Document:

Exhibit 4.1

 

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 (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. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAYBE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

Issue Date: October 28, 2016

Principal Amount:

Interest Rate: 5% per annum

Maturity Date: April 28, 2017

Original Issue Discount: 16.67%

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, NuGene International,
Inc. a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of
Kodiak Capital Group, LLC or its registered assigns (the “Holder”) the sum of $120,000 together with
any interest as set forth herein, on April 28, 2017 (the “Maturity Date”), and to pay interest on the
unpaid principal balance hereof at the rate of five percent (5%) per annum (the “Interest Rate”) until
the same becomes due and payable, whether at the Maturity Date or upon acceleration or by prepayment or otherwise. The Maturity
Date will be extended by successive thirty day periods (up to a maximum extension of 90 days) (i) if and each time the Borrower
makes a payment of $100,000 of principal (plus any accrued interest) on or before any Maturity Date, or (ii) if and each time following
the original Maturity Date, Holder converts at least $100,000 in principal under this Note into Common Stock within 15 days following
the Maturity Date. 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 Issue Date 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 Borrower's common stock, $0.0001 par value per share (the “Common Stock”)
in accordance with the terms hereof shall be made in lawful money of the United States of America. All payments shall be made at
such address, as Holder shall hereafter give to 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 Note Purchase Agreement by and between Borrower and Holder, pursuant to which this Note was originally
issued (the “Purchase Agreement”). Notwithstanding anything to the contrary herein, the Note (including
all outstanding principal and accrued interest) will be immediately due and payable upon closing by the Borrower of any financing
transaction in which the Borrower receives gross proceeds of at least $2,000,000 (a “Qualified Financing”).

 

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The following additional terms shall apply
to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1         Conversion
Right. If an Event of Default occurs, or if Holder fails to repay the Note in full on the original Maturity Date, the Holder
shall have the right thereafter, from time to time, and at any time while this Note is outstanding 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 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 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 un-exercised or unconverted portion or any other security
of 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 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 the rules and regulations issued thereunder, provided, further, however that the limitations on conversion may be waived by
Holder upon, at the election of Holder, not less than 61 days' prior notice to Borrower, and the provisions of the conversion limitation
shall continue to apply until such 61st day (or such later date, as determined by 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 “Conversion Notice”), delivered to
Borrower by Holder in accordance with Section 1.4 below; provided that the Conversion Notice is submitted by facsimile or e-mail
(or by other means resulting in, or reasonably expected to result in, notice) to Borrower before 6:00 pm 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 Holder's option, accrued and unpaid interest, if any, on such principal amount
at the interest rate provided in this Note through the Conversion Date, plus (3) any fees associated with delivery of shares imposed
on the Holder by the Transfer Agent.

 

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1.2         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 Borrower relating to Borrower’s securities or the securities of any subsidiary of Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events). As used in this Agreement, the “Variable
Conversion Price” shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of
40%). “Market Price” means the lowest price at which the Common Stock was traded on the OTCQB, or other
applicable trading market, as reported by a reliable reporting service (e.g. Bloomberg LP) during the 30 Trading Days immediately
preceding the Conversion Date.

 

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 Notes issued pursuant to the Purchase Agreement. The Borrower is required at all times to have
authorized and reserved the Reserved Amount pursuant to the Purchase Agreement. If at any time the Reserved Amount is less than
three times the number of shares that is actually issuable upon full conversion of the Notes, then the Borrower will take immediate
steps to increase the reserve but in any event will increase the reserve within forty-five (45) days of the Reserved Amount falling
below three times the number of shares that is actually issuable upon full conversion of the Notes. Without limiting the generality
of the foregoing, in the event the Borrower does not have sufficient authorized shares of Common Stock to maintain the Reserved
Amount equal to 300% of the number of shares issuable upon full conversion of the Notes, the Borrower shall take immediate action
to increase its authorized shares of Common Stock, including the filing of a Schedule 14A or Schedule 14C, as applicable (if the
Borrower is then subject to such requirements), with the SEC, within 20 days of receiving a request by the Holder, so as to increase
the Reserved Amount within 45 days of the Reserved Amount falling below three times the number of shares issuable upon full conversion
of the Notes. The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations hereunder
and under 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 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,
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. Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue Conversion Shares 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.

 

		1.4	Method of Conversion.

 

		a.	Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by Holder in
whole or in part at any time from time to time after the Issue Date, by (a) submitting to Borrower a Conversion Notice by facsimile
(with receipt confirmation from recipient), e-mail or other reasonable means of communication dispatched on the Conversion Date
prior to 6:00 p.m., Eastern Standard Time and (b) subject to Section 1.4(b), surrendering this Note at the principal office of
Borrower.

 

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		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, Holder shall not be required to physically surrender this Note
to Borrower unless the entire unpaid principal amount of this Note is so converted. Holder and 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 Holder and Borrower, so as not to require physical surrender of this Note upon each such conversion. Holder and any assignee,
who is an “accredited investor” as defined under Rule 501(a), 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. 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 Holder (or in street name), and 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 Holder or the custodian in whose
street name such shares are to be held for Holder's account) requesting the issuance thereof shall have paid to Borrower the amount
of any such tax or shall have established to the satisfaction of Borrower that such tax has been paid.

 

		d.	Delivery of Common Stock upon Conversion. Upon receipt by Borrower from Holder of a facsimile
transmission (with receipt confirmation from recipient) or e-mail (or other reasonable means of communication) of a Conversion
Notice meeting the requirements for conversion as provided in this Section 1.4, Borrower shall issue Conversion Shares to the Holder
by crediting the account of the Holder’s broker with The Depository Trust Borrower through its Deposit or Withdrawal at Custodian
system (“DWAC”) or Direct Registration System (“DRS”) if the Borrower is then a participant in such system
and either (A) there is an effective registration statement permitting the issuance of the Conversion Shares to or resale of the
Conversion Shares by the Holder or (B) Rule 144 or any other applicable exemption from registration is available for the resale
of the Conversion Shares, and otherwise by physical delivery to the address specified by the Holder on or before 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.

 

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		e.	Obligation of Borrower to Deliver Common Stock; Liquidated Damages. Upon receipt by Borrower
of a Conversion Notice, Holder shall be deemed to be 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
Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted
shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If Holder shall have given a Conversion Notice as provided herein, Borrower’s obligation to issue and
deliver the Conversion Shares shall be absolute and unconditional, irrespective of the absence of any action by 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 Borrower to Holder of record, or any setoff;
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by Holder of any obligation to Borrower,
and irrespective of any other circumstance which might otherwise hint such obligation of Borrower to Holder in connection with
such conversion. The Conversion Date specified in the Conversion Notice shall be the Conversion Date so long as the Conversion
Notice is received by Borrower before 6:00 p.m., Eastern Standard Time, on such date. If the Borrower fails for any reason to deliver
to the Holder Conversion Shares by the Deadline, the Borrower shall pay to the Holder, in cash, as liquidated damages and not as
a penalty, $1,000 per Trading Day (increasing to $2000 per Trading Day on the fifth (5th) Trading Day after such liquidated damages
begin to accrue) for each Trading Day after such Deadline until such certificates are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Article III
hereof for the Borrower’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have
the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.

 

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		f.	Failure to Deliver Common Stock Prior to Deadline; Compensation for Buy-In. Should Borrower
fail to deliver the Common Stock by the Deadline then Holder, at any time, prior to selling all of the shares being converted,
may rescind any portion, in whole or in part, of that particular conversion, attributable to the unsold shares and have the rescinded
conversion amount returned to the principal sum with the rescinded conversion shares returned to the Borrower. In addition to any
other rights available to the Holder, if the Borrower fails for any reason to deliver to the Holder Conversion Shares by the Deadline,
and if after such Deadline the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise),
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder
of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Deadline (a “Buy-In”),
then the Borrower shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder)
the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock
so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive
from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation
was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note
in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Borrower had timely
complied with its delivery requirements under Section 1.4(d). For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual
sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of
$10,000 under clause (A) of the immediately preceding sentence, the Borrower shall be required to pay the Holder $1,000. The Holder
shall provide the Borrower written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request
of the Borrower, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Borrower’s failure to timely deliver certificates representing shares of Common Stock upon conversion
of this Note as required pursuant to the terms hereof.

 

	 	1.5	Concerning the Shares. Buyer understands that the
Note, and until such time as the Conversion Shares have become eligible for legend removal pursuant to Section 2(g) of the Purchase
Agreement, the Conversion Shares may bear a restrictive legend in substantially the form set forth in Section 2(g) of the Purchase
Agreement.

 

	 	1.6	Effect of Certain Events.

 

		a.	Effect of Merger, Consolidation, Etc. At the option of Holder, the sale, conveyance or disposition
of all or substantially all of the assets of Borrower, the effectuation by Borrower of a transaction or series of related transactions
in which more than 50% of the voting power of Borrower is disposed of, or the consolidation, merger or other business combination
of Borrower with or into any other Person (as defined below) or Persons when Borrower is not the survivor shall be treated pursuant
to Section 1.6(b) hereof.  

 

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		b.	Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and
outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common Stock of Borrower shall be changed into the same
or a different number of shares of another class or classes of stock or securities of Borrower or another entity, or in case of
any sale or conveyance of all or substantially all of the assets of Borrower other than in connection with a plan of complete liquidation
of Borrower, then 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 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 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. 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 (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or
if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not 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 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 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 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 Holder with respect to the shares of Common Stock issuable
upon such conversion had such Holder been Holder of such shares of Common Stock on the record date for the determination of shareholders
entitled to such Distribution.

 

		d.	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, Borrower, at its expense, shall promptly compute such adjustment
or readjustment and prepare and furnish to Holder a certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. Borrower shall, upon the written request at any time of Holder,
furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time
in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time
would be received upon conversion of the Note.

 

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		1.7	Status as Shareholder. Upon
                                         submission of a Conversion Notice by a Holder, (i) the shares covered thereby (provided
                                         the Reserved Amount fully covers the dollar amount being converted and that such shares
                                         meet the conditions set forth in Section 1.1 above) shall be deemed converted into shares
                                         of Common Stock and (ii) Holder’s rights as a Holder of such converted portion
                                         of this Note shall cease and terminate, excepting only the right to receive certificates
                                         (or electronic transmissions into Holder’s broker account) 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 Borrower to comply with the terms of this Note.
                                         Notwithstanding the foregoing, if a Holder has not received certificates (or transfer
                                         in the form of electronic transmission into Holder's broker account) 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 Holder otherwise elects to retain its
                                         status as a holder of Common Stock by so notifying Borrower) Holder shall regain the
                                         rights of a Holder of this Note with respect to such unconverted portions of this Note
                                         and Borrower shall, as soon as practicable, return such unconverted Note to 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, Holder shall retain all of its rights
                                         and remedies, to the extent required thereby, for Borrower's failure to convert this
                                         Note.

 

		1.8	Prepayment. Notwithstanding anything to the contrary contained in this Note, so long as
Borrower has not received a Conversion Notice from Holder, then at any time during the period beginning on the Issue Date, Borrower
shall have the right, exercisable on not less than ten (10) days’ prior written notice to Holder of the Note to prepay the
outstanding Note (principal and accrued interest), in full or in part, in accordance with this Section 1.8. Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to Holder of the Note at its registered
addresses by facsimile (with receipt confirmation by recipient) or email and shall state: (i) that Borrower is exercising its right
to prepay the Note, and (ii) the principal and interest amount and date of prepayment which shall be not less than ten (10) Trading
Days or more than twelve days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), which must be no less than ten (10) and no later than twelve (12) days from the date of the Optional
Prepayment Notice, Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of Holder
as specified by Holder in writing to Borrower. 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 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 being prepaid plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note being prepaid to the Optional Prepayment Date.
For the avoidance of doubt, the Holder may convert any outstanding part of this Note during the period from delivery of the Optional
Prepayment Notice until the Optional Prepayment Date.

 

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	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.	 	 	115	%
	2.      The period beginning on the date which is sixty-one (61) days following the Issue Date and thereafter.	 	 	125	%

 

ARTICLE III. EVENTS OF DEFAULT/INDEMNITY

 

If any of the following events
occur (each, an “Event of Default”), the Holder shall be entitled to consider the Borrower to be in default
and this Note shall become immediately due and payable:

 

		3.1	Failure to Pay Principal or Interest. Borrower fails to pay the principal hereof or interest
thereon when due on this Note, whether at the Maturity Date, upon acceleration or otherwise (including, without limitation, any
failure to repay the Note upon completion of a Qualified Financing in accordance herewith, or any failure to prepay the Note on
an Optional Prepayment Date in accordance with Section 1.8).

 

		3.2	Conversion and the Shares. Borrower fails to issue shares of Common Stock to Holder (or
announces or threatens in writing that it will not honor its obligation to do so) upon exercise by Holder of the conversion rights
of Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer or issue any certificate
(or electronic transmission) for shares of Common Stock issued to Holder upon conversion of or otherwise pursuant to this Note
as and when required by this Note, 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) the shares of Common Stock to be issued to 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 Holder upon conversion of
or otherwise pursuant to this Note as and when required by this Note and the Purchase Agreement (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 Holder shall have delivered a Conversion Notice.

 

		3.3	Breach of Covenants. 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 (including, without limitation,
any failure to complete a Closing in accordance with the Purchase Agreement, any failure to maintain the Reserved Amount, or the
Borrower providing Holder with material nonpublic information in violation of Section 4(j) of the Purchase Agreement).

 

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		3.4	Breach of Representations and Warranties. Any representation or warranty of Borrower made
herein or in any agreement, statement or certificate given in 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 Holder with respect to this Note or the Purchase Agreement.

 

		3.5	Receiver or Trustee. Borrower or any subsidiary of 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
Borrower or any subsidiary of Borrower.

 

		3.7	Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common
Stock on the OTC (which specifically includes, OTCBB, OTCQB, OTCPK and the Pink Sheets electronic quotation system) or any national
securities exchange.

 

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

 

		3.9	DTC Chill. A “Chill” restriction shall be placed on the Common Stock by the
Depository Trust Borrower ("DTC").

 

		3.10	Cessation of Operations. The Borrowers ceases operations.

 

		3.11	Judgement Against Borrower. Any monetary judgment, writ or similar final process shall be
entered or filed against the Borrower, any subsidiary or any of their respective property or other assets for more than $50,000.

 

		3.12	Replacement of Transfer Agent. The Borrower replaces its transfer agent.

 

		3.13	Reverse Stock Split. The Borrower effectuates a reverse split, stock dividend or similar
transaction of its Common Stock without twenty (20) calendar days’ notice to the Holder.

 

		3.14	No Bid Price. There is no bid price for the Common Stock.

 

		3.15	Cross-Default. The Borrower or any subsidiary thereof shall default on any of its obligations
under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which
there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any
long term leasing or factoring arrangement that (a) involves an obligation greater than $50,000, whether such indebtedness now
exists or shall hereafter be created and (b) results in such indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise become due and payable;

 

    	10

     

    

 

		3.16	The Company shall fail to maintain sufficient reserved shares pursuant to Section 1.3 of this Note
or fails to file a Schedule 14A or 14C, as applicable, within 20 days of receiving a request of the Holder in accordance with Section
1.3 .

 

		3.17	The Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange
Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable).

 

		3.18	Remedies upon a Default. Notwithstanding anything to the contrary contained in this Note,
upon the occurrence of an Event of Default under Article III, exercisable through the delivery of written notice to Borrower by
the Holder (the “Default Notice”), the Note shall become immediately due and payable and Borrower shall
pay to Holder, in full satisfaction of its obligations hereunder, an amount equal to: 140% times the outstanding principal amount
of this Note as of the date of payment (“Mandatory Prepayment Date”) plus Default Interest and all other
amounts payable hereunder, such as accrued and unpaid interest and liquidated damages, 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 (“Default Amount”), and Holder shall be entitled to
exercise all other rights and remedies available at law or in equity. Additionally, the Variable Conversion Price shall decrease
by five percent (5%) upon each Event of Default.

 

ARTICLE IV. MISCELLANEOUS

 

		4.1	Failure or Indulgence Not Waiver. No failure or delay on the part of 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 made in accordance with the Purchase
Agreement.

 

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

 

    	11

     

    

 

		4.4	Assignability. This Note shall be binding upon Borrower and its successors and assigns,
and shall inure to the benefit of 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 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 in compliance with
applicable securities rules and regulations.

 

		4.5	Cost of Collection. If default is made in the payment of this Note, Borrower shall pay Holder
hereof all 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 New York applicable to contracts made and wholly to be performed within the State of New York and shall be binding upon the
successors and assigns of each party hereto. The Holder and the Borrower hereby mutually waive trial by jury and consent to exclusive
jurisdiction and venue in the courts of the State of New York.

 

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

 

		4.8	Notice of Corporate Events. Except as otherwise provided below, 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. At any time
at which this Note is convertible into Common Stock, Borrower shall provide Holder with prior notification of any meeting of Borrower's
shareholders (and copies of proxy materials and other information sent to shareholders). At any time at which this Note is convertible
into Common Stock, in the event of any taking by 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 Borrower or any proposed liquidation,
dissolution or winding up of Borrower, Borrower shall mail a notice to 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. Borrower
shall make a public announcement of any event requiring notification to Holder hereunder substantially simultaneously with the
notification to Holder in accordance with the terms of this Section 4.8.

 

		4.9	Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance
of this Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest
due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law.

 

    	12

     

    

 

		4.10	Next Business Day. Whenever any payment or other obligation hereunder shall be due on a
day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

		4.11	Headings. The headings contained herein are for convenience only, do not constitute a part
of this Note and shall not be deemed to limit or affect any of the provisions hereof.

 

[THE
REMAINDER OF THIS PAGE HAS INTENTIONALLY

BEEN
LEFT BLANK]

 

    	13

     

    

 

IN WITNESS WHEREOF,
the Borrower has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

 

	 	NUGENE INTERNATIONAL, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	14

     

    

 

EXHIBIT A: NOTICE OF CONVERSION

 

The undersigned hereby elects
to convert $[                                   ] of the Note (defined below) into the number of shares of Common Stock of NuGene International, Inc. (the
“Borrower”) to be issued pursuant to the conversion of the Note as set forth below according to the conditions
of the Convertible Promissory Note of Borrower dated ________, 2016 (the "Note"). No fee will be charged
to 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 Conversion
Notice to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
Transfer"). This election shall only be effective if the Borrower’s transfer agent is a participating member of DTC's
DWAC program and the Borrower is DWAC eligible.

 

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: _________________

 

	By:	 	 
	Name:	 
	Title:	 
	 	 
	Date:	 	 

 

    	15Exhibit 10.1

 

NOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE AGREEMENT
(the “Agreement”), dated October __, 2016, by and between NuGene International, Inc., a Nevada corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”, and together
with the Company, the  "Parties").

 

WHEREAS:

 

A.           The
Parties are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the
rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”) as described in this Agreement.

 

B.           Purchasers,
severally and not jointly, desire to purchase and the Company desires to issue and sell, upon the terms and conditions set forth
in this Agreement five percent (5%) promissory notes of the Company, in the form attached hereto as Exhibit A (the
“Notes”), in the aggregate principal amount of up to $2,400,000, which, upon the occurrence
of certain events set forth therein, will be convertible into shares (“Conversion Shares”), of the Company’s
common stock, par value $0.0001 (“Common Stock”) and warrants, in the form of Exhibit B hereto
(the “Warrants”), to purchase shares of Common Stock (the “Warrants Shares”,
and together with the Warrants, the Notes, and the Conversion Shares, the “Securities”), for an aggregate
purchase price of up to $2,000,000 (reflecting an aggregate original issue discount of up to $400,000, or 16.67%).

 

NOW THEREFORE, the Company and Purchasers,
severally and not jointly, hereby agree as follows:

 

1.           Purchase
and Sale of Securities.

 

a.           Purchase
of Notes and Warrants. On each Closing Date (as defined below), the Company shall issue and sell to Purchasers and Purchasers
shall purchase from the Company (i) such principal amount of the Notes and (ii) Warrants in an amount equal to 75% of the number
of shares of Common Stock that would be issued upon conversion of the such Notes, at an assumed conversion price equal to 60% multiplied
by the Market Price (as defined in the Note) , as set forth immediately below each Purchaser’s name for such Closing on the
signature pages hereto.

 

b.           Form
of Payment/Closing. On or prior to each Closing Date, each Purchaser shall pay the purchase price, in the amount as is set
forth immediately below each respective Purchaser’s name for such Closing on the signature pages hereto, for the Note to
be issued and sold to it at the Closing (the “Purchase Price”) (equal to 83.33% of the principal amount
of such Note) by wire transfer of immediately available funds to the escrow agent under the escrow agreement among the Company,
the Purchasers, and Sichenzia Ross Ference Kesner LLP, as escrow agent (the “Escrow Agent”), dated on
or about the date hereof (the “Escrow Agreement”), as set forth below:

 

    	 	1	 

     

    

  

	 	Citibank
	 	153 East 53rd Street
	 	23rd Floor
	 	New York, NY  10022
	 	A/C of Sichenzia Ross Friedman Ference LLP
	 	A/C#:       4974921703
	 	ABA#:      021000089
	 	SWIFT Code: CITIUS33
	 	REMARK: NUGENE

 

On each Closing Date, (i) the Purchase
Price will be released from escrow in accordance with the Escrow Agreement, and (ii) the Company shall deliver such duly executed
Notes and corresponding Warrants, to Purchasers (each such event, a “Closing”)

 

c.           Closing
Dates. The Closings will occur in tranches, subject to the satisfaction (or written waiver) of the conditions set forth in
Section 6 and Section 7 below, as follows (each, a “Closing Date”):

 

i. The initial Closing (the “First Closing”)
will occur on date of execution of this Agreement, with the total Purchase Price from all Purchasers to be no less than $400,000,
provided that, no Purchaser will be obligated for more than the amount set forth for such Purchaser on the signature pages hereto
with respect to such Closing.

 

ii. The second Closing (the “Second Closing”)
will occur upon filing by the Company of a registration statement with the Securities and Exchange Commission (the “SEC”)
for any primary offering of Common Stock (the “Registration Statement”), subject to the condition (which may be waived
only by each Purchaser as to such Purchaser’s purchase for such Closing) that, as of such filing date, the average daily
dollar volume for the Common Stock for the prior 10 Trading Days is at least $15,000. “Trading Day” shall mean any
day on which the Common Stock is tradable for any period on the OTCQB, or any other trading market on which the Common Stock is
then being traded. The total Purchase Price from all Purchasers at the Second Closing shall be no less than $200,000, provided
that, no Purchaser will be obligated for more than the amount set forth for such Purchaser on the signature pages hereto with respect
to such Closing.

 

iii. The third Closing (the “Third Closing”)
will occur on the earlier to occur of (a) filing of Amendment No. 1 to the Registration Statement or (b) the effective date of
the Registration Statement, subject to the condition (which may be waived only by each Purchaser as to such Purchaser’s purchase
for such Closing) that as of such filing or effectiveness date (as applicable), the average daily dollar volume for the Common
Stock for the prior 10 Trading Days is at least $20,000. The total Purchase Price from all Purchasers at the Third Closing shall
be no less than $200,000, provided that, no Purchaser will be obligated for more than the amount set forth for such Purchaser on
the signature pages hereto with respect to such Closing..

 

iv. The fourth Closing (the “Fourth Closing”)
will occur on the earlier to occur of (a) filing of Amendment No. 2 to the Registration Statement or (b) the effective date of
the Registration Statement, subject to the condition (which may be waived only by each Purchaser as to such Purchaser’s purchase
for such Closing) that as of such filing or effectiveness date (as applicable), the average daily dollar volume for the Common
Stock for the prior 10 Trading Days is at least $20,000. The total Purchase Price from all Purchasers at the Fourth Closing shall
be no less than $200,000, provided that, no Purchaser will be obligated for more than the amount set forth for such Purchaser on
the signature pages hereto with respect to such Closing..

 

    	 	2	 

     

    

  

v. The fifth Closing (the “Fifth Closing”)
(which, for the avoidance of doubt, may occur in multiple tranches and in such amounts (up to the maximum aggregate principal amount
hereunder) as agreed to by the Parties) will occur at any time following the Fourth Closing, subject to the mutual agreement of
the Parties, on such date as may be agreed to by the Parties.

 

2.           Representations
and Warranties of Purchasers. Each Purchaser, severally and not jointly, represents and warrants to the Company, as to such
Purchaser, that:

 

a.           Investment
Purpose. As of the date hereof, Purchaser is purchasing the Securities pursuant to this Agreement for its own account and not
with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration
under the Securities Act, provided, however, that by making the representations herein, Purchaser does not agree
to hold any Securities for a minimum or other specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or a valid exemption under the Securities Act. Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.

 

b.           Accredited
Investor Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, on each Closing
Date it will be an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D. Such Purchaser is
not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

 

c.           Reliance
on Exemptions. Purchaser understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and
understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser
to acquire the Securities.

 

d.           Information.
Purchaser and its advisors, if any, have been furnished with all publicly made materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the Securities which have been requested by Purchaser
or its advisors. Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company, provided
that, neither such inquiries nor any other due diligence investigation conducted by Purchaser or any of its advisors or representatives
shall modify, amend or affect Purchaser’s right to rely on the Company’s representations and warranties contained in
Section 3 below. Purchaser understands that its investment in the Securities involves a significant degree of risk. Purchaser is
not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.

 

e.           Governmental
Review. Purchaser understands that no United States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities.

 

    	 	3	 

     

    

  

f.            Transfer
or Re-sale. The Purchaser understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the Securities Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the
Securities are sold pursuant to an effective registration statement under the Securities Act, or (b) the Securities may be
sold or transferred pursuant to an exemption from such registration.

 

g.           Legends.
The Purchaser understands that the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

 

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

 

h.           Authorization;
Enforcement. This Agreement has been duly and validly authorized by Purchaser. This Agreement has been duly executed and delivered
on behalf of Purchaser, and this Agreement constitutes a valid and binding agreement of Purchaser enforceable in accordance with
its terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under
the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be
brought.

 

i.            Residency.
Purchaser is a resident of the jurisdiction set forth immediately below Purchaser’s name on the signature pages hereto.

 

j.            Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

k.          General
Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement.

 

    	 	4	 

     

    

  

l.            Confidentiality
Prior To The Date Hereof. Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). “Person”
shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

3.           Representations
and Warranties of The Company. The Company represents and warrants to the Purchasers that:

 

a.           Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is, or shall be, a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. Schedule 3(a) sets forth a list of all of the Subsidiaries of the Company and
the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business,
operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiary”
or “Subsidiaries” (as the case may be) means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b.           Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including without limitation, the issuance of the Securities and the issuance and reservation for issuance
of the Conversion Shares and Warrant Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders is required
in connection therewith, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with the authority to sign this Agreement and the other
documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Notes and the Warrants, each of such instruments will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with their terms, except (a) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (b) as enforceability
of any indemnification or contribution provision may be limited under the federal and state securities laws; and (c) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.

 

    	 	5	 

     

    

  

c.           Capitalization.
The capitalization of the Company is as set forth on Schedule 3(c). All of the Company’s outstanding shares of capital stock
are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. Except as disclosed in the Company’s
SEC Documents (as defined herein), no shares of capital stock of the Company are subject to preemptive rights or any other similar
rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company.
Except as disclosed in the Company’s SEC Documents and on Schedule 3(c), as of the effective date of this Agreement, (i)
there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or
their securities under the Securities Act and (iii) there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance
of the Securities. The Company has made available to the Purchaser true and correct copies of the Company’s Articles of Incorporation,
as amended, as in effect on the date hereof (“Articles of Incorporation”), the Company’s By-laws,
as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or
exercisable for common stock of the Company and the material rights of the holders thereof in respect thereto.

 

d.           Issuance
of Shares. The Conversion Shares and Warrant
Shares are duly authorized and reserved for issuance and, upon conversion of the Note or exercise of the Warrants in accordance
with their respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and
encumbrances with respect to the issue thereof and, except as set forth in the Company's SEC Documents, shall not be subject to
preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder
thereof.

 

e.           Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the common stock upon the issuance
of the Conversion Shares or Warrant Shares. The Company further acknowledges that its obligation to issue Conversion Shares or
Warrant Shares in accordance with this Agreement, the Notes, and the Warrants, is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

    	 	6	 

     

    

  

f.            No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities) will not (i) conflict
with or result in a violation of any provision of the Articles of Incorporation or By-laws, or (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture,
patent, patent license of instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations
of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Articles of
Incorporation, By-laws or other organizational documents and, except as disclosed in the Company’s SEC Documents, neither
the Company nor any of its Subsidiaries is in default (and no event has occurred which the notice or lapse of time or both could
put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property
or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually
or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being
conducted, and shall not be conducted so long as Purchaser owns any of the Securities, in violation of any law, ordinance or regulation
of any governmental entity. Except as specifically contemplated by this Agreement and as required under the Securities Act and
any applicable state securities laws and except as disclosed in the Company’s SEC Documents, the Company is not required
to obtain any consent, authorization or order of, or make any filing or registration with any court, governmental agency, regulatory
agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its
obligations under this Agreement in accordance with the terms hereof or thereof or to issue and sell the Securities in accordance
with the terms hereof and to issue the Conversion Shares and Warrant Shares other than: (i) any filing required to be made under
the Company’s disclosure obligations under the Exchange Act and (ii) the filing of Form D with the SEC and such filings as
are required to be made under applicable state securities laws.

 

g.           SEC
Documents: Financial Statements. Except as set forth on Schedule 3(g) of the Disclosure Schedules, the Company has filed
all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a)
or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials and any amendments filed through the date hereof, including the exhibits thereto
and documents incorporated by reference therein, being collectively referred to herein as the “SEC Documents”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration
of any such extension. As of their respective dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Documents, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject
to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Documents comply in all material
respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

    	 	7	 

     

    

  

h.           Absence
of Certain Changes. Except as set forth in the SEC Documents, since June 30, 2016, there has been no material adverse change
and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results
of operations, prospects or Exchange Act reporting status of the Company or any of its Subsidiaries.

 

i.            Absence
of Litigation. Except as set forth in the SEC Documents, to the Company’s knowledge, there is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company of any of its
Subsidiaries, or their officers or directors in the their capacity as such, that could have a Material Adverse Effect.

 

j.            Patents,
Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents,
patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service
names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business
as now operated (and, as presently contemplated to be operated in the future). There is no claim or action by any Person pertaining
to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary
with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated
to be operated in the future). To the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current
and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any Person;
and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of
its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual
Property.

 

k.          Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company
and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to
be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns are presently being audited by any taxing authority.

 

    	 	8	 

     

    

  

l.            Certain
Transactions. Except as set forth in the SEC Documents and for arm’s length transactions pursuant to which the Company
or any of its Subsidiaries makes payments in the ordinary course of business, none of the officers, directors, or employees of
the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

m.           Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Purchasers pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made
herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred
or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the Exchange Act are being incorporated into an effective registration statement filed by the Company under the Securities Act).

 

n.           Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that the Purchasers are acting solely
in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Purchasers are not acting as financial advisors or fiduciaries of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Purchasers or any
of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents
to the Purchasers that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation
of the Company and its representatives.

 

o.           No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 2,
neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder
approval provisions of any Trading Market on which any of the Securities of the Company are listed or designated.

 

    	 	9	 

     

    

  

p.           Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the
Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the
Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. Since June 30, 2016, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
the possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

q.           Environmental
Matters.

 

(i)          There
are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions
activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal,
state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of
the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing.
The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

(ii)         Other
than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its subsidiaries, and no Hazardous Materials
were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the
period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.

 

(iii)        There
are no underground storage tanks on or under any real property owned, leased or used by The Company or any of its Subsidiaries
that are not in compliance with applicable law.

 

r.            Title
to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case free and clear of all liens, encumbrances and defects or such as would not have a Material Adverse Effect. Any real
property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not have a Material Adverse Effect.

 

    	 	10	 

     

    

  

s.          Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

t.            Internal
Accounting Controls. Except as set forth in the SEC Documents, the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.

 

u.           Foreign
Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other Person
acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

 

v.           No
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended.

 

v.           Brokers.
The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or
similar payments relating to this Agreement or the transactions contemplated hereby.

 

4.           Covenants.

 

a.           Best
Efforts. The Parties shall use their best efforts to timely satisfy each
of the conditions described in Section 6 and 7 of this Agreement.

 

b.           Use
of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes, including fees and expenses relating to an uplisting of the Common Stock to
a national securities exchange.

 

c.           Blue
Sky Laws. The Company shall, on or before the First Closing, take such action as the Company shall reasonably determine is
necessary to qualify the Securities for sale to the Purchaser at the Closings pursuant to this Agreement under applicable securities
or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Purchaser on or prior to the First Closing Date.

 

    	 	11	 

     

    

  

d.           Listing.
The Company shall obtain a listing of the Conversion Shares and the Warrant Shares upon a Trading Market upon which shares of Common
Stock will be listed or quoted as soon as possible after the First Closing and, so long as the Purchaser owns any of the Securities,
shall maintain, so long as any other shares of common stock shall be so listed, listing or quotation on a Trading Market of all
Conversion Shares and Warrant Shares from time to time issuable upon conversion of the Notes or exercise of the Warrants. A “Trading
Market” shall mean any regulated or self-regulated exchange or organized trading market, including the NASDAQ Capital
Market, the New York Stock Exchange, NYSE MKT, OTCQX, OTCQB or OTC Pink Marketplace, as applicable. The Company will obtain and,
so long as any Purchaser owns any of the Securities, maintain the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial
Industry Regulatory Authority (“FINRA”) and such regulatory authorities, as applicable.

 

e.           Corporate
Existence. As long as any Purchaser owns any Securities, if the Company is not required to file reports pursuant to the Exchange
Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information
as is required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further
action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell
such Securities without registration under the Securities Act within the requirements of the exemption provided by Rule 144.

 

f.            No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the Securities Act or cause the offering
of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

h.           Removal
of Legend. The Company shall cause the legend set forth in Section 2(g) above to be removed and the Company shall, at the Company’s
expense (with respect to obtaining any required legal opinion) issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, such Security is registered for resale
under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 under the
Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold.
The Purchasers will accept a blanket legal opinion with respect to any such legend removal and may recommend to the Company an
attorney to provide any requisite legal opinion with respect to such legal opinion.

 

    	 	12	 

     

    

  

i.            Registration
Rights. In the event that the Notes are not repaid in full on the original Maturity Date (as defined in the Notes), at any
time thereafter, if the Company proposes to register any of its common stock or other securities under the Securities Act in connection
with the public offering of such securities (other than a registration statement on Form S-8, Form S-4 and /or registration relating
solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization
or other transaction under Rule 145 of the Securities Act, or a registration on any form that does not include substantially the
same information as would be required to be included in a registration statement covering the resale of the Registrable Securities),
the Company shall, at such time, promptly give each Purchaser written notice of such registration (a “Piggyback Registration
Notice”), provided that, the Company will not be required to provide the Purchasers a Piggyback Registration Notice in connection
with any registration statement filed by the Company in connection with the Company’s next underwritten public offering following
the date of this Agreement. Upon the written request of each Purchaser given within twenty (20) days after mailing of such Piggyback
Registration Notice by the Company, the Company shall include in such registration statement filed in connection with such offering,
at the Company’s expense, the resale of all of the Registrable Securities that each such Purchaser has requested to be registered.
“Registrable Securities” means the shares of common stock issuable upon conversion of the Notes and exercise of the
Warrants.

 

j.            No Material Nonpublic
Information. The Company will not provide any Purchaser with material nonpublic information, at any time while such Purchaser
holds any Note or Warrant, without the prior written consent of such Purchaser.

 

5.           Transfer
Agent Instructions. At each Closing, the Company shall issue irrevocable instructions to its transfer agent to issue certificates,
registered in the name of Purchasers or their nominees, for the Conversion Shares and Warrants Shares for such Closing, in such
amounts as specified from time to time by Purchasers to the Company upon conversion of the Notes or exercise of the Warrants in
accordance with the terms set forth in Exhibit C (the “Irrevocable Transfer Agent Instructions”),
which will initially reserve for issuance 300% of the number of Conversion Shares (based on the Conversion Price as of the First
Closing Date) and Warrant Shares (the “Reserved Amount”). In the event that the Company proposes to replace its transfer
agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to this 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 Company and the Company. Prior
to registration of the resale of the Conversion Shares and the Warrant Shares under the Securities Act or the date on which the
Conversion Shares and the Warrant Shares may be sold without any restriction pursuant to Rule 144 or any available exemption under
the Securities Act, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company
warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, and stop
transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares and the Warrant Shares, prior
to registration of Conversion Shares and the Warrant Shares under the Securities Act or the date on which the Conversion Shares
and the Warrants Shares may be sold pursuant to Rule 144 or any available exemption under the Securities Act, without any restriction),
will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement, the Notes and the Warrants; (ii) it will not direct
its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing), electronically
or in certificated form, any certificate for Conversion Shares or Warrant Shares to be issued to Purchasers upon conversion or
exercise of or otherwise pursuant to the Notes or Warrants as and when required by the Notes, the Warrants and this Agreement;
and (iii) it will not fail to remove, or direct its transfer agent not to remove or impair, delay, and/or hinder its transfer agent
from removing, any restrictive legend, or to withdraw any stop transfer instructions in respect thereof, on any certificate for
any Conversion Shares or Warrants Shares issued to Purchasers upon conversion or exercise of or otherwise pursuant to the Notes
or Warrants as and when required by the Notes, Warrants, and this Agreement. Nothing in this Section shall affect in any way Purchasers’
obligations and agreement set forth in Section 2(g) hereof.

 

    	 	13	 

     

    

  

6.           Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Notes and Warrants
to Purchasers at each Closing is subject to the satisfaction, at or before each respective Closing Date of each of the following
conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at
any time in its sole discretion:

 

a.           Purchasers
shall have executed this Agreement and delivered the same to the Company.

 

b.           Purchasers
shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.           The
representations and warranties of Purchasers shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and
Purchasers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by Purchasers at or prior to the Closing Date.

 

d.           No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority or competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

7.           Conditions
to Purchasers’ Obligation to Purchase. The obligation of Purchasers hereunder to purchase the Notes and Warrants at each
Closing is subject to the satisfaction, at or before each respective Closing Date of each of the following conditions, provided
that these conditions are for the Purchasers’ sole benefit and may be waived by the Purchasers at any time in their sole
discretion:

 

a.           The
Company shall have executed this Agreement and delivered the same to Purchasers.

 

b.           The
Company shall have delivered to Purchasers the duly executed Notes and Warrants in accordance with Section 1(b) above.

 

c.           The
Company shall have delivered to Purchasers the duly executed Irrevocable Transfer Agent Instructions in accordance with Section
5.

 

d.           The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Purchasers
shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may be reasonably requested by Purchasers including, but not limited
to certificates with respect to the Company’s Articles of Incorporation, Bylaws and Board of Directors’ resolutions
relating to the transactions contemplated hereby.

 

    	 	14	 

     

    

  

e.           No
litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority or competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

 

f.            No
event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not
limited to a change in the Exchange Act reporting status of the Company or the failure of the Company to be timely in its Exchange
Act reporting obligations.

 

g.           Trading
in the Company's Common Stock shall not have been suspended by the SEC.

 

h.           The
Escrow Agent will have received the closing statement executed by the Company in accordance with the Escrow Agreement.

 

8.           Miscellaneous.

 

a.           Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state and county
of New York. The parties to this Agreement 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
Company and Purchasers waive trial by jury. In any action relating to this Agreement, 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 Agreement
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 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.

 

b.           Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party

 

    	 	15	 

     

    

  

c.           Headings.
The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

 

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

 

e.           Entire
Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the Parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor Purchasers make any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
may be waived or amended other than by an instrument in writing signed by holders of the majority of the outstanding principal
amount of Notes.

 

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

 

NuGene International, Inc.

17912 Cowan

Irvine, California 92614

Attn:

Email:

 

If to Purchasers, to the addresses set forth on
signature pages hereto, with a copy to:

 

Sichenzia Ross Ference Kesner LLP

61 Broadway, 32nd Floor

New York, NY 10006

Attention: Darrin M. Ocasio, Esq.

E-mail: dmocasio@srfkllp.com

 

    	 	16	 

     

    

   

g.           Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and assigns.
Neither the Company nor Purchasers shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(f), Purchasers may assign their rights hereunder to any
Person that purchases Securities in a private transaction from Purchasers or to any of their affiliates as that term is defined
under the Exchange Act, without the consent of the Company.

 

h.           Third
Party Beneficiaries. This Agreement is intended for the benefit of the Parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i.            Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the
closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Purchasers.

 

j.            Indemnity.
The Company agrees to indemnify and hold harmless Purchasers and all their officers, directors, employees and agents for loss or
damage arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties
and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.

 

k.          Publicity.
The Company, and Purchasers shall have the right to review a reasonable period of time before issuance of any press releases, SEC,
or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall
be entitled, without the prior approval of Purchasers, to make any press release or SEC filing with respect to such transactions
as is required by applicable law and regulations (although Purchasers shall be consulted by the Company in connection with any
such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

 

l.            Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

m.           No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

    	 	17	 

     

    

  

n.           Remedies.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to Purchasers by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Agreement, that Purchasers 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 Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing
economic loss and without any bond or other security being required.

 

o.           Expenses.
Each Party will be responsible for its own expenses incurred in connection with this Agreement, except as otherwise set forth herein,
and except that the Company will reimburse Purchasers for the Purchasers’ legal expenses in the amount of $25,000, from the
proceeds of the First Closing.

 

q.           Prohibition
on Variable Rate Transactions. The Company may not, at any time while any Notes are outstanding, directly or indirectly (except
in connection with this Agreement), without prior written consent of the holders of the majority of the outstanding principal amount
of the Notes, issue any securities that are convertible or exercisable into common stock at a conversion or exercise price that
is variable, and not subject to a floor, unless the Company prepays the Notes in their entirety upon such issuance, or with the
proceeds thereof.

 

[REMAINDER OF DOCUMENT INTENTIONALLY LEFT
BLANK]

 

    	 	18	 

     

    

  

IN WITNESS WHEREOF, the Parties
have caused this Agreement to be duly executed as of the date first above written.

 

NUGENE INTERNATIONAL, INC.

 

	By:	 	 
	Name:  	 
	Title: 	 

 

OLD MAIN CAPITAL, LLC

 

	By:	 	 
	Name: Adam Long	 
	Title:   President	 
	Address: 3109 Stirling Road Suite 100	 
	Fort Lauderdale, FL 	 
	E-mail: adam@oldmaincapital.com	 

 

Purchase Price (First Closing): $100,000

Principal Amount (First Closing): $120,000

 

Purchase Price (Second Closing): $50,000

Principal Amount (Second Closing): $60,000

 

Purchase Price (Third Closing): $50,000

Principal Amount (Third Closing): $60,000

 

Purchase Price (Fourth Closing): $50,000

Principal Amount (Fourth Closing): $60,000

 

Purchase Price (Fifth Closing): amount to be
agreed to by Parties

Principal Amount (Fifth Closing): amount to
be agreed to by Parties

 

    	 	19	 

     

    

  

RIVER NORTH EQUITY LLC

 

	By:	 	 
	Name: 	 
	Title:   	 
	Address: 	 

 

E-mail:

 

Purchase Price (First Closing): $140,000

Principal Amount (First Closing): $168,000

 

Purchase Price (Second Closing): $70,000

Principal Amount (Second Closing): $84,000

 

Purchase Price (Third Closing): $70,000

Principal Amount (Third Closing): $84,000

 

Purchase Price (Fourth Closing): $70,000

Principal Amount (Fourth Closing): $84,000

 

Purchase Price (Fifth Closing): amount to be
agreed to by Parties

Principal Amount (Fifth Closing): amount to
be agreed to by Parties

 

    	 	20	 

     

    

  

KODIAK CAPITAL GROUP, LLC

 

	By:	 	 
	Name: 	 
	Title:   	 
	Address:  	 

 

E-mail:

 

Purchase Price (First Closing): $100,000

Principal Amount (First Closing): $120,000

 

Purchase Price (Second Closing): $50,000

Principal Amount (Second Closing): $60,000

 

Purchase Price (Third Closing): $50,000

Principal Amount (Third Closing): $60,000

 

Purchase Price (Fourth Closing): $50,000

Principal Amount (Fourth Closing): $60,000

 

Purchase Price (Fifth Closing): amount to be
agreed to by Parties

Principal Amount (Fifth Closing): amount to
be agreed to by Parties

 

    	 	21	 

     

    

  

SBI INVESTMENTS LLC, 2014-1

 

	By:	 	 
	Name: 	 
	Title:   	 
	Address:  	 

 

E-mail:

 

Purchase Price (First Closing): $60,000

Principal Amount (First Closing): $72,000

 

Purchase Price (Second Closing): $30,000

Principal Amount (Second Closing): $36,000

 

Purchase Price (Third Closing): $30,000

Principal Amount (Third Closing): $36,000

 

Purchase Price (Fourth Closing): $30,000

Principal Amount (Fourth Closing): $36,000

 

Purchase Price (Fifth Closing): amount to be
agreed to by Parties

Principal Amount (Fifth Closing): amount to
be agreed to by Parties

 

    	 	22	 

     

    

  

Exhibit A

 

Form of Note

 

    	 	23	 

     

    

 

Exhibit B

 

Form of Warrant

 

    	 	24	 

     

    

 

Exhibit C

 

Irrevocable
Transfer Agent Instructions

 

    	 	25

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