Document:

EXHIBIT 10.7

 

Agreement 

 

Conducted and Signed on the 26th
of October, 2014

 

Between:

 

T.A.B. Anti-Bacterial Textiles Ltd. 

PC 514997741

Of 19 Hagaaton st. , Naharia

(Hereinafter: "The Company")

 

The one party;

 

And:

 

Mr. Joshua Hershcovich

i.d. 052607298

of 7 Haoren st., Naharia

(Hereinafter: "The Director")

 

(Hereinafter: "the
shareholder" 

The other party;

 

	Given	that the company is interested in raising capital from the public;
	 	 
	And given	that in order to do so the company intends to submit a prospectus for raising the capital as stated;
	 	 
	And given	that the parties are interested to put to order their rights and duties in this agreement;

 

Therefore it has been hereby agreed as follows:

 

The shareholder will not offer his shares
in the company for resale to the public, until a time when the company has completed to raise a sum equal to 1.35m $US, that are
45% of the sum that the company seeks to raise according to the prospectus which the company intends to submit (3m $US).

 

And as proof the parties have signed:

 

	/s/ Meir Elishkov	 	 	/s/ Joshua Hershcovich	 
	 	 	 
	The Company (by Mr Meir Elishkov.)	 	Joshua HershcovichEXHIBIT 10.8

 

Agreement 

 

Conducted and Signed on the 26th
of October, 2014

 

Between: 

 

T.A.B. Anti-Bacterial Textiles Ltd. 

PC 514997741

Of 19 Hagaaton st. , Naharia

(Hereinafter: "The Company")

 

The one party;

 

And:

 

Mr. Meir Elishkov

i.d. 014493308

of 6 Silver st., Naharia 

(Hereinafter "the shareholder")

The other party;

 

	Given	that the company is interested in raising capital from the public;
	 	 
	And given	that in order to do so the company intends to submit a prospectus for raising the capital as stated;
	 	 
	And given	that the parties are interested to put to order their rights and duties in this agreement;

 

Therefore it has been hereby agreed as follows:

 

The shareholder will not offer his shares
in the company for resale to the public, until a time when the company has completed to raise a sum equal to 1.35m $US, that are
45% of the sum that the company seeks to raise according to the prospectus which the company intends to submit (3m $US).

 

And as proof the parties have signed:

 

	/s/ Joshua Hershcovich	 	 	/s/ Mr. Meir Elishkov	 
	 	 	 
	The Company (by Mr Joshua Hershcovich)	 	Meir ElishkovEXHIBIT 10.9

 

Date: 12/10/2014

 

To:

 

Shay Hershcovich 

 

Re: An Irrevocable undertaking to
pay commission for capital raising.

 

We, Nano Textile Ltd. P.C 514997741 Ltd. (hereafter: “The
Company”) hereby declare and commit in an irrevocable way as follows:

 

		1.	The Company declares that an approach on its behalf was made to you for capital raising services for The Company from private
investors.

 

		2.	The Company undertakes to pay you for capital raising for The Company from private investors the commission in the amount and
in the following way:

 

A rate of 8% of the amount that was raised as per
this agreement (hereafter: “The Raising Amount”) independent of the actual value of The Company at the time of
the execution of this undertaking and/or at the time of the raising and/or any other time (hereafter: “The Raising Commission”).

 

		3.	The Raising Fee shall be paid as follows:

 

		3.1.	8% of the total commission in cash

 

		3.2.	In the event that The Company is required to pay another broker, thus in such case, the commission shall be 4% of the total
investment.

 

		4.	The Company undertakes to pay the above said Raising Commission as follows:

 

		4.1.	The commission in cash within 14 (fourteen) days of the time you will approach The Company in writing and notify it that you
have completed the capital raising process and that the funds are deposited in escrow.

 

		4.2.	The commission specified in the above paragraph 3.2 shall be paid through a transfer or stocks to you or to whomever you shall
instruct us in writing, and shall be paid within 45 (forty five) days of the notice submission as said above in paragraph 4.1.

 

		5.	The address of The Company for the purpose of notice submission according to this agreement is as registered in the Corporations
Registrar.

 

		6.	This undertaking is irrevocable commencing its execution date and cannot be terminated.

 

Regards,

 

	 	/s/ Joshua Hershcovich
	 	 
	 	Nano Textile Ltd. 

 

I, the undersigned, hereby agree and confirm the aforementioned
in this agreement.

 

	/s/ Shay Hershcovich	 

 

Signature:
Shay HershcovichNEITHER 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 19339
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 19339 AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

	Principal Amount: $106,000.00	Issue Date: July 8, 2014

CONVERTIBLE PROMISSORY NOTE

FOR VALUE
RECEIVED, a Labor Smart, Inc., a Nevada corporation (hereinafter called the "Borrower"), hereby promises to pay to the
order of Tailwind Partners, LLC a Utah limited liability company, or registered assigns (the "Holder") the sum of $106,000.00
together with any interest as set forth herein, on April 8, 2015 (the
"Maturity Date"), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (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 four percent (24%) per annum from the due date thereof until the same is paid ("Default Interest"),
interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and
the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value
per share (the "Common Stock") in accordance with the terms hereof) shall be made in lawful money of the United States
of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made
in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case
of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall
not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term "business
day" shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York
are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which
this Note was originally issued (the "Purchase Agreement").

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	 

    	 

    

1.1
Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date which
is one hundred eighty (180) days following the date of this Note and ending on the later of: (I)
the Maturity Date and (ii) the date of payment of the Default Amount (as defined in
Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note
to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the "Conversion Price")
determined as provided herein (a "Conversion"); provided, however, that in no
event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion
of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares
of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised
or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the
limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this
Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations
on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days' prior notice to the Borrower,
and the provisions of the conversion limitation shall continue to apply until such 61 st day (or such later date, as determined
by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in
effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"),
delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted
by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00
p.m., New York, New York time on such conversion date (the "Conversion Date"). The term "Conversion Amount"
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Borrower's option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date, plus (3) at the Borrower's option, Default Interest, if any, on the amounts referred
to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof.

1.2 Conversion Price.

(a) Calculation
of Conversion Price. The conversion price (the "Conversion Price") shall equal the Variable Conversion Price (as
defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating
to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 58%
multiplied by the Market Price (as defined herein). "Market Price" means the average of the lowest three (3)
Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete Trading
Day prior to the Conversion Date. "Trading Price" means any intraday trading price, designated by the Holder, of any
shares of Common Stock as reporting on the OTC Markets website, or applicable trading market (the "OTCQB") as reported
by a reliable reporting service ("Reporting Service") designated by the Holder (i.e. www.otcmarkets.com,
Bloomberg, etc.) or, if the OTCQB is not the principal trading market for such security, the lowest intraday price of such security
on the principal securities exchange or trading market where such security is listed or traded or, if no

    	 	2	 

    	 

    

intraday
price of such security is available in any of the foregoing manners, the closing price of the Common stock. If the Trading Price
cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value
as mutually determined by the Borrower and the holders of a majority
in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean any
day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.

(b)
Conversion Price During Major Announcements. Notwithstanding
anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends
to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation
and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person,
group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower's Common
Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to
as the "Announcement Date"), then the Conversion Price shall, effective upon the Announcement Date and continuing through
the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would
have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in
effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in
this Section 1.2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall mean, with respect to any
proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b)
has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of
clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer
(or takeover scheme) which caused this Section 1.2(b) to become operative.

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 five times the number of shares that is actually issuable upon full conversion of the Note (based on the
Conversion Price of the Notes in effect from time to time)(the "Reserved Amount"). The Reserved Amount shall be increased
from time to time in accordance with the Borrower's obligations pursuant to Section 4(g) of the Purchase Agreement. The Borrower
represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the
Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common
Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make
proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free
from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed
its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this
Note.

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.

    	 	3	 

    	 

    

(a)
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
from time to time after the Issue Date, by

(A) 
submitting to the Borrower a Notice of Conversion
(by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York,
New York time) and

(B) 
subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

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

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

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

(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued
and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article 1, 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 he 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,

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recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any obligation to the
Borrower, and irrespective of any other circumstance which might otherwise limit such obligation
of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as
the Notice of Conversion is received by the Borrower before 6:00 p.m., New York,
New York time, on such date.

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

(g) Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which
failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the
month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first
day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event
interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible
into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right
to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult
if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section
1.4(g) are justified.

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

"NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 19339 AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE

    	 	5	 

    	 

    

OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

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

1.6 Effect of Certain Events.

(a)   
Effect of Merger, Consolidation. Etc. At the option of the Holder, the sale, conveyance or disposition of
all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related
transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or
other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not
the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article 111) pursuant to which the Borrower shall
be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default
Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual,
corporation, limited liability company, partnership, association, trust or other entity or organization.

(b)  
Adjustment Due to Merger. Consolidation, Etc. If at any time when this Note is issued and outstanding and
prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization,
or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different
number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation
of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the
basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable
upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had
this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this
Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and
of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any

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securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice
(but in any event at least fifteen (1 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 sale of assets (during which time the Holder shall
be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers,
sales, transfers or share exchanges.

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

(d)  
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower
issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock
for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts
or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance)
of such shares of Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Conversion Price
will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

The Borrower shall
be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or
options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities") (such warrants,
rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options") and the
price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in
effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (1) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the
case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable,
by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion
of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance
of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon
exercise of such Options.

Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the
price per share for which Common Stock is issuable upon such conversion or exchange is less than the

    	 	7	 

    	 

    

Conversion
Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon such conversion or exchange" is determined by dividing (I)
the total amount, if any, received or receivable by the Borrower as consideration for the issuance
or sale of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if ally, payable to the Borrower upon the conversion or exchange thereof
at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

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

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

1.7
Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market
on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon
conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the
Purchase Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the
principal United States securities market on which the Common Stock is then traded (the "Maximum Share Amount"), which
shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable
adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating
to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate
any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower's ability to issue shares
of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered
an Event of Default under Section 3.3 of the
Note.

1.8 Status as
Shareholder. Upon submission of a Notice of Conversion by a Holder, (I) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holders allocated portion of the Reserved Amount or Maximum
Share Amount) shall be deemed converted into shares of Common Stock and (ii) the 1-loider's rights as a Holder of such converted
portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower
to comply with the terms of this Note.

    	 	8	 

    	 

    

Notwithstanding
the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day
after the expiration of the Deadline with respect to a conversion of any portion of this
Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect
to such unconverted portions of this Note and the Borrower shall, as soon as practicable,
return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion
of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation,
(i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion
Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions
determined in accordance with Section 1.3) for the Borrower's failure to convert this Note.

1.9 Prepayment.
Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the Issue Date and
ending on the date which is one hundred twenty (120) days following the issue date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full, in accordance with this
Section 1.9. Any notice of prepayment hereunder (an "Optional Prepayment Notice") shall be delivered to the Holder of
the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2)
the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On
the date fixed for prepayment (tile "Optional Prepayment Date"), the Borrower shall make payment of the Optional
Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at
least one (I) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower
shall make payment to the Holder of an amount in cash (the "Optional Prepayment Amount") equal to 125%, multiplied by
the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the Optional Prepayment Date pj (y) Default Interest, if ally, on the amounts
referred to in clauses (w) and (x) pj (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower
delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the Note within two
(2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant
to this Section 1.9.

Notwithstanding
anything to the contrary contained in this Note, at any time during the period beginning on the date which is one hundred twenty-one
(121) days following the issue date and ending on the date which is one hundred fifty (150)
days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days
prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance
with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses
and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be
not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional
Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment
Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one
(1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall
make payment to the Holder of an amount in cash (the "Second Optional Prepayment Amount") equal to 130%, multiplied by
the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, 011
the amounts referred to in clauses (w) and (x) plus (z)
any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due
to the Holder of the Note within two (2) business days

    	 	9	 

    	 

    

following
the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

Notwithstanding
anything to the contrary contained in this Note, at any time during the period beginning on the date which is one hundred fifty-one
(151) days following the issue date and ending on the date which is one hundred eighty (180)
days following the issue date, the Borrower shall have the right, exercisable on not less
than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued
interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be
delivered to the Holder of the Note at its registered
addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which
shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date,
the Borrower shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as
specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the 'Third
Optional Prepayment Amount") equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note
plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus
(y) Default interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Third Optional
Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower
shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

After the expiration
of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment without the prior written
consent of the Holder.

ARTICLE 11. CERTAIN COVENANTS

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

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

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

    	 	10	 

    	 

    

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

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

ARTICLE III. EVENTS
OF DEFAULT

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

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

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

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

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

    	 	11	 

    	 

    

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

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

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

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

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

3.10Liquidation.Any dissolution,
liquidation, or winding up of Borrower or any

substantial portion of its business.

3.11Cessation 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.

3.12Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future).

3.13Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from
two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder
with respect to this Note or the Purchase Agreement.

3.14Reverse Splits. The Borrower effectuates
a reverse split of its Common Stock

without twenty (20) days prior written notice to the Holder.

3.15Replacement of Transfer Agent. In the event
that the Borrower proposes to

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

3.15Cross-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

    	 	12	 

    	 

    

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 o1 (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided,
however, the term "Other Agreements" shall not include the related or companion documents to this Note. Each of the loan
transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to
the Holder.

Upon
the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to
pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum
(as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE
SI-IALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation
of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8,
3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable
through the delivery of written notice to the Borrower by such Holders (the "Default Notice"), and upon the occurrence
of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest
thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower
shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150%
times the sum of (w) the then outstanding principal amount of this Note plus accrued and unpaid
interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date") plus Default
Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z)
any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding
principal amount of this Note to the date of payment &us the amounts referred to in clauses (x), (y) and (z) shall collectively
be known as the "Default Sum") or (ii) the "parity value" of the Default Sum to be prepaid, where parity value
means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in
accordance with Article I, treating the 'Trading Day immediately preceding the Mandatory Prepayment Date as the "Conversion
Date" for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a
breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by
(b) the highest Closing Price for the Common Stock during the period beginning on the date
of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment
Date (the "Default Amount") and all other amounts payable hereunder shall immediately become due and payable, all without
demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation,
legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at
law or in equity.

If
the Borrower fails to pay the Default Amount within live (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.

    	 	13	 

    	 

    

ARTICLE
IV. MISCELLANEOUS

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

4.2 Notices.All notices, demands, requests,
consents, approvals, and other

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

If to the Borrower:

Labor Smart, Inc.

5604 Wendy Bagwell Parkway

Suite 223

Hiram, GA 30141

If to the Holder:

Tailwind Partners, LLC 1384 Michigan Ave.

Salt Lake City, UT 84105

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 50 1(a)
of the 1933 Act). 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.

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 State of Utah without regard to principles of conflicts
of laws. Any action brought by

    	 	14	 

    	 

    

either
party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of Utah
or in the federal courts located in the state of Utah. The parties to this Note hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. The Borrower
and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents
to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

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

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

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

    	 	15	 

    	 

    

4.10Remedies.
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 July 8, 2014

Labor Smart, Inc.

By: /s/ Ryan Schadel, CEO

 

 

 

 

 

 

 

 

 

 

 

 

    	 	16

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