Document:

EX-4.18

 Exhibit 4.18 

[***] Certain information in this document has been excluded pursuant to 

Regulation S-K, Item 601(b)(10). Such excluded information is not material and 

is the type that the registrant treats as private or confidential. 

MANUFACTURING AND SUPPLY AGREEMENT 

(“Agreement”) 
 between

 Ascendis Pharma A/S 

Tuborg Boulevard 12 
 2900 Hellerup

 Denmark 
 (hereinafter
referred to as “Ascendis”) 
 and 

NOF CORPORATION 
 20-3, Ebisu 4-chome, 

Shibuya-ku, 

Tokyo, 150-6019 

Japan 
 (hereinafter referred to as
“NOF”) 
 (hereinafter individually referred to as “Party” and collectively as “the Parties”) 

 

							
	 1.
	 	INTRODUCTION	  	 	3	 
	 2.
	 	DEFINITIONS	  	 	3	 
	 3.
	 	SUBJECT MATTER OF THE AGREEMENT	  	 	5	 
	 4.
	 	OBLIGATIONS OF THE PARTIES	  	 	5	 
	 5.
	 	GOVERNANCE	  	 	7	 
	 6.
	 	COMMUNICATIONS	  	 	8	 
	 7.
	 	SUBCONTRACTING	  	 	8	 
	 8.
	 	BATCH SIZE AND CAPACITY	  	 	9	 
	 9.
	 	FORECAST AND PURCHASE ORDERS	  	 	9	 
	 10.
	 	DELIVERY AND RELEASE	  	 	10	 
	 11.
	 	STORAGE	  	 	11	 
	 12.
	 	PURCHASE PRICE AND PAYMENT TERMS	  	 	11	 
	 13.
	 	NON-COMPLIANCE	  	 	12	 
	 14.
	 	RECALL	  	 	13	 
	 15.
	 	REGULATORY COMPLIANCE AND SUPPORT	  	 	13	 
	 16.
	 	TERM AND TERMINATION	  	 	14	 
	 17.
	 	CONFIDENTIALITY	  	 	15	 
	 18.
	 	INTELLECTUAL PROPERTY RIGHTS	  	 	16	 
	 19.
	 	INSURANCE AND LIABILITY	  	 	16	 
	 20.
	 	REPRESENTATIONS AND WARRANTIES	  	 	17	 
	 21.
	 	ASSIGNABILITY AND SUB-CONTRACTING	  	 	18	 
	 22.
	 	FORCE MAJEURE	  	 	19	 
	 23.
	 	ARBITRATION AND LAW	  	 	19	 
	 24.
	 	MISCELLANEOUS	  	 	20	 

 APPENDICES 
  

	1	 Product 

  

	2	 Purchase Price 

  

	3	 Quality Agreement 

  

	4	 Specifications 

  

	5	 [***] 

  

	6	 List of applicable patents 

 

	7	 Notification by NOF from 31 July 2019 

  
 2 

	1.	 INTRODUCTION 

WHEREAS: 
  

	 	(A)	 The Parties have agreed to enter into a commercial supply partnership with the objective to guarantee delivery
of agreed quantities of Product of the specified quality at agreed times. 

  

	 	(B)	 The Parties have agreed to enter into this Manufacturing and Supply Agreement to set forth the general terms
and conditions on which the supply of Product will be carried out. 

  

	2.	 DEFINITIONS 

“Affiliate” shall mean any corporation, company or other legal entity which is controlled by a Party, controls a Party or is under common
control with a Party. In this definition, “control” means the direct or indirect possession of more than fifty percent (50%) of the shares or ownership interest representing the voting right for the election of directors or persons
performing similar functions for such corporation, company or other legal entity. 
 “Agreement” shall mean this MANUFACTURING AND SUPPLY
AGREEMENT. 
 “Appendix” shall mean any Appendix as amended, dated, signed and renumbered (e.g. Appendix 1.1, 2.1, 3.1... and so forth)
from time to time. 
 “Ascendis Product” shall mean TransCon PTH (1-34) drug product. 

“Background Technology” shall mean the full range of NOF’s Intellectual Property Rights and factual knowledge (i) existing on the
Effective Date of this Agreement and/or (ii) licensed to, acquired or developed by NOF outside or under this Agreement but during the term of this Agreement, which NOF is free to dispose of. 

“Business Day(s)” shall mean any working day(s) for both Parties (with the exclusion of Saturday and Sunday) on which banks are normally open
in either Japan or Denmark as may be applicable. 
 “Calendar Quarter” shall mean each three (3) successive calendar months starting
on 1 January, 1 April, 1 July or 1 October, respectively. 
 “cGMP” shall mean Current Good Manufacturing Practices as
promulgated under the European Directive 2003/94/EC and the US Federal Food Drug and Cosmetic Act, CFR Title 21. 

  
 3 

 “Confidential Information” shall mean any proprietary information, samples, technical data,
or trade secrets or Know-how, including, but not limited to, research and development plans, products, services, lists of collaborators and corporate partners, markets, developments, inventions, processes,
formulas, technology, marketing, finances or other business information disclosed by either Party (the “Discloser”) (either directly or indirectly in writing, orally or otherwise) to the other Party (the “Recipient”). 

“Delivery” shall mean the transfer of Product at the point where risk and responsibility is transferred from NOF to Ascendis according to the
agreed Incoterms. 
 “Delivery Date” shall mean the date of Delivery of Product by NOF to Ascendis or its designee. 

“Effective Date” shall mean the date on which this Agreement becomes effective in accordance with Article 16.1. 

“Final Release” shall mean the final release for delivery of Product by Ascendis or its designated representative. 

“Health Authorities” shall mean any national or international health authority including but not limited to those of the European Union,
Japan, and the United States. 
 “Intellectual Property Rights” or “IPR” shall mean without limitation, proprietary information,
patents, patent applications, formulae, trade-marks, trade-mark applications, trade-names, inventions, copyright, industrial designs etc. 
 “Joint
Steering Committee” or “JSC” shall have the meaning assigned to it in Article 5.1. 

“Know-how” shall mean any and all present and future data concerning Ascendis, Product, and any
derivatives hereof e.g., but not limited to production know-how, quality specifications, analytical data, data indicated in a DMF, patents, use-, packaging- and
improvement data, which data are possessed, performed and/or developed by either Ascendis or NOF and/or exchanged under any confidentiality agreement between the parties or any other agreement entered into between the parties during the negotiations
prior to execution of this Agreement or during the term of this Agreement. 
 “PPQ” shall mean the Process Performance Qualification of the
manufacturing process of the Product, as defined in Appendix 1. 
 “Product” shall mean PEG maleimide “[***]” as stated in
Appendix 1. 
 “Propyl Amine” shall mean [***] 

“Purchase Order” shall mean an order submitted by Ascendis according to Section 9.5 specifying Ascendis’ purchase order number,
required quantities of Product and requested date of delivery. 
 “Purchase Price” shall mean the price agreed to be paid by Ascendis to
NOF as set forth in Appendix 2. 

  
 4 

 “Quality Agreement” shall mean the agreement set out in Appendix 3 hereto. 

“Release Documentation” shall be the documentation which NOF shall provide to Ascendis following NOF’s internal release of the Product.
Such documentation shall contain the following: Certificate of Analysis (CoA), Certificate of Conformity (CoC), list of deviations and out of specification (OOS) results, version history for Master Batch Record, certificates of origin in English.
Further details on the requirements for such documentation are specified in the Quality Agreement (Appendix 3). 
 “Services” shall mean
the manufacture and supply of Product as set out in this Agreement. 
 “Specifications” shall mean the specifications of
Products as set forth in Appendix 4. 
 “Year” shall mean the NOF’s financial year, which runs from 1 April to 31 March. 

 

	3.	 SUBJECT MATTER OF THE AGREEMENT 

 

	 	3.1.	 This Agreement covers PPQ, manufacture and supply by NOF of Product to Ascendis for commercial use worldwide as
part of the Ascendis Product. This Agreement thus covers the PPQ batches and all subsequent batches delivered by NOF for commercial use. 

  

	 	3.2.	 NOF hereby undertakes, upon Ascendis’ request, to synthesize, manufacture, analyse, quality control,
label, package and deliver the Product to Ascendis, in accordance with the terms and conditions of this Agreement; and Ascendis will from time to time place Purchase Orders for Product according to forecasts as set forth in Article 9. Operations
shall take place in compliance with the Quality Agreement. 

  

	4.	 OBLIGATIONS OF THE PARTIES 

 

	 	4.1.	 NOF hereby undertakes to supply Product in accordance with the Specifications to Ascendis on the terms and
conditions agreed upon hereunder, and Ascendis hereby undertakes to purchase such Product in the quantities ordered by Ascendis from time to time. 

  

	 	4.2.	 Ascendis is not bound to grant any kind of exclusivity to NOF under this Agreement, but will be required to
satisfy its Purchase Requirements pursuant to Article 9. 

  

	 	4.3.	 In the performance of the Services, NOF shall comply with cGMP and all other relevant EU, UK, US and Japanese
rules and regulations. NOF shall also comply with relevant ICH guidelines. 

  
 5 

	 	4.4.	 If Ascendis’ conducting clinical trials with—or marketing of—Ascendis Product in China or any
member state of the Organisation for Economic Co-operation and Development (“OECD”), either in its own name or through a partner, will oblige Ascendis to cause NOF to comply with rules and
regulations not specifically mentioned in this Agreement and not specifically exempt according to clause 4.7, the Parties will discuss in good faith how NOF may comply with such rules, and the cost and any fees, if any, will be borne by [***].

  

	 	4.5.	 If Ascendis’ conducting clinical trials with – or marketing of—Ascendis Product, either in its
own name or through a partner, in any country not covered by clause 4.4 above will oblige Ascendis to cause NOF to comply with rules and regulations not specifically mentioned in this Agreement, the Parties will discuss in good faith whether or not
and how NOF will comply with such rules, and the cost and any fees, if any, that will be borne by [***]. 

  

	 	4.6.	 NOF and Ascendis shall discuss and liaise regarding the present status of the manufacturing and analysis of
Product on a continuous basis. Upon Ascendis’ request NOF shall inform Ascendis of the present status and the results obtained. 

  

	 	4.7.	 Subject to the provisions of Section 15.2, during and following the term of this Agreement, NOF shall use
its best efforts to make available any and all documentation regarding the Product under “Strict Confidential” basis, as defined in CONFIDENTIALITY AGREEMENT entered into by the Parties on [***] which is required for a regulatory body to
which Ascendis may apply for registration of the Ascendis Product, but only to the extent such disclosure is, reasonably necessary for the application and to ensure compliance with cGMP and other applicable requirements. 

 

	 	4.8.	 NOF shall, up to [***], during the term of this Agreement grant Ascendis [***] access (upon reasonable notice)
to visit NOF’s premises for routine audits of facilities, equipment, procedures, records and personnel. Ascendis shall also be allowed to perform for-cause audits upon [***] notice, such reasonable causes
to be defined in the Quality Agreement. 

  

	 	4.9.	 NOF shall during the term of this Agreement allow inspectors from Health Authorities (possibly accompanied by
Ascendis staff), to perform the required inspections pursuant to legal, administrative or judicial action. NOF shall submit any observations relevant to the manufacturing or analytical control of Products from such inspections to Ascendis without
delay. 

  

	 	4.10.	 On the request of Ascendis, NOF shall allow representatives from Ascendis collaboration partners such as
licensees, distributors (possibly accompanied by Ascendis staff), to inspect NOF’s premises upon prior signed Confidentiality Agreement of such collaboration partners. Such inspections will be strictly related to the manufacturing or analytical
control of Products. If Products are implicated in regulatory inspection findings during audits initiated by authorities or other third parties, or if such findings are otherwise relevant for the manufacturing or analytical control of Products NOF
shall notify Ascendis without delay. 

  

	 	4.11.	 [***]. 

  
 6 

	 	4.12.	 In case of quality related issues, NOF shall allow [***] extended access to its [***], located at [***], to
observe manufacturing and review documents related to GMP system and Ascendis production batches when NOF is manufacturing for Ascendis (hereinafter the “PIP”), provided Ascendis notifies NOF at least [***] in advance. If the notified date
of arrival would conflict with a planned visit by a third party or internal meeting, NOF may postpone by up to [***]. NOF will provide the PIP with reasonable office space within the [***] and the PIP shall have access to such office space during
regular working hours. The PIP shall comply with any and all confidentiality, security, safety, quality or similar guidelines that apply to persons present in the facility and that are communicated by NOF. 

 

	 	4.13.	 NOF shall not implement any change in [***] without having obtained Ascendis’ prior written approval,
unless such change is mandated by regulatory changes, in which case NOF shall notify Ascendis of the nature of the change. 

  

	 	4.14.	 Post-approval changes not mandated by regulatory changes and not based on Ascendis’ request shall be
implemented at [***]. 

  

	 	4.15.	 If changes in applicable regulatory requirements coming into force after the Effective Date necessitate a
change in the processes or the Specifications, the Parties shall in good faith discuss how to share additional costs. 

  

	 	4.16.	 In the event Ascendis requests a change in the Product or manufacturing of the Product, and NOF can implement
the change, [***] shall [***] cost of implementing such change, as well as other post-approval changes reasonably requested by Ascendis and acceptable to NOF. 

 

	 	4.17.	 NOF agrees to keep Ascendis promptly informed of any action by, or notification or other information, which it
receives (directly or indirectly) from any governmental or regulatory authority, which raises any concerns regarding the safety or efficacy of Product or any medicinal products containing Product. 

 

	 	4.18.	 Ascendis agrees to keep NOF informed of notification of any action by, or notification or other information
which it receives (directly or indirectly) from any governmental or regulatory authority, which raises any concern regarding safety in the handling of Product. 

 

	 	4.19.	 NOF shall endeavour to live up to certain key performance indicators (“KPIs”) when delivering the
Services over time, including [***]. 

  

	5.	 GOVERNANCE 

  

	 	5.1.	 The Parties shall form a Joint Steering Committee (JSC) comprised of [***] members from each Party, including
at least [***]. 

  

	 	5.2.	 The JSC shall meet at least [***] and shall discuss and evaluate the mutual collaboration and shall in good
faith attempt to resolve any disputes in connection with the Agreement. Each Party may call for an ad hoc teleconference as such Party deems necessary. As agreed between the Parties in each case, the meetings of the JSC may be carried out by
teleconference, video conference or face-to-face, as the case may be, provided however that the Parties endeavour to meet face to face at least [***].

  
 7 

	 	5.3.	 [***]. 

  

	 	5.4.	 Written minutes of JSC meetings must be made alternately by each Party and must be circulated for comments no
later than [***] after each meeting. 

  

	 	5.5.	 [***]. 

  

	6.	 COMMUNICATIONS 

 

	 	6.1.	 The Parties agree that electronic communications (email) are acceptable for exchanging forecasts, Purchase
Orders, order confirmations, agendas, meeting minutes and other information of an operational nature. Legal notices shall be delivered physically by courier. 

  

	 	6.2.	 The Parties shall each designate a primary logistics contact person, and NOF ́s European entity, NOF
Europe GmbH (hereinafter “NOF Europe”) shall facilitate communication between the Parties regarding forecasts, orders, delivery and shipping. 

  

	 	6.3.	 Subject to further details in the Quality Agreement, the Parties shall each designate a primary quality contact
person and NOF Europe shall facilitate communication between the Parties regarding quality related matters, except in the event of urgent matters, in which case the designated quality persons may contact each other directly. 

 

	7.	 SUBCONTRACTING 

 

	 	7.1.	 Any subcontracting of validated processes of the Services from NOF to a third party manufacturer shall be
subject to Ascendis’ prior written approval. 

  

	 	7.2.	 In case NOF wishes to subcontract a non-validated process of the
Services, or change a subcontractor performing a non-validated process of the Services, NOF shall inform Ascendis prior to implementing the change. Such change may, subject to the Quality Agreement, require
Ascendis’ prior written approval. 

  

	 	7.3	 In case NOF requests approval from Ascendis of a change request regarding subcontracting pursuant to
Section 7.1, 7.2 or ”NOF proposed changes” in the Quality Agreement, such request shall be sent in writing to all of Ascendis’s appointed members of the JSC, and Ascendis shall notify NOF whether it approves such change or not
within [***] of having confirmed receipt of the request, such confirmation shall be notified to NOF in writing or by e-mail and not to be unreasonably

  
 8 

	 	
withheld and in no event later than [***] of the date of the request. Ascendis shall be deemed to have approved the request if Ascendis fails to notify within the said period. If Ascendis rejects
such change, the Parties shall discuss and agree how to proceed with the implementation of such change in good faith and apply their best efforts not to cause any delay of production of the Product. However, NOF shall not have any liability for any
Product supply delay caused by Ascendis’s rejection or negligence of the discussion. 

  

	8.	 BATCH SIZE AND CAPACITY 

 

	 	8.1.	 From the Effective Date, Product shall be manufactured using NOF’s [***] and delivered in a batch size
corresponding to [***], providing an expected yield of Product in the range of [***]. 

  

	 	8.2.	 Manufacturing in the [***], NOF guarantees ability to deliver up to [***]. 

 

	 	8.3.	 The Parties agree to mutually discuss options to secure flexibility in the supply of Product and mitigate the
risk of shortages in case Ascendis’ actual needs turn out lower or higher than forecasted. 

  

	 	8.4.	 If required, and upon mutual agreement, NOF shall qualify an alternative manufacturing facility (another NOF
site or a CMO) as backup. Relevant cost should be covered by [***]. 

  

	9.	 FORECAST AND PURCHASE ORDERS 

 

	 	9.1.	 Long Term Forecast 

[***], Ascendis shall provide NOF with a non-binding written rolling forecast for required volumes of
Product for the following [***] period. 
  

	 	9.2.	 Purchase commitments for PPQ batches and Post PPQ batches 

Upon the execution of this Agreement, Ascendis commits to purchasing [***] PPQ batches. 

Provided that Ascendis obtains marketing approval for the Ascendis Product, Ascendis shall for every [***] during the term of this Agreement,
commencing with the [***] after the completion of the PPQ, either (i) order at least [***] for delivery in [***] or (ii) pay to NOF an amount equal to [***] of the price of [***] of Product. 

 

	 	9.3.	 Rolling [***] forecast  

For purchases following the [***], Ascendis shall, in each of the months of [***], provide NOF with a partially binding rolling forecast
showing Ascendis’ expected requirements for Product ([***]) to be delivered under this Agreement during the following [***]. 

  
 9 

 Until [***] the Ascendis Product, the forecast for [***] will be considered fully binding
on the Parties, i.e. NOF commits to deliver and Ascendis commits to purchase the forecasted quantity. The forecast for [***] may not deviate from the previous forecast by more than [***]. The forecast for [***] may be adjusted as Ascendis sees fit.

 From the [***] the Ascendis Product, the forecast for [***] will be considered fully binding on the Parties, i.e. NOF commits to deliver
and Ascendis commits to purchase the forecasted quantity. The forecast for [***] may not deviate from the previous forecast by more than [***]. The forecast for [***] may be adjusted as Ascendis sees fit. 

If Ascendis fails to purchase the volume of Product provided in such binding forecast, then [***]. 

 

	 	9.4.	 [***] of Intermediates 

NOF shall at all times [***] of [***]. If, at any time, [***] of [***] should expire, e.g. due to cancellations of orders for Product,
Ascendis shall purchase such expired volumes of [***], at a price corresponding to the price of [***]. 
  

	 	9.5.	 Purchase Orders 

Ascendis shall from time to time place Purchase Orders with NOF on the terms agreed herein. A Purchase Order shall [***]. Ascendis may also
place Purchase Orders for quantities beyond the binding forecast, and NOF shall use [***] to deliver such additional quantities, but shall not be obliged to do so unless NOF confirms the full Purchase Order. Ascendis shall on each Purchase Order
specify the required Delivery Date which shall be no earlier than [***] from submission of each Purchase Order. NOF shall confirm such Purchase Order(s) in writing no later than [***] upon receipt of said Purchase Orders [***]. 

 

	10.	 DELIVERY AND RELEASE 

 

	 	10.1.	 NOF shall deliver Product ordered under Article 8 in the quantities agreed and under the common understanding
by the Parties that it is of the essence to Ascendis that NOF observes Delivery Dates and that Product delivered under this Agreement is in accordance with the Specifications and the Quality Agreement. 

 

	 	10.2.	 Delivery of a quantity of Product within [***] of the ordered quantity shall be deemed acceptable, and Ascendis
shall pay for the delivered quantity. 

  

	 	10.3.	 NOF bears the responsibility towards Ascendis that any required conditions for storage and transportation of
the Product as specified in the Quality Agreement are fulfilled until Delivery thereof to Ascendis or its designee. 

  

	 	10.4.	 Product shall be delivered to Ascendis or its designee [***] according to Incoterms 2010, packed in accordance
with the requirements set out in the Quality Agreement, at either the address of 

  

	 	a)	 [***], or 

  
 10 

	 	b)	 [***], or 

  

	 	c)	 such other address as Ascendis may specify in writing 

 

	 	10.5.	 NOF shall no later than [***] prior to the confirmed Delivery Date forward the Release Documentation for
Ascendis to review. Following receipt of the Release Documentation, Final Release shall be performed by Ascendis’ Qualified Person, such Final Release not to be unreasonably withheld. Delivery is subject to Final Release except in the event
that Ascendis requests for shipment in Quarantine (as defined in the Quality Agreement). 

  

	 	10.6.	 NOF shall deliver on the confirmed Delivery Date as set forth in Article 9.5, or no later than [***] after
receiving notification of Final Release, whichever is later. 

  

	 	10.7.	 Any delay in delivery of the Product and/or Release Documentation shall be notified to Ascendis no later than
[***] after the delay has become apparent to NOF, including a description of the cause. NOF shall [***] solve the issues and shall confirm a new Delivery Date to Ascendis as soon as possible. 

 

	 	10.8.	 If Ascendis finds that the Release Documentation does not comply with the Specifications or with any other
requirement under this Agreement, Ascendis shall notify NOF in writing of Ascendis’ observations with respect to the non-compliance without undue delay after receipt of such documentation, provided that
failure by Ascendis to do so shall not imply any loss of rights or remedy for Ascendis under this Agreement or at law. 

  

	11.	 STORAGE 

  

	 	11.1.	 Storage by NOF of Product shall be carried out under fail-safe conditions, including but not limited to alarm,
emergency power supply, etc. 

  

	 	11.2.	 NOF shall, upon Ascendis’ written request, store released Product in quantities up to [***] for up to
[***] following the Delivery Date. [***]. 

  

	12.	 PURCHASE PRICE AND PAYMENT TERMS 

 

	 	12.1.	 Ascendis will pay to NOF the Purchase Price for Product. The Purchase Price for Product is listed in Appendix
2. 

  

	 	12.2.	 The agreed Purchase Price for Product is based on [***] and [***]. The Parties shall discuss in good faith
whether the Purchase Price shall be adjusted if [***]. 

  
 11 

	 	12.3.	 NOF’s price for the Services [***]. If NOF is obligated by law to charge any value added and/or similar
tax to Ascendis, NOF shall ensure that if such value-added and/or similar tax is applicable, that it is invoiced to Ascendis in accordance with applicable rules so as to allow Ascendis to reclaim such value-added and/or similar tax from the
appropriate government authority. Neither Party is responsible for taxes on the other Party’s income or the income of the other Party’s personnel or subcontractors. If Ascendis is required by government regulation to withhold taxes for
which NOF is responsible, Ascendis will deduct such withholding tax from payment to NOF and Ascendis will provide to NOF a valid tax receipt in NOF’s name. If NOF is exempt from such withholding taxes as a result of a tax treaty or other
regime, NOF shall provide to Ascendis a valid tax treaty residency certificate or other tax exemption certificate at a minimum of [***] prior to payment being due. Without prejudice to any existing remedy NOF may have at law or contract, if Ascendis
fails to pay on the due date any undisputed amount which is payable to NOF hereunder, then NOF may charge Ascendis a late payment fee not to exceed [***] on any unpaid amounts each [***] (or part thereof) such payment is late or the highest interest
rate permissible under applicable law, whichever is lower. 

  

	 	12.4.	 NOF shall invoice Ascendis for Product [***] or [***], whichever event comes first. 

 

	 	12.5.	 [***]. 

  

	 	12.6.	 Payments by Ascendis will be made in [***] after receipt of invoice by Ascendis, [***]. Any invoices covered by
credit insurance obtained by Ascendis will be payable [***]. 

  

	13.	 NON-COMPLIANCE 

 

	 	13.1.	 If upon review of the Release Documentation or up to [***] after Delivery, Ascendis finds that Product does not
conform to the terms and conditions of this Agreement, including, without limitation, the Specifications and/or Quality Agreement and/or cGMP, Ascendis shall without undue delay notify NOF hereof in writing, stating Ascendis’ observations with
respect to the non-compliance. For latent defects (as defined in the Quality Agreement), Ascendis shall notify NOF within a time limit as set out in the Quality Agreement. 

 

	 	13.2.	 NOF shall within [***] calculated from the day on which such written notification or complaint has been
received by NOF, inform Ascendis whether NOF agrees or not to the notification or complaint filed. If such response is not given within the above-mentioned [***] it is understood that NOF agrees to said notification or complaint.

  

	 	13.3.	 In the event of a dispute as to the acceptance of a batch of Product, the Parties agree to seek an amicable
settlement by way of discussions between quality assurance representatives from either Party. If the dispute is not resolved amicably within [***] from Ascendis’ notice mentioned in Article 13.1, the issue may be referred to [***].

  
 12 

	 	13.4.	 If the Parties agree or it is otherwise concluded that Product does not conform with this Agreement, NOF shall,
[***]. If the defect is detected after shipment from NOF, NOF shall [***]. 

  

	14.	 RECALL 

  

	 	14.1.	 [***] shall [***] whether and under what circumstances to require the recall of batches of Product. [***]. In
the event that a recall of a batch from a clinical trial or from sale is necessary [***], provided however [***]. 

  

	15.	 REGULATORY COMPLIANCE AND SUPPORT 

 

	 	15.1	 NOF is obligated to support regulatory requirements and requests of EU (including UK), USA and JP. For the
avoidance of doubt, such support includes necessary review of regulatory files.    Health Authority Requirements are in this context defined as direct legal requirements imposed on Ascendis where
non-compliance results in loss of license to operate or financial penalties due to non-compliance in the respective region. Health Authority Requests are defined as
enquiries from Health Authorities with relation to regulatory submissions (including but not limited to marketing authorization applications, clinical trial applications, line extensions, variations and safety requests). 

 

	 	15.2.	 NOF shall use its best efforts to deliver solely to the respective Health Authority any information/data which
are required to support Health Authority Requests. For any Health Authority, NOF shall not be obliged to submit batch records from any manufacturing process. If any Health Authority should require batch records from a manufacturing process, the
Parties shall discuss in good faith how to resolve this. [***]. If an Excluded-Health-Authority Requirement or Request would necessitate submission of the detailed information relating to manufacturing processes, the Parties shall discuss in good
faith how to resolve this. If the Parties cannot resolve if and how NOF shall disclose batch records from any manufacturing process or certain detailed information relating to the manufacturing processes, [***] 

The Parties agree that [***] if NOF is required and agrees to supply additional information that is not in NOF’s possession at the time
of request of disclosure by Ascendis, [***]. 
  

	 	15.3.	 Subject to the section 15.2, NOF must make available to the respective Health Authority any information
required to support regulatory requirements/requests within the time the Parties agree. 

  
 13 

	16.	 TERM AND TERMINATION 

 

	 	16.1.	 This Agreement will be in effect from August 31 2020 and will continue in effect until December 31
2027 (the “Initial Term”). 

  

	 	16.2.	 Following the Initial Term, this Agreement will continue in effect unless and until terminated by either Party
according to the provisions for termination herein. 

  

	 	16.3.	 Notwithstanding any termination of this Agreement, the rights and duties of the Parties with respect to any
terms, which by their nature are intended to survive termination, shall survive and continue to be enforceable, including but not limited to Articles 2, 13, 14, 15, 17, 18, 19, 20, 23. 

 

	 	16.4.	 This Agreement may be terminated: 

 

	 	a)	 By either Party upon notice to take effect immediately in the event of: 

 

	 	i)	 An assignment by the other Party for the benefit of creditors; 

 

	 	ii)	 The admitted insolvency of the other Party; 

 

	 	iii)	 The institution of voluntary or involuntary proceedings by or against the other Party in bankruptcy,
insolvency, moratorium or for a receivership, or for a winding-up or for the dissolution or reorganization of the other Party; or 

 

	 	iv)	 The taking of any action by the other Party under an act for relief from creditors; 

 

	 	b)	 By either Party upon [***] written notice to the other Party in the event of a failure of such other Party to
perform or observe a material obligation imposed by this Agreement, unless such failure is cured or the Parties have reached agreement on a plan to achieve a cure of such failure prior to the end of such [***] period. 

 

	 	c)	 By Ascendis after the Initial Term with [***] written notice. Earliest termination shall be effective per
[***], provided notice has been served [***]. 

  

	 	d)	 By NOF after Initial Term with [***] notice. Earliest termination shall be effective per [***], provided notice
has been served [***]. 

  

	 	e)	 By mutual agreement of the Parties. 

 

	 	16.5.	 This Agreement may be terminated with immediate effect by Ascendis in the event of a change of fifty percent
(50%) or more of the direct or indirect ownership of NOF or manufacturing facilities relevant to the Services, if such ownership goes to [***]. NOF shall provide prompt written notice to Ascendis of any such change. If Ascendis chooses to terminate,
NOF will provide support and assistance enabling Ascendis to obtain continued supply of Product from an alternate supplier. The costs and expenses of such tech transfer shall be borne [***]. 

 

	 	16.6.	 This Agreement may be terminated with immediate effect by NOF in the event of a change of fifty percent (50%)
or more of the direct or indirect ownership of Ascendis, if such ownership goes to [***]. Ascendis shall provide prompt written notice to NOF of any such change. 

  
 14 

	 	16.7.	 Termination of this Agreement, for any reason, shall not release either Party from any liability which at said
time it has already incurred to the other Party, nor affect in any way the survival of any rights, duties or obligations of either Party which are stated elsewhere in this Agreement to survive said expiration or prior termination.

  

	 	16.8.	 Upon termination NOF shall keep the original batch documentation for Products manufactured and/or packed by NOF
in accordance with the obligations laid down in Appendix 3. 

  

	 	16.9.	 Upon termination NOF shall [***] regarding the quality of the Products manufactured and/or packed by NOF and
[***] in relation to any [***] of the Products in accordance with the obligations laid down in Appendix 3. 

  

	17.	 CONFIDENTIALITY 

 

	 	17.1.	 The Recipient shall not, during the term of this Agreement, (a) use Confidential Information for any
purpose whatsoever other than for the performance of this Agreement, or (b) disclose Confidential Information to any third party other than employees, Affiliates or representatives (“Representatives”) who have a need to know in order
to perform the Services. The Recipient shall impose similar obligations relating to Confidential Information imposed it under this Agreement to such Representatives and shall be responsible for the performance of such obligations by such
Representatives. The Recipient agrees that Confidential Information shall remain the sole property of the Discloser. The Recipient further agrees to take all reasonable precautions to prevent any unauthorized disclosure of Confidential Information.
Notwithstanding the above, the Recipients’ obligation under this Article 17 relating to Confidential Information shall not apply to information which: 

  

	 	a)	 is known to the Recipient at the time of first disclosure to the Recipient by the Discloser as evidenced by
written records of the Recipient, 

  

	 	b)	 has become publicly known and made generally available through no wrongful act of the Recipient,

  

	 	c)	 has been developed independently by or on behalf of the Recipient with no use of or reliance upon the
Discloser’s Confidential Information; or 

  

	 	d)	 has been received by the Recipient without restriction on disclosure from a third party. 

  
 15 

	 	17.2.	 Upon the termination of this Agreement (irrespective of the reason therefore), or upon the Discloser’s
request, the Recipient will deliver on request to the Discloser or destroy all of the Discloser’s Confidential Information (including its copy), which is in the Recipient’s possession or control. Notwithstanding the foregoing, each Party
may keep one (1) copy solely to monitor its obligations under this Agreement. 

  

	 	17.3.	 The obligations of the Recipient under this Article 17 shall remain in effect for a period of [***] after the
termination of this Agreement. 

  

	18.	 INTELLECTUAL PROPERTY RIGHTS 

 

	 	18.1.	 [***] shall be [***], provided, however, that ownership of [***], whichever may be applicable.

  

	 	18.2.	 [***]. This Agreement shall not grant or be construed as granting any rights by license or otherwise to [***].
[***]. [***] after the termination of this Agreement, provided, however, that in the event of termination of this Agreement [***], the Parties agree to negotiate in good faith a tech transfer agreement enabling Ascendis to obtain continued supply of
Product from an alternate supplier. The costs and expenses of such tech transfer shall be borne [***]. For purposes of specifically this Article 18.1, second paragraph, NOF’s material obligations shall be understood as NOF’s ability to
Deliver, [***] of Product ordered according to the provisions of Section 9 during a [***] period following the Effective Date. 

  

	 	18.3.	 Other than as set out specifically above. This Agreement will not transfer any rights to intellectual property
in any way. If Intellectual Property Rights owned by Ascendis or licensed to Ascendis are necessary for NOF to perform its obligations hereunder and to obtain the benefit of its rights under this Agreement, Ascendis hereby grants to the extent
necessary to NOF a [***] solely [***] and solely [***]. As far as [***]. 

  

	 	18.4.	 Issued patents applicable to NOF’s performance of its obligations under this Agreement shall be listed in
Appendix 6 as updated by NOF and/or Ascendis from time to time. For the avoidance of doubt, it is understood that Intellectual Property Rights other than issued patents, e.g. trade secrets, may apply without being listed in Appendix 6.

  

	19.	 INSURANCE AND LIABILITY 

 

	 	19.1.	 [***] request prove to have taken out, insurance in order to cover damages on Product while in the custody of
[***]. 

  

	 	19.2.	 [***] request prove to have taken out, a civil liability insurance in order to cover liabilities imposed on NOF
under national legislation and/or EU directives/regulations (a) as a consequence of any and all obligations under this Agreement [***] and/or (b) as a consequence of negligent acts and/or omissions [***], including, without limitation
[***] or other treatment of Product. 

  
 16 

	 	19.3.	 NOF will indemnify, defend and hold harmless Ascendis from all damages suffered or otherwise incurred arising
in connection with claims arising from NOF’s failure to perform the Services. Notwithstanding anything to the contrary in this Agreement, this Article 19.3 does not apply to any claims for which a sole or exclusive remedy is provided for under
another portion of this Agreement, including Article 13.4. 

  

	 	19.4.	 Ascendis will indemnify, defend and hold harmless NOF from all damages suffered or otherwise incurred arising
in connection with claims arising from: the use of the Product; omissions by Ascendis in inspecting, marketing, or distributing Ascendis’ final products; and/or other claims not subject to NOF’s indemnification obligations.

  

	 	19.5.	 The Indemnifying Party shall be entitled, at its option, to control the defense and settlement of any claim for
which it is liable, provided that the Indemnifying Party shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of the claim as the disposition or settlement relates to the indemnified Party. The
indemnified Party shall reasonably cooperate in the investigation, defense and settlement of any claim for which indemnification is sought or provided hereunder and shall provide prompt notice of any such claim or reasonably anticipated claim to the
Indemnifying Party. 

  

	 	19.6.	 NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING,
WITHOUT LIMITATION, LOSS OF PROFITS, REVENUES, INJURY TO GOODWILL, LOSS OF THE USE OF GOODS OR EQUIPMENT, DAMAGE TO ANY ASSOCIATED EQUIPMENT, COST OF CAPITAL, OR DOWNTIME COSTS), SPECIAL OR PUNITIVE DAMAGES REGARDLESS OF WHETHER SUCH PARTY KNEW OR
SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES. 

  

	 	19.7.	 Except for [***]. 

  

	20.	 REPRESENTATIONS AND WARRANTIES 

 

	 	20.1.	 NOF hereby represents and warrants the following: 

 

	 	a)	 it has obtained (and will maintain throughout the existence of this Agreement) all necessary approvals,
licenses or registrations necessary or desirable for the performance of the Services, 

  

	 	b)	 it has the necessary experience to perform the Services, 

 

	 	c)	 the personnel that NOF utilizes in the performance of the Agreement shall be appropriately qualified and
trained for the tasks that they are to perform, 

  

	 	d)	 any machinery and equipment that NOF provides or causes to be applied in the performance of the Agreement shall
be of an appropriate quality and, as required by normal practice shall be qualified and approved by the relevant body or organization, 

  
 17 

	 	e)	 the Services are conducted in compliance with the laws as applicable at its domicile or by the relevant
Purchase Order and relevant standards, such as but not limited to cGMP, 

  

	 	f)	 NOF is not debarred under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. Sec. 335a(a) or
any foreign equivalents, and 

  

	 	g)	 in the event that during the term of this Agreement NOF (i) becomes debarred; or (ii) receives notice
of an action or threat of an action with respect to its debarment, NOF agrees to immediately notify Ascendis and shall immediately cease all activities relating to this Agreement. 

 

	 	h)	 [***], NOF has no actual knowledge, as of the Effective Date, of [***]. 

 

	 	20.2.	 Ascendis represents and warrants to NOF that Ascendis is the owner or licensee or otherwise has the right to
use and provide to NOF all information provided to NOF relating to Product. 

  

	 	20.3.	 DISCLAIMER OF ALL OTHER WARRANTIES. THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE
PARTIES’ ONLY WARRANTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND ARE MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED, INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE, MERCHANTABILITY, OR ARISING FROM THE COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR OTHERWISE. EXCEPT AS OTHERWISE SET FORTH HEREIN, NOF DOES NOT WARRANT OR GUARANTEE THAT THE MANUFACTURE, SALE OR USE OF THE PRODUCTS WILL NOT
INFRINGE THIRD PARTY PATENTS OR OTHER THIRD PARTY INTELLECTUAL PROPERTY RIGHTS AND THAT THE PRODUCTS ARE SUITABLE FOR THE SPECIFIC USE INTENDED BY ASCENDIS. 

  

	21.	 ASSIGNABILITY AND SUB-CONTRACTING 

 

	 	21.1.	 Neither Party shall be entitled to assign or sub-contract its rights
and/or obligations hereunder in whole or in part to any third party, including Affiliates unless having obtained the other Party’s prior written approval, provided, however, that Ascendis is free to assign its rights and obligations, including
(without limitation) to a third party acquiring, by purchase or license, rights to further develop or commercialize the Ascendis Product, it being agreed that no assignment by Ascendis pursuant to Article 21.1 shall release Ascendis from its
obligations hereunder, [***]. 

  
 18 

	22.	 FORCE MAJEURE 

 

	 	22.1.	 Neither Party shall be liable for non-performance of any provisions of
this Agreement due to force majeure as defined below. 

  

	 	22.2.	 Force majeure shall include strikes, lockouts, other industrial disturbances, rebellions, epidemics,
landslides, earthquakes, fires, storms, floods, sinking, droughts, civil disturbances, explosions, act or decisions of duly constituted national government authorities or of courts of law, impossibility to obtain equipment, supplies, fuel or other
required materials, unexpected toxicity findings of Product, beyond the control of the Party pleading force majeure preventing this Party from performing its rights and obligations and not to be overcome by due diligence of such Party and which
could not reasonably have been foreseen at the time accepting the relevant order, provided neither Party shall have any obligation to settle a labour dispute in order to exercise due diligence. 

 

	 	22.3.	 The Parties agree that if either of them find themselves wholly or partly unable to fulfil their respective
obligations under this Agreement by reasons of force majeure, the Party pleading force majeure will as soon as possible notify the other Party of its inability to perform, giving a detailed explanation of the occurrence which excuses performance.
Except from the payments of funds that are due and payable prior to any force majeure neither Party shall be required to make up for any performance that is prevented by force majeure. 

 

	 	22.4.	 However, if the force majeure persists for a period of more than [***], and the Party pleading force majeure
cannot present a remedial action plan acceptable to both Parties within the said [***], the non-failing Party shall be entitled to terminate this Agreement with immediate written notice. 

 

	23.	 ARBITRATION AND LAW 

 

	 	23.1.	 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the
breach, termination or invalidity thereof, the Parties shall try to settle the problem amicably between themselves. Should they fail to agree, the matter in dispute shall be settled by arbitration in accordance with the Rules of Arbitration of
[***]. The award rendered shall be final and binding and enforceable by any court having jurisdiction. The arbitration court shall consist of [***] and shall have its seat in [***]. The language of the proceedings shall be English. The Institute
shall appoint [***] on request by a Party hereto. 

  

	 	23.2.	 This Agreement shall be governed by and construed in accordance with the Laws of [***] 

  
 19 

	24.	 MISCELLANEOUS 

 

	 	24.1.	 This Agreement and all Appendixes constitutes the entire agreement between the Parties concerning the subject
matter hereof and supersedes all written or oral prior agreements or understandings with respect thereto, except any confidentiality agreements made by the Parties, which shall survive the obligations undertaken hereunder. No variation or
modification of the terms of this Agreement nor any change of any of the terms or provisions hereof shall be valid unless stated in an amendment to this Agreement. This notwithstanding, any Appendix associated with this Agreement shall be valid and
may be updated from time to time if signed by an Authorised Representative of each Party. 

  

	 	24.2.	 The headings contained in this Agreement are for convenience and reference purposes only and shall not affect
the meaning of the interpretation of this Agreement. 

  

	 	24.3.	 The provisions of this Agreement are separate and divisible and the invalidity or unenforceability of any part
shall not affect the validity or enforceability of any remaining part or parts, all of which shall remain in full force and effect. However, the Parties agree to substitute any invalid or unenforceable provision by a valid and enforceable
arrangement, which achieves to the greatest extent possible the financial balance and mutual understanding already established between the Parties. 

  

	 	24.4.	 The Appendices to this Agreement shall form an integral part of this Agreement and shall be regarded as
incorporated into this Agreement in every respect. In case of inconsistency between the terms and conditions of the said Appendices and this Agreement, the latter shall prevail to the extent of such inconsistency, except that in quality related
matters, the Quality Agreement shall prevail. 

  

	 	24.5.	 All communication between the Parties and all notices made hereunder shall be made in the English language
unless public authorities may require any written communication to be made in any other language and if so the Party submitting to the other Party and/or suggesting such written communication shall upon request from the other Party provide a proper
translation hereof into English (certified by an authorised translator should the receiving Party so require). 

  

	 	24.6.	 In the implementation of and performance under this Agreement, each Party shall comply with any and all
relevant and applicable laws. Such compliance shall be the sole responsibility of such Party requiring no supervision, direction, responsibility or liability on behalf of the other Party. 

 

	 	24.7.	 Agreement shall be valid or binding upon the Parties hereto. 

Remainder of page intentionally left blank. Signatures on next page. 

  
 20 

 In witness thereof, the Parties hereto have caused this Agreement to be executed in duplicate by their duly
authorised representatives. 
  

					
	Copenhagen, 03-03 2021	 	                                	 	Tokyo, Apr. 7 2021
			
	Ascendis Pharma A/S	 		 	NOF CORPORATION
			
	 /s/ Michael Wolff Jensen
	 		 	 /s/ Tsuncharu Miyazaki

			
	 Michael Wolff Jensen

Chairman
 Ascendis Pharma
A/S
	 		 	 Tsuncharu Miyazaki

Managing Executive Officer
 General
Manager DDS Development Division

			
	  
	 		 	  

  
 21 

 APPENDIX 1 

Product 
 [***] 

  
 22 

 APPENDIX 2 

Purchase Price 
 [***] 

  
 23 

 APPENDIX 3 

Quality Agreement 
 [***] 

  
 24 

 APPENDIX 4 

Specifications 
 [***] 

  
 25 

 APPENDIX 5 

[***] 
 [***] 

  
 26 

 APPENDIX 6 

List of applicable patents 
 [***] 

  
 27 

 APPENDIX 7 

[***] 

  
 28EXHIBIT 10.1 

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED 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. 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: $55,750.00	Issue Date: February 14, 2022
	Purchase Price: $55,750.00	 

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED,
BLACKSTAR ENTERPRISE GROUP, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order of SIXTH STREET LENDING LLC, a Virginia limited liability company, or registered assigns (the “Holder”)
the sum of $55,750.00 together with any interest as set forth herein, on February 14, 2023 (the “Maturity Date”), and
to pay interest on the unpaid principal balance hereof at the rate of ten percent (10%)(the “Interest Rate”) per annum
from the date hereof (the “Issue Date”) until the same becomes due and payable, whether
at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise
explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear interest at
the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”).
Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence accruing
on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by
prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments
shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the
provisions of this Note. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto
in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase
Agreement”).

 

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

 

The following terms shall
apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

1.1              
 Conversion Right. The Holder shall have
the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following
the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount (as
defined in Article III), each in respect of the remaining outstanding amount of this Note to convert all or any part of the outstanding
and unpaid amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of

    	1 

    	 

    

capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”)
determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder
be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted
portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which
the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The beneficial ownership
limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of shares of Common Stock
to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit
A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided
that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result
in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”);
however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business
day. 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, 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 1.4 hereof.

 

1.2              
Conversion Price. The conversion price
(the “Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments
by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price”
means the average of the two (2) lowest Trading Prices (as defined below) for the Common Stock during the fifteen (15) Trading
Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security
as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market
(the “OTC”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTC is not the principal trading market for such security, the closing bid price of such security on
the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security
that are listed in the “pink sheets”. 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 reasonably determined by the Borrower. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange
or other securities market on which the Common Stock is then being traded. 

 

    	2 

    	 

    

1.3              
Authorized Shares. The Borrower covenants
that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note
issued pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved six times the
number of shares that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section
1.1 is not in effect)(based on the respective Conversion Price of the Note (as defined in Section 1.2) in effect from time to time,
initially 47,871,198 shares)(the “Reserved
Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time to time
in accordance with the Borrower’s obligations hereunder. 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 Note.
The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its
officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates
for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4              
Method of Conversion.

 

(a)               
Mechanics of Conversion. As set forth
in Section 1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180)
days following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default
Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting
to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal
office of the Borrower (upon payment in full of any amounts owed hereunder). 

 

(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. 

 

(c)                
Delivery of Common Stock Upon Conversion.
Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication)
of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and
deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon
such conversion within two (2) business days after such receipt (the “Deadline”) (and, solely in the case of conversion
of the entire unpaid principal

    	3 

    	 

    

amount hereof, surrender of this Note) in
accordance with the terms hereof and the Purchase Agreement. 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 hereunder, 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.

 

(d)               
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 set forth herein, the Borrower shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s
Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”)
system.

 

(e)               
Failure to Deliver Common Stock Prior to Deadline.
Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief,
the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due
to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the
Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result of any
failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such cash
amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the
Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be
added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note
and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower
agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate,
interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the
liquidated damages provision contained in this Section 1.4(e) are justified.

 

1.5              
 Concerning the Shares. The shares of
Common Stock issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to
an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions)
to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration
(such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate”
(as defined in Rule 144) of the Borrower

    	4 

    	 

    

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).

 

Any restrictive legend on
certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall
issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer agent shall have received
an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without registration under the
Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in the case of the Common
Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration
statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In the event that the Company
does not reasonably 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), at the Deadline, it will be considered an Event of Default pursuant to Section
3.2 of the Note.

 

1.6              
Effect of Certain Events.

 

(a)               
Effect of Merger, Consolidation, Etc.
At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the
effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person
(as defined below) or Persons when the Borrower is not the survivor shall 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). “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 Note, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common
Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities
of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have
the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder
would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter
be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion
hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent
practicable, ten (10) days prior written notice (but in any event at least five (5) 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

    	5 

    	 

    

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 Note. The above provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or share exchanges.

 

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

 

1.7              
Prepayment. Notwithstanding anything to
the contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph
(the “Prepayment Periods”) or as otherwise agreed to between the Borrower and the Holder, the Borrower shall have the
right, exercisable on not more than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding
Note (principal and accrued interest), in full, in accordance with this Section 1.7. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading
Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”),
the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder
as specified by the Holder in a writing to the Borrower (which shall direction to be sent to Borrower by the Holder at least one
(1) business day prior to the Optional Prepayment Date). If the Borrower exercises its right to prepay the Note, the Borrower shall
make payment to the Holder of an amount in cash equal to the percentage (“Prepayment Percentage”) as set forth in the
table immediately following this paragraph opposite the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the
Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus
(z) any amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”).

 

	Prepayment Period	Prepayment Percentage
	                1.    The period beginning on the Issue Date and ending on the date which is sixty (60) days following the Issue Date.	120%
	2.     The period beginning on the date which is sixty-one (61) days following the Issue Date and ending on the date which is ninety (90) days following the Issue Date.	125%
	3.    The period beginning on the date that is ninety-one (91) days from the Issue Date and ending one hundred twenty (120) days following the Issue Date.	130%
	4.     The period beginning on the date that is one hundred twenty-one (121) days from the Issue Date and ending one hundred eighty (180) days following the Issue Date.	135%

 

    	6 

    	 

    

After the expiration of
the Prepayment Periods set forth above, the Borrower may submit an Optional Prepayment Notice to the Holder. Upon receipt by the
Holder of the Optional Prepayment Notice post Prepayment Periods, the prepayment shall be subject to the Holder’s and the
Borrower’s agreement with respect to the applicable Prepayment Percentage.

 

Notwithstanding anything
contained herein to the contrary, the Holder’s conversion rights herein shall not be affected in any way until the Note is
fully paid (funds received by the Holder) pursuant to an Optional Prepayment Notice.

 

Article
II.  CERTAIN COVENANTS

 

2.1              
Sale of Assets. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise
dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any
assets may be conditioned on a specified use of the proceeds of disposition.

 

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 and Interest.
The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration
and such breach continues for a period of five (5) days after written notice from the Holder.

 

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

 

3.3              
Breach of Covenants. The Borrower breaches
any material covenant or other material term or condition contained in this Note and any collateral documents including but not
limited

    	7 

    	 

    

to the Purchase Agreement and such breach
continues for a period of twenty (20) days after written notice thereof to the Borrower from the Holder.

 

3.4              
Breach of Representations and Warranties.
Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant
hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material
respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of
the Holder with respect to this Note or the Purchase Agreement.

 

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

 

3.6              
Bankruptcy. Bankruptcy, insolvency, reorganization
or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.7              
Delisting of Common Stock. The Borrower
shall fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms
maintained by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
the New York Stock Exchange, or the American Stock Exchange.

 

3.8              
Failure to Comply with the Exchange Act.
The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject
to the reporting requirements of the Exchange Act (the filing of a Form 15 is an immediate Event of Default).

 

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

 

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

 

3.11          
Financial Statement Restatement.The
restatement of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for
any date or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated
financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase
Agreement.

 

3.12          
 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.

 

    	8 

    	 

    

3.13          
Cross-Default.  Notwithstanding anything
to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any
covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure
or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which
event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of
this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements”
means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other
Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted
with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Amount (as defined herein).  UPON THE OCCURRENCE
AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE
AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT
AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default
specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note
or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice
to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the
remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified
in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date
of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4(e) 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 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. 

 

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

 

Article
IV. MISCELLANEOUS

 

    	9 

    	 

    

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

 

4.2              
Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
email or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by 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:

 

BLACKSTAR ENTERPRISE GROUP, INC.

4450 Arapahoe Ave., Suite 100

Boulder, CO 80303

Attn: Joseph
E. Kurczodyna, Chief Financial Officer

Email: capmercbanc@hotmail.com

 

If to the Holder:

 

SIXTH STREET LENDING LLC

1800 Diagonal Road, Suite
623

Alexandria VA
22314

Attn: Curt Kramer, Chief
Executive Officer

e-mail: ckramer@sixthstreetlending.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 (and the other Notes issued pursuant to the Purchase
Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4              
Assignability. This Note shall be binding
upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.
Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange
Commission). 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; and may be assigned by the Holder without the consent of the Borrower.

    	10 

    	 

    

 

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

 

4.6              
Governing Law. This Note shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia 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 Circuit Court of Fairfax County, Virginia or in the Alexandria Division of the United States District Court for the Eastern
District of Virginia. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any objection or defense based on lack of jurisdiction or venue or based upon forum non conveniens.
The Borrower and Holder waive trial by jury. The Holder shall be entitled to recover from the Borrower its reasonable attorney's
fees and costs incurred in connection with or related to any Event of Default by the Company, as defined in Article III hereof.
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 hereof or any agreement delivered
in connection herewith. Each party hereby irrevocably waives personal service of process and consents to process being served in
any suit, action or proceeding in connection with this Note, any agreement or any other document delivered in connection with this
Note by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

 

4.7              
Purchase Agreement. By its acceptance
of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.8              
Remedies. The Borrower acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations
under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions
of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and
to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or
other security being required.

 

IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer this on February 14, 2022

 

BLACKSTAR ENTERPRISE GROUP, INC.

 

 

By: /s/ Joseph E. Kurczodyna

_______________________________

Joseph E. Kurczodyna

Chief Financial Officer

    	11 

    	 

    

EXHIBIT A -- NOTICE OF CONVERSION

 

 

The undersigned hereby
elects to convert $_________________ principal amount of the Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth
below, of BLACKSTAR ENTERPRISE GROUP, INC., a Delaware corporation (the “Borrower”) according to the conditions of
the convertible note of the Borrower dated as of February 14, 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 Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

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

 

Date of conversion: _____________

Applicable Conversion Price: $____________

Number of shares of common stock
to be issued

pursuant
to conversion of the Notes: ______________

Amount of Principal Balance due remaining

under the Note
after this conversion: ______________

 

SIXTH STREET LENDING LLC

 

By:_____________________________

Name: Curt Kramer

Title: President

Date: __________________

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