Document:

Exhibit 10.102

 

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

 

	Principal Amount: $60,000. 00	Issue Date: June 5, 2012
	Purchase Price: $60,000. 00	 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE
RECEIVED,SURGE GLOBAL ENERGY, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby
promises to pay to the order of ASHER ENTERPRISES, INC. , a Delaware corporation, or registered assigns (the “Holder”)
the sum of $60,000. 00 together with any interest as set forth herein, on March 4, 2013 (the “Maturity Date”), and
to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per
annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon
acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set
forth herein. Any amount of principal or interest on this Note which is not paid when due (whether at maturity or upon an Event
of Default) shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is
paid (“Default Interest”). Interest shall commence accruing on the date that the Note is
fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due
hereunder (to the extent not converted into common stock, $0. 001 par value per share (the “Common Stock”) in accordance
with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address
as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date
on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than
a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto
in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase
Agreement”). The Note shall become effective upon the Closing Date as such term is the defined in the Purchase Agreement.

 

    	 

    	 

    

  

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

 

The following terms shall
apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

1. 1 Conversion
Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which is
one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date
of payment of the Default Amount (as defined in Article III) pursuant to Section 1. 6(a) or Article III, each in respect of the
remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of
this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares
of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at
the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided,
however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of
this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion
of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion
or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion
of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership
by the Holder and its affiliates of more than 4. 99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived
by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions
of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may
be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall
be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date
specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered
to the Borrower by the Holder in accordance with Section 1. 4 below; provided that the Notice of Conversion is submitted by facsimile
or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p. m. , New
York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the
amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts
owed to the Holder pursuant to Sections 1. 3 and 1. 4(g) hereof.

 

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1. 2 Conversion
Price.

 

(a) Calculation
of Conversion Price. The conversion price (the “Conversion Price”) shall equal the
Variable Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights
offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of
40%). “Market Price” means the average of the lowest three (3) Trading Prices (as
defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading Day prior to
the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on the
Over-the-Counter Bulletin Board, or applicable trading market (the “OTCQB”) as reported by a reliable reporting
service (“Reporting Service”) designated by the Holder (i. e. Bloomberg) or, if the OTCQB is not the principal
trading market for such security, the closing bid price of such security on the principal securities exchange or trading
market where such security is listed or traded or, if no closing bid price of such security is available in any of the
foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in
the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such
security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the
Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any
day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other
securities market on which the Common Stock is then being traded.

 

(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1. 2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially
all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer
to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred
to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective
upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to
the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and
(y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the
Conversion Price shall be determined as set forth in this Section 1. 2(a). For purposes hereof, “Adjusted Conversion Price
Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public
announcement as contemplated by this Section 1. 2(b) has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment
of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1. 2(b) to become operative.

 

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1. 3 Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have
twenty-five (25) million shares authorized but unissued in its capital structure such that when the Holder submits a Notice of
Conversion there will be at a minimum twenty-five (25) million shares of Common Stock that are authorized but unissued for the
Borrower's transfer agent to issue to the Holder (the “Reserved Amount”). This Reserved Amount is in addition to any
shares presently held or to be held in the future by the transfer agent for the benefit of the Holder. If at any time the Reserved
Amount is less than twenty-five (25) million shares of Common Stock then the Borrower will take immediate steps to increase the
reserve but in any event will increase the reserve within thirty (30) days of the Reserved Amount falling below twenty-five (25)
million shares of Common Stock (the "Cure Period"). The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to
its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the
then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient
number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.
The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares
of Common Stock in accordance with the terms and conditions of this Note.

 

If the Borrower does not
maintain the Reserved Amount it will be considered an Event of Default under Section 3. 2 of the Note, however Borrower shall have
sixty (60) days to cure this provision.

 

1. 4 Method
of Conversion.

 

(a) Mechanics
of Conversion. Subject to Section 1. 1, this Note may be converted by the Holder in whole or in part at any time from time
to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable
means of communication dispatched on the Conversion Date prior to 6:00 p. m. , New York, New York time) and (B) subject to Section
1. 4(b), surrendering this Note at the principal office of the Borrower.

 

(b) Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower,
so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such
records of the Borrower shall,primafacie, 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 Common Stock issuable upon such conversion within five (5) business days after such receipt (the “Deadline”)
(and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with
the terms hereof and the Purchase Agreement.

 

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

 

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(f) Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable
upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.
1 and in this Section 1. 4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its
Deposit Withdrawal Agent Commission (“DWAC”) system.

 

(g) Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right
to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described
in Section 1. 3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $1,500 per day in
cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to
Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice
to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount
of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal
amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to
convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion
right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1. 4(g) are justified. Notwithstanding the provisions of this Section 1. 4(g) to the contrary, if the failure
to deliver the Common Stock as required hereunder is due to circumstances beyond the control of the Borrower, including, an act
of war or terrorism, forces of nature, work stoppages or shortages, etc. , then the provisions of this Section 1. 4(g) shall not
apply and the Borrower shall continue to use its best efforts to deliver the Common Stock as required by the terms of this Agreement,
but not including any acts by the Borrower's transfer.

 

1. 5 Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule
144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees
to sell or otherwise transfer the shares only in accordance with this Section 1. 5 and who is an Accredited Investor (as defined
in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth
below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act
or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that
can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been
so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or
an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

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

 

The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or
(ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not
accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration,
such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3. 2 of the Note.

 

1. 6 Effect
of Certain Events.

 

(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be
deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder
upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III)
or (ii) be treated pursuant to Section 1. 6(b) hereof. “Person” shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.

 

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(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all
or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1. 6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least
forty-five (45) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is
no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1. 6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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

 

(d) Adjustment
Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance
with this Section 1. 6(d) hereof is deemed to have issued or sold,any shares of Common Stock for no consideration or for a consideration
per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith)
less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive
Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration
per share received by the Borrower in such Dilutive Issuance.

 

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

 

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

 

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

 

(f) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1. 6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note.

 

    	9

    	 

    

  

1. 7 Trading
Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities
market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise
pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common
Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock
is then traded (the “Maximum Share Amount”), which shall be 4. 99% of the total shares outstanding on the Closing Date
(as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share
Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of
any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any
of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu
of any further right to convert this Note, this will be considered an Event of Default under Section 3. 3 of the Note.

 

1. 8 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount
or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of
such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure
by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion
of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common
Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted
portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note
has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the
Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default
Payments pursuant to Section 1. 3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default
and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.
3) for the Borrower’s failure to convert this Note.

 

    	10

    	 

    

  

1. 9 Prepayment.
Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the Issue Date and
ending on the date which is one hundred twenty (120) days following the issue date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay all or part of the outstanding
Note (principal and accrued interest), in full, in accordance with this Section 1. 9. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading
Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”),
the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional Prepayment
Amount”) equal to 130%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x)
accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default
Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to
Sections 1. 3 and 1. 4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment
Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to prepay the Note pursuant to this Section 1. 9. 

 

Notwithstanding anything
to the contrary contained in this Note, at any time during the period beginning on the date which is one hundred twenty -one (121)
days following the issue date and ending on the date which is one hundred fifty (150) days following the issue date, the Borrower
shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay
the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1. 9. Any Optional Prepayment Notice
shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its
right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the
Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment
Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one
(1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall
make payment to the Holder of an amount in cash (the “Second Optional Prepayment Amount”) equal to 140%, multiplied
by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid
principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred
to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1. 3 and 1. 4(g) hereof. If the Borrower
delivers an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder of the Note within
two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant
to this Section 1. 9.

 

Notwithstanding
anything to the contrary contained in this Note, at any time during the period beginning on the date which is one hundred
fifty-one (151) days following the issue date and ending on the date which is one hundred eighty (180) days following the
issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to
the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this
Section 1. 9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and
shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be
not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the
Borrower shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as
specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If
the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the
“Third Optional Prepayment Amount”) equal to 145%, multiplied by the sum of: (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z)
any amounts owed to the Holder pursuant to Sections 1. 3 and 1. 4(g) hereof. If the Borrower delivers an Optional Prepayment
Notice and fails to pay the Third Optional Prepayment Amount due to the Holder of the Note within two (2) business days
following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this
Section 1. 9.

 

    	11

    	 

    

  

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

 

Article
II. CERTAIN COVENANTS

 

2. 1 Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or
other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares
of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its
capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.

 

2. 2 Restriction
on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities
or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants,
rights or options to purchase or acquire any such shares.

 

2. 3 Borrowings.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable
upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments
for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed
on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade
creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall
be used to repay this Note.

 

2. 4 Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, which shall not be unreasonably withheld, 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.

 

    	12

    	 

    

 

 2. 5 Advances
and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, which shall not be unreasonably withheld, lend money, give credit or make advances to any person, firm, joint
venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower,
except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder
in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

Article
III. EVENTS OF DEFAULT

 

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

 

3. 1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon
when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3. 2 Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or
threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically
or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or
hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of
Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note,
or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes
any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and
any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not
be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation
of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a
conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the
option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such
advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder. 

 

3. 3 Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any
collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days
after written notice thereof to the Borrower from the Holder.

 

3. 4 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement
or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement),
shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have)
a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

    	13

    	 

    

  

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 incurred after the date of the Note shall be entered or filed against the Borrower
or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded
or unstayed for a period of thirty (30) days unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld.

 

3. 7 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower.

 

3. 8 Delisting
of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCQB or an equivalent
replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock
Exchange.

 

3. 9 Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or
the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3. 10 Liquidation.
Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3. 11 Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts
as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3. 12 Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future).

 

3. 13 Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period
from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder
with respect to this Note or the Purchase Agreement.

 

3. 14 Reverse
Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

    	14

    	 

    

  

3. 15
 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower
fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in
a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3. 16 Cross-Default.
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable
notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements,
in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the
terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder.
“Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower,
and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided,
however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the
loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower
to the Holder.

 

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3. 1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3. 2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND
THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM
(AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified
in Sections 3. 1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading
Market Prepayment Event pursuant to Section 1. 7 or upon acceleration), 3. 3, 3. 4, 3. 6, 3. 8, 3. 9, 3. 11, 3. 12, 3. 13, 3. 14,
and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”),
and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the
principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due
and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the
greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued
and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”)
plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1. 3 and 1. 4(g) hereof (the then outstanding principal amount of this Note to the date of payment
plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or
(ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares
of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the
Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining
the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the
Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the
Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due
and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity.

 

    	15

    	 

    

  

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

 

Article
IV. MISCELLANEOUS

 

4. 1 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

 

4. 2 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

    	16

    	 

    

  

If to the Borrower,
to:

 

SURGE GLOBAL ENERGY, INC.

75-153 Merle Drive - Suite B

Palm Desert, CA 92211

Attn:
E. JAMIE SCHLOSS, President

facsimile: 760-766-2990

 

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

 

Schnader Harrison
Segal & Lewis LLP

Attn: Sarah
Hewitt

140 Broadway
Site 3100

New York, NY
10005-1101

facsimile:
212-972-6758

 

If to the Holder:

 

ASHER ENTERPRISES, INC.

1 Linden Pl.
, Suite 207

Great Neck, NY.
11021

Attn:
Curt Kramer, President

facsimile:
516-498-9894

 

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

 

Naidich Wurman Birnbaum & Maday,
LLP

80 Cuttermill Road, Suite 410

Great Neck, NY 11021

Attn: Bernard S. Feldman, Esq.

facsimile:
516-466-3555

 

4. 3 Amendments.
This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term
“Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes
issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4. 4 Assignability.
This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a)
of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with
a bonafide margin account or other lending arrangement.

 

4. 5 Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

    	17

    	 

    

  

4. 6 Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note
shall be brought only in the state courts of New York or in the federal courts located in the state and county of Nassau. The parties
to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not
assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive
trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.
In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party
hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in
connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

4. 7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount
(or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock
acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower
and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

4. 8 Purchase
Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4. 9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including
by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property,
or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed
sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or
winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date
specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement
regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower
shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section 4. 9.

 

    	18

    	 

    

  

4. 10 Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for
a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law
or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing
any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic
loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer this June 5, 2012.

 

	 	SURGE GLOBAL ENERGY, INC. 
	 	 
	 	By: 	/s/ E. Jamie Schloss
	 	E. JAMIE SCHLOSS
	 	President

 

    	19

    	 

    

  

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 SURGE GLOBAL ENERGY, INC. , a Delaware corporation (the “Borrower”) according to the conditions of the convertible
note of the Borrower dated as of May 25, 2012 (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:

 

ASHER ENTERPRISES, INC.

1 Linden Pl.
, Suite 207

Great Neck, NY.
11021

Attention: Certificate
Delivery

(516) 498-9890

 

Date of Conversion:     
_____________

Applicable Conversion Price:    $____________

Number of Shares of Common Stock to
be Issued

Pursuant to Conversion of the Notes:
  ______________

Amount of Principal Balance Due remaining

Under the Note after this conversion:
______________

 

ASHER ENTERPRISES, INC.

 

By:_____________________________

Name: Curt Kramer

Title:  President

Date: ______________

1 Linden Pl.
, Suite 207

Great Neck, NY.
11021

 

    	20Exhibit 4.1

 

Exhibit 4.1

 

THE PAWS PET COMPANY,
INC.

Common stock SUBSCRIPTION
AGREEMENT

 

Background

 

The PAWS Pet Company and ______________ entered
into an Agreement dated June ___, 2012, whereby in exchange for an Investment in The PAWS Pet Company agreed to issue ___________
restricted common shares to the Investor in exchange for an investment of $___________ or $0.01 per share.

 

1.1     Subscription.
The undersigned (the “Subscriber”), intending to be legally bound, hereby irrevocably subscribes for ________________
shares of the Common Stock the Company in a transaction exempt from the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”).

 

1.2     Purchase
of Shares. The Company shall deliver the Shares to the Subscriber promptly after the acceptance of this Subscription Agreement
by the Company.

 

1.3     Acceptance
or Rejection.

 

(a)     The
Subscriber understands and agrees that the Company reserves the right to reject this subscription for the Shares if, in its reasonable
judgment, it deems such action in the best interest of the Company, at any time prior to the Closing.

 

(b)     The
Subscriber understands and agrees that its subscription for the Shares is irrevocable.

 

(c)     In
the event the sale of the Shares subscribed for by the Subscriber is not consummated by the Company for any reason (in which event
this Subscription Agreement shall be deemed to be rejected), this Subscription Agreement and any other agreement entered into between
the Subscriber and the Company relating to this subscription shall thereafter have no force or effect and the Company shall promptly
return or cause to be returned to the Subscriber the Subscription Amount remitted to the Company by the Subscriber, without interest
thereon or deduction therefrom, in exchange for the Shares.

 

SECTION
2.

 

2.1     Closing.
The closing (the “Closing”) of the purchase and sale of the Shares, shall occur simultaneously with (i) the acceptance
by the Company of the Subscriber’s subscription, as evidenced by the Company’s execution of this Subscription Agreement; and (ii)
the release by the Company of the certificate representing the Shares.

 

SECTION
3.

 

3.1     Investor
Representations and Warranties. The Subscriber hereby acknowledges, represents and warrants to, and agrees with, the Company
and its affiliates as follows:

 

(a)     Investment
Purposes. The Subscriber is acquiring the Shares for its own account as principal, not as a nominee or agent, for investment
purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part and no other
person has a direct or indirect beneficial interest in such Shares or any portion thereof. Further, the Subscriber does not have
any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or
to any third person, with respect to the Shares for which the Subscriber is subscribing or any part of the Shares.

 

    	1

    	 

    

 

(b)     Authority.
The Subscriber has full power and authority to enter into this Agreement, the execution and delivery of this Agreement has been
duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber.

 

(c)     No
General Solicitation. The Subscriber is not subscribing for the Shares as a result of or subsequent to any advertisement, article,
notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented
at any seminar or meeting, or any solicitation of a subscription by person previously not known to the Subscriber in connection
with investment securities generally.

 

(d)     Investment
Experience. The Subscriber is (i) experienced in making investments of the kind described in this Agreement, (ii) able, by
reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated
with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection
with the transactions described in this Agreement, and (iii) able to afford the entire loss of its investment in the Shares.

 

(e)     Exemption
from Registration. The Subscriber acknowledges its understanding that the offering and sale of the Shares is intended to be
exempt from registration under the Securities Act. In furtherance thereof, in addition to the other representations and warranties
of the Subscriber made herein, the Subscriber further represents and warrants to and agrees with the Company and its affiliates
as follows:

 

(1)     The
Subscriber realizes that the basis for the exemption may not be present if notwithstanding such representations, the Subscriber
has in mind merely acquiring the Shares for a fixed or determinable period in the future, or for a market rise, or for sale if
the market does not rise. The Subscriber does not have any such intention;

 

(2)     The
Subscriber has the financial ability to bear the economic risk of its investment, has adequate means for providing for its current
needs and personal contingencies and has no need for liquidity with respect to its investment in the Company; and

 

(3)     The
Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks
of the prospective investment in the Shares. The Subscriber also represents it has not been organized for the purpose of acquiring
the Shares; and

 

(4)     The
Subscriber acknowledges that it has had access to and has reviewed all documents and records relating to the Company, including,
but not limited to, the Company’s Form 8-K filed with the United States Securities and Exchange Commission on August 16,
2010, including the risk factors described therein (as such documents have been amended since the date of their filing, collectively,
the “Company SEC Documents”), that it has deemed necessary in order to make an informed investment decision
with respect to an investment in the Shares; that it has had the opportunity to ask representatives of the Company certain questions
and request certain additional information regarding the terms and conditions of such investment and the finances, operations,
business and prospects of the Company and has had any and all such questions and requests answered to its satisfaction; and that
it understands the risks and other considerations relating to such investment.

 

(f)     No
Other Company Representations. No representations or warranties have been made to the Subscriber by the Company, or any officer,
employee, agent, affiliate or subsidiary of the Company, other than the representations of the Company contained herein, and in
subscribing for Shares the Subscriber is not relying upon any representations other than those contained herein.

 

(g)     Compliance
with Laws. Any resale of the Shares shall only be made in compliance with exemptions from registration afforded by, or pursuant
to an effective registration statement under, the Securities Act and in compliance with applicable state law.

 

    	2

    	 

    

 

(h)     Legends.
Each certificate representing the Shares shall be endorsed with the following legends, in addition to any other legend required
to be placed thereon by applicable federal or state securities laws:

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND WITHOUT A VIEW TO RESALE
OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER
OR OTHER APPLICABLE SECURITIES LAWS.

 

(i)     Accredited
Investor. The Subscriber is an “accredited investor” as that term is defined in Rule 501 of the General Rules and
Regulations under the Securities Act by reason of Rule 501(a)(3).

 

(j)     Potential
Loss of Investment. The Subscriber understands that an investment in the Shares is a speculative
investment which involves a high degree of risk and the potential loss of its entire investment. The Company is an early stage
company with only a brief operating history for the Subscriber to evaluate its business. The Company, previously known as American
Antiquities, Inc., completed the acquisition of Panther Air Cargo, LLC, a Florida limited partnership doing business as Pet Airways,
through a share exchange agreement. The Company’s common stock previously traded on the OTC Bulletin Board under the symbol
“AAQS” and now trades on the OTC Bulletin Board under the symbol “PAWS.”

 

(k)     Investment
Commitment. The Subscriber’s overall commitment to investments which are not readily marketable is not disproportionate to
the Subscriber’s net worth, and an investment in the Shares will not cause such overall commitment to become excessive.

 

(l)     Receipt
of Information. The Subscriber has received all documents, records, books and other information pertaining to the Subscriber’s
investment in the Company that has been requested by the Subscriber.

 

(m)     Investor
Questionnaire. The Subscriber represents and warrants to the Company that all information that the Subscriber has provided
to the Company, including, without limitation, the information in the Investor Questionnaire attached hereto as Exhibit A
or previously provided to the Company (the “Investor Questionnaire”), is correct and complete as of the date hereof.

 

(n)     No
Reliance. Other than as set forth herein, the Subscriber is not relying upon any other information, representation or warranty
by the Company or any officer, director, stockholder, agent or representative of the Company in determining to invest in the Shares.
The Subscriber has consulted, to the extent deemed appropriate by the Subscriber, with the Subscriber’s own advisers as to the
financial, tax, legal and related matters concerning an investment in the Shares and on that basis believes that its investment
in the Shares is suitable and appropriate for the Subscriber.

 

(o)     No
Governmental Review. The Subscriber is aware that no federal or state agency has (i) made any finding or determination as to
the fairness of this investment, (ii) made any recommendation or endorsement of the Shares or the Company, or (iii) guaranteed
or insured any investment in the Shares or any investment made by the Company.

 

    	3

    	 

    

 

(p)     Price
of Shares. The Subscriber understands that the price of the Shares offered hereby bear no relation to the assets, book value
or net worth of the Company and were determined arbitrarily by the Company.

 

(q)     Financing
Risk. The Company currently does not have enough working capital to satisfy its capital needs. The Company is dependent upon
investors to fund its ongoing operations, and cannot be certain that future financing will be available to it on acceptable terms
when it needs it. The Company can give no assurances that it will be able to raise adequate funding to reach cash flow break even.
If the Company is unable to obtain financing to meet its needs, the Subscriber may lose of its investment.

 

(r)     Dilution.
In order to capitalize the Company, execute its business plan, and for other corporate purposes, the Company has issued, and expects
to issue additional shares of Common Stock, securities exercisable or convertible into shares of Common Stock, or debt. Such securities
have been and may be issued for a purchase price consisting of cash, services or other consideration that may be materially different
than the purchase price of the Shares. The issuance of any such securities may result in substantial dilution to the relative ownership
interests of the Company’s existing shareholders and substantial reduction in net book value per share. Additional equity
securities may have rights, preferences and privileges senior to those of the holders of Common Stock, and any debt financing may
involve restrictive covenants that may limit the Company’s operating flexibility.

 

(s)     Former
Shell Company. Subscriber acknowledges and agrees that the Company was, at one time, a “shell company” as defined
in Rule 12b-2 under the Exchange Act. Pursuant to Rule 144(i) under the Securities Act, securities issued by a current or former
shell company (such as the Shares) that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot
be sold in reliance on Rule 144 until one year after the date on which such company filed current “Form 10 information”
(as defined in Rule 144(i)) with the SEC reflecting that it ceased being a shell company, and provided that at the time of a proposed
sale pursuant to Rule 144, the issuer is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has
filed all reports and other materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the
preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form
8-K reports. As a result, the restrictive legends on certificates for the Shares cannot be removed except in connection with an
actual sale meeting the foregoing requirements.

 

3.2     Restrictions
on Disposition. The Subscriber further acknowledges and understands that, without in anyway limiting the acknowledgements and
understandings as set forth hereinabove, the Subscriber agrees that the Subscriber shall in no event make any disposition of all
or any portion of the Shares which the Subscriber is acquiring hereunder unless and until:

 

(1)     there
is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is
made in accordance with said registration statement; or

 

(2)     (i)
the Subscriber shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, (ii) the Subscriber shall have furnished the Company with
an opinion of the Subscriber’s own counsel to the effect that such disposition will not require registration of any such Shares
under the Securities Act and (iii) such opinion of the Subscriber’s counsel shall have been concurred in by counsel for the Company
and the Company shall have advised the Subscriber of such concurrence.

 

    	4

    	 

    

 

SECTION
4.

 

4.1     Company’s
Representations and Warranties. The Company represents and warrants to the Subscriber as follows:

 

(a)     Organization
of the Company. The Company is a corporation duly organized and validly existing and in good standing under the laws of the
State of Illinois.

 

(b)     Authority.
(a) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement
and to issue the Shares; (b) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization
of the Company or its Board of Directors or stockholders is required; and (c) this Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting
generally the enforcement of creditors’ rights and remedies or by other equitable principles of general application.

 

(c)     Exemption
from Registration; Valid Issuances. The sale and issuance of the Shares, in accordance with the terms and on the bases of the
representations and warranties of the Subscriber set forth herein, may and shall be properly issued by the Company to the Subscriber
pursuant to any applicable federal or state law. When issued and paid for as herein provided, the Shares shall be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Shares pursuant to, nor the Company’s performance of its obligations
under, this Agreement shall (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the
Shares or any of the assets of the Company, or (b) entitle the other holders of the Common Stock of the Company to preemptive or
other rights to subscribe to or acquire the Common Stock or other securities of the Company. The Shares shall not subject the Subscriber
to personal liability by reason of the ownership thereof.

 

(d)     No
General Solicitation or Advertising in Regard to this Transaction. Neither the Company nor any of its affiliates nor any person
acting on its or their behalf (a) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D) or general advertising with respect to any of the Shares, or (b) made any offers or sales of any security or solicited
any offers to buy any security under any circumstances that would require registration of the Common Stock or other securities
of the Company under the Securities Act.

 

SECTION
5.

 

5.1     Commissions
and Fees. No commissions or finders fees will be paid in connection with the sale of Common Stock under this Agreement.

 

5.2     Indemnity.
The Subscriber agrees to indemnify and hold harmless the Company, its officers and directors, employees and its affiliates and
their respective successors and assigns and each other person, if any, who controls any thereof, against any loss, liability, claim,
damage and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any
false representation or warranty or breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber
herein or in any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.

 

5.3     Modification.
Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is sought.

 

5.4     Notices.
Any notice, demand or other communication which any party hereto may be required, or may elect, to give to anyone interested hereunder
shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail letter box, registered or certified mail,
return receipt requested, addressed to such address as may be given herein, or (b) delivered personally at such address.

 

    	5

    	 

    

 

5.5     Counterparts.
This Agreement may be executed through the use of separate signature pages or in any number of counterparts and by facsimile, and
each of such counterparts shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties
are not signatories to the same counterpart. Signatures may be facsimiles.

 

5.6     Binding
Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and assigns. If the Subscriber is more than one person,
the obligation of the Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments
herein contained shall be deemed to be made by and be binding upon each such person and its heirs, executors, beneficiaries, administrators
and successors.

 

5.7     Entire
Agreement. This Agreement and the documents referenced herein contain the entire agreement of the parties and there are no
representations, covenants or other agreements except as stated or referred to herein and therein.

 

5.8     Assignability.
This Agreement is not transferable or assignable by the Subscriber.

 

5.9     Governing
Law, Arbitration. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall
be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the
principles of conflict of laws thereof. Each party agrees that all legal proceedings in equity or at law concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto
or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be held in the City of San Francisco,
California, United States of America in arbitration before the International Chamber of Commerce and shall be determined by three
arbitrators, and otherwise held in accordance with its rules. Each party shall choose one arbitrator and the two arbitrators shall
choose the third. The third arbitrator so chosen shall have a background in either corporate finance, banking or law. The arbitration
shall be conducted in the English language and the arbitration award shall include the allocation of costs and expenses among the
parties. The arbitration ruling shall be final and binding.

 

5.10     Pronouns.
The use herein of the masculine pronouns “him” or “his” or similar terms shall be deemed to include the feminine
and neuter genders as well and the use herein of the singular pronoun shall be deemed to include the plural as well.

 

5.11     Further
Assurances. Upon request from time to time, the Subscriber shall execute and deliver all documents, take all rightful oaths
and do all other acts that may be necessary or desirable, in the reasonable opinion of the Company or its counsel, to effect the
subscription for the Shares in accordance herewith.

 

    	6

    	 

    

 

IN WITNESS WHEREOF, the Subscriber has executed
this Subscription Agreement on the __ day of June, 2012.

 

INDIVIDUAL INVESTOR:

 

_________________________________

 

PARTNERSHIP, CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER INVESTOR

 

_________________________________

(Name of Entity)

 

By: ______________________________

Name: ________________________

Title: ______________________________

Address:

 

Taxpayer Identification Number: _________________

 

ACCEPTANCE OF SUBSCRIPTION

 

(to be filled out only by the Company)

 

The Company hereby accepts the above application
for subscription for Shares on behalf of the Company.

 

Dated: __ day of ________2011

 

THE PAWS PET COMPANY, INC.

 

By: ______________________________

Name:

Title:

 

    	7

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