Employment Period following a notice of non-extension by
either party, then the Company shall have no further payment obligations to the Employee (or his estate or legal representative if applicable, in the case of death or Disability) other than for payment of the Accrued Obligations. 

(c) Condition; Remedies. The Employee acknowledges and agrees that the Company’s obligations pursuant to this Section 4 (other
than with respect to the Accrued Obligations or as otherwise required by law) are conditioned on the execution and delivery by the Employee (or, if applicable, his executor, administrator or legal representative) of a general release in form and
substance satisfactory to the Company within thirty (30) days following the Termination Date, and in the absence of the execution and delivery of such a timely general release or if such general release is subsequently revoked by the Employee,
the Company shall have no obligation to make any such payments. The Company shall not have any obligation to make any payments whatsoever to the Employee with respect to his employment by the Company, or the termination of his employment, other than
as set forth in this Agreement, and any and all rights of the Employee to any compensation or benefits in connection with his employment shall automatically and immediately terminate upon the termination of his employment, and the

  
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Employee covenants and agrees not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment. Notwithstanding anything to the contrary in this
Agreement, if the payments set forth in Section 4(a)(ii) are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the timing of the Employee’s execution and delivery of the
general release could affect the calendar year in which such payments commence because the Termination Date occurs within thirty (30) days prior to the end of a calendar year, then no portion of such payments shall be made until the
Company’s first payroll payment date in the year following the year in which the Termination Date occurs, and any amount that is not paid prior to such date due to such restriction shall be paid (subject to the applicable conditions) on that
date. 
 (d) Resignation upon Termination. Notwithstanding anything to the contrary contained herein, upon termination of the
Employee’s employment for any reason or under any circumstance, the Employee shall be deemed to have given the Company notice of his resignation from any and all positions as officer of the Company and its subsidiaries and, if the Employee was
terminated for Cause, as a member of the PetIQ, Inc. Board of Directors or other similar governing body of the Company and its subsidiaries, to the extent applicable. 

(e) Return of Company Property. Upon termination of the Employee’s employment for any reason or under any circumstances, the
Employee shall return any and all of the property of the Company Group (including, without limitation, all computers, keys, credit cards, identification tags, documents, data, Confidential Information (as defined below) and Work Product (as defined
below) and other proprietary materials) and all other materials. 
 Section 5. Non-Compete; Non-Solicitation. 
 (a) Non-Compete. The Employee
agrees that during the Employment Period, including any period of automatic extension of the Employment Period, and for a period of twelve (12) months thereafter (the “Restricted Period”), the Employee agrees that he
shall not, and shall not permit his respective affiliates to, directly or indirectly through another person, engage in a Competitive Business (defined below) by providing any services similar to those provided during employment for the Company,
including without limitation any business management, strategic planning, or sales services, advice, or expertise, or any related services, in any geographic location in which the Company Group is engaged in business, which includes the United
States (the “Geographic Area”). For purposes of this Agreement, “Competitive Business” shall mean any business that is engaged in the acquisition, distribution, marketing, sale, resale, manufacture or production of
veterinary pet prescription and over-the-counter medications or related products, and providing preventative pet care and veterinarian services, and all matters and
services incidental or related thereto, or any other business in competition with the business conducted by (or actively being contemplated by) the Company Group. 

(b) Non-Solicitation. 

(i) The Employee agrees that during the Employment Period, including any period of automatic extension of the Employment
Period, and during the Restricted Period, the Employee shall not, and shall not permit his respective affiliates to, directly or indirectly through another person within the Geographic Area, to hire any employee or

  
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independent contractor of the Company Group, or solicit, induce, recruit or encourage any such employee or independent contractor to leave the employ of, or reduce the services provided to, the
Company Group, or encourage or attempt to do any of the foregoing, either for the Employee’s own purposes or for any other person or entity. 

(ii) During the Employment Period, including any period of automatic extension of the Employment Period, and during the
Restricted Period, the Employee agrees that he shall not, and shall not permit his respective affiliates to, directly or indirectly through another person within the Geographic Area, (A) solicit, interfere with, subvert, disrupt or alter the
relationship, contractual or otherwise, between the Company Group and any client, customer, contractor, vendor, supplier, licensor or licensee of the Company Group, or any prospective client, customer, contractor, vendor, supplier, licensor or
licensee of the Company Group, (B) divert or take away or attempt to divert or take away the business or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished or sold by the Company) of any
of the clients, customers or accounts, or prospective clients, customers or accounts, of the Company, or (C) encourage or attempt to do any of the foregoing, either for the Employee’s own purposes or for any other person or entity. 

(c) Acknowledgments. Employee acknowledges that the restrictions set forth in Sections 5(a) and 5(b) are fair and reasonable in all
respects. Without limiting the foregoing, Employee makes the following acknowledgments: 
 (i) Employee will, by virtue of
Employee’s position with the Company, have and gain a high level of inside knowledge regarding the Company Group and its business, and as a result, will have the ability to harm or threaten its legitimate business interests, including without
limitation, its goodwill, technologies, intellectual property, business plans, processes, methods of operation, customers, customer lists, referral sources, vendors and vendor contracts, financial and marketing information, and other trade secrets.

 (ii) Employee will provide services or have significant presence or influence on behalf of the Company Group within the
entire Geographic Area due to the nature of the Company Group’s business, which is conducted extensively’ throughout the Geographic Area. 

(iii) Employee has received sufficient consideration in exchange for the covenants made herein. 

Section 6. Nondisclosure and Nonuse of Confidential Information. 

(a) The Employee will not disclose or use at any time, either during the Employment Period or thereafter, any Confidential Information (as
hereinafter defined) of which the Employee is or becomes aware, whether or not such information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Employee’s performance in good
faith of duties assigned to the Employee by the Company or has been expressly authorized by the CEO or his designee; provided, however, that this sentence shall not be deemed to prohibit the Employee from complying with any subpoena,
order, judgment or decree 

  
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of a court or governmental or regulatory agency of competent jurisdiction (an “Order”); provided, further, however, that (i) the Employee agrees
to provide the Company with prompt written notice of any such Order and to assist the Company, at the Company’s expense, in asserting any legal challenges to or appeals of such Order that the Company in its sole discretion pursues, and
(ii) in complying with any such Order, the Employee shall limit his disclosure only to the Confidential Information that is expressly required to be disclosed by such Order. The Employee will take all appropriate steps to safeguard Confidential
Information and to protect it against disclosure, misuse, espionage, loss and theft. The Employee shall deliver to the Company at the termination of the Employment Period, or at any time the Company may request, all memoranda, notes, plans, records,
reports, electronic information, files and software and other documents and data (and copies thereof) relating to the Confidential Information or the Work Product (as hereinafter defined) of the business of the Company Group which the Employee may
then possess or have under his control. 
 (b) As used in this Agreement, the term “Confidential Information” means
information that is not generally known to the public (including the existence and content of this Agreement, except that the Employee shall have the right to disclose the existence and content of this Agreement to his spouse, legal advisors and
financial advisors) and that is used, developed or obtained by the Company Group in connection with its business, including, but not limited to, information, observations and data obtained by the Employee while employed by the Company Group or any
predecessors thereof (including those obtained prior to the date of this Agreement) concerning (i) the business or affairs of the Company or any of its subsidiaries (or such predecessors), (ii) products or services, (iii) fees, costs and
pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software and hardware, including operating systems, applications and program listings, (viii) flow charts, manuals and
documentation, (ix) databases and data, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice,
(xii) customers and clients and customer or client lists, (xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all similar and related information in whatever form.
Confidential Information will not include any information that is publicly known and made generally available through no wrongful act of the Employee or others who were under confidentiality obligations as to the information involved. Confidential
Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination. 

(c) For the avoidance of doubt, Section 6(a) does not prohibit or restrict Employee (or Employee’s attorney) from responding to any
inquiry about the Agreement or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or governmental entity, or making
other disclosures that are protected under the whistleblower provisions of federal law or regulation. Employee understands and acknowledges that he does not need the prior authorization of the Company to make any such reports or disclosures and that
he is not required to notify the Company that he has made such reports or disclosures. 

  
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 (d) Notwithstanding anything in Section 6(a) or elsewhere in the Agreement to the
contrary, Employee understands that Employee may, without informing the Company prior to any such disclosure, disclose Confidential Information (i) in confidence to a federal, state, or local government official, either directly or indirectly,
or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, without
informing the Company prior to any such disclosure, if Employee files a lawsuit against the Company for retaliation for reporting a suspected violation of law, Employee may disclose Confidential Information to his attorney and use the Confidential
Information in the court proceeding or arbitration, provided that Employee files any document containing the Confidential Information under seal and does not otherwise disclose the Confidential Information, except pursuant to court order. Without
prior authorization of the Company, however, the Company does not authorize Employee to disclose to any third party (including any government official or any attorney Employee may retain) any communications that are covered by the Company’s
attorney-client privilege. 
 Section 7. Property; Inventions and Patents. 

(a) The Employee has attached hereto, as Schedule A, a list describing any Inventions (as defined below), which belong to the Employee,
which were made by the Employee prior to his employment with the Company, which relate to the Company Group and which are not assigned to the Company under this Agreement (the “Prior Inventions”). The Employee agrees that all
inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos, products, equipment and all similar or related information
and materials (whether patentable or unpatentable) (collectively, “Inventions”) which relate to the Company Group’s actual or anticipated business, research and development or existing or future products or services and
which are conceived, developed or made by the Employee (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed (if and to the extent such Inventions result from any work performed
for the Company, any use of the Company’s premises or property or any use of the Company’s Confidential Information) by the Company (including those conceived, developed or made prior to the date of this Agreement) together with all patent
applications, letters patent, trademark, tradename and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as, the “Work
Product”), excluding all Prior Inventions, belong in all instances to the Company or such affiliate. To the extent that any of the Prior Inventions are incorporated into the product, process or machine of the Company or any affiliate by
the Employee, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, transferable, sublicensable, worldwide license to make, have made, modify, use and sell such Prior Invention as a part of or in
connection with such product, process or machine. The Employee will promptly disclose such Work Product to the Company’s General Counsel or his designee and perform all actions reasonably requested by the Company’s General Counsel or his
designee (whether during or after the Employment Period) to establish and confirm the Company’s ownership of such Work Product (including, without limitation, the execution and delivery of assignments, consents, powers of attorney and other
instruments) and to provide reasonable assistance to the Company Group (whether during or after the Employment Period) in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or
in the prosecution or defense of interferences relating to any Work Product. The Employee recognizes and agrees that the Work Product, to the extent copyrightable, 

  
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constitutes works for hire under the copyright laws of the United States and that to the extent Work Product constitutes works for hire, the Work Product is the exclusive property of the Company,
and all right, title and interest in the Work Product vests in the Company. To the extent Work Product is not works for hire, the Work Product, and all of the Employee’s right, title and interest in Work Product, including without limitation
every priority right, is hereby assigned to the Company. 
 (b) Employee hereby represents and warrants that the patents and other assets
owned by Employee set forth on Schedule A are not related in any way to the Company Group, except as stated therein. For the avoidance of doubt, if any invention (i) is developed by Employee entirely on his own time without using the
Company’s equipment, supplies, facilities or trade secret information and (ii) does not either (1) relate to the Company’s business (or actual or demonstrably anticipated research or development) at the time of conception or
reduction to practice of the invention or (2) result from any work performed by Employee for the Company, such invention shall not be deemed to be Work Product for purposes of this Agreement and shall not be subject to the provisions hereof
relating to Work Product. 
 (c) The Employee shall assist and cooperate fully with the Company and its affiliates in obtaining for the
Company and its affiliates the grant of letters patent, copyrights and any other intellectual property rights relating to the Work Product in the United States and/or such other countries as the Company and its affiliates may designate. With respect
to Work Product, the Employee shall, during the Employment Period and at any time thereafter, execute all applications, statements, instruments of transfer, assignment, conveyance or confirmation, or other documents, furnish all such information to
the Company and its affiliates and take all such other appropriate lawful actions as the Company and its affiliates requests. 

Section 8. Acknowledgement and Enforcement. 

(a) Employee acknowledges that he has become familiar, or will become familiar with the trade secrets of the members of the Company Group and
with other confidential and proprietary information concerning members of the Company Group and their respective predecessors, successors, customers and suppliers, and that his services are of special, unique and extraordinary value to the Company.
Employee acknowledges and agrees that the Company would not enter into this Agreement, providing for compensation and other benefits to Employee on the terms and conditions set forth herein but for Employee’s agreements herein (including those
set forth in Sections 5, 6, and 7 herein). Furthermore, Employee acknowledges and agrees that the Company will be providing Employee with additional special knowledge after the Effective Date, with such special knowledge to include additional
Confidential Information and trade secrets. Employee agrees that the covenants set forth in Sections 5, 6, and 7 (collectively, the “Restrictive Covenants”) are reasonable and necessary to protect the Company Group’s trade
secrets and other Confidential Information, proprietary information, goodwill, stable workforce and customer relations. 
 (b) Without
limiting the generality of Employee’s agreement with the provisions of Section 8(a), Employee (i) represents that he is familiar with and has carefully considered the Restrictive Covenants, (ii) represents that he is fully aware
of his obligations hereunder, (iii) agrees to the reasonableness of the length of time, scope and geographic coverage, 

  
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as applicable, of the Restrictive Covenants, (iv) agrees that the Company currently conducts business throughout the Restricted Area and (v) agrees that the Restrictive Covenants will
continue in effect for the applicable periods set forth above regardless of whether Employee is then entitled to receive severance pay or benefits from the Company. Employee believes that he has received and will receive sufficient consideration and
other benefits as an employee of the Company and as otherwise provided hereunder or as described in the recitals hereto to clearly justify such restrictions. 

(c) Because the Employee’s services are special, unique and extraordinary and because the Employee has access to Confidential Information
and Work Product, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Agreement, including the Restrictive Covenants set forth herein. Therefore, in the event of a breach or threatened breach of this
Agreement, or any Restrictive Covenant herein. the Company Group and its successors or assigns may, in addition to other rights and remedies existing in their favor at law or in equity, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security). 

Section 9. Assurances by the Employee. 

The Employee represents and warrants to the Company that he may enter into this Agreement and fully perform all of his obligations under this
Agreement and as an employee of the Company without breaching, violating, or conflicting with (i) any judgment, order, writ, decree, or injunction of any court, arbitrator, government agency, or other tribunal that applies to the Employee or
(ii) any agreement, contract, obligation, or understanding to which the Employee is a party or may be bound. 
 Section 10. Non-Disparagement. 
 The Employee agrees that he will not make, or cause to be made, any statement,
observation, or opinion, or communicate any information (whether oral or written), to any person other than the CEO or his designee, the Company’s Human Resource Director, the Company’s General Counsel, or PetIQ, Inc.’s Board of
Directors, that disparages the Company Group, or is likely in any way to harm the business or the reputation of the Company Group, or any of their respective former, present or future managers, directors, officers, members, stockholders or
employees. 
 Section 11. Termination of Severance Payments. 

In addition to the foregoing, and not in any way in limitation thereof or in limitation of any right or remedy otherwise available to the
Company, if the Employee violates any provision of this Agreement, or facts or circumstances have been made known that if known as of the Termination Date, the Employee would not have been entitled to the benefits of Section 4(a)(ii), (i) the
provisions set forth in Section 4(a)(ii), and the Company’s obligations thereunder, shall be terminated and of no further force or effect, without limiting or affecting the Employee’s obligations under Sections 5, 6, 7, or 10, or the
Company’s other rights and remedies available at law or equity and (ii) the Employee shall promptly pay the Company any amounts received pursuant to Section 4(a)(ii). 

  
 - 11 - 

 Section 12. General Provisions. 

(a) Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought, Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction or arbitrator to
be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 

(b) Entire Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including, but not limited to, all
prior employment agreements, offer letters, and term sheets describing the terms and conditions of employment of the Employee; provided that, this Agreement shall not supersede any confidentiality, intellectual property assignment, non-competition, and non-solicitation covenants contained in any other agreement to which Employee is a party. 

(c) Counterparts. This Agreement may be executed in two (2) or more counterparts (delivery of which may be by facsimile or via
email as a portable document format (.pdf)), each of which will be deemed an original, and it will not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one (1) of such
counterparts. 
 (d) Successors and Assigns: Beneficiaries. This Agreement is personal to the Employee and without the prior written
consent of the Company shall not be assignable by the Employee. The obligations of the Employee hereunder shall be binding upon Employee’s heirs, administrators, executors, assigns and other legal representatives. This Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the Company’s successors and assigns. 
 (e) Governing Law.
THIS AGREEMENT, AND THE TERMS AND CONDITIONS HEREUNDER, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF IDAHO, EXCEPT WITH RESPECT TO SECTION 12(k) HEREOF, WHICH SHALL BE GOVERNED BY THE FEDERAL ARBITRATION ACT. 

(f) Amendment and Waiver. Subject to Section 12(a) hereof, the provisions of this Agreement may be amended and waived only with the
prior written consent of the Employee and the Company, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or
enforceability of this Agreement or any provision hereof. 

  
 - 12 - 

 (g) Notices. All notices, requests, demands, claims, consents and other
communications which are required or otherwise delivered hereunder shall be in writing and shall be deemed to have been duly given if (i) personally delivered or transmitted by electronic mail, (ii) sent by nationally recognized overnight
courier, (iii) mailed by registered or certified mail with postage prepaid, return receipt requested, or (iv) transmitted by facsimile to the parties hereto at the following addresses (or at such other address for a party as shall be
specified by like notice): 
 (i) if to the Company, to: 

PetIQ, LLC 

923 S. Bridgeway Place 

Eagle, ID 83616 

Attention: General Counsel 

Facsimile: 208-939-3200 

(ii) if to the Employee, to his address set forth on the signature page hereto; 

or to such other address as the party to whom such notice or other communication is to be given may have furnished to each other party in
writing in accordance herewith. Any such notice or communication shall be deemed to have been received (i) when delivered, if personally delivered or transmitted by electronic mail, with receipt acknowledgment by the recipient by return
electronic mail, (ii) when sent, if sent by facsimile on a business day during normal business hours (or, if not sent on a business day during normal business hours, on the next business day after the date sent by facsimile), (iii) on the next
business day after dispatch, if sent by nationally recognized, overnight courier guaranteeing next business day delivery, and (iv) on the fifth (5th) business day following the date on which
the piece of mail containing such communication is posted, if sent by mail. 
 (h) Descriptive Headings. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 
 (i) Construction. Where specific
language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in
this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. 

(j) Right of Set Off. In the event of a breach by the Employee of the provisions of this Agreement, the Company is hereby authorized at
any time and from time to time, to the fullest extent permitted by law and after ten (10) days prior written notice to Employee, to set-off and apply any and all amounts at any time held by the Company on
behalf of the Employee and all indebtedness at any time owing by the Company to the Employee against any and all of the obligations of the Employee now or hereafter existing. 

  
 - 13 - 

 (k) Arbitration; Waiver of Jury Trial. With the exception of equitable relief as
noted in Section 8 hereof, any controversy or claim arising out of or relating to this Agreement or the breach thereof (including, without limitation, as to arbitrability and any disputes with respect to Employee’s employment with the
Company or the termination of such employment, including, without limitation, any claim for alleged discrimination, harassment or retaliation on the basis of race, sex, color, national origin, sexual orientation, age, religion, creed, marital
status, veteran status, alienage, citizenship, disability or handicap, or any other legally protected status, and any alleged violation of any federal, state, or other governmental law, statute or regulation, including, but not limited to, claims
arising under Title VII of the Civil Rights Act of 1964, other civil rights statutes including, without limitation, 42 U.S.C. § 1981, 42 U.S.C. § 1982, and 42 U.S.C. § 1985, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the Occupational Safety and Health Act, the Immigration Reform and Control Act, or any state or
local law, as amended), shall be settled by individual arbitration (as opposed to class or collective arbitration) administered before JAMS (the “Arbitrator”) under the common rules then pertaining. The arbitration hearing
shall commence within ninety (90) calendar days after the Arbitrator is selected, unless the Company and the Employee mutually agree to extend this time period. The arbitration shall take place in the State of Idaho. The Arbitrator will have
full power to give directions and make such orders as the Arbitrator deems just, and to award all remedies that would be available in court. Nonetheless, the Arbitrator explicitly shall not have the authority, power, or right to alter, change,
amend, modify, add, or subtract from any provision of this Agreement, except pursuant to Section 12(a). The Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award
or decision is based within thirty (30) days after the conclusion of the arbitration hearing. The award rendered by the Arbitrator shall be final and binding (absent fraud or manifest error), and any arbitration award may be enforced by
judgment entered or vacated in any court of competent jurisdiction. The prevailing party shall be reimbursed by the other party to the action for reasonable attorneys’ fees and expenses relating to such action, with the exception of any action
by an employee alleging a civil rights or statutory cause of action, in which case the Company shall pay the filing fees and costs of the arbitration and each party shall be responsible for its own attorneys’ fees and costs, provided that the
arbitrator may grant any remedy or relief that a party could obtain from a court of competent jurisdiction on the basis of such claims. 

(l) Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa. 
 (m) 409A Compliance. To the
extent any provision of this Agreement or action by the Company would subject the Employee to liability for interest or additional taxes under Section 409A of the Code, it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Company. It is intended that this Agreement will comply with Code Section 409A and the interpretive guidance thereunder, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements, and in-kind distributions, and this Agreement shall be administered accordingly, and interpreted and construed on a basis consistent with such intent. All references in this Agreement to the Employee’s termination
of employment shall mean a “separation from service” within the meaning of Code Section 409A and Treasury Regulation Section 1.409A-1(h)(1)(ii). Notwithstanding anything to the contrary
herein, if the 

  
 - 14 - 

 
Employee is a “specified employee” as defined in Code Section 409A, any portion of the amounts payable under this Agreement as a result of a termination of employment that are not
eligible for any of the exceptions to the application of Code Section 409A (such as the severance pay exception or the short-term deferral exception), shall not be paid to the Employee until the earlier of (i) the expiration of the six
(6)-month period measured from the date of the Employee’s “separation from service” or (ii) the Employee’s death. Any series of payments hereunder shall be considered a series of separate payments for purposes of Code
Section 409A. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code Section 409A, such reimbursements and
in-kind benefit payments shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv) (or any similar or successor provisions). This Agreement may be
amended to the extent necessary (including retroactively) by the Company in order to preserve compliance with Code Section 409A. The preceding shall not be construed as a guarantee of any particular tax effect for the Employee’s
compensation and benefits and the Company does not guarantee that any compensation or benefits provided under this Agreement will satisfy the provisions of Code Section 409A. 

(n) Survival. For the avoidance of doubt, the obligations of the Employee under Sections 3(d), 3(e), 4(d), 4(e), and 5-11 (and all subsections thereto) shall survive the end of the Employment Period or the termination of this Agreement or the Employee’s employment for any reason (whether such termination is by the Company,
by, the Employee, or otherwise). 
 [signature page follows] 

  
 - 15 - 

 IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of
the date first written above. 
  

			
	PETIQ, LLC
		
	By:	 	 /s/ McCord Christensen

		 	Name: McCord Christensen
		 	Title: Chief Executive Officer
	
	EMPLOYEE
	
	 /s/ Michael Smith

 Signature Page to Employment Agreement 

 SCHEDULE A 

LIST OF PRIOR INVENTIONS 

AND ORIGINAL WORKS OF AUTHORSHIP 
  

					
	 Title
	  	 Date
	  	 Identifying Number or Brief Description

	None	  		  	

 Signature of Employee: /s/ Michael Smith 

Print Name of Employee: Michael Smith 
 Date: May 28, 2019

  

  
 A-1NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: July 2, 2019

Principal
Amount: $16,500.00

Purchase
Price: $15,000.00

 

CONVERTIBLE
NOTE

DUE
JUNE 5, 2020

 

THIS
CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Notes of Sylios Corp, a Florida corporation, (the “Borrower”),
due June 5, 2020 (this note, the “Note” and, collectively with the other notes of such series, the “Notes”).

 

FOR
VALUE RECEIVED, Borrower promises to pay to Armada Investment Fund, LLC or its registered assigns (the “Holder”),
with an address at: 7703 Springfield Lake Drive, Lake Worth, FL 33467, or shall have paid pursuant to the terms hereunder, the
principal sum of Sixteen Thousand Five Hundred Dollars ($16,500.00), plus accrued but unpaid interest thereon, on June
5, 2020 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid or such
later date if extended by the Holder as provided hereunder, and to pay interest, if any, to the Holder on the aggregate unconverted
and then outstanding principal amount of this Note in accordance with the provisions hereof.

This
Note is subject to the following additional provisions:

 

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

 

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

 

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

 

    	 	1	 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mandatory
Default Amount” means 150% of the outstanding principal amount of this Note, plus, all other amounts, costs, expenses
and liquidated damages due in respect of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 9(d).

 

    	 	2	 

    	 

    

 

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

 

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

 

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

 

“Other
Holder” means a holder, if any of one or more Other Notes (collectively, “Other Holders”).

 

“Other
Notes” means Notes, if any, nearly identical to this Note issued to other Holders if any pursuant to the Purchase Agreement.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 5, 2019 among Borrower and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

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

 

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

 

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

 

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

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the
New York Stock Exchange, the OTC Bulletin Board, OTCQB, OTC Pink or the OTCQX (or any successors to any of the foregoing).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if any of the NASDAQ markets or exchanges
is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on
the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices
for the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or
a similar organization or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common
Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d)
in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good
faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to Borrower, the
fees and expenses of which shall be paid by Borrower.

 

“Warrants”
means the Warrants issued pursuant to the Purchase Agreement.

 

    	 	3	 

    	 

    

 

Section
2. Interest and Repayment.

 

a)
Interest and Principal Payments. Holders shall be entitled to receive, and Borrower shall pay, simple interest on the outstanding
principal amount of this Note at the annual rate of eight percent (8%) (as subject to increase as set forth in this Note) from
the Original Issue Date through the Maturity Date. Principal and interest shall be due and payable on the Maturity Date.

 

b)
Payment Grace Period. Except as set forth herein, the Borrower shall not have any grace period to pay any monetary amounts
due under this Note.

 

c)
Conversion Privileges. The Conversion Rights set forth in Section 4 shall remain in full force and effect immediately from
the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable
in full on the Maturity Date, unless previously converted into Common Stock in accordance with Section 4 hereof.

 

d)
Application of Payments. Interest on this Note shall be calculated on the basis of a 365 or 366-day year as the case may
be and the actual number of days elapsed. Payments made in connection with this Note shall be applied first to amounts due hereunder
other than principal and interest, thereafter to interest and finally to principal.

 

e)
Pari Passu. All payments made on this Note and the Other Notes and all actions taken by the Borrower with respect to this
Note and the Other Notes, including but not limited to Optional Redemption, shall be made and taken pari passu with respect
to this Note and the Other Notes. Notwithstanding anything to the contrary contained herein or in the Transaction Documents, it
shall not be considered non-pari passu for a Holder or Other Holder to elect to receive interest paid in shares of Common Stock
or for the Borrower to actually pay interest in shares of Common Stock to such electing Holder or Other Holder, nor for a Holder
of a Note or Other Note to accept a prepayment provided a prepayment offer was made to the Holder and holders of Other Notes on
a pari passu basis.

 

f)
Manner and Place of Payment. Principal and interest on this Note and other payments in connection with this Note shall
be payable at the Holder’s offices as designated above in lawful money of the United States of America in immediately available
funds without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower shall instead
make its payment pursuant to the assignee’s instructions upon receipt of written notice thereof. Except as set forth herein,
this Note may not be prepaid or mandatorily converted without the consent of the Holder.

 

Section
3. Registration of Transfers and Exchanges.

 

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

 

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

 

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

 

    	 	4	 

    	 

    

 

Section
4. Conversion.

 

a)
Voluntary Conversion. At any time after the Closing Date, until this Note is no longer outstanding, this Note shall be
convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject
to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by delivering to Borrower
a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”),
specifying therein the principal amount of this Note and accrued interest, if any, to be converted at the election of the Holder
and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion
Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to Borrower unless
the entire principal amount of this Note has been so converted. Conversions of principal hereunder shall have the effect of lowering
the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and Borrower shall maintain
records showing the principal amount(s) converted and the date of such conversion(s). Borrower may deliver an objection to any
Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy,
the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee
by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of
a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face
hereof.

 

b)
Conversion Price. The conversion price for the principal and interest in connection with voluntary conversions by the Holder
shall be 70% multiplied by the Market Price (as defined herein)(representing a discount rate of 30%), subject to adjustment as
described herein (“Conversion Price”). Market Price” means the lowest one (1) Trading Prices (as defined
below) for the Common Stock during the twenty (20) Trading Day period ending on the last complete Trading Day prior to the Conversion
Date. “Trading Prices” means, for any security as of any date, the lowest traded price on the Over-the Counter Pink
Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting service (“Reporting
Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal trading market for such security,
on the principal securities exchange or trading market where such security is listed or traded or, if the lowest intraday trading
price of such security is not available in any of the foregoing manners, the lowest intraday price of any market makers for such
security that are quoted on the OTC Markets. If the Trading Prices cannot be calculated for such security on such date in the
manner provided above, the Trading Prices 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 Prices are required in order to
determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable
for any period on the OTCQB, or on the principal securities exchange or other securities market on which the Common Stock is then
being traded. Upon any Event of Default, including not having current financial information publicly disclosed, the Conversion
Price will be reduced to 60% multiplied by the Market Price (as defined herein)(representing a discount rate of 40%).

 

c)
Mechanics of Conversion.

 

i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
plus interest, if any, elected by the Holder to be converted by (y) the Conversion Price. Upon every Conversion, the Company shall
deliver an additional $500 worth of shares (as calculated by the Conversion Price in effect on the Conversion Notice being honored)
to cover the Holder’s expenses and deposit fees associated with each Notice of Conversion.

 

    	 	5	 

    	 

    

 

ii.
Delivery of Certificate Upon Conversion. Not later than five (5) Trading Days after each Conversion Date (the “Share
Delivery Date”), Borrower shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing
the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective
Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase
Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note. On or after the earlier
of (i) the six-month anniversary of the Original Issue Date or (ii) the Effective Date, Borrower shall in lieu of delivering physical
certificates representing the Conversion Shares, upon request of the Holder, so long as the certificates therefor do not bear
a legend and the Holder is not obligated to return such certificate for the placement of a legend thereon, the Borrower shall
cause its transfer agent to electronically transmit the Conversion Shares by crediting the account of Holder’s prime broker
with the Depository Trust Company through its Deposit Withdrawal At Custodian system, provided that the Borrower’s Common
Stock is DTC eligible and the Borrower’s transfer agent participates in the Deposit Withdrawal at Custodian system. Such
delivery must be made on or before the Legend Removal Date.

 

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

 

iv.
Obligation Absolute. Borrower’s obligations to issue and deliver the Conversion Shares upon conversion of this Note
in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to Borrower or any violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might otherwise limit such obligation of Borrower to the Holder in connection
with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver
by Borrower of any such action Borrower may have against the Holder. In the event the Holder of this Note shall elect to convert
any or all of the outstanding principal amount hereof, Borrower may not refuse conversion based on any claim that the Holder or
anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless
an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have
been sought and obtained, and Borrower posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding
principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence
of such injunction, Borrower shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If Borrower
fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery
Date, Borrower shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount
being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated
damages being to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds
such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant
to Section 8 hereof for Borrower’s failure to deliver Conversion Shares within the period specified herein and the Holder
shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

 

    	 	6	 

    	 

    

 

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

 

vi.
Reservation of Shares Issuable Upon Conversion. Borrower covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note as herein
provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the
other holders of the Notes), not less than three times such aggregate number of shares of the Common Stock as shall (subject to
the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions
of Section 5) upon the conversion of the then outstanding principal amount of this Note and interest which has accrued and would
accrue on such principal amount, assuming such principal amount was not converted through three years after the Original Issue
Date. Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.

 

    	 	7	 

    	 

    

 

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

 

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

 

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

 

    	 	8	 

    	 

    

 

Section
5. Certain Adjustments.

 

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

 

    	 	9	 

    	 

    

 

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

 

c)
Notice to the Holder.

 

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

 

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

 

    	 	10	 

    	 

    

 

Section
6. Negative Covenants. As long as any principal amount of this Note remains outstanding, Borrower shall not, and shall
not permit any of the Subsidiaries to, directly or indirectly:

 

a)
enter into any transaction pursuant to Section 3(a)(10) of the Securities Act;

 

b)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder, provided, however, that Borrower may amend its articles of incorporation to increase
the number of common shares authorized provided all such additional shares of common stock are reserved solely for issuance to
the Holders, or to create a class or series of preferred stock so long as the class or series has no conversion or dividend rights,
or any liquidation preference;

 

c)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to the Conversion Shares or Warrant Shares as permitted or required under the
Transaction Documents;

 

d)
declare or make any dividend or other distribution of its assets or rights to acquire its assets to holders of shares of Common
Stock, preferred stock, or any other equity security by way of return of capital or otherwise including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction;

 

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

 

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

 

Section
7. Events of Default.

 

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

 

    	 	11	 

    	 

    

 

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

 

ii.
Borrower shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by Borrower
of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (ix) below)
which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after written notice
of such failure sent by the Holder or by any Other Holder to Borrower and (B) ten (10) Trading Days after Borrower has become
or should have become aware of such failure;

 

iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents other than the Notes, including but not limited to failure to strictly
comply with the provisions of the Transaction Documents, or (B) any other material agreement, lease, document or instrument to
which Borrower or any Subsidiary is obligated (and not covered by clause (vi) below), which, in the case of subsection (B), would
reasonably be expected to have a Material Adverse Effect;

 

iv.
any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any Other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

v.
Borrower or any Subsidiary shall be subject to a Bankruptcy Event;

 

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

 

vii.
Borrower shall be a party to any Change of Control Transaction or Fundamental Transaction;

 

viii.
Borrower shall fail for any reason to deliver certificates to a Holder prior to the fifth (5th) Trading Day after a
Conversion Date pursuant to Section 4(c) or Borrower shall provide at any time notice to the Holder, including by way of public
announcement, of Borrower’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof;

 

ix.
any monetary judgment, writ or similar final process shall be entered or filed against Borrower, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 90 calendar days;

 

    	 	12	 

    	 

    

 

x.
any dissolution, liquidation or winding up by Borrower or a material Subsidiary of a substantial portion of their business not
assumed by the Borrower or another Subsidiary;

 

xi.
cessation of material operations by Borrower or by a material Subsidiary if the operations are not assumed by the Borrower or
another Subsidiary;

 

xii.
an event resulting in the Common Stock no longer being listed or quoted on a Trading Market, or notification from a Trading Market
that the Borrower is not in compliance with the conditions for such continued quotation on at least one Trading Market and such
non-compliance continues for twenty (20) days following such notification;

 

xiii.
a Commission or judicial stop trade order or suspension from the Borrower’s Principal Trading Market;

 

xiv.
the Borrower effectuates a reverse split of its Common Stock without ten (10) days prior written notice to the Holder;

 

xv.
a failure by Borrower to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms
of this Note or any other Transaction Document;

 

xvi.
a default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and
Holder are parties, or the occurrence of an event of default under any such other agreement to which Borrower and Holder are parties
which is not cured after any required notice and/or cure period or waived;

 

xvii.
the occurrence of an Event of Default under any Other Note;

 

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

 

xix.
Borrower does not meet the current public information requirements under Rule 144; or

 

xx.
the Conversion Price falls below the par value of the common stock subject to cure as set forth above.

 

In
the event more than one grace, cure or notice period is applicable to an Event of Default, then the shortest grace, cure or notice
period shall be applicable thereto.

 

    	 	13	 

    	 

    

 

b)
Remedies Upon Event of Default, Fundamental Transaction and Change of Control Transaction. If any Event of Default or a
Fundamental Transaction or a Change of Control Transaction occurs, the outstanding principal amount of this Note, liquidated damages
and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately
due and payable in cash at the Mandatory Default Amount. Commencing on the Maturity Date and also five (5) days after the occurrence
of any Event of Default interest on this Note shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum
rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender
this Note to or as directed by Borrower. In connection with such acceleration described herein, the Holder need not provide, and
Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it
under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the
Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to
this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.

 

Section
8. Prepayment. The Borrower shall not have the option to prepay this Note after 180th day after the Issue
Date (“Cutoff Date”). Prior to the Cutoff Date, the Borrower shall have the right, exercisable on not less five (5)
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. 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. Prior to the Option Prepayment Date the Holder may convert all or a portion of this
Note in accordance with its terms.

 

Section
9. Miscellaneous.

 

a)
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: (i) if to Borrower, to: Sylios Corp., 501 1st Ave N., Suite 901, St. Petersburg,
FL 33701 Attn: Wayne Anderson, email: wa@sylios.com, and (ii) if to the Holder, to: the address and fax number indicated
on the front page of this Note, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman,
P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

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

 

    	 	14	 

    	 

    

 

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

 

d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. This
Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies
of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213
or any similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such rule or statute, any other
document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient
or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this
Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

 

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

 

f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances.

 

    	 	15	 

    	 

    

 

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

 

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

 

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

 

j)
Amendment. Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof waived
without the written consent of Borrower and the Holder.

 

k)
Facsimile Signature. In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic
signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with the
same force and effect as if such signature page were an original thereof.

 

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

 

(Signature
Pages Follow)

 

    	 	16	 

    	 

    

 

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

 

	 	SYLIOS
    CORP
	 	 	 
	 	By:	/s/
    Wayne Anderson
	 	Name:
    	Wayne
    Anderson
	 	Title:
    	Chief
    Executive Officer

 

    	 	17	 

    	 

    

 

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Convertible Note due June 5, 2020 of Sylios Corp. a Florida corporation
(the “Company”), into shares of common stock (the “Common Stock”), of Borrower according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to the holder for
any conversion, except for such transfer taxes, if any.

 

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

 

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

 

Conversion
calculations:

	 	Date
    to Effect Conversion: __________________________
	 	 
	 	Principal
    Amount of Note to be Converted: $________________
	 	 
	 	Additional
    Interest to be Converted: $________________
	 	 
	 	Number
of shares of Common Stock to be issued: _____________
	 	 
	 	Signature:
    ______________________________________
	 	 
	 	Name:
    _________________________________________
	 	 
	 	Address
    for Delivery of Common Stock Certificates: ______
	 	________________________________________________
	 	________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC
    Instructions: ______________________________
	 	 
	 	Broker
    No:_____________
	 	Account
    No: _______________

 

    	 	18

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