Document:

cei_ex101.htm

EXHIBIT 10.1
       
 FINAL RELEASE AND WAIVER AGREEMENT
  
 This Final Release and Waiver Agreement (“Agreement”) is made and entered into on November 3, 2022 (“Agreement Date”), by and between Camber Energy, Inc., a Nevada corporation (“Camber”), and Discover Growth Fund, LLC, a U.S. Virgin Islands limited liability company (“Discover”).
  
 Recitals
  
 A. Camber is currently in compliance with the NYSE American LLC (“Trading Market”) listing standards.
  
 B. Camber previously entered into certain Promissory Notes (collectively, the “Notes”) and Stock Purchase Agreements (collectively, the “Purchase Agreements”) with Discover for the purchase and sale of shares of Series C Redeemable Convertible Preferred Stock (“Preferred”) convertible into shares of Common Stock of Camber (“Common Stock”) pursuant to the Fifth Amended and Restated Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock filed by Camber with the Secretary of State of Nevada on November 8, 2021, as amended on October 28, 2022 (“Certificate”).
  
 C. As an accommodation to Camber and in order to help facilitate implementation of Camber’s business plans and continued trading on the Trading Market, and in exchange for the indemnity as provided herein, Discover is willing to waive all rights to receive additional Conversion Shares as provided herein.
  
 Agreement
  
 In consideration of the premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Camber and Discover agree as follows:
  
 I. Waiver of All Rights to Receive Additional Shares.
  
 A. No Further Conversion Shares. Notwithstanding any other provision of the Certificate, any of the Purchase Agreements or any other Transaction Document, Discover hereby absolutely and unconditionally waives and releases any and all rights to receive further or additional shares of Common Stock with respect to any and all shares of Preferred previously converted by Discover including, but not limited to, the right to deliver Additional Notices for more Conversion Shares under Section I.G.1.d of the Certificate.
  
 B. No Preferred Shares. The parties acknowledge and agree that Discover currently holds no remaining shares of Preferred, and as such has no ability to convert any additional shares of Preferred, and in no event will Discover be entitled to receive any more Conversion Shares. For the avoidance of doubt, Discover shall have the right to retain all shares of Common Stock previously delivered to it by Camber.
  
 C. No Conversion of Debt. Notwithstanding any other provision of the Notes or any other document, Discover hereby absolutely and unconditionally waives and releases any and all rights to convert all or any part of any Notes into Common Stock, and agrees not to convert or attempt to convert any portion of any Notes, at any particular price or at all.
  
 	 
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 II. General Release of Discover. Camber, on behalf of itself and on behalf of each of its predecessors, successors, parents, subsidiaries, shareholders, and affiliated and/or related companies, and each of its respective present and former officers, directors, shareholders, employees, representatives, business entities, executors, administrators, conservators, trustees, estates, assignors and assignees (collectively, the “Releasing Parties”) hereby knowingly and voluntarily fully and forever absolutely and irrevocably waive, release and discharge Discover, its Affiliates, predecessors, successors, parents, subsidiaries, sister companies, and affiliated and/or related companies and entities, and each of their respective present and former officers, directors, shareholders, partners, members, employees, representatives, agents, attorneys, advisors, business entities, executors, administrators, conservators, assignors and assignees and all parties acting through, under or in concert with them, and each of them, in their individual and representative capacities (collectively, the “Released Parties”) from any and all claims, charges, complaints, grievances, demands, liens, actions, suits, causes of action, obligations, controversies, debts, costs, indemnity, attorneys' fees, expenses, damages, judgments, orders, and liabilities of whatever kind and/or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, which have existed or may have existed, or which do exist or which hereafter can, shall or may exist as of the date this Agreement is executed, including without limitation any that are based upon, connected with, or otherwise arising out of or in any way relating to any Transaction Documents, the resale of Conversion Shares or any shares of Common Stock by Discover or its Affiliates, any application of state or federal securities laws, rules or regulations, any requirement that any of the Released Parties was or is required to register as a dealer under federal securities laws, and all matters related thereto (collectively, the “Released Claims”). The Releasing Parties, and each of them, expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights and benefits conferred by any law which would limit the scope of the release provided above. The Releasing Parties acknowledge that they or any of them may hereafter discover facts in addition to or different from those which they now know to be true with respect to the subject matters of the claims released herein, but hereby stipulate and agree that they have fully, finally, and forever settled and released any and all such claims, whether known or unknown, suspected or unsuspected, contingent or non-contingent, concealed or hidden, which now exist or heretofore existed upon any theory of law or equity now existing or coming into existence in the future, without regard to Discovery or existence of such different or additional facts.
  
 III. Indemnification of Discover. Camber will indemnify, defend, and hold harmless Discover, its Affiliates, any person who owns or controls Discover within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act (collectively, “Discover Parties” and each a “Discover Party”), and each of their officers, directors, managers, members, shareholders, partners, employees, representatives, advisors, agents and attorneys, from any and all losses, liabilities, obligations, claims, contingencies, damages, reasonable costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of defense, investigation and preparation (collectively, “Losses”) that any Discover Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by Camber in this Agreement or in the other Transaction Documents, (b) any action by Camber or a creditor or stockholder of Camber who is not an Affiliate of an Discover Party, or (c) any threatened, pending or completed action, suit, hearing, trial, investigation, proceeding or arbitration, whether civil, criminal or administrative, and whether formal or informal, based upon, connected with, or otherwise arising out of or in any way relating to any Transaction Documents, the resale of Conversion Shares or any shares of Common Stock by any Discover Party, the application of any state or federal securities laws, rules, or regulations to any Discover Party, or any actual or claimed requirement that any Discover Party was or is required to register as a dealer under federal securities laws, and all matters related thereto. Camber shall promptly pay as incurred the reasonable fees, costs and expenses directly to any attorney or expert engaged by the Discover Parties. In no event will Camber be liable for fees for more than one firm of attorneys (plus local counsel as applicable) to represent all Discover Parties. Each of the Discover Parties is an intended third-party beneficiary of this Agreement.
  
 	 
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 IV. Acknowledgments. Camber hereby acknowledges, agrees, represents and warrants to Discover Parties that: (a) Discover at all times fully and completely complied with all of its obligations under the Notes, the Purchase Agreements, the Transaction Documents and all other agreements between Camber and Discover; (b) all Delivery Notices and calculations provided by Discover to Camber with regard to Preferred were and are fully correct and accurate in all respects; and (c) Discover is not a dealer and has not acted as a dealer with respect to any shares of Preferred Stock, Common Stock, or securities of Camber.
  
 V. Representations and Warranties.
  
 A. Representations and Warranties by Camber. Camber hereby represents and warrants to, and as applicable covenants with, Discover as of the Agreement Date:
  
 1. Approval. The Board of Directors, Chief Executive Officer, Chief Financial Officer, attorneys and advisors of Camber have carefully read and reviewed this Agreement, and they find it to be in the best interests of Camber and its stockholders. The Board of Directors has unanimously approved this Agreement and authorized Camber to enter into this Agreement.
  
 2. Organization and Qualification. Camber is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Camber is not in violation or default of any of the provisions of its certificate of incorporation or bylaws, except as would not reasonably be expected to result in a material adverse effect on Camber.
  
 3. Authorization; Enforcement. Camber has the requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement has been duly authorized by all necessary action on the part of Camber and no further consent or action is required by Camber. This Agreement constitutes the valid and binding obligation of Camber, enforceable against Camber in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable law.
  
 	 
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 4. No Conflicts. The execution, delivery and performance of this Agreement by Camber does not and will not (a) conflict with or violate any provision of Camber’s certificate or articles of incorporation or bylaws, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of Camber, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing Camber debt or otherwise) or other understanding to which Camber is a party or by which any property or asset of Camber is bound or affected, (c) conflict with or result in a violation of any material law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Camber is subject (including U.S. federal and state securities laws and regulations), or by which any material property or asset of Camber or a Subsidiary is bound or affected, or (d) conflict with or violate the terms of any material agreement by which Camber is bound or to which any property or asset of Camber bound or affected; except in the case of each of clauses (b), (c) and (d), such as would not reasonably be expected to result in a material adverse effect on Camber.
  
 5. Filings, Consents and Approvals. Camber is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Camber of this Agreement, other than required federal and state securities filings and such filings and approvals as are required to be made or obtained under the applicable Trading Market rules in connection with the transactions contemplated hereby, each of which has been, or if not yet required to be filed will be, timely filed.
  
 B. Representations and Warranties by Discover. Discover hereby represents and warrants to Camber as of the Closing as follows:
  
 1. Organization; Authority. Discover is an entity validly existing and in good standing under the laws of the jurisdiction of its organization with full right, company power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by Discover of the transactions contemplated by this Agreement have been duly authorized by all necessary company or similar action on the part of Discover. This Agreement constitutes the valid and legally binding obligation of Discover, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (c) insofar as indemnification and contribution provisions may be limited by applicable law.
  
 	 
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 VI. General Provisions.
  
 A. Definitions. The parties acknowledge the accuracy of the Recitals set forth above, which are incorporated herein by reference. In addition to the terms defined elsewhere in this Agreement, capitalized terms that are not otherwise defined have the meanings set forth in the Certificate, the Notes, the Agreements and the related Transaction Documents (as defined in the Agreements).
  
 B. Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by Camber and Discover or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement will be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
  
 C. Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement will not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, will incorporate such substitute provision in this Agreement.
  
 D. Governing Law. All matters between the parties, including without limitation questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the laws of the U.S. Virgin Islands, without regard to the principles of conflicts of law that would require or permit the application of the laws of any other jurisdiction, except for corporation law matters applicable to Camber which will be governed by the corporate law of its jurisdiction of formation. The parties hereby waive all rights to a trial by jury. In any action, arbitration or proceeding, including appeal, arising out of or relating to any of the Transaction Documents or otherwise involving the parties, the prevailing party will be awarded its reasonable attorneys’ fees and other costs and expenses reasonably incurred in connection with the investigation, preparation, prosecution or defense of such action or proceeding.
  
 E. Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and will not be deemed to limit or affect any of the provisions hereof.
  
 F. Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise this Agreement and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendments hereto. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
  
 	 
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 G. Further Assurances. Each party will take all further actions and execute all further documents as may be reasonably necessary to implement the provisions and carry out the intent of this Agreement fully and effectively.
  
 H. Ratification. Except as expressly provided herein, the Notes and the Agreements are hereby ratified and affirmed in all respects, and remain in full force and effect. Except as expressly provided herein, the execution of this Agreement shall not operate as a waiver of any right, power or remedy of Discover, constitute a waiver of any provision of any of the Notes, Agreements, Certificate or any Transaction Document or serve to effect a novation of the obligations under the Notes, Agreements, Certificate or any Transaction Document. All of the obligations of Camber under this Agreement will constitute Secured Obligations under all of the Notes. Except as expressly provided herein, the Notes, Agreements and all Transaction Documents between Camber and Discover shall continue in full force and effect and nothing herein shall act as a waiver of any of Discover’s rights under any of the foregoing, or serve to effect a novation of the obligations thereunder. For the avoidance of doubt, nothing provided for in Section I above shall in any way effect any rights of any Affiliate of Discover with regard to any documents, instruments or securities held by any such Affiliate.
  
 I. Execution. This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by portable document format, facsimile or electronic transmission, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
      
 J. Entire Agreement. This Agreement contains the entire agreement and understanding of the parties, and supersedes all prior and contemporaneous agreements, term sheets, letters, discussions, communications and understandings, both oral and written, which the parties acknowledge have been merged into this Agreement. No party, representative, advisor, attorney or agent has relied upon any collateral contract, agreement, assurance, promise, understanding, statement or representation not expressly set forth herein or in the Notes, Purchase Agreements or Transaction Documents. The parties hereby absolutely, unconditionally and irrevocably waive all rights and remedies, at law and in equity, directly or indirectly arising out of or relating to, or which may arise as a result of, any Person’s reliance on any such statement or assurance.
  
 	 
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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories on the Agreement Date.
  
 	 Camber:
	  

	  
	  

	 CAMBER ENERGY, INC.
	  

	  
	  

	 By:
	  /s/ James A. Doris
	  

	 Name:
	  James A. Doris
	  

	 Title:  
	 Chief Executive Officer
	  

	  
	  
	  

	 Discover:
	  

	  
	  

	 DISCOVER GROWTH FUND, LLC
	  

	  
	  
	  

	 By: 
	 /s/ Sheniqua Rouse-Pierre
	  

	 Name: 
	 Sheniqua Rouse-Pierre
	  

	 Title:  
	 Treasurer of General Partner of Member
	  

  
 	 
	7EXHIBIT 4.1

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS PROMISSORY NOTE 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 OR OTHER APPLICABLE
EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal Amount: US$750,000.00	Issue Date: February 24, 2022
	Purchase Price: US$675,000.00	 

 

PROMISSORY
NOTE

 

FOR VALUE RECEIVED,
CREATIVE LEARNING CORPORATION, a Delaware corporation (hereinafter called the “Borrower”) (Trading Symbol: CLCN),
hereby promises to pay to the order of AJB Capital Investments LLC, a Delaware limited liability company, or registered
assigns (the “Holder”) the sum of US$750,000.00 (the “Principal”) together with guaranteed interest (the
“Interest”) on the Principal balance hereof in the amount of ten percent (10%) (the “Interest Rate”) per
calendar year from the date hereof (the “Issue Date”). All Principal and Interest owing hereunder, along with any and
all other amounts, shall be due and owing on August 24, 2022 (the “Maturity Date”). Interest shall accrue on a monthly
basis and is payable on the first of each month beginning April 1, 2022 or upon acceleration or by prepayment or otherwise; provided
that, any interest that has accrued between the Issue Date and April 1, 2022 shall be added proportionally to the interest payments
due between April 1, 2022 and August 1, 2022. Notwithstanding the foregoing, the final payment of Principal and Interest shall
be due on the Maturity Date. This Note may be prepaid in whole or in part as set forth herein. Any amount of Principal or Interest
on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) eighteen percent (18%) per annum and
(ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”).
Default Interest shall commence accruing upon an Event of Default and shall be computed on the basis of a 360-day year and the
actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock of the Borrower, $0.0001
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 Maturity Date may be extended
by the Borrower by notice to the Holder for up to six (6) months following the date of the original Maturity Date hereunder. In
the event that the Maturity Date is extended, the interest rate shall equal twelve percent (12%) per annum for any period following
the original Maturity Date, payable monthly.

 

    	 

    	 

    

 

This Note carries an original
issue discount of $75,000 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and
sale of the Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $675,000
computed as follows: the Principal Amount minus the OID.

 

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
also apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS 

 

1.1          Conversion
Right. The Holder shall have the right from time to time only following an Event of Default, and ending on 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, interest,
penalties, and all other amounts under this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a “Conversion”);
provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of
that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the
Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation
on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable
upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. 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 or Borrower’s transfer agent by the Holder in accordance with Section 1.4 below; provided that
the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result
in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on such conversion date
(the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of this Note,
the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option,
accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date,
provided however, that the Borrower shall have the right to pay any or all interest in cash plus (3) at the Holder’s
option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4)
at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

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1.2       
  Conversion Price.

 

(a)       Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal the lowest trading price (i) during the previous twenty (20) Trading Day period ending on the Conversion Date, or (ii)
during the previous twenty (20) Trading Day period ending on date of issuance of this Note. To the extent the Conversion Price
of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit
the consent of the stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor all
conversions submitted pending this adjustment. If the shares of the Borrower’s Common Stock have not been delivered within
three (3) business days to the Borrower or Borrower’s transfer agent, the Notice of Conversion may be rescinded. At any time
after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable by DWAC (including if the Borrower’s
transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock specified in a Notice
of Conversion), a 10% discount will apply for all future conversions under all Notes until DWAC delivery becomes available. If
in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible for
clearing deposit, an additional 15% discount shall apply for all future conversions under all Note until such chill is lifted.
Additionally, if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into
free trading shares after one hundred eighty-one (181) days from the Issue Date (other than as a result of the Holder’s status
as an affiliate of the Company), an additional 15% discount will be attributed to the Conversion Price. If the trading price cannot
be calculated for such security on such date in the manner provided above, the trading price shall be the fair market value as
mutually determined by the Borrower and the Holder. “Trading Day” shall mean any day on which the Common Stock is tradable
for any period on the OTC Pink, OTCQB or on the principal securities exchange or other securities market on which the Common Stock
is then being traded. The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with any
such issuance. Holder shall be entitled to deduct $500.00 from the conversion amount in each Notice of Conversion to cover Holder’s
deposit fees associated with each Notice of Conversion.

 

While this Note is outstanding,
at any time any third party has the right to convert monies owed to that third party (or receive shares pursuant to a settlement
or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount to market greater than the
Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the Holder, in Holder’s
sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this Note) until the earlier
of the date that this Note is no longer outstanding or the date that the Company no longer has securities or indebtedness outstanding
that is convertible into Common Stock at a discount to market pursuant. While this Note is outstanding, each time any third party
has a look back period greater than the look back period in effect under the Note at that time, including but not limited to under
Section 3(a)(9) and Section 3(a)(10), then the Holder, in Holder’s sole discretion, may utilize such greater number of look
back days until the earlier to occur of the date this Note is no longer outstanding or the security held by such third party is
no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business day of becoming aware of any
event that could permit the Holder to make any adjustment described in the two immediately preceding sentences.

 

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(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.

 

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

 

If at any time the Conversion
Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then the Conversion Price
hereunder shall equal such par value for such conversion and the Conversion Amount for such conversion shall be increased to include
Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount
to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion
shares as would have been issued had the Conversion Price not been subject to the minimum price set forth in this Section 1.2(c).

 

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1.3          Authorized
Shares. The Borrower covenants that during the period while any outstanding balance is owing hereunder or any conversion of
the Note is available, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free
from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the
Purchase Agreement. The Borrower is required at all times to have authorized and reserved four (4) times the number of shares that
is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)
(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s
obligations pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change
to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the
then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient
number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.
The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares
of Common Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the
Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions.

 

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

 

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 an Event of Default, by (A) submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New
York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

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

 

    	5

    	 

    

 

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

 

(e)       Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued
and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the
right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder
shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same,
any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce
the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection
with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice
of Conversion is received by the Borrower before 5:00 p.m., New York, New York time, on such date.

 

    	6

    	 

    

 

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

 

(g)       DTC
Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason, the
principal amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s and
Borrower’s expectation that any principal amount increase will tack back to the Issue Date) and the Conversion Price shall
be redefined to mean seventy percent (70%) multiplied by the Conversion Price that would otherwise be in effect, subject to adjustment
as provided in this Note.

 

(h)       Failure
to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which
failure shall be governed by such Section) the Borrower shall pay to the Holder $1,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder
or credit the Holder’s balance account with OTC for the number of shares of Common Stock to which the Holder is entitled
upon such Holder’s conversion of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages
will tack back to the Issue Date). Such cash amount shall be paid to Holder by the fifth day of the month following the month in
which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following
the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon
in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance
with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting
from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly,
the parties acknowledge that the liquidated damages provision contained in this Section 1.4(h) are justified.

 

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

 

    	7

    	 

    

 

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, (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, including Rule 144 under the Act (or a successor rule) (“Rule 144”) or other applicable exemption,
or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Holder 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 or other applicable exemption without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that
has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

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

 

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

 

    	8

    	 

    

 

1.6          Effect
of Certain Events.

 

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

 

(b)      Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all
or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.6(b) unless (a) it first gives, to the extent practicable, fifteen (15) days prior written notice (but in any event at least
ten (10) 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.

 

    	9

    	 

    

 

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

 

(d)      Adjustment
Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance
with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued in an Exempt Issuance
(as defined in the Purchase Agreement), any shares of Common Stock for a consideration per share (before deduction of reasonable
expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect
on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately
upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower
in such Dilutive Issuance.

 

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

 

    	10

    	 

    

 

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 in an Exempt Issuance), 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.

 

1.7          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.

 

    	11

    	 

    

 

1.8          Prepayment.
The Borrower may at any time pay or prepay all or any portion of the amounts outstanding hereunder by making a payment to the Holder
of an amount in cash equal to the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

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 financial institutions
or other lenders incurred in the ordinary course of business, (c) borrowings, the proceeds of which shall be used to repay this
Note, (d) borrowings which are expressly subordinated to this Note, or (e) purchase money indebtedness secured by a first lien
on the assets acquired with the proceeds of such indebtedness, including without limitation vehicle or equipment loans.

 

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

 

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

 

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

 

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

 

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

 

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 and such failure continues for a period of five (5) days after written notice thereof
to the Borrower from the Holder.

 

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3.2          Conversion
and the Shares. The Borrower (i) 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, (ii) 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, (iii) 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, (iv) 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, (v) fails to remain current in its obligations
to its transfer agent, (vi) causes a conversion of this Note to be delayed, hindered or frustrated due to a balance owed by the
Borrower to its transfer agent, (vii) fails to repay Holder, within forty eight (48) hours of a demand from the Holder, any amount
of funds advanced by Holder to Borrower’s transfer agent in order to process a conversion, (viii) fails to reserve sufficient
amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails to provide a Rule 144 opinion letter from
the Borrower’s legal counsel to the Holder covering the Holder’s resale into the public market of the respective conversion
shares under this Note, within two (2) business days of the Holder’s submission of a Notice of Conversion to the Borrower
(provided that the Holder must request the opinion from the Borrower at the time that Holder submits the respective Notice of Conversion
and the date of the respective Notice of Conversion must be on or after the date which is six (6) months after the date that the
Holder funded the Purchase Price under this Note), and/or (x) an exemption under Rule 144 is unavailable for the Holder’s
deposit into Holder’s brokerage account and resale into the public market of any of the conversion shares under this Note
at any time after the date which is six (6) months after the date that the Holder funded the Purchase Price under this Note (other
than as a result of Holder’s status as an affiliate of the Borrower).

 

3.3          Conversion
of Preferred Stock. The Borrower fails to cause, within sixty (60) days of the Effective Date, the conversion of sufficient
of its outstanding preferred stock into, or otherwise issue, shares of Common Stock such that, following the issuance of the Commitment
Fee Shares (as defined in the Purchase Agreement) to the Buyer, Buyer would not be in possession of an amount of Common Stock greater
than 4.99% of the issued and outstanding Common Stock of the Company.

 

3.4         Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any
collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of seven (7) calendar
days after written notice thereof to the Borrower from the Holder.

 

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

 

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

 

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

 

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

 

3.9          Delisting
of Common Stock. The Borrower shall fail to maintain the listing or quotation of the Common Stock on at least one of the OTC
Pink, OTCQB, OTCQX, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement
exchange and such failure continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.

 

3.10        Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act (including
but not limited to becoming delinquent in its filings); and/or the Borrower shall cease to be subject to the reporting requirements
of the Exchange Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.18        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 (as defined herein), 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) or any other third party, including, without
limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the agreements and instruments
defined as the Transaction Documents. Each loan transaction between Borrower and Holder will be cross-defaulted with each other
loan transaction and with all other existing and future debt of Borrower to the Holder.

 

3.19        Bid
Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero
market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB, OTCQX, or an equivalent replacement
exchange) and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.

 

3.20        OTC
Markets Designation. OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat
Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’
(Exclamation Mark Sign) and such breach continues for a period of five (5) days after written notice thereof to the Borrower from
the Holder.

 

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

 

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

 

3.23        Delisting
or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock (i)
is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level of
the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American and such breach continues
for a period of five (5) days after written notice thereof to the Borrower from the Holder.

 

3.24        UPON
THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3 OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY AND AUTOMATICALLY
DUE AND PAYABLE WITHOUT DEMAND, PRESENTMENT, OR NOTICE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS
HEREUNDER, AN AMOUNT EQUAL TO: (A) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN OF SECTION 3.2, 3.9, 3.10,
3.16, 3.17, 3.19, 3.20, 3.22 OR 3.23, 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, MULTIPLIED BY TWO (2); OR (B) IN THE EVENT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED
IN ANY OTHER SECTION, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS (X) ACCRUED AND UNPAID INTEREST ON THE UNPAID
PRINCIPAL AMOUNT OF THIS NOTE TO THE MANDATORY PREPAYMENT DATE, PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED
TO IN CLAUSES (W) AND/OR (X) PLUS (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF (THE THEN
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT PLUS THE AMOUNTS REFERRED TO IN CLAUSES (X), (Y) AND (Z)
SHALL COLLECTIVELY BE KNOWN AS THE “DEFAULT SUM”) or (ii) at the option of the Holder, the “parity value”
of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common
Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I,

 

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treating the Trading
Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest
applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in
which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest trading price for the Common
Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory
Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable,
all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies
available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or 3.19 occurs or is continuing after the nine (9)
month anniversary of this Note, then the principal amount of the Note shall increase by Fifteen Thousand and No/100 United States
Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the
Issue Date) and the Holder shall be entitled to use the lowest trading price during the delinquency period as a base price for
the conversion and the Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Conversion Price
that would otherwise be in effect, subject to adjustment as provided in this Note. If this Note is not
paid at Maturity Date, then the outstanding principal due under this Note shall increase by Fifteen Thousand and No/100 United
States Dollars ($15,000).

 

The Holder shall have the right at any time
after an Event of Default occurs under this Note to require the Borrower, to immediately issue, in lieu of the Default Amount and/or
Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or Default Sum divided by the
Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial ownership limitations
contained herein). This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without
the need for any party to give any notice or take any other action.

 

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

 

If the Holder shall
commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, the
Holder shall be entitled to use the lowest trading price during the delinquency period as a base price for the conversion and the
Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Conversion Price that would otherwise
be in effect, subject to adjustment as provided in this Note.

 

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.

 

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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, electronic mail, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by electronic mail or facsimile, with accurate confirmation generated
by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

 

If to the Borrower, to:

 

Creative Learning Corporation

14 Kings Highway

Haddonfield, NJ 08033

Milpitas, CA 94035

Attn: John Possumato

E-mail: john@driveitaway.com

 

If to the Holder:

 

AJB Capital Investments LLC

4700 Sheridan Street, Suite J

Hollywood, FL 33021

Attn: Ari Blaine

Email: ari@ajbcapitalinvestments.com

 

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

 

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

 

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

 

4.6          Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of Wyoming 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 located in the State of New York or federal courts located in the State of New York.
The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and
shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall
be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of
this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified
to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other
Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.

 

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

 

    	20

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

4.15        Piggyback
Registration Rights. The Borrower shall provide Holder with the option to include on each registration statement that the Borrower
files with SEC all shares issuable upon conversion of this Note, other than a registration statement on Form S-8 or Form S-4. The
Borrower’s failure to comply with this Section 4.15 shall result in liquidated damages of twenty-five percent (25%) of the
outstanding principal balance of this Note, but not less than Fifteen Thousand and No/100 United States Dollars ($15,000), being
immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note.

 

[signature page follows]

 

    	22

    	 

    

 

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

 

	 	CREATIVE LEARNING CORPORATION
	 	 
	 	By:	/s/John Possumato
	 	Name:	John Possumato
	 	Title: 	Chief Executive Officer

 

    	 

    	 

    

 

EXHIBIT A

NOTICE OF CONVERSION

 

The undersigned hereby elects
to convert $__________ principal amount of the Note (defined below) together with $ of accrued and unpaid interest thereto,
totaling $ into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common
Stock”) as set forth below, of Creative Learning Corporation, a Delaware corporation (the “Borrower”), according
to the conditions of the convertible note of the Borrower dated as of February 24, 2022 (the “Note”), as of the date
written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

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

 

Name of DTC Prime Broker:

Account Number:

 

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

 

	 	 	Name: [NAME]	 	 
	 	 	Address: [ADDRESS]	 	 
	 	 	 	 	 
	 	 	Date of Conversion:	 	__________________
	 	 	Applicable Conversion Price: $	 	$_________________
	 	 	Number of Shares of Common Stock	 	 
	 	 	 	to be Issued Pursuant to	 	 
	 	 	 	Conversion of the Notes:	 	__________________
	 	 	Amount of Principal Balance Due	 	 
	 	 	 	remaining Under the Note after	 	 
	 	 	 	this conversion:	 	__________________
	 	 	Accrued and unpaid interest remaining:	 	__________________

 

	 	 	[HOLDER]	 
	 	 	 	 
	 	 	By:	 	 
	 	 	Name:	[NAME]	 
	 	 	Title:	[TITLE]	 
	 	 	Date:	[DATE]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00350-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00350-of-00352.parquet"}]]