Document:

Document

Exhibit 10.3
Sio Gene Therapies Inc.
Early Exercise Stock Purchase Agreement
Under the 2015 Equity Incentive Plan
THIS AGREEMENT is made by and between Sio Gene Therapies Inc., a Delaware corporation (the “Company”), and _______________ (“Purchaser”).  
Witnesseth:
WHEREAS, Purchaser holds a stock option dated _______________(the “Option”)  to purchase shares of common stock of the Company (“Common Stock”) pursuant to the Company’s 2015 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Option consists of a Stock Option Grant Notice and a Stock Option Agreement; and
WHEREAS, Purchaser desires to exercise the Option on the terms and conditions contained herein; and
WHEREAS, Purchaser wishes to take advantage of the early exercise provision of Purchaser’s Option and therefore to enter into this Agreement;
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1.INCORPORATION OF PLAN AND OPTION BY REFERENCE.  This Agreement is subject to all of the terms and conditions as set forth in the Plan and the Option.  If there is a conflict between the terms of this Agreement and/or the Option and the terms of the Plan, the terms of the Plan shall control.  If there is a conflict between the terms of this Agreement and the terms of the Option, the terms of the Option shall control.  Defined terms not explicitly defined in this Agreement but defined in the Plan shall have the same definitions as in the Plan.  Defined terms not explicitly defined in this Agreement or the Plan but defined in the Option shall have the same definitions as in the Option.
2.PURCHASE AND SALE OF COMMON STOCK.  
(a)Agreement to purchase and sell Common Stock.  Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to Purchaser, an aggregate of            (      ) shares of Common Stock at $     per share, for an aggregate purchase price of $     , payable as follows:  
									
	Cash, check, bank draft or money order payable to the Company		$
	Value of              shares of common stock1
		$
	Total Exercise Price		$
			
	1Shares must meet the public trading requirements set forth in the Option.  Shares must be valued in accordance with the terms of the Option being exercised, must have been owned for the minimum period required in the Option and must be owned free and clear of any liens, claims, encumbrances or security interest.  Certificates must be endorsed or accompanied by an executed stock assignment.

(b)Closing.  The closing hereunder, including payment for and delivery of the Common Stock, shall occur at the offices of the Company immediately following the execution of this Agreement, or at such other time and place as the parties may mutually agree; provided, however, that if stockholder approval of the Plan is required before the Option may be exercised, then the Option may not be exercised, and the closing shall be delayed, 
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until such stockholder approval is obtained.  If such stockholder approval is not obtained within the time limit specified in the Plan, then this Agreement shall be null and void.
3.UNVESTED SHARE REPURCHASE OPTIONS.
(a)Repurchase Option.  In the event Purchaser’s Continuous Service terminates, then the Company shall have an irrevocable option (the “Repurchase Option”) for a period of ninety (90) days after said termination (or in the case of shares issued upon exercise of the Option after such date of termination, within ninety (90) days after the date of the exercise), or such longer period as may be agreed to by the Company and Purchaser, to repurchase from Purchaser or Purchaser’s personal representative, as the case may be, those shares that Purchaser received pursuant to the exercise of the Option that have not as yet vested as of such termination date in accordance with the Vesting Schedule indicated on Purchaser’s Stock Option Grant Notice (the “Unvested Shares”). 
(b)Share Repurchase Price.   The Company may repurchase all or any of the Unvested Shares at the lower of (i) the Fair Market Value of the such shares (as determined under the Plan) on the date of repurchase, or (ii) the price equal to Purchaser’s Exercise Price for such shares as indicated on Purchaser’s Stock Option Grant Notice.
4.EXERCISE OF REPURCHASE OPTION.  The Repurchase Option shall be exercised by written notice signed by such person as designated by the Company, and delivered or mailed as provided herein.  Such notice shall identify the number of shares of Common Stock to be purchased and shall notify Purchaser of the time, place and date for settlement of such purchase, which shall be scheduled by the Company within the term of the Repurchase Option set forth above.  The Company shall be entitled to pay for any shares of Common Stock purchased pursuant to its Repurchase Option at the Company’s option in cash or by offset against any indebtedness owing to the Company by Purchaser (including without limitation any Promissory Note given in payment for the Common Stock), or by a combination of both.  Upon delivery of such notice and payment of the purchase price in any of the ways described above, the Company shall become the legal and beneficial owner of the Common Stock being repurchased and all rights and interest therein or related thereto, and the Company shall have the right to transfer to its own name the Common Stock being repurchased by the Company, without further action by Purchaser.
5.CAPITALIZATION ADJUSTMENTS TO COMMON STOCK.  In the event of a Capitalization Adjustment, then any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of Common Stock shall be immediately subject to the Repurchase Option and be included in the word “Common Stock” for all purposes of the Repurchase Option with the same force and effect as the shares of the Common Stock presently subject to the Repurchase Option, but only to the extent the Common Stock is, at the time, covered by such Repurchase Option.  While the total Option Price shall remain the same after each such event, the Option Price per share of Common Stock upon exercise of the Repurchase Option shall be appropriately adjusted.
6.CORPORATE TRANSACTIONS.  In the event of a Corporate Transaction, then the Repurchase Option may be assigned by the Company to the successor of the Company (or such successor’s parent company), if any, in connection with such Corporate Transaction.  To the extent the Repurchase Option remains in effect following such Corporate Transaction, it shall apply to the new capital stock or other property received in exchange for the Common Stock in consummation of the Corporate Transaction, but only to the extent the Common Stock was at the time covered by such right.  Appropriate adjustments shall be made to the price per share payable upon exercise of the Repurchase Option to reflect the Corporate Transaction upon the Company’s capital structure; provided, however, that the aggregate price payable upon exercise of the Repurchase Option shall remain the same.
7.ESCROW OF UNVESTED COMMON STOCK.  As security for Purchaser’s faithful performance of the terms of this Agreement and to insure the availability for delivery of Purchaser’s Common Stock upon exercise of the Repurchase Option herein provided for, Purchaser agrees, at the closing hereunder, to deliver to and deposit with the Secretary of the Company or the Secretary’s designee (“Escrow Agent”), as Escrow Agent in this transaction, three (3) share transfer forms duly endorsed (with date and number of shares blank) in the form 
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attached hereto as Exhibit A, together with a certificate or certificates evidencing all of the Common Stock subject to the Repurchase Option; said documents are to be held by the Escrow Agent and delivered by said Escrow Agent pursuant to the Joint Escrow Instructions of the Company and Purchaser set forth in Exhibit C, attached hereto and incorporated by this reference, which instructions also shall be delivered to the Escrow Agent at the closing hereunder.
8.RIGHTS OF PURCHASER. Subject to the provisions of the Option, Purchaser shall exercise all rights and privileges of a stockholder of the Company with respect to the shares deposited in escrow.  Purchaser shall be deemed to be the holder of the shares for purposes of receiving any dividends that may be paid with respect to such shares and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested and been released from the Company’s Repurchase Option.
9.LIMITATIONS ON TRANSFER.  In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the Common Stock while the Common Stock is subject to the Repurchase Option.  After any Common Stock has been released from the Repurchase Option, Purchaser shall not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the Common Stock except in compliance with the provisions herein and applicable securities laws.  Furthermore, the Common Stock shall be subject to any right of first refusal in favor of the Company or its assignees that may be contained in Purchaser’s Stock Option Agreement.
10.RESTRICTIVE LEGENDS.  All certificates representing the Common Stock shall have endorsed thereon legends in substantially the following forms (in addition to any other legend which may be required by other agreements between the parties hereto):
(a)“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY.  ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE COMPANY.”
(b)“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
(c)“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S).”
(d)“THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO THE EXERCISE OF [AN INCENTIVE STOCK OPTION/ A NONSTATUTORY STOCK OPTION].
(e)Any legend required by appropriate blue sky officials.
11.INVESTMENT REPRESENTATIONS.  In connection with the purchase of the Common Stock, Purchaser represents to the Company the following:
(a)Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Common Stock.  Purchaser is acquiring the Common Stock for investment for Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act.
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(b)Purchaser understands that the Common Stock has not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.
(c)Purchaser further acknowledges and understands that the Common Stock must be held indefinitely unless the Common Stock is subsequently registered under the Securities Act or an exemption from such registration is available.  Purchaser further acknowledges and understands that the Company is under no obligation to register the Common Stock.  Purchaser understands that the certificate evidencing the Common Stock will be imprinted with a legend that prohibits the transfer of the Common Stock unless the Common Stock is registered or such registration is not required in the opinion of counsel for the Company.  
(d)Purchaser is familiar with the provisions of Rules 144 and 701, under the Securities Act, as in effect from time to time, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions.  Rule 701 provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities, such issuance will be exempt from registration under the Securities Act.  In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the securities exempt under Rule 701 may be sold by Purchaser ninety (90) days thereafter, subject to the satisfaction of certain of the conditions specified by Rule 144 and the market stand-off provision described in Purchaser’s Stock Option Agreement and Section 12 below.
(e)In the event that the sale of the Common Stock does not qualify under Rule 701 at the time of purchase, then the Common Stock may be resold by Purchaser in certain limited circumstances subject to the provisions of Rule 144, which requires, among other things: (i) the availability of certain public information about the Company, and (ii) the resale occurring following the required holding period under Rule 144 after Purchaser has purchased, and made full payment of (within the meaning of Rule 144), the securities to be sold.
(f)Purchaser further understands that at the time Purchaser wishes to sell the Common Stock there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public current information requirements of Rule 144 or 701, and that, in such event, Purchaser would be precluded from selling the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been satisfied.
12.MARKET STAND-OFF AGREEMENT. By exercising the Option, Purchaser agrees not to sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by Purchaser, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as necessary to permit compliance with NASD Rule 2711 or NYSE Member Rule 472 and similar rules or regulations (the “Lock-Up Period”); provided, however, that nothing shall prevent the exercise of the Repurchase Option during the Lock-Up Period.  Purchaser further agrees to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto.  In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to Purchaser’s shares of Common Stock until the end of such period. The underwriters of the Company’s shares are intended third party beneficiaries of this Section 12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
13.SECTION 83(b) ELECTION.   Purchaser understands that Section 83(a) of the Code taxes as ordinary income the difference between the amount paid for the Common Stock and the fair market value of the Common Stock as of the date any restrictions on the Common Stock lapse.  In this context, “restriction” includes the right of the Company to buy back the Common Stock pursuant to the Repurchase Option set forth above.  Purchaser understands that Purchaser may elect to be taxed at the time the Common Stock is purchased, rather than when and as the Repurchase Option expires, by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within thirty (30) days of the date of purchase.  Even if the fair market value of the 
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Common Stock at the time of the execution of this Agreement equals the amount paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in the future.  Purchaser understands that failure to file such an 83(b) Election in a timely manner may result in adverse tax consequences for Purchaser.  Purchaser further understands that Purchaser must file an additional copy of such 83(b) Election with his or her federal income tax return for the calendar year in which the date of this Agreement falls.  Purchaser acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Common Stock hereunder, and does not purport to be complete.  Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death.  Purchaser assumes all responsibility for filing an 83(b) Election and paying all taxes resulting from such election or the lapse of the restrictions on the Common Stock.
14.REFUSAL TO TRANSFER.  The Company shall not be required (a) to transfer on its books any shares of Common Stock of the Company which shall have been transferred in violation of any of the provisions set forth in this Agreement, or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred.
15.NO EMPLOYMENT RIGHTS.  This Agreement is not an employment contract and nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company or its Affiliates to terminate Purchaser’s employment for any reason at any time, with or without cause and with or without notice.
16.MISCELLANEOUS.
(a)Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, and if not during normal business hours of the recipient, then on the next business day, (c) five (5) calendar days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the other party hereto at such party’s address hereinafter set forth on the signature page hereof, or at such other address as such party may designate by ten (10) days advance written notice to the other party hereto.
(b)Successors and Assigns.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser, Purchaser’s successors, and assigns. The Company may assign the Repurchase Option hereunder at any time or from time to time, in whole or in part.
(c)Attorneys’ Fees; Specific Performance.  Purchaser shall reimburse the Company for all costs incurred by the Company in enforcing the performance of, or protecting its rights under, any part of this Agreement, including reasonable costs of investigation and attorneys’ fees. It is the intention of the parties that the Company, upon exercise of the Repurchase Option and payment for the shares repurchased, pursuant to the terms of this Agreement, shall be entitled to receive the Common Stock, in specie, in order to have such Common Stock available for future issuance without dilution of the holdings of other stockholders.  Furthermore, it is expressly agreed between the parties that money damages are inadequate to compensate the Company for the Common Stock and that the Company shall, upon proper exercise of the Repurchase Option, be entitled to specific enforcement of its rights to purchase and receive said Common Stock.
(d)Governing Law; Venue.  To the extent that United States federal laws do not otherwise control, this Agreement and all determinations made and actions taken pursuant to this Agreement and the Plan shall be governed by the internal laws of the State of New York, and construed accordingly.
The parties agree that any action brought by either party to interpret or enforce any provision of this Agreement shall be brought in, and each party agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate state or federal court for the district encompassing the Company’s principal place of business.
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(e)Further Execution.  The parties agree to take all such further action(s) as may reasonably be necessary to carry out and consummate this Agreement as soon as practicable, and to take whatever steps may be necessary to obtain any governmental approval in connection with or otherwise qualify the issuance of the securities that are the subject of this Agreement.  
(f)Independent Counsel.  Purchaser acknowledges that this Agreement has been prepared on behalf of the Company by Cooley llp, counsel to the Company and that Cooley llp does not represent, and is not acting on behalf of, Purchaser.  Purchaser has been provided with an opportunity to consult with Purchaser’s own counsel with respect to this Agreement.
(g)Entire Agreement; Amendment.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and merges all prior agreements or understandings, whether written or oral.  This Agreement may not be amended, modified or revoked, in whole or in part, except by an agreement in writing signed by each of the parties hereto.
(h)Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.  In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
(i)Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

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In Witness Whereof, the parties hereto have executed this Agreement as of _______________.
															
	Sio Gene Therapies Inc.				
			By		
			Name		
			Title		
			Address:		
			
			
			
					
			Purchaser		
			Address:		
			

Attachments:
Exhibit A    Assignment Separate from Certificate 
Exhibit B    Joint Escrow Instructions 

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Exhibit A

SHARE TRANSFER FORM SEPARATE FROM SHARE CERTIFICATE
For Value Received, _______________________ hereby sells, assigns and transfers for value received unto Sio Gene Therapies Inc., a Delaware corporation (the “Company”), pursuant to the Repurchase Option under that certain Early Exercise Stock Purchase Agreement, dated _______________ by and between the undersigned and the Company (the “Agreement”), _______________ (_______________) common shares of the Company standing in the undersigned’s name on the books of the Company represented by Certificate No(s). _______________ and does hereby irrevocably constitute and appoint the Company’s Secretary attorney-in-fact to transfer said common shares on the books of the Company with full power of substitution in the premises.  This share transfer form may be used only in accordance with and subject to the terms and conditions of the Agreement, in connection with the repurchase of common shares issued to the undersigned pursuant to the Agreement, and only to the extent that such shares remain subject to the Company’s Repurchase Option under the Agreement.
															
	Dated:				
					
					
				(Signature)	
					
				(Print Name)	

(Instruction:  Please do not fill in any blanks other than the “Signature” line and the “Print Name” line.)

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Exhibit B
JOINT ESCROW INSTRUCTIONS

Secretary
Sio Gene Therapies Inc.
11 Times Square
33rd Floor
New York, NY 10036

Dear Sir or Madam:
As Escrow Agent for both Sio Gene Therapies Inc., a Delaware corporation (“Company”), and the undersigned purchaser of common shares of the Company (“Purchaser”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Early Exercise Stock Purchase Agreement (“Agreement”), dated _______________ to which a copy of these Joint Escrow Instructions is attached as Exhibit C, in accordance with the following instructions:
1.In the event the Company or an assignee shall elect to exercise the Repurchase Option set forth in the Agreement, the Company or its assignee will give to Purchaser and you a written notice specifying the number of common shares to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company.  Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.
2.At the closing you are directed (a) to date any share transfer forms necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the common shares to be transferred, to the Company against the simultaneous delivery to you of the purchase price (which may include suitable acknowledgment of cancellation of indebtedness) of the number of common shares being purchased pursuant to the exercise of the Repurchase Option.
3.Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing common shares to be held by you hereunder and any additions and substitutions to said shares as specified in the Agreement.  Purchaser does hereby irrevocably constitute and appoint you as the Purchaser’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities and other property all documents of assignment and/or transfer and all share certificates necessary or appropriate to make all securities negotiable and complete any transaction herein contemplated.
4.This escrow shall terminate and the common shares held hereunder shall be released in full upon the expiration or exercise in full of the Repurchase Option, whichever occurs first.
5.If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of same to Purchaser and shall be discharged of all further obligations hereunder; provided, however, that if at the time of termination of this escrow you are advised by the Company that the property subject to this escrow is the subject of a pledge or other security agreement, you shall deliver all such property to the pledgeholder or other person designated by the Company.
6.Except as otherwise provided in these Joint Escrow Instructions, your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.
7.You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties or their assignees.  You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for 
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Purchaser while acting in good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.
8.You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court.  In case you obey or comply with any such order, judgment or decree of any court, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.
9.You shall not be liable in any respect on account of the identity, authority or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.
10.You shall not be liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.
11.Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be Secretary of the Company or if you shall resign by written notice to the Company.  In the event of any such termination, the Secretary of the Company shall automatically become the successor Escrow Agent unless the Company shall appoint another successor Escrow Agent, and Purchaser hereby confirms the appointment of such successor as Purchaser’s attorney-in-fact and agent to the full extent of your appointment.
12.If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.
13.It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such dispute shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.
14.Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, including delivery by express courier or five days after deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at such other addresses as a party may designate by ten days’ advance written notice to each of the other parties hereto:

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	Company:		Sio Gene Therapies Inc.
			11 Times Square
			33rd Floor
			New York, NY 10036
			Attn: [                          ]

			
	Purchaser:		
			
			
			
	Escrow Agent:		Sio Gene Therapies Inc.
			11 Times Square
			33rd Floor
			New York, NY 10036
			Attn: Corporate Secretary

15.By signing these Joint Escrow Instructions you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.
16.You shall be entitled to employ such legal counsel and other experts (including without limitation the firm of Cooley llp) as you may deem necessary properly to advise you in connection with your obligations hereunder.  You may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.  The Company shall be responsible for all fees generated by such legal counsel in connection with your obligations hereunder.
17.This instrument shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  It is understood and agreed that references to “you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow Agents.  It is understood and agreed that the Company may at any time or from time to time assign its rights under the Agreement and these Joint Escrow Instructions in whole or in part.
18.This Agreement shall be governed by and interpreted and determined in accordance with the laws of the State of California, as such laws are applied by California courts to contracts made and to be performed entirely in California by residents of that state.
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			Very truly yours,
						
			SIO GENE THERAPIES INC.
						
			By
						
			Title
						
			PURCHASER:
						
						
			
						
	ESCROW AGENT:					
						
	Secretary, Sio Gene Therapies Inc.				

12Exhibit 10.3

 

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

 

	Principal Amount: $605,000.00	Issue Date: September 16, 2020
	Actual Amount of Purchase Price: $544,500.00	 

 

SELF-AMORTIZATION PROMISSORY NOTE

 

FOR VALUE RECEIVED,
CUENTAS INC., a Florida corporation (hereinafter called the “Borrower” or the “Company”) (Trading
Symbol: CUEN), hereby promises to pay to the order of LABRYS FUND, LP, a Delaware limited partnership, or registered assigns
(the “Holder”), in the form of lawful money of the United States of America, the principal sum of $605,000.00, which
amount is the $544,500.00 actual amount of the purchase price (the “Consideration”) hereof plus an original issue discount
in the amount of $60,500.00 (the “OID”) (subject to adjustment herein) (the “Principal Amount”) and to
pay interest on the unpaid Principal Amount hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum
(with the understanding that the first twelve months of interest (equal to $72,600.00) shall be guaranteed, provided, however,
that if the Note is repaid in its entirety on or prior to February 16, 2020, then the interest shall be accrued on a per annum
basis based on the number of days elapsed as of the repayment date) from the date hereof (the “Issue Date”) until the
same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein.
The maturity date shall be twelve (12) months from the Issue Date (the “Maturity Date”), and is the date upon which
the principal sum, the OID, as well as any accrued and unpaid interest and other fees, shall be due and payable.

 

This Note may not be prepaid or repaid in whole or in part except
as otherwise explicitly set forth herein.

 

Interest shall commence
accruing on the date that the Note is fully funded and shall be computed on the basis of a 365-day year and the actual number of
days elapsed. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser
of (i) fifteen percent (15%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is
paid (“Default Interest”).

 

All payments due hereunder
(to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the “Common Stock”)
in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made
at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of
this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the
same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which
is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date.

 

Each capitalized term
used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement,
dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used in
this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks
in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term
“Trading Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market
(as defined in the Purchase Agreement), any tier of the OTC Markets, NASDAQ Stock Market, the New York Stock Exchange, or the NYSE
American.

 

    1

     

    

 

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

 

In connection with
the issuance of this Note, the Borrower issued the Second Commitment Shares (as defined in the Purchase Agreement) to Holder as
a commitment fee, provided, however, that the Second Commitment Shares must be returned to the Borrower’s treasury if the
Note is fully repaid and satisfied on or prior to the Maturity Date, subject further to the terms and conditions of this Note.

 

The following terms shall also apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS UPON DEFAULT

 

1.1 Conversion Right Upon Default. The Holder shall have the right, at any time on or following
the date that an Event of Default (as defined in this Note) occurs under this Note, to convert all or any portion of the then outstanding
and unpaid Principal Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein
(a “Conversion”); provided, however, that notwithstanding anything to the contrary contained herein, the a Holder
shall not have the right to convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving
effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s
affiliates (the “Affiliates”), and any other Persons (as defined below) acting as a group together with the Holder
or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), 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 Attribution Parties 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 would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially owned by the
Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible
for any schedules required to be filed in accordance therewith. 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 1.1, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties
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 at the time of the respective calculation hereunder. “Person”
and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations
contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares to be issued upon each
conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price
then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4
below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on
such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion
of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus
(3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1)
and/or (2).

 

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1.2 Conversion
Price.

 

(a) Calculation
of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default Interest)
under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal the
closing bid price of the Common Stock on the Trading Day immediately preceding the date of the respective conversion. If at any
time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then
at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion
Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such
additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable
upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been
adjusted by the Holder to the par value price. The Conversion Price is subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the Borrower’s securities, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events. Holder shall be entitled to deduct $1,500.00 from the conversion amount in each
Notice of Conversion to cover Holder’s fees associated with each Notice of Conversion, so long as the total conversion amount
of the respective Notice of Conversion is $10,000.00 or more.

 

1.3 Authorized
and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of a number of Conversion Shares equal to the greater of: (a) 365,612 shares of Common Stock or (b) the sum of (i) the number of
Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) as of any
issue date (taking into consideration any adjustments to the Conversion Price pursuant to Section 2 hereof or otherwise) multiplied
by (ii) one and a half (1.5) (the “Reserved Amount”). The Borrower represents that upon issuance, the Conversion
Shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably instructed
its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated
by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents
who are charged with the duty of executing stock certificates or cause the Company to electronically issue shares of Common Stock
to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated
by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

 

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

 

1.4 Method
of Conversion.

 

(a) Mechanics
of Conversion. This Note may be converted by the Holder in whole or in part, on any Trading Day, at any time on or following
the date that an Event of Default (as defined in this Note) occurs under this Note, by submitting to the Borrower or Borrower’s
transfer agent a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 11:59 p.m., New York, New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time,
shall be deemed to have been delivered and received on the next Trading Day.

 

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

 

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

 

(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for
the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) within
two (2) Trading Days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid
Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company shall fail
for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion Shares
or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or to credit
the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled
upon the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available
to the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure
an amount equal to 1.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to
the Deadline and to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately
preceding the last possible date which the Company could have issued such Conversion Shares to the Holder without violating this
Section 1.4(d); and (ii) the Holder, upon written notice to the Company, may void its Notice of Conversion with respect to, and
retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Notice of Conversion;
provided that the voiding of an Notice of Conversion shall not affect the Company’s obligations to make any payments which
have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail
to issue and deliver a certificate to the Holder and register such Conversion Shares on the Company’s share register or credit
the Holder’s balance account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s
exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below, and if on or after such Trading
Day the Holder purchases (in an open market transaction) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company
shall, within two (2) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to
the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other reasonable
and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to deliver such certificate (and to issue such Conversion Shares) or credit such Holder’s
balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Conversion Shares or credit such Holder’s balance account with DTC and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing shall limit the Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing the
Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required pursuant to
the terms hereof.

  

    4

     

    

 

(e) Obligation
of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or Borrower’s
transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion, the
outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this Note shall
be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with
respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or
other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the
electronic delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective
of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the
recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might
otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified
in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower’s
transfer agent before 11:59 p.m., New York, New York time, on such date.

 

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

 

1.5 Concerning
the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such shares
are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have
been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement))
to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration
or (iii) such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption, or (iv)
such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise
transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).
Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time
as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation
S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be
immediately sold, each certificate for the Conversion Shares that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:

 

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

  

    5

     

    

 

The legend set forth
above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares without such
legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by
crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable federal or state securities
laws: (a) such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or
otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to
the number of securities as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the
Legal Counsel Opinion (as contemplated by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public
sale or transfer of such Conversion Shares may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer agent and
all DTC fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including those represented by
a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.
In the event that the Company does not accept the opinion of counsel provided by the Holder with respect to the transfer of Conversion
Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption, at
the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation S, or other applicable exemption, as applicable,
have been met, it will be considered an Event of Default under this Note.

 

1.6 Effect
of Certain Events.

 

(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other
Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default
pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction
an amount equal to the Default Amount (defined in Section 3.20) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person”
shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

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

 

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

  

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

 

(e) Dilutive
Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or grants
any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues (or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise
entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of any
convertible notes or warrants outstanding as of or following the Issue Date, excluding this Note), in each or any case at an effective
price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such
issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made
whenever such Common Stock or other securities are issued. By way of example, and for the avoidance of doubt, if the Company issues
a convertible promissory note (including but not limited to a Variable Rate Transaction), and the holder of such convertible promissory
note has the right to convert it into Common Stock at an effective price per share that is lower than the then Conversion Price
(including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common
Stock), then the Holder has the right to reduce the Conversion Price to such Base Conversion Price (including but not limited to
a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock) in perpetuity regardless
of whether the holder of such convertible promissory note ever effectuated a conversion at the Base Conversion Price. Notwithstanding
the foregoing, no adjustment will be made under this Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance
of securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if
all such securities were issued at the initial closing.

 

An “Exempt Issuance”
shall mean the issuance of (a) shares of Common Stock or other securities to employees, officers, directors, or consultants of
the Company pursuant to any stock or option or similar equity incentive plan duly adopted for such purpose, by a majority of the
non-employee members of the Company’s Board of Directors or a majority of the members of a committee of non-employee directors
established for such purpose in a manner which is consistent with the Company’s prior business practices; (b) securities
issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the disinterested
directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities; (c) securities issued pursuant to any equipment loan or leasing arrangement, real property
leasing arrangement or debt financing from a bank or similar financial institution approved by a majority of the disinterested
directors of the Company; (d) securities issued with respect to which the Holder waives its rights in writing under this Section
1.6(e); or (e) securities upon the exercise or exchange of or conversion of this Note.

 

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

 

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1.7 [Intentionally
Omitted].

 

1.8 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other than
the Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion
of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s
rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates
for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to
such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder
or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.

 

1.9 Prepayment.
At any time during which there is not a continuing Event of Default under this Note (the “Prepayment Period”), the
Borrower shall have the right, exercisable on not less than one (1) Trading Day prior written notice to the Holder of the Note,
to prepay the outstanding Principal Amount and interest then due under this Note, in whole or in part, in accordance with this
Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder
of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and
(2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice.
On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the amounts designated
below to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior
to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note in accordance with this Section 1.9, the
Borrower shall make payment to the Holder of an amount in cash equal to the sum of: (w) 100% multiplied by the Principal Amount
then outstanding plus (x) accrued and unpaid interest on the Principal Amount to the Optional Prepayment Date plus
(y) $750.00 to reimburse Holder for the fees associated with the Second Commitment Shares.

 

Upon confirmation by Holder that the prepayment
has been received by the Holder and that all amounts outstanding under this Note are paid in full, the Holder shall return the
Second Commitment Shares back to the Company’s treasury, subject to the terms of this Note. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as provided in this Section 1.9,
then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section 1.9.

 

1.10 Repayment
from Proceeds. While any portion of the outstanding Principal Amount and interest (including Default Interest) under this Note
are due and owing, if the Company receives cash proceeds from any source or series of related or unrelated sources, including but
not limited to, from payments from customers, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower,
the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets (in all cases, other than
an Exempt Issuance), the Borrower shall, within seven (7) business days of Borrower’s receipt of such proceeds, inform the
Holder of such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to immediately
apply up to 25% of such proceeds to repay all or any portion of the outstanding Principal Amount and interest (including any Default
Interest) then due under this Note, provided, however, that this Section 1.10 shall not apply to the initial $200,000.00 in the
aggregate of such cash proceeds received by the Company. Failure of the Borrower to comply with this provision shall constitute
an Event of Default.

 

ARTICLE II. RANKING AND CERTAIN COVENANTS

 

2.1 Ranking
and Security. The obligations of the Borrower under this Note shall rank senior with respect to any and all unsecured Indebtedness
incurred following the Issue Date.

 

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2.2 Other
Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly
through any Subsidiary or affiliate) incur or suffer to exist or guarantee any unsecured Indebtedness that is senior to or pari
passu with (in priority of payment and performance) the Borrower’s obligations hereunder. As used in this Section 2.2, the
term “Borrower” means the Borrower and any Subsidiary of the Borrower. As used herein, the term “Indebtedness”
means (a) all indebtedness of the Borrower for borrowed money or for the deferred purchase price of property or services, including
any type of letters of credit, but not including deferred purchase price obligations or other contractual obligations in place
as of the Issue Date and as disclosed in the SEC Documents or obligations to trade creditors or other third parties incurred in
the ordinary course of business, (b) all obligations of the Borrower evidenced by notes, bonds, debentures or other similar instruments,
(c) purchase money indebtedness hereafter incurred by the Borrower to finance the purchase of fixed or capital assets, including
all capital lease obligations of the Borrower which do not exceed the purchase price of the assets funded, (d) all guarantee obligations
of the Borrower in respect of obligations of the kind referred to in clauses (a) through (c) above that the Borrower would not
be permitted to incur or enter into, and (e) all obligations of the kind referred to in clauses (a) through (d) above that the
Borrower is not permitted to incur or enter into that are secured and/or unsecured by (or for which the holder of such obligation
has an existing right, contingent or otherwise, to be secured and/or unsecured by) any lien or encumbrance on property (including
accounts and contract rights) owned by the Borrower, whether or not the Borrower has assumed or become liable for the payment of
such obligation.

 

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

 

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

 

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

 

2.6 Advances
and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, lend money, give credit, make advances to or enter into any similar transaction with
any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and
affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower
has informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in
the ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So
long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any
such party. For the avoidance of doubt, the Borrower may borrow money from an affiliate of the Borrower subject to the terms herein.

 

2.7 3(a)(10)
Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a “3(a)(10)
Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(10)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than $25,000, will be assessed and will become immediately due and payable to the Holder at its election in the form
of a cash payment or added to the balance of this Note (under Holder’s and Borrower’s expectation that this amount
will tack back to the Issue Date).

 

2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, (a) change the nature of its business;

 

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(b) sell, divest, change the structure
of any material assets other than in the ordinary course of business; or (c) enter into any variable rate transactions or Merchant
Cash Advance transactions. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower shall maintain
and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or
remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain,
duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary and failure to do so would cause a Material Adverse Effect.

 

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

 

2.10 Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note.

 

ARTICLE III. EVENTS OF DEFAULT

 

It shall be considered
an event of default if any of the following events listed in this Article III (each, an “Event of Default”) shall occur,
provided, however, in each case of an Event of Default (except with respect to an Event of Default under Sections 3.1, 3.2,
or 3.19) , the Borrower shall have seven (7) calendar days to cure such Event of Default (with the understanding that each respective
cure period shall begin on the date that the Holder provides notice of the respective Event of Default to the Borrower) unless
a shorter cure period is identified herein:

 

3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.

 

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

 

3.3 Breach
of Agreements and Covenants. The Borrower breaches any material agreement, covenant or other material term or condition contained
in the Purchase Agreement, this Note, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith or therewith.

  

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3.4 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this Note,
the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given in writing pursuant hereto or in
connection herewith or therewith shall be false or misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase
Agreement.

 

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

 

3.6 Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or
any of its property or other assets for more than $500,000, and shall remain unvacated, unbonded or unstayed for a period of twenty
(20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

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

 

3.8 Failure
to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements
of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.

 

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

 

3.10 Cessation
of Operations. Any cessation of operations by Borrower.

 

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

 

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

 

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

 

3.14 Cross-Default.
The declaration of an event of default by any lender or other extender of credit to the Company under any notes, loans, agreements
or other instruments of the Company evidencing any Indebtedness of the Company (including those filed as exhibits to or described
in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.

3.15 Variable
Rate Transactions. The Borrower consummates a Variable Rate Transaction at any time on or after the Issue Date (excluding this
Note).

 

3.16 Inside
Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any
actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date

  

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3.17 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder is unable to (i)
obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s
conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or
(ii) thereupon deposit such shares into the Holder’s brokerage account.

 

3.18 Delisting
or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock (i)
is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level of
the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American.

 

3.19 Failure
to Pay an Amortization Payment. The Borrower fails to pay an Amortization Payment (as defined in this Note) when due as provided
in Section 4.17 of this Note.

 

3.20 Rights
and Remedies Upon an Event of Default. Upon the occurrence and during the continuation of any Event of Default specified in
this Article III, the Holder shall no longer be required to return the Second Commitment Shares to the Borrower under any circumstances
and this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount (the “Default Amount”) equal to the Principal Amount then outstanding plus accrued interest (including
any Default Interest) through the date of full repayment multiplied by 125%. Holder may, in its sole discretion, determine to accept
payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion formula set forth in Section
1.2 shall apply. Upon an uncured Event of Default, all amounts payable hereunder shall immediately become due and payable, all
without demand, presentment or notice, all of which hereby are expressly waived by the Borrower, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity.

 

ARTICLE IV. MISCELLANEOUS

 

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

 

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

 

If to the Borrower, to:

 

CUENTAS INC.

19 W. Flagler St., Suite 902

Miami, FL 33130

Attention: Arik Maimon

e-mail: arik@cuentas.com

 

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If to the Holder:

   

LABRYS FUND, LP

48 Parker Road

Wellesley, MA 02482

e-mail: admin@equiluxgroup.com

 

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

 

4.4 Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder without
the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to any “accredited
investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”,
as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary,
this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid
and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

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

 

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4.6 Governing
Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Note or any other agreement, certificate, instrument or document contemplated hereby shall be
brought only in the state courts located in the Commonwealth of Massachusetts or federal courts located in the Commonwealth of
Massachusetts. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note
or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party
in any action or dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

 

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

 

4.8 Purchase
Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement and the documents entered
into in connection herewith and therewith.

 

4.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including
by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property,
or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any Change
in Control or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder,
at least ten (10) days prior to the record date specified therein (concurrently with the consummation of the transaction or event,
whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right
or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to
the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder
hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

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

 

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

 

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

 

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

 

4.14 [Intentionally
Omitted].

 

4.15 Dispute
Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be)
or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the
Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within one (1)
Trading Day after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no
notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If
the Holder and the Borrower are unable to agree upon such determination or calculation within one (1) Trading Day of such
disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the
Borrower shall, within one (1) Trading Day, submit (a) the disputed determination of the Conversion Price, the closing bid
price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower
and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any
prepayment amount or Default Amount, to an independent, outside accountant selected by the Holder that is reasonably
acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the
determinations or calculations and notify the Borrower and the Holder of the results no later than one (1) Trading Day from
the time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation shall be binding upon all parties absent demonstrable error.

 

    15

     

    

 

4.16 [Intentionally
Omitted].

 

4.17 Amortization
Payments. The Borrower shall make the following amortization payments (each an “Amortization Payment”) in cash
to the Holder towards the repayment of this Note, as provided in the following table:

 

	Payment Date:	 	Payment Amount:	 
	12/15/2020	 	$	67,760.00	 
	1/15/2021	 	$	67,760.00	 
	2/16/2021	 	$	67,760.00	 
	3/16/2021	 	$	67,760.00	 
	4/16/2021	 	$	67,760.00	 
	5/14/2021	 	$	67,760.00	 
	6/16/2021	 	$	67,760.00	 
	7/16/2021	 	$	67,760.00	 
	8/16/2021	 	$	67,760.00	 
	9/16/2021	 	$	67,760.00	 

 

(a) With
respect to the first Amortization Payment originally due on December 15, 2020 (the “First Amortization Payment”), the
Company may notify the Holder on or before December 15, 2020, that the Company is electing to extend the due date of the First
Amortization Payment to January 15, 2021 (the “First Amortization Payment Extension”) as further provided herein. If
the Company exercises the First Amortization Payment Extension, then the First Amortization Payment shall be due on January 15,
2021 and the Company shall pay $6,776.00 (the “First Amortization Payment Extension Fee”) to the Holder on or before
December 15, 2020. For the avoidance of doubt, the First Amortization Payment Extension shall not affect the due date of any other
Amortization Payment and the First Amortization Payment Extension Fee shall not reduce the amounts owed under the Note.

 

(b) If
the Company exercised the First Amortization Payment Extension and fully complied with Section 4.17(a) of this Note, then the Company
may notify the Holder on or before January 15, 2021, that the Company is electing to further extend the due date of the First Amortization
Payment to February 16, 2021 (the “Additional First Amortization Payment Extension”) as further provided herein. If
the Company exercises the Additional First Amortization Payment Extension, then the First Amortization Payment shall be due on
February 16, 2021 and the Company shall pay $6,776.00 (the “Additional First Amortization Payment Extension Fee”) to
the Holder on or before January 15, 2021. For the avoidance of doubt, the Additional First Amortization Payment Extension shall
not affect the due date of any other Amortization Payment and the Additional First Amortization Payment Extension Fee shall not
reduce the amounts owed under the Note.

 

(c) With
respect to the second Amortization Payment originally due on January 15, 2021 (the “Second Amortization Payment”),
the Company may notify the Holder on or before January 15, 2021, that the Company is electing to extend the due date of the Second
Amortization Payment to February 16, 2021 (the “Second Amortization Payment Extension”) as further provided herein.
If the Company exercises the Second Amortization Payment Extension, then the Second Amortization Payment shall be due on February
16, 2021 and the Company shall pay $6,776.00 (the “Second Amortization Payment Extension Fee”) to the Holder on or
before January 15, 2021. For the avoidance of doubt, the Second Amortization Payment Extension shall not affect the due date of
any other Amortization Payment and the Second Amortization Payment Extension Fee shall not reduce the amounts owed under the Note.

  

4.18 Right
of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or financing
from any 3rd party other than an Exempt Issuance, that the Borrower intends to act upon, then the Borrower must first offer such
opportunity to the Holder to provide such capital or financing to the Borrower on the same terms as each respective 3rd party’s
terms up to 10% of the aggregate amount of such offering. Should the Holder be unwilling or unable to provide such capital or financing
to the Borrower within 5 trading days from Holder’s receipt of written notice of the offer (the “Offer Notice”)
from the Borrower, then the Borrower may obtain such capital or financing in full from that respective 3rd party upon the exact
same terms and conditions offered by the Borrower to the Holder, which transaction must be completed within 30 days after the date
of the Offer Notice. If the Borrower does not receive the capital or financing from the respective 3rd party within 30 days after
the date of the respective Offer Notice, then the Borrower must again offer the capital or financing opportunity to the Holder
as described above, and the process detailed above shall be repeated. The Offer Notice must be sent via electronic mail to Admin@EquiluxGroup.com.

 

[signature page follows]

 

    16

     

    

 

IN WITNESS WHEREOF, Borrower has
caused this Note to be signed in its name by its duly authorized officer on September 16, 2020.

 

CUENTAS INC.

  

	By: 	              	 
	 	Name: Arik Maimon	 
	 	Title: Chief Executive Officer	 

 

    17

     

    

 

EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued
pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CUENTAS INC., a Florida corporation
(the “Borrower”), according to the conditions of the self-amortization promissory note of the Borrower dated as of
September 16, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion,
except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

	 	☐	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	Name of DTC Prime Broker:
	 	 	Account Number:

 

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

   

	Date of Conversion:	 	 	 
	Applicable Conversion Price:	 	$	       	 
	Number of Shares of Common Stock to be  Issued Pursuant to Conversion of the Note:	 	 	 	 
	Amount of Principal Balance Due remaining Under the Note after this conversion:	 	 	 	 

 

	By:	 	 
	Name:	 	 
	Title:	 	 
	Date:

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