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Document

CARMAX, INC.
AMENDED AND RESTATED 2002 EMPLOYEE STOCK PURCHASE PLAN
(as amended and restated June 1, 2021)

1.    Purpose and Effective Date.  The CarMax, Inc. Amended and Restated 2002 Employee Stock Purchase Plan (the “Plan”) provides eligible employees of CarMax, Inc., a Virginia corporation, an opportunity to purchase CarMax, Inc. Common Stock (“Common Stock”) through payroll deductions and to receive a Company match for a portion of their payroll deductions.  The Plan was originally effective on October 1, 2002, and was amended and restated effective as of November 1, 2004, as of July 1, 2006, as of January 19, 2009, as of June 23, 2009 and as of January 1, 2020.  The effective date of this amendment and restatement is June 1, 2021.  
2.    Definitions.  
(a)    Benefits Department: The employee benefits department of the Company.
    (b)    Committee: The Compensation and Personnel Committee of the Company’s Board of Directors.
(c)    Company: CarMax, Inc., a Virginia corporation, and any subsidiary business entity (including, but not limited to, a corporation, a partnership, or limited liability company) that is under common control with CarMax, Inc., as determined under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended.  Notwithstanding the foregoing, the term “Company” shall not include Edmunds.com, Inc., Edmunds Holding Company, Everest Endeavors II, LLC, and any other subsidiary entities thereof.

(d)    Compensation: All cash compensation and commissions (estimated as deemed necessary by the Plan Administrator) before any deductions or withholding and including overtime and bonuses, but exclusive of all amounts paid as reimbursements of expenses including those paid as part of commissions and those paid in the form of relocation bonuses, housing allowances or other payments in connection with employee relocations.
(e)    Eligible Employees: Employees who meet the requirements set forth in Section 4.
(f)    Employee: Any person employed by the Company as a common law employee on the United States payroll. It is expressly intended that persons not employed as common law employees on the Company’s United States payroll are to be excluded from participation in the Plan, even if a court or administrative agency determines that such individuals are common law employees and not independent contractors.
(g)    Enrollment Date: The date on which an Eligible Employee begins participation in the Plan pursuant to Section 6.   
(h)    Participating Employees: Eligible Employees who participate in the Plan.

(i)    Plan Administrator: An Employee (or a group of Employees) appointed by the Committee as provided in Section 5 or, in the absence of any such specific appointment, the Chief Financial Officer of the Company.
(j)    Plan Service Provider: A plan service provider/dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers or other provider of employee plan administrative services selected by the Plan Administrator as provided in Section 5.
3.    Amount of Stock Subject to the Plan.  The total number of shares of Common Stock that may be purchased under the Plan shall be 8,000,000, subject to adjustment as provided in Section 16.  Such shares must be shares purchased for Participating Employees on the open market.
4.Eligible Employees.  
(a)Any Employee classified as a “Full-Time Associate” or “Part-Time Associate” pursuant to the Company’s policies and procedures shall become eligible to participate in the Plan after he or she has completed one year of service as an Employee of the Company; provided, however, that (i) Employees who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, with respect to securities of the Company, and (ii) Employees who are officers of the Company (other than those serving as Assistant Vice Presidents, Assistant Treasurers or Assistant Secretaries), shall not be eligible to participate in the Plan. 
(b)    If an Employee has one year of service but is excluded from participation in the Plan due to the requirements set forth in (i) or (ii) of the preceding paragraph, the Employee will be eligible to participate in the Plan  as soon as administratively practicable, after he or she is no longer excluded because of such requirements.  Continuity of service for purposes of determining if an Employee has completed one year of service is determined pursuant to the Company’s rehire/reinstatement and change of status policies in effect at the time the eligibility determination is made.  
5.Administration of the Plan. 
(a)The Plan shall be administered by the Committee or its designee.  The Committee shall have all powers necessary to administer the Plan, including but not limited to, the power: to construe and interpret the Plan’s documents; to decide all questions relating to an Employee’s employment status and eligibility to participate in the Plan; to make adjustments to the limitations on payroll deductions set forth in Section 7; to employ such other persons as are necessary for the proper administration of the Plan; and to make all other determinations necessary or advisable in administering the Plan.  Any construction, interpretation, or application of the Plan by the Committee shall be final, conclusive and binding.
(b)    The Committee shall appoint an officer or other Employee of the Company to serve as the Plan Administrator. The Plan Administrator shall be authorized to designate other 
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Employees of the Company to assist him or her in carrying out his or her responsibilities under the Plan.  The Plan Administrator and his or her designees shall be responsible for the general administration of the Plan including establishment of operating procedures, enrollment deadlines and such other matters as the Committee deems necessary for the efficient and proper administration of the Plan.
(c)    The Plan Administrator shall appoint a Plan Service Provider in order to fulfill the duties of the Plan Service Provider set forth herein.  The Plan Administrator shall also have the authority to replace any Plan Service Provider he or she has appointed for the Plan with another Plan Service Provider.
6.    Participation in the Plan.  
(a)    An Eligible Employee may commence or recommence participation in the Plan as soon as administratively feasible after he or she has enrolled and that enrollment has been processed by the Plan Service Provider.  
 (b)    An Eligible Employee shall authorize payroll deductions from the Employee’s Compensation and authorize the Plan Service Provider to establish an employee stock purchase plan account for the Employee (“ESPP Account”).
(c)    A Participating Employee’s contributions will begin in the first pay period that is administratively practicable after the enrollment has been processed by the Plan Service Provider.
7.    Payroll Deductions and Limitations.  
(a)    Payroll deductions shall be a percentage of the Participating Employee’s Compensation for each payroll period as specified by the Participating Employee according to procedures defined by the Benefits Department.  Payroll deductions for each payroll period shall not be less than 2% nor more than 10% of Compensation for such payroll period.  Payroll deduction specifications shall be made in 1% increments.  The Plan Administrator shall have the power to change these percentage limitations.
(b)    The maximum amount that may be contributed by each Participating Employee to the Plan in any one calendar year is $10,000.  When a Participating Employee’s aggregate payroll deductions for the calendar year total $10,000, the Participating Employee’s purchases of Common Stock and payroll deductions under the Plan shall be suspended for the remainder of the calendar year.  However, the Participating Employee shall continue to be a participant under the Plan unless he or she elects to stop contributions in the manner described in Section 17 or his or her participation terminates under Section 18 and the Employee’s purchases of Common Stock and payroll deductions will be resumed for the first full payroll period of the next calendar year. 
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8.    Changes in Payroll Deductions.  A Participating Employee may change the percentage of his or her payroll deductions, according to the procedures defined by the Benefits Department, subject to the minimum, maximum and allowed increments set forth in Section 7.  The change will be effective as soon as administratively practicable after the change request has been processed by the Plan Service Provider. A Participating Employee may also elect to stop making contributions in the manner described in Section 17.
9.    Company Matching Contributions.   The Company shall contribute an amount each month (the “Company Matching Contribution”) towards the purchase of shares for  Participating Employees. Unless modified by the Committee, the amount of the Company Matching Contribution shall be 15% of each Participating Employee’s contribution.  From time to time the Committee may modify the amount of the Company Matching Contribution; provided, however, that the Company Matching Contribution may not exceed 15% of each Participating Employee’s contribution.  The Company Matching Contribution shall be used to purchase shares for Participating Employees in accordance with Section 11.  Participating Employees shall be fully vested in shares purchased with Company Matching Contributions.
10.    Purchase Price.  A purchase price for all shares of Common Stock to be purchased under the Plan shall be determined on a monthly basis.  The purchase price shall apply to all purchases attributable to a Participating Employee’s payroll deductions for the payroll periods in the calendar month immediately preceding the date the purchase transactions take place (the “Payroll Deduction Month”).  The purchase price shall be 100% of the average selling price of Common Stock on the open market during a two to three day period in which the purchases are made (the “Purchase Price”).  Such purchase period shall end no later than the last business day of the month immediately following the Payroll Deduction Month.  
11.    Method of Purchase. The shares of Common Stock to be purchased under the Plan shall be purchased once each month on the open market.  The Company shall transmit the aggregate payroll deductions from the prior month together with the related Company Matching Contribution and information on each Participating Employee’s contribution to the Plan Service Provider promptly after the end of each month.  On a date as soon as practicable following receipt of the funds, the Plan Service Provider shall arrange for the purchase of Common Stock on the open market.  As soon as practicable after completing the purchase of the shares, the Plan Service Provider shall credit the ESPP Account for each Participating Employee with as many shares and fractional interests in shares as the Participating Employee’s contribution and the Company Matching Contribution will allow, based on the Purchase Price.  Shares purchased pursuant to both Participating Employee contributions and Company Matching Contributions made with respect to a calendar year shall be credited to the ESPP Accounts of Participating Employees no later than March 15 following the end of such calendar year. 
12.Dividend Reinvestment.
(a)Each ESPP Account shall be established with the following default dividend policy.  Cash dividends, if any, paid with respect to the Common Stock held in each ESPP 
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Account under the Plan shall be automatically reinvested in Common Stock, unless the Participating Employee directs otherwise.  The Plan Service Provider shall arrange for the reinvestment of dividends on the open market at the Participating Employee’s expense as soon as the Plan Service Provider receives the cash dividends.  The Company will not  pay any expenses associated with reinvesting dividends.
(b)    The Committee shall have the right at any time or from time to time upon written notice to the Plan Service Provider to change the default dividend reinvestment policy for ESPP Accounts established under the Plan.
13.    Rights as a Shareholder.  A Participating Employee shall have the right to vote full shares of Common Stock held in the Participating Employee’s ESPP Account and the right to receive annual reports, proxy statements and other documents sent to shareholders of Common Stock generally; provided, however, that so long as such shares are held for a Participating Employee by the Plan Service Provider, if a Participating Employee fails to respond in a timely manner to a request for instructions with respect to voting, the Plan Service Provider shall take such action with respect to the shares held for the Participating Employee as permitted by the New York Stock Exchange rules.  To the extent that such rules and applicable law permit, the Plan Service Provider shall vote shares with respect to which no specific voting instructions are given in accordance with the recommendations of the Board of Directors of the Company.  By instructing the Plan Service Provider in accordance with the terms and conditions of the Plan Agreement (defined below), a Participating Employee shall have the right at any time:
(a)    to obtain evidence of the shares of Common Stock credited to the Participating Employee’s ESPP Account; 
(b)    to direct that any whole shares of Common Stock credited to the Participating Employee’s ESPP Account be sold, and that the proceeds, less selling expenses, be remitted to the Participating Employee; or
(c)    to direct that any whole shares of Common Stock credited to the Participating Employee’s ESPP Account be transferred to an individual brokerage account.
14.    Rights Not Transferable.  Rights under the Plan are not assignable or transferable by a Participating Employee other than by will or by the laws of descent and distribution and, during the Participating Employee’s lifetime, are exercisable only by the Participating Employee.
15.    Joint Accounts.  Participating Employees may, to the extent permitted by the Plan Service Provider, establish ESPP Accounts as joint accounts with rights therein as prescribed under applicable state law.
16.    Certain Adjustments in the Case of Stock Dividends or Splits.  The Committee shall make appropriate adjustments in the number of shares of Common Stock that 
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may be purchased under the Plan if there are changes in the Common Stock by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, mergers or consolidations.
17.Stopping Contributions. 
(a)A Participating Employee may stop his or her contributions in accordance with procedures defined by the Benefits Department. Payroll deductions will stop as soon as administratively practicable. In addition, contributions will be automatically stopped for any Participating Employee who goes on a leave of absence without pay, effective when the Employee ceases to be paid by the Company.
(b)    After contributions for an Employee have been stopped, the Plan Service Provider will leave the ESPP Account open and the Committee reserves the right to charge the Employee any account fees resulting from the ESPP Account left open.  Shares may be left in the ESPP Account or the Employee may sell the shares or request evidence of ownership thereof.  If dividends are being paid and reinvested at the time of withdrawal, they will continue to be reinvested (if paid) unless the Employee requests the Plan Service Provider to pay them in cash.  The Employee may also ask the Plan Service Provider to close the ESPP Account.
(c)    An Employee for whom contributions have been stopped may start contributions again pursuant to Section 6 at any time when the Employee is an Eligible Employee.
18.    Termination of Participation in the Plan. An Employee’s participation in the Plan shall terminate when the Employee ceases to be employed by the Company, whether by reason of retirement, termination of employment, death, or otherwise (“Terminated Participant”).  Payroll deductions shall cease immediately or as soon as administratively feasible after the Plan Service Provider processes the termination.  Purchases shall be made for the calendar month in which the last payroll deduction is made in accordance with Section 11.  The Terminated Participant may elect to: (i) obtain evidence of the whole shares of Common Stock credited to his or her ESPP Account; (ii)  direct the Plan Service Provider to sell all whole shares of Common Stock credited to his or her ESPP Account and remit the proceeds, less selling expenses, to the Terminated Participant, or (iii) direct the Plan Service Provider to transfer all whole shares of Common Stock credited to his or her ESPP Account to an individual brokerage account.  In any event, the Plan Service Provider will sell any fractional interest held in the Terminated Participant’s ESPP Account to the Company and remit the proceeds of such sale, less selling expenses to the Terminated Participant.  In the event of an Employee’s death, the distribution shall be made to the Employee’s designated beneficiary or, in the absence of a designated beneficiary, to the Employee’s estate, in accordance with procedures established by the Plan Service Provider.
19.    Amendment of the Plan. The Committee may, at any time, or from time to time, amend the Plan in any respect; provided, however, that the Company shall obtain shareholder approval of an amendment to the extent necessary to comply with any applicable law, regulation or stock exchange rule.
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20.    Termination of the Plan.  The Plan and all rights of Employees hereunder shall terminate:
(a)    on the last business day of any month that Participating Employees become entitled to purchase a number of shares of Common Stock greater than the number of shares remaining unpurchased out of the total number of authorized shares under Section 3; or
(b)    at any earlier date at the discretion of the Board of Directors of the Company.
In the event that the Plan terminates under circumstances described in (a) above, the Common Stock remaining unpurchased as of the termination date shall be allocated to Participating Employees for purchase on a pro rata basis.  Upon termination of the Plan, ESPP Accounts shall remain open subject to the same limitations and conditions set forth in the second paragraph of Section 17.
21.    ESPP Account.  The relationship between the Plan Service Provider and each Participating Employee shall be governed by a separate agreement of terms and conditions between them (“Plan Agreement”).  In electing to participate in the Plan, a Participating Employee shall be deemed to have accepted the terms of the Plan Agreement.  
22.    Payment of Expenses.  The Company shall pay all expenses associated with purchases under the Plan, including brokerage commissions, if any.  
23.    Notices.  Any notice or instruction to be given to the Company shall be in writing and delivered by hand, Company office mail or U.S. mail to the address below:
CarMax, Inc.
c/o Secretary, CarMax, Inc.
12800 Tuckahoe Creek Parkway
Richmond, Virginia  23238
Any signature submitted to the Company electronically or by facsimile will have the same force and effect as an original signature.
24.    Government and Other Regulations.  The Plan, and the rights to purchase Common Stock hereunder, and the Company’s obligation to sell and deliver Common Stock hereunder shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or government agency as may, in the opinion of counsel for the Company, be required.  Any provision of this Plan that violates or conflicts with Section 409A of the Internal Revenue Code of 1986, as amended, shall be null and void and of no effect.
25.    Severability.   If any provision of this Plan is not valid or enforceable, that validity or enforceability shall not affect the remaining provisions of the Plan.
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26.    Indemnification of Committee.  Service on the Committee shall constitute service as a member of the Board of Directors of the Company so that members of the Committee shall be entitled to indemnification and reimbursement as members of the Board of Directors of the Company pursuant to its Articles of Incorporation and Bylaws.
27.    Tax Matters.
(a)    Each Employee shall make provision satisfactory to the Plan Administrator for payment of any taxes required by law to be withheld in respect of the purchase or disposition of Common Stock. In the Plan Administrator’s discretion and subject to applicable law, such tax obligations may be paid in whole or in part by the withholding or delivery of shares of Common Stock, including shares purchased under this Plan, valued at fair market value on the date of withholding or delivery.  The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Employee.
(b)    The Company does not represent or guarantee that any particular federal, state, or local income or payroll tax consequence will result to Participating Employees as a result of participation in the Plan.  
28.    Designation of Beneficiary.   An Eligible or Participating Employee may file a written designation of a beneficiary in the manner prescribed by the Plan Administrator to receive shares of Common Stock or cash allocated to the Employee’s ESPP Account in the event of the Employee’s death.  In the absence of a beneficiary designation, or if the designated beneficiary has predeceased the Employee, the Company shall deliver the shares of Common Stock and cash allocated to the Employee’s ESPP Account to the executor or administrator of the Participating Employee’s estate.
29.    Governing Law.  The Plan shall be construed, enforced, and administered in accordance with the laws of the Commonwealth of Virginia to the extent such laws are not preempted by federal law.  
IN WITNESS HEREOF, this plan has been executed as of the 1st day of June, 2021.

                                CARMAX, INC.
By:    /s/ Enrique Mayor-Mora        
Name: Enrique Mayor-Mora                          
Title: SVP and Chief Financial Officer          
8Exhibit 10.3

 

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL
ISSUE DISCOUNT” FOR U.S. FEDERAL INCOME TAX PURPOSES. THE ISSUER WILL MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE: (1) THE ISSUE PRICE
AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE, (3) THE YIELD TO MATURITY OF THE NOTE, AND (4) ANY
OTHER INFORMATION REQUIRED TO BE MADE AVAILABLE BY U.S. TREASURY REGULATIONS UPON RECEIVING A WRITTEN REQUEST FOR SUCH INFORMATION AT
THE FOLLOWING ADDRESS: 20295 29TH PLACE, #200, AVENTURA, FL 33180.

 

NEITHER THE ISSUANCE NOR 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 AND ACCEPTABLE BY THE COMPANY), IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

 

	Principal Amount: $555,555.56	Issue Date: April 7, 2021 

Purchase Price: $500,000

Original Issue Discount: $55,555.56

 

 

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

 

For value received, CROSSWIND
RENEWABLE ENERGY CORP., an Oklahoma corporation, (referred to hereinafter as “CWNR” or the “Borrower”),
hereby promises to pay to the order of LEONITE CAPITAL, LLC, a Delaware limited liability company, or registered assigns (the “Holder”)
the principal sum of up to five hundred fifty five thousand five hundred fifty five and 56/100 Dollars ($555,555.56) or so much as has
been advanced in one or more tranches (the “Principal Amount”), together with interest on the Principal Amount, on
the dates set forth below or upon acceleration or otherwise, as set forth herein (or as may be amended, extended, renewed and refinanced,
collectively, this “Note”). The “Interest Rate” shall reset daily and accrue at a rate equal to
the greater of (i) the Prime Rate plus six and three quarter percent (6.75%) per annum, or (ii) ten percent (10%). The “Prime
Rate” shall mean that variable rate of interest published from time to time by the Wall Street Journal as the prime rate of
interest. In no event shall the Interest Rate exceed the maximum rate allowed by law; any interest payment which would for any reason
be unlawful under applicable law shall be applied to principal.

 

The consideration to the Borrower
for this Note is five hundred thousand Dollars ($500,000) (the “Consideration”) to be paid in one or more tranches
(each, a “Tranche”). The first Tranche shall consist of a payment by Holder to Borrower on the Issue Date of no less
than two hundred fifty thousand Dollars ($250,000). Holder shall retain five thousand dollars ($5,000) from the first Tranche advanced
to the Borrower to cover legal fees. The timing and amounts of the remainder of the Tranches (the “Subsequent Tranches”)
shall be distributed at Holder’s sole discretion, except that so long as no Event of Default shall have occurred, and the Registration
Statement contemplated in Section 3.13 below shall have been declared effective by the SEC within 180 days of the Issue Date, then if
shares of the Borrower’s common stock close at or above $1.50 per share for five consecutive Trading Days, with trading volume of
no less than 100,000 for each of such Trading Days, Holder agrees to advance any unadvanced portion of the Consideration. Each Subsequent
Tranche will be evidenced by a signed Flow of Funds Memorandum.

 

The maturity date (“Maturity
Date”) for each Tranche shall be at the end of the period that begins from the date each Tranche is advanced and ends twelve
(12) months thereafter (such periods each referred to herein as a “Tranche Term”). The principal sum, as well as interest
and other fees shall be due and payable in accordance with the payment terms set forth in Article I herein. Notwithstanding the foregoing,
the Maturity Date for this Note and all Tranches advanced hereunder, shall be no later than the date upon which the Borrower competes
a Registered Public Offering of shares of the Company. Subject to Section 5.9 below, this Note may not be prepaid in whole or in part
except as otherwise explicitly set forth herein.

 

Any amount of principal, interest,
other amounts due hereunder or penalties on this Note, which is not paid by the due date as specified herein, shall bear interest at the
lesser of the rate of twenty percent (20%) per annum or the maximum legal amount permitted by law, from the due date thereof until the
same is paid (“Default Interest”).

 

 

    	 	 	 

     

    

 

If any payment (other than
a payment due at maturity or upon default) is not made on or before its due date, the Holder may at its discretion collect a delinquency
charge equal to the greater of one hundred Dollars ($100.00) or five (5%) percent of the unpaid amount. The unpaid balances on all obligations
payable by Borrower and due to Holder pursuant to the terms of this Note, shall in addition to other remedies contained herein, bear interest
after default or maturity at an annual rate equal to the Default Interest rate.

 

Except as provided for in
Section 1.2.1 below, all payments of principal and interest due hereunder (to the extent not converted into Borrower’s common stock
(the “Common Stock”) shall be paid by automatic debit, wire transfer, check or in coin or currency which, at the time
or times of payment, is the legal tender for public and private debts in the United States of America and shall be made at such place
as Holder or the legal holder or holders of the Note may from time to time appoint in a payment invoice or otherwise in writing, and in
the absence of such appointment, then at the offices of Holder at such address as the Holder shall hereafter give to the Borrower by written
notice made in accordance with the provisions of this Note. Unless otherwise agreed or required by applicable law, payments will be applied
first to any accrued unpaid interest, then to any late charges, and then to principal. 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, interest shall continue
to accrue during such extension. 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.

 

This Note carries
an original issue discount of fifty five thousand five hundred fifty five and 56/100 Dollars ($55,555.56) (the “OID”),
to cover the Holder’s accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with
the purchase and sale of the Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall
be five hundred thousand Dollars ($500,000), computed as follows: the Principal Amount minus the OID. The OID shall be earned upon each
Tranche on a pro rata basis of their proportion of the total Consideration. (For example: upon the advance of the first Tranche, twenty
seven thousand seven hundred seventy seven and 78/100 Dollars ($27,777.78) shall be added to the principal amount of the outstanding Note
in addition to the amount advanced, and the total amount owed, or the total principal amount, shall be two hundred seventy seven thousand
seven hundred seventy seven and 78/100 Dollars ($277,777.78)). The portion of the Principal Amount that is owed by Borrower to Holder
at any time, is calculated based on the actual amounts advanced by Holder to Borrower pursuant to this Note, increased by the pro rata
portion of the OID earned for such actual amounts advanced, reduced by the amount of any payments or conversions applied towards the Principal
Amount.

 

It is further acknowledged
and agreed that the Principal Amount owed by Borrower under this Note shall be increased by the amount of all reasonable expenses incurred
by the Holder in connection with the collection of amounts due, or enforcement of any terms pursuant to, this Note. All such expenses
shall be deemed added to the Principal Amount hereunder to the extent such expenses are paid or incurred by the Holder.

 

This Note shall be a senior
secured obligation of the Borrower, with first priority over all current and future Indebtedness (as defined below) of the Borrower and
any subsidiaries, whether such subsidiaries exist on the Issue Date or are created or acquired thereafter (each a “Subsidiary”
and collectively, the “Subsidiaries”). The obligations of the Borrower under this Note are secured pursuant to the
terms of the security and pledge agreement (the “Security and Pledge Agreement”) of even
date herewith by and between the Borrower and the Holder, terms of which are incorporated by reference and
made part of this Note. With respect to any Subsidiary created or acquired subsequent to the Issue Date, Borrower agrees to cause such
Subsidiary to execute any documents or agreements that would bind the Subsidiary to the terms herein and in the Related Documents (defined
below).

 

This Note is issued by the
Borrower to the Holder pursuant to the terms of that certain Securities Purchase Agreement even date herewith (the “Purchase
Agreement” and collectively with the Security and Pledge Agreement, the “Related Documents”), terms of which
are incorporated by reference and made part of this Note. Each capitalized term used herein, and not otherwise defined, shall have the
meaning ascribed thereto in the Purchase Agreement. As used herein, the term “Trading Day” means any day that the Common Shares
are listed for trading or quotation on the OTC, or any other exchanges or electronic quotation systems on which the Common Shares are
then traded (as defined in the Purchase Agreement).

 

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

 

In addition to the terms
above, the following terms shall also apply to this Note:

 

 

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ARTICLE I. PAYMENTS

 

1.1             
Principal Payments. The Principal Amount of each Tranche shall be due and payable on the Maturity Date of such Tranche.

 

1.2             
Interest Payments. Interest on this Note (i) is computed separately for each Tranche; (ii) compounds monthly (that
is, for each month during each Tranche Term, the amount of accrued interest is determined by multiplying one twelfth (1/12th) of the Interest
Rate by the sum of the principal amount plus any accrued and unpaid interest of such Tranche); (iii) is payable on a monthly basis; and
(iv) is guaranteed to the Holder for the entirety of each Tranche Term, without regard to an acceleration of the Maturity Date, based
on the total Principal Amount of each Tranche, without regard to a reduction of the Principal Amount resulting from, without limitation,
Principal Payments, Conversion (as defined below), or prepayment by Borrower. Beginning on the date that is one month after the Issue
Date, and on the same day of each month thereafter throughout the term of this Note, Borrower shall make monthly payments of interest
due under this Note to the Holder at the Interest Rate as set forth above (each, an “Interest Payment”). See Exhibit
C, attached hereto, for a complete payment schedule for the first Tranche. Payment schedules for additional Tranche shall be provided
upon distribution of such additional Tranches.

 

1.3             
Other Payment Obligations. All payments, fees, penalties, and other charges, if any, due under this Note shall be payable
pursuant to the terms contained herein, but in any case, shall be payable no later than the Maturity Date.

 

ARTICLE II. CONVERSION RIGHTS

 

2.1             
Conversion Right. The Holder shall have the right at any time, at the Holder’s option to convert all or any part of
the outstanding and unpaid principal amount and accrued and unpaid interest of this Note into fully paid and non-assessable Common Shares
of Borrower or other securities into which such Common Shares shall hereafter be changed or reclassified (each, a “Conversion
Share”) at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”);
provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion
of this Note upon conversion of which the sum of (1) the number of Common Shares beneficially owned by the Holder and its affiliates (other
than Common Shares which may be deemed beneficially owned through the ownership of the unconverted portion of the Note or the unexercised
or unconverted portion of any other security of Borrower subject to a limitation on conversion or exercise analogous to the limitations
contained herein, and, if applicable, net of any shares that may be deemed to be owned by any person not affiliated with the Holder who
has purchased a portion of the Note from the Holder) and (2) the number of Common Shares issuable upon the conversion of the portion of
this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding Common Shares. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further,
however, that the limitations on conversion may be waived (up to a maximum of 9.99%) by the Holder upon, at the election of the
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 the Holder, as may be specified in such notice of waiver). The number of Common
Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit
A (the “Notice of Conversion”), delivered to Borrower by the Holder in accordance with Section 2.4 below; provided
that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in,
notice) to Borrower before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”). The
term “Conversion Amount” means, with respect to any conversion of this Note, the sum of: (1) the principal amount of
this Note to be converted in such conversion; plus (2) at the Holder’s option, accrued and unpaid interest; provided, however,
that at the option of Holder, the accrued and unpaid interest can be converted prior to any other amounts under the Note, if any, on such
principal amount at the interest rates provided in this Note to the Conversion Date; plus (3) at the Holder’s option, Default
Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2); plus (4) the Holder’s expenses
relating to a Conversion, including but not limited to amounts paid by Holder on the Borrower’s transfer agent account; plus
(5) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 2.3 and 2.4(g) hereof.

 

2.2             
Conversion Price.

 

(a)              
Calculation of Conversion Price. The Conversion Price shall be $0.02 (the “Fixed Conversion Price”);
provided that at any time after any Event of Default (as defined herein) under this Note, the Conversion Price shall immediately
be equal to the lesser of (i) the Fixed Conversion Price; (ii) sixty five percent (65%) of the lowest intraday price during the twenty
one (21) consecutive Trading Day period immediately preceding the Trading Day that the Borrower receives a Notice of Conversion or (iii)
the discount to market based on subsequent financing.

 

 

    	 	3	 

     

    

 

(b)              
Fixed Conversion Price Adjustments.

 

(1)              
Intentionally Omitted.

 

(2)              
Common Share Distributions and Splits. If Borrower, at any time while this Note is outstanding: (i) pays a distribution
on its Common Shares or otherwise makes a distribution or distributions payable in Common Shares on its Common Shares; (ii) subdivides
outstanding Common Shares into a larger (or smaller) number of shares; or (iii) issues, in the event of a reclassification of shares of
Common Shares, any Common Shares of Borrower, then the Fixed Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of Common Shares (excluding any treasury shares of Borrower) outstanding immediately before such event and of which
the denominator shall be the number of Common Shares outstanding immediately after such event.

 

(3)              
Fundamental Transaction. If, at any time while this Note is outstanding, (i) Borrower effects any merger or consolidation
of Borrower with or into another person, (ii) Borrower effects any sale of all or substantially all of its assets in one transaction or
a series of related transactions, (iii) any tender offer or exchange offer (whether by Borrower or another person) is completed pursuant
to which holders of Common Shares are permitted to tender or exchange their shares for other securities, cash or property, or (iv) Borrower
effects any reclassification of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively
converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”),
then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have
been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount
of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had
been, immediately prior to such Fundamental Transaction, the holder of 1 Common Share (the “Alternate Consideration”).
For purposes of any such conversion, the determination of the Fixed Conversion Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of 1 Common Share in such Fundamental Transaction,
and Borrower shall apportion the Fixed Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.

 

(4)              
Anti-dilution Adjustment. If at any time while this Note is outstanding, Borrower sells, grants, or otherwise makes a disposition
of Common Shares, or sells, grants, or otherwise makes a disposition of other securities (or in the case of securities existing on the
Issue Date, amends such securities) convertible into, exercisable for, or that would otherwise entitle any person or entity the right
to acquire Common Shares, or announces its intention, or files any document with the SEC or other regulatory body that reflects its intention
to do of any of the foregoing, at an effective price per share that is lower than the then Fixed Conversion Price (such lower price, the
“Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed
that if the holder of the Common Shares or other securities so issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which
are issued in connection with such issuance, be entitled to receive Common Shares at an effective price per share that is lower than the
Fixed Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance, and the Base Conversion Price shall then be adjusted to equal the lowest of such issuance price), then the Fixed Conversion
Price shall be reduced to a price equal the Base Conversion Price as it may be adjusted as provided for above. Such adjustment shall be
made whenever such Common Shares or other securities are issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 2.2(b)(4) in respect of an Exempt Issuance. For purposes of this Section 2.2(b)(4) an “Exempt Issuance” means
an issuance of Common Shares or other securities convertible into or exercisable or exchangeable for Common Shares (i) upon the exercise
or exchange of any securities issued hereunder under the Warrants and/or other securities exercisable or exchangeable for or convertible
into Common Shares issued and outstanding on the date of this Note, (ii) to employees or directors of, or consultants or advisors to,
Borrower or any of its Subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of Borrower, (iii)
to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing
or real property leasing transaction approved by the Board of Directors of Borrower, (iv) to suppliers or third party service providers
in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors of Borrower, (v) pursuant
to the acquisition of another corporation or other entity by Borrower by merger, purchase of substantially all of the assets or other
reorganization or pursuant to a joint venture agreement, provided that such issuances are approved by the Board of Directors of Borrower,
(vi) to third parties in connection with collaboration, technology license, development, marketing or other similar agreements or strategic
partnerships approved by the Board of Directors of Borrower, or (vii) shares with respect to which the Holder waives its anti-dilution
rights granted hereby; provided, however, that any such issuance described in (iii) through (vi) shall only be to a person (or to the
equity holders of a person) which is, itself or through its Subsidiaries, an employee, director, consultant or advisor, in the case of
(ii) above, or an operating company or an owner of an asset in a business synergistic with the business of Borrower in the case of (iii)
through (vi) above and shall provide to Borrower additional benefits in addition to the investment of funds, but in none of (ii) through
(vi) above shall not include a transaction in which Borrower is issuing securities primarily for the purpose of raising capital or to
an entity whose primary business is investing in securities. In the event of an issuance of securities involving multiple tranches or
closings, any adjustment pursuant to this Section 2.2(b)(4) shall be calculated as if all such securities were issued upon distribution
of the initial tranche.

 

 

    	 	4	 

     

    

 

(5)              
Notice to the Holder. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 2.2(b), Borrower
shall within two (2) business days deliver to the Holder a notice setting forth the Fixed Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment, provided that Borrower’s failure to timely provide the notice shall
not affect the automatic adjustments contemplated hereby.

 

2.3             
Authorized Shares. Borrower covenants that during the period the conversion right exists, Borrower will reserve from its
authorized and unissued Common Shares a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common
Shares upon the full conversion of this Note and exercise of the Warrants. Borrower is required at all times to have authorized and reserved
seven (7) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the
Note in effect from time to time, which, if cannot be determined shall be estimated in good faith by Borrower) it being acknowledged and
agreed by the parties that for the initial issuance of the Note, 100,000,000 shares of Common Shares is sufficient and will be reserved
(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with Borrower’s
obligations hereunder. 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 Common
Shares into which the Note 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 Common Shares authorized and reserved, free from preemptive rights, for conversion
of the outstanding Note, including but not limited to authorizing additional shares or effectuating a reverse split. Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent by letter, a copy of which is attached hereto as Exhibit B to issue certificates
for the Common Shares issuable upon conversion of this Note and exercise of the Warrants, 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 Common Share certificates to execute
and issue the necessary certificates for Common Shares in accordance with the terms and conditions of this Note. If, at any time Borrower
does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

2.4             
Method of Conversion.

 

(a)              
Mechanics of Conversion. Subject to Section 2.1, this Note may be converted by the Holder in whole or in part, at any time
from the date hereof, by (A) submitting to Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication
dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 2.4(b), surrendering this Note
at the principal office of Borrower.

 

(b)              
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to Borrower unless the entire
unpaid principal amount of this Note is so converted. The 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 the Holder and Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of Borrower shall,
prima facie, be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this
Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid
and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

(c)              
Payment of Taxes. 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 Common Shares or other securities or property on conversion of this Note in a name other than that of the
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 the Holder or the custodian in whose street name such shares are to be held for the Holder’s
account) requesting the issuance thereof shall have paid to 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 Shares Upon Conversion. Upon receipt by Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
2.4, Borrower shall issue and deliver to or cause to be issued and delivered to or upon the order of the Holder certificates for Common
Shares issuable upon such conversion by the end of the next business day 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.

 

 

    	 	5	 

     

    

 

(e)              
Obligation of Borrower to Deliver Common Shares. Upon receipt by Borrower of a Notice of Conversion, the Holder shall be
deemed to be the holder of record of the Common Shares 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 II, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right
to receive the Common Shares or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have
given a Notice of Conversion as provided herein, Borrower’s obligation to issue and deliver the certificates for Common Shares shall
be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with
respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay
in the enforcement of any other obligation of Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder of any obligation to Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of Borrower to the Holder in connection with such conversion. The Conversion Date specified in the
Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by Borrower before 9:00 p.m., New York,
New York time, on such date.

 

(f)               
Delivery of Common Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Common Shares
issuable upon conversion, provided Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in
Section 2.1 and in this Section 2.4, Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common
Shares issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal
Agent Commission (“DWAC”) system. If the Borrower is not registered with DTC as of the Issue Date, the Borrower shall
be required to register with DTC within 30 days of the Issue Date, and the provisions of this paragraph shall apply after such registration.
Failure to become DTC registered or maintain DTC eligibility as provided herein shall be an Event of Default under Section 4.22 of this
Note.

 

(g)              
Failure to Deliver Common Shares Prior to Deadline. Without in any way limiting the Holder’s right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree that if Borrower causes the Common Shares issuable upon
conversion of this Note to not be delivered by the second (2nd) Trading Day following the Deadline (other than a failure due to the circumstances
described in Section 2.3 above, which failure shall be governed by such Section) Borrower shall pay to the Holder $1,000 per day in cash,
for each day beyond the Deadline that Borrower fails to deliver such Common Shares. Such cash amount shall be paid to Holder by the fifth
day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to Borrower by the first
day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest
shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Shares
in accordance with the terms of this Note. Borrower agrees that the right to convert is a valuable right to the Holder, and as such, Borrower
will not take any actions to hamper, delay or prevent any Holder conversion of the Note. The damages resulting from a failure, attempt
to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge
that the liquidated damages provision contained in this Section 2.4(g) are justified.

 

2.5             
Concerning the Common Shares. The Common Shares issuable upon conversion of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the Act or (ii) Borrower or its transfer agent shall have
been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration
or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”)
or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of Borrower who agrees to sell or otherwise
transfer the shares only in accordance with this Section 2.5 and who is an Accredited Investor. Except as otherwise provided (and subject
to the removal provisions set forth below), until such time as the Common Shares issuable upon conversion of this Note have been registered
under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for Common Shares issuable upon conversion of this Note that has not been so
included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption
that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER AND ACCEPTABLE TO THE COMPANY), 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.

 

 

    	 	6	 

     

    

 

The legend set forth above shall be removed and
Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) Borrower or its transfer agent shall
have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the
effect that a public sale or transfer of such Common Shares may be made without registration under the Act, which opinion shall be accepted
by Borrower (which acceptance shall be subject to and conditioned on any requirements, if any, of the its transfer agent, the exchange
on which Borrower is then trading or other applicable laws, rules or regulations) so that the sale or transfer is effected or (ii) in
the case of the Common Shares issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective
registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold. In the event that Borrower does not accept the opinion of counsel provided
by the Holder with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S,
at the Deadline, it will be considered an Event of Default pursuant to Section 4.2 of the Note; provided that notwithstanding the foregoing,
if Borrower is legally unable to accept such opinion as a result of any of Borrower’s transfer agent requirements, the requirements
of the exchange on which Borrower is then traded, or other applicable laws, rules or regulations, Borrower’s non-acceptance shall
be an Event of Default pursuant to Section 4.25.

 

2.6             
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into Common Shares and (ii) the Holder’s rights as a Holder of such converted
portion of this Note shall cease and terminate, excepting only the right to receive certificates for such Common Shares 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 for all Common Shares prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder
otherwise elects to retain its status as a holder of Common Shares by so notifying Borrower) the 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 the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been
converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 2.3 to the extent required thereby for such Conversion Default and any subsequent Conversion
Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section
2.3) for Borrower’s failure to convert this Note.

 

ARTICLE III. RANKING, CERTAIN COVENANTS AND POST
CLOSING OBLIGATIONS

 

3.1             
Warrants. Upon the advance of each Tranche by Holder to the Borrower, Borrower shall issue to the Holder warrants (the “Warrants”),
each in the same form, exercisable for an amount of the Borrower’s Common Shares equal to six (6) multiplied by the Purchase Price
of such Tranche. The Warrants shall have a term of 36 Months, an exercise price of five cents ($0.05) per share, and shall contain full-ratchet
anti-dilution protection provisions.

 

3.2             
Equity Interest. Upon the advance of the first Tranche by Holder to the Borrower, Borrower shall issue to Holder seven hundred
fifty thousand (750,000) shares of Borrower’s common stock (the “Initial Equity Interest”). Upon the advance
of any future Tranche under this Note, Borrower shall issue to Holder an amount of the Borrower’s common stock equal to three (3)
multiplied by the Purchase Price such future Tranches (the “Additional Equity Interest” and collectively with the Initial
Equity Interest, the “Equity Interest”).

 

3.3             
Distributions on Common Shares. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether
in cash, property or other securities) on the Common Shares (or other capital securities of the Borrower) other than dividends on Common
Shares solely in the form of additional Common Shares or (b) directly or indirectly or through any Subsidiary make any other payment or
distribution in respect of Common Shares (or other securities representing its capital) except for distributions that comply with Section
3.7 below.

 

3.4             
Restrictions on Certain Transactions. Restrictions on Variable Rate Transactions. Unless approved by the Holder, Borrower
and each Subsidiary shall not enter into an agreement or amend an existing agreement to effect any
sale of securities involving, or convert any securities previously issued under, a Variable Rate Transaction. The term “Variable
Rate Transaction” means a transaction in which Borrower or any Subsidiary (i) issues or sells any convertible securities either
(A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of, or quotations
for, the Common Shares at any time after the initial issuance of such convertible securities, or (B) with a conversion, exercise or exchange
price that is subject to being reset at some future date after the initial issuance of such convertible securities or upon the occurrence
of specified or contingent events directly or indirectly related to the business of Borrower or the Subsidiary, as the case may be, or
the market for the Common Shares, or (ii) enters into any agreement (including, without limitation,
an “equity line of credit” or an “at-the-market offering”) whereby Borrower or any Subsidiary may sell securities
at a future determined price (other than standard and customary “preemptive” or “participation” rights).  The
Holder shall be entitled to obtain injunctive relief against Borrower and its Subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages. 

 

 

    	 	7	 

     

    

 

3.5             
Restrictions on Other Certain Transactions. So long as the Borrower shall have any obligation under this Note and unless
approved in writing by the Holder (which such approval not to be unreasonably withheld), the Borrower shall not directly or indirectly:
(a) change the nature of its business; (b) sell, divest, change the structure of any material assets of the Borrower or any Subsidiary
other than in the ordinary course of business (c) accept Merchant-Cash-Advances in which it sells future receivables at a discount, any
other factoring transactions, or similar financing instruments or financing transactions; or (d) Enter into a borrowing arrangement where
the Company pays an effective APR greater than 20%.

 

3.6             
Restriction on Common Share Repurchases. So long as the Borrower shall have any obligation under this Note, Borrower shall
not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or
other securities or otherwise) in any one transaction or series of related transactions any Common Shares (or other securities representing
its capital) of Borrower or any warrants, rights or options to purchase or acquire any such shares; except for the repurchase of shares
at a nominal price in connection with rights under an agreement with an employee or consultant of the Borrower whose shares have been
forfeited as a result of such employee or consultant’s ceasing to provide services to the Borrower.

 

3.7             
Payments from Future Funding Sources. The Borrower shall pay to the Holder on an accelerated basis, any outstanding Principal
Amount of the Note, along with all unpaid interest, and fees and penalties, if any, from the sources of capital below, at the Holder’s
discretion, it being acknowledged and agreed by Holder that Borrower shall have the right to make Bona Fide payments to vendors with Common
Shares:

 

3.7.1       
Future Financing Proceeds - one hundred percent (100%) of the net cash proceeds of any future financings by Borrower or
any Subsidiary, whether debt or equity, or any other financing proceeds such as cash advances, royalties or earn-out payments provided,
however, that this provision is not applicable if the transaction generating the future financing proceeds has a specific use of proceeds
requirement that such proceeds are to be used exclusively to purchase the assets or equity of an unaffiliated business in an arm’s
length transaction and the proceeds are used accordingly.

 

3.7.2       
Other Future Receipts - all net proceeds from any sale of assets of Borrower or any of its Subsidiaries other than sales
of inventory of the Borrower or its Subsidiaries in the ordinary course of business or receipt by Borrower or any of its Subsidiaries
of any tax credits or collections pursuant to any settlement or judgement.

 

3.7.3       
Asset Sale - The Borrower shall pay to the Holder on an accelerated basis, any outstanding Principal Amount of the Note,
along with unpaid interest, and fees and penalties, if any, from the net proceeds to the Borrower or Subsidiary resulting from the sale
of any assets outside of the ordinary course of business or securities in any Subsidiary.

 

3.8             
Use of Proceeds. Borrower agrees to use the proceeds of this Note in accordance with Section 5.3 of the SPA.

 

3.9             
Ranking and Security. The obligations of the Borrower under this Note shall constitute a first priority
security interest and rank senior with respect to any and all Indebtedness existing prior to or incurred as of or following the initial
Issue Date. The obligations of the Borrower under this Note are secured pursuant to the Security and Pledge Agreement attached hereto.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly through any Subsidiary
or affiliate) incur or suffer to exist or guarantee any Indebtedness that is senior to or pari passu with (in priority of payment and
performance) the Borrower’s obligations hereunder. As used herein, the term “Indebtedness” means (a) all indebtedness
of the Borrower for borrowed money or for the deferred purchase price of property or services, including any type of letters of credit,
but not including deferred purchase price obligations in place as of the Issue Date or obligations to trade creditors incurred in the
ordinary course of business, (b) all obligations of the Borrower evidenced by notes, bonds, debentures or other similar instruments, (c)
purchase money indebtedness hereafter incurred by the Borrower to finance the purchase of fixed or capital assets, including all capital
lease obligations of the Borrower which do not exceed the purchase price of the assets funded, (d) all guarantee obligations of the Borrower
in respect of obligations of the kind referred to in clauses (a) through (c) above that the Borrower would not be permitted to incur or
enter into, and (e) all obligations of the kind referred to in clauses (a) through (d) above that the Borrower is not permitted to incur
or enter into that are secured and/or unsecured by (or for which the holder of such obligation has an existing right, contingent or otherwise,
to be secured and/or unsecured by) any lien or encumbrance on property (including accounts and contract rights) owned by the Borrower,
whether or not the Borrower has assumed or become liable for the payment of such obligation.

 

3.10         
Right of Participation. For a period of eighteen (18) months from the date hereof, in the event Borrower or any Subsidiary
of the Borrower, proposes to offer and sell its securities, whether debt, equity, or any other financing transaction (each a “Future
Offering”), the Holder shall have the right, but not the obligation, to participate in the purchase of the securities being
offered in such Future Offering up to an amount equal to one hundred percent (100%) of the maximum Principal Amount of this Note.

 

 

    	 	8	 

     

    

 

3.11         
Right of First Refusal. If at any time while this Note is outstanding, the Borrower or any Subsidiary has a bona fide offer
of capital or financing from any third party that the Borrower or any Subsidiary intends to act upon, then the Borrower must first offer
such opportunity to the Holder to provide such capital or financing to the Borrower or Subsidiary on the same terms as each respective
third party’s terms. Should the Holder be unwilling or unable to provide such capital or financing to the Borrower or Subsidiary
within 3 Trading Days from Holder’s receipt of written notice of the offer (the “Offer Notice”) from the Borrower,
then the Borrower or Subsidiary may obtain such capital or financing from that respective third party upon the exact same terms and conditions
offered by the Borrower to the Holder, which transaction must be completed within 30 days after the date of the Offer Notice. If the Borrower
or Subsidiary does not receive the capital or financing from the respective 3rd party within 30 days after the date of the
respective Offer Notice, then the Borrower must again offer the capital or financing opportunity to the Holder as described above, and
the process detailed above shall be repeated. The Offer Notice must be sent via electronic mail to avi@leonitecap.com Cc: dberger@bergerlawpllc.com.
Notwithstanding the foregoing, this clause shall not apply to a bona fide brokered offering in excess of five million Dollars ($5,000,000).

 

3.12         
Terms of Future Financings. So long as this Note is outstanding, upon any issuance of (or announcement of intent to effect
an issuance of) any security, or amendment to (or announcement of intent to effect an amendment to) any security that was originally issued
before the Issue Date, by the Borrower or any Subsidiary, with any term that the Holder reasonably believes is more favorable to the holder
of such security or with a term in favor of the holder of such security that the Holder reasonably believes was not similarly provided
to the Holder in this Note, then (i) the Borrower shall notify the Holder of such additional or more favorable term within three (3) business
days of the issuance and/or amendment (as applicable) of the respective security, and (ii) such term, at Holder’s option, shall
become a part of the transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision
of this Section 3.12). The types of terms contained in another security that may be more favorable to the holder of such security include,
but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original
issue discounts, stock sale price, private placement price per share, and warrant coverage. If Holder elects to have the term become a
part of the transaction documents with the Holder, then the Borrower shall immediately deliver acknowledgment of such adjustment in form
and substance reasonably satisfactory to the Holder (the “Acknowledgment”) within three (3) business days of Borrower’s
receipt of request from Holder (the “Adjustment Deadline”), provided that Borrower’s failure
to timely provide the Acknowledgement shall not affect the automatic amendments contemplated hereby.

 

3.13         
Registration Rights. Borrower shall be required to file a Registration Statement within 90 days of the Issue Date to register
the Registrable Securities issued to Holder pursuant to this Note. Subsequent to the filing of the registration statement, Borrower shall
have the continuing obligation to use best efforts to have such registration statement declared effective by the SEC within 180 days of
the Issue Date, including but not limited to, the obligation to timely cure any questions, comments, or concerns the SEC may have concerning
the contemplated registration statement. As used herein, Registrable Securities shall mean the shares issuable upon Conversion of the
Note, the Reserved Amount, the Equity Interest shares and the shares underlying the Warrants.

 

3.14         
Exchange Act Reporting. Within three (3) months of the Issue Date, Borrower shall become a fully reporting company under
the SEC reporting requirements and become subject to and fully compliant with, the annual and periodic reporting requirements of the Exchange
Act (including but not limited to becoming current in its filings). Failure to become a fully reporting company and subject to and compliant
with the Exchange Act as described herein, as well as failure to maintain such fully reporting status once the Company becomes subject
to and fully compliant with the SEC reporting requirements under the Exchange Act (including but not limited to becoming delinquent in
its filings), shall be an event of default under Section 4.9.

 

3.15         
Opinion Letter. At the earlier of (i) six (6) months or (ii) on the date upon which the Borrower competes a Registered Public
Offering of shares of the Company, the Borrower shall be responsible for supplying an opinion letter specific to the fact that Common
Stock issued pursuant to conversion of the Note, as well as the Equity Interest and the shares issued pursuant to the Warrant are either
exempt from Registration Requirements pursuant to Rule 144 (so long as the requirements of Rule 144 are satisfied) or have been duly registered
and permitted to be sold and transferred without restriction. Failure to provide an opinion letter as described herein shall be an event
of default pursuant to Section 4.2 of the Note. Failure of the shares of the Company to be eligible for Rule 144 within six (6) months
shall be an event of default pursuant to Section 4.25 of the Note.

 

ARTICLE IV. EVENTS OF DEFAULT

 

It shall be considered an
event of default if any of the following events listed in this Article IV (each, an “Event of Default”) shall occur:

 

4.1       Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at
maturity, upon acceleration or otherwise. A three (3) day cure period shall apply for failure to make a payment when due except where
payments are noted herein as being due immediately or for payments due on the Maturity Date of any Tranche which in each case shall have
no cure period.

 

 

    	 	9	 

     

    

 

4.2             
Failure to Reserve Shares. Borrower fails to reserve a sufficient amount of Common Shares as required under the terms of
this Note (including the requirements of Section 2.3 of this Note), fails to issue Common Shares to the Holder (or announces or threatens
in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
Common Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, Borrower directs
its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically
or in certificated form) Common Shares to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from
removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any Common Shares issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement
or threat that it does not intend to honor the obligations described in this paragraph), or fails to supply an opinion letter specific
to the fact that Common Stock issued pursuant to conversion of the Note, as well as the Equity Interest and the shares issued pursuant
to the Warrant are exempt from Registration Requirements pursuant to Rule 144, and any such failure shall continue uncured (or any written
announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the
Holder shall have delivered a Notice of Conversion. It is an obligation of Borrower to remain current in its obligations to its transfer
agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance
owed by Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to Borrower’s transfer agent
in order to process a conversion, such advanced funds shall be paid by Borrower to the Holder within five (5) business days of a demand
from the Holder, either in cash or as an addition to the outstanding Principal Amount of the Note, and such choice of payment method is
at the discretion of Borrower.

 

4.3             
Breach of Covenants. Borrower, or the relevant related party, as the case may be, breaches any material covenant, post-closing
obligation or other material term or condition contained in this Note, or in the related Warrants, Purchase Agreement, Security and Pledge
Agreement, Term Sheet or any other collateral documents (together, the “Transaction Documents”) and breach continues
for a period of ten (10) days.

 

4.4             
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given pursuant hereto or in connection herewith, 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) an effect on the rights of the Holder with respect to this Note and
the other Transaction Documents.

 

4.5             
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.

 

4.6             
Judgments or Settlements. (i) Any money judgment, writ or similar process shall be entered or filed against Borrower or
any subsidiary of Borrower or any of its property or other assets for more than $25,000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder; or (ii) the settlement of any claim or litigation, creating
an obligation on the Borrower in amount over $25,000.

 

4.7             
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against Borrower or any subsidiary
of Borrower. With respect to any such proceedings that are involuntary, Borrower shall have a 45 day cure period in which to have such
involuntary proceedings dismissed.

 

4.8             
Delisting of Common Shares. If at any time on or after the date in which Borrower’s Common Shares are listed or quoted
on the OTC Pink or an equivalent U.S. replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock Exchange,
or the NYSE MKT, Borrower shall fail to maintain the listing or quotation of the Common Shares, or if its shares have been suspended from
trading on the OTC Pink or a U.S. equivalent replacement exchange, the Nasdaq Global Market, the Nasdaq Capital Market, the New York Stock
Exchange, or the NYSE MKT.

 

 

    	 	10	 

     

    

 

4.9             
Failure to Comply with the Exchange Act. Borrower shall fail within three months of the Issue Date to become a fully reporting
company under the SEC reporting requirements and become subject to, and fully compliant with, the annual and periodic reporting requirements
of the Exchange Act (including but not limited to failing to becoming current in its filings) and/or at any point after the earlier of
three months from the Issue Date or the date on which the Borrower becomes fully compliant with the Exchange Act, Borrower shall fail
to be fully compliant with, or cease to be subject to, the reporting requirements of the Exchange Act (including but not limited to becoming
delinquent in its filings).

 

4.10         
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

4.11         
Cessation of Operations. Any cessation of operations by the Borrower or the Borrower admits it is otherwise generally unable
to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

4.12         
Maintenance of Assets. The failure by Borrower to maintain any intellectual property rights, personal, real property or
other assets which are necessary to conduct its business (whether now or in the future), to the extent that such failure would result
in a material adverse condition or material adverse change in or affecting the business operations, properties or financial condition
of Borrower or any of its subsidiaries (a “Material Adverse Effect”).

 

4.13         
Financial Statement Restatement. Borrower restates any financial statements for any date or period from two years prior
to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to
the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note.

 

4.14         
Failure to Execute Transaction Documents or Complete the Transaction. The failure of the Borrower to execute any of the
Transaction Documents or to complete the transaction for the full Principal Amount of the Note, as contemplated by the Purchase Agreement.

 

4.15         
Illegality. Any court of competent jurisdiction issues an order declaring this Note, any of the other Transaction Documents
or any provision hereunder or thereunder to be illegal, as long as such declaration was not the result of an act of negligence by the
Holder, exclusive of the execution of the Transaction Documents or the transactions and acts contemplated herein.

 

4.16         
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the other financial instrument, including
but not limited to all promissory notes, currently issued, or hereafter issued, by the Borrower, to the Holder or any other third party
(the “Other Agreements”), after the passage of all applicable notice and cure or grace periods, that results in a Material
Adverse Effect shall, at the option of the Holder, be considered a default under this Note, in which event the Holder shall be entitled
to apply all rights and remedies of the Holder under the terms of this Note by reason of a default under said Other Agreement or hereunder.

 

4.17         
Variable Rate Transactions. The Borrower (i) enters into a Variable Rate Transaction (as defined
herein) (ii) issues Common Shares (or convertible securities or purchase rights) pursuant to an equity line of credit of the Borrower
or otherwise in connection with a Variable Rate Transaction (whether now existing or entered into in the future) or (iii) adjusts downward
the “floor price” at which Common Shares (or convertible securities or purchase rights) may be issued under an equity line
of credit or otherwise in connection with a Variable Rate Transaction (whether now existing or entered into in the future).

 

4.18         
Certain Transactions. Borrower enters into certain transactions prohibited by Sections 3.3, 3.4, 3.5, and 3.6 of this Agreement.

 

4.19         
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.

 

4.20         
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails
to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock
in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

4.21         
DTC “Chill”. The DTC places a “chill” (i.e. a restriction placed by DTC on one or more of DTC’s
services, such as limiting a DTC participant’s ability to make a deposit or withdrawal of the security at DTC) on any of the Borrower’s
securities.

 

 

    	 	11	 

     

    

 

4.22         
DWAC Eligibility. In addition to the Event of Default in Section 4.21, the Common Stock is otherwise not eligible for trading
through the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, or if the Borrower is not registered
with DTC on the Issue Date, Borrower fails to become DTC registered within 30 days of the Issue Date.

 

4.23         
Bid Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement marketplace
or exchange).

 

4.24         
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose,
or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing
of a Form 8-K pursuant to Regulation FD on that same date.

 

4.25         
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion
of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or (ii) thereupon deposit
such shares into the Holder’s brokerage account.

 

4.26         
Intentionally Omitted.

 

4.27         
Remedies Upon Default.

 

(a)              
Upon the occurrence of any Event of Default specified in this Article IV, in addition to and without limitation of other remedies
set forth herein in this Note, (i) interest shall accrue at the Default Interest rate; (ii) this Note shall become immediately due and
payable, all without demand, presentment or notice, all of which are hereby expressly waived by the Borrower, and the Borrower shall
pay to the Holder, an amount (the “Default Amount”) equal to the Principal Amount then outstanding (including Liquidating
Damages, defined below) plus accrued and unpaid interest through the date of the Event of Default, unaccrued interest through the remainder
of the Tranche Terms, together with all costs, including, without limitation, legal fees and expenses of collection, and Default Interest
through the date of full repayment; and (iii) a liquidated damages charge equal to 25% of the outstanding balance due under the Note
(“Liquidating Damages”) will be assessed and will become immediately due and payable to the Holder, either in form of a cash
payment or as an addition to the Principal Amount due under the Note. In addition, the Holder shall be entitled to exercise all other
rights and remedies available at law or in equity, including, without limitation, those set forth in the Related Documents.

 

ARTICLE V. MISCELLANEOUS

 

5.1             
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

 

5.2             
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, facsimile, or electronic mail 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, upon electronic mail delivery, or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:

 

 

    	 	12	 

     

    

 

If to the Borrower, to:

 

______________________________

______________________________

______________________________

______________________________

 

If to the Holder:

 

LEONITE CAPITAL LLC

1 Hillcrest Center Dr., Suite 232

Spring Valley, NY 10977

ATTN: Avi Geller

e-mail: avi@leonitecap.com 

Cc: Siegfied@leonitecap.com; jake@leonitecap.com;
dberger@bergerlawpllc.com

 

5.3             
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and
the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

5.4             
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in
Rule 501(a) of the 1933 Act).

 

5.5             
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including attorneys’ fees. Such amounts spent by Holder shall be added to the Principal Amount of the Note at the time of such expenditure.

 

5.6             
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Delaware without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state and/or federal courts located in Delaware. The parties to this Note hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens. THE BORROWER IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED
HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event
that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Documents 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. All transactions contemplated herein are being made subject to the rules of Iska as found on Leonite’s website
(Leonitecap.com/iska).

 

5.7             
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty.

 

 

    	 	13	 

     

    

 

5.8             
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy
at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by
the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach
of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.

 

5.9             
Prepayment. Unless an Event of Default shall occur, Borrower shall have the right at any time prior to the Maturity Date,
upon thirty (30) days’ notice to the Holder, to prepay the Note by making a payment to Lender equal to 110% multiplied by the sum
of (i) the outstanding Principal Amount, (ii) all accrued and unpaid interest, (iii) all unaccrued interest through the remainder of the
Term that is guaranteed pursuant to Section 1.2 above, and (iv) any other amounts due under the Note. Notwithstanding the foregoing, Holder
may convert any or all of this Note into shares of Common Stock at any time.

 

5.10         
Usury. To the extent it may lawfully do so, the Borrower hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right
or remedy under this Note.  Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided
that the total liability of the Borrower under this Note for payments which under Delaware law are in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which under Delaware
law in the nature of interest that the Borrower may be obligated to pay under this Note exceed such Maximum Rate.  It is agreed that
if the maximum contract rate of interest allowed by Delaware law and applicable to this Note is increased or decreased by statute or any
official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum
Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by applicable law.  If
under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Borrower to the Holder with respect to indebtedness
evidenced by this Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be refunded
to the Borrower, the manner of handling such excess to be at the Holder’s election.

 

5.11         
Section 3(a)(10) Transactions. If at any time while this Note is outstanding, the Borrower enters into a transaction structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act, then a liquidated
damages charge of 25% of the outstanding principal balance of this Note at that time, will be assessed and will become immediately due
and payable to the Holder, either in the form of cash payment or as an addition to the balance of the Note, as determined by mutual agreement
of the Borrower and Holder.

 

5.12         
No Broker-Dealer Acknowledgement. Absent a final adjudication from a court of competent jurisdiction stating otherwise,
so long as any obligation of Borrower under this Note or the other Transaction Documents is outstanding, the Company shall not state,
claim, allege, or in any way assert to any person, institution, or entity, that Holder is currently, or ever has been, a broker-dealer
under the Securities Exchange Act of 1934.

 

5.13         
Opportunity to Consult with Counsel. The Borrower represents and acknowledges that it has been provided with the opportunity
to discuss and review the terms of this Note and the other Transaction Documents with its counsel before signing it and that it is freely
and voluntarily signing the Transaction Documents in exchange for the benefits provided herein. In light of this, the Borrower will not
contest the validity of Transaction Documents and the transactions contemplated therein. The Borrower further represents and acknowledges
that it has been provided a reasonable period of time within which to review the terms of the Transaction Documents.

 

5.14         
Intentionally Omitted.

 

 

    	 	14	 

     

    

 

5.15         
Pending Legislation. As of the Issue Date hereof, proposed legislation exists, namely proposed amendments to Rule 144(d)(3)(ii)
proposed on December 22, 2020 in SEC Release 2020-336, that would fundamentally change the economic terms of this Note. In the event the
rule becomes law and becomes effective while any amounts are outstanding under this Note, Section 2.2 hereof shall be automatically amended
to contain only a fixed conversion price of $0.02 per share. In the event that the Borrower is in default of any of the provisions of
the Note or other Transaction Documents, and the Company has not cured said default within five (5) calendar days, the fixed conversion
price shall be reduced to $.01 per share (the “Default Fixed Price”) in addition to any other principal adjustments, default
interest, or other remedies available to it under law. Should the default remain uncured for 30 calendar days, the Default Fixed Price
shall decrease by 10% for every seven calendar days the respective default remains uncured. In the event the final rule, or any other
combination of final rules, make this provision inoperable, invalid, or otherwise have an effect that changes the economics of the transactions
contemplated hereby, the pertinent clause or mechanic of operation shall be stricken and only the fixed price provision shall remain.
The amendment contemplated in this paragraph 5.15 shall not apply so long as the Registrable Shares are saleable under an effective Registration
Statement.

 

[signature page to follow]

 

 

 

    	 	15	 

     

    

 

IN WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by its duly authorized officer this April 7, 2021.

 

 

 

CROSSWIND RENEWABLE ENERGY CORP.

 

 

By:  _____________________________

Name: Charles S. Arnold

Title: Chief Executive Officer

 

 

    	 	16	 

     

    

 

EXHIBIT A – FORM OF NOTICE OF CONVERSION

 

(See Attached)

 

 

 

 

    	 	 	 

     

    

 

EXHIBIT B – FORM OF TRANSFER AGENT INSTRUCTION
LETTER

 

(See Attached)

 

 

 

 

    	 	 	 

     

    

 

EXHIBIT C – PAYMENT SCHEDULE FOR
THE FIRST TRANCHE

 

 

	Date	Total Payment
	4/7/2021*	-
	5/7/2021	$ 2,314.81  
	6/7/2021	$ 2,314.81  
	7/7/2021	$ 2,314.81  
	8/7/2021	$ 2,314.81  
	9/7/2021	$ 2,314.81  
	10/7/2021	$ 2,314.81  
	11/7/2021	$ 2,314.81  
	12/7/2021	$ 2,314.81  
	1/7/2022	$2,314.81  
	2/7/2022	$ 2,314.81  
	3/7/2022	$ 2,314.81  
	4/7/2022	$280,092.59

 

* Date of Advance of 1st Tranche

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00329-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00329-of-00352.parquet"}]]