Document:

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of March 29, 2017, by and between QUANTUM MATERIALS CORP.,
a Nevada corporation (the “Company”), L2 CAPITAL, LLC, a Kansas
limited liability company (“L2”), and SBI INVESTMENTS LLC, 2014-1,
a a statutory series of Delaware limited liability company (“SBI”)
(together with it permitted assigns, L2 and SBI shall collectively be referred to herein as the “Buyer”).
Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the equity purchase
agreement by and between the parties hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Purchase Agreement”).

 

WHEREAS:

 

The
Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, to sell to the Buyer up to Five Million
Dollars ($5,000,000.00) of Put Shares and to induce the Buyer to enter into the Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws.

 

NOW,
THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:

 

1.
DEFINITIONS.

 

As
used in this Agreement, the following terms shall have the following meanings:

 

a.
“Investor” means the Buyer, any transferee or assignee thereof to whom a Buyer assigns its rights under this
Agreement in accordance with Section 9 and who agrees to become bound by the provisions of this Agreement, and any transferee
or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement in accordance with Section 9 and
who agrees to become bound by the provisions of this Agreement.

 

b.
“Person” means any individual or entity including but not limited to any corporation, a limited liability company,
an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or
a governmental agency.

 

c.
“Register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more registration statements of the Company in compliance with the Securities Act and/or
pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis (“Rule
415”), and the declaration or ordering of effectiveness of such registration statement(s) by the United States Securities
and Exchange Commission (the “SEC”).

 

d.
“Registrable Securities” means all of the Put Shares which have been, or which may, from time to time be issued,
including without limitation all of the shares of common stock which have been issued or will be issued to the Investor under
the Purchase Agreement (without regard to any limitation or restriction on purchases), and any and all shares of capital stock
issued or issuable with respect to the Put Shares, or shares of common stock issued to the Investor as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitation on purchases under
the Purchase Agreement.

 

    	 

    	 

    

 

e.
“Registration Statement” means one or more registration statements of the Company covering the sale of the
Registrable Securities.

 

2.
REGISTRATION.

 

a.
Mandatory Registration. The Company shall, within sixty (60) calendar days from the date hereof, file with the SEC an initial
Registration Statement covering the maximum number of Registrable Securities (beginning with the Put Shares) as shall be permitted
to be included thereon in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of
such Registrable Securities by the Investor, including but not limited to under Rule 415 under the Securities Act at then prevailing
market prices (and not fixed prices), as mutually determined by both the Company and the Investor in consultation with their respective
legal counsel, subject to the aggregate number of authorized shares of the Company’s Common Stock then available for issuance
in its Certificate of Incorporation. The initial Registration Statement shall register the Registrable Securities. The Investor
and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement and any amendment or
supplement to such Registration Statement and any related prospectus prior to its filing with the SEC, and the Company shall give
due consideration to all reasonable comments. The Investor shall furnish all information reasonably requested by the Company for
inclusion therein. The Company shall use its reasonable best efforts to have the Registration Statement and any amendment declared
effective by the SEC at the earliest possible date. The Company shall use reasonable best efforts to keep the Registration Statement
effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale
by the Investor of all of the Registrable Securities covered thereby at all times until the earlier of (i) the date as of which
the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the Securities
and (ii) the date on which the Investor shall have sold all the Registrable Securities covered thereby and no Available Amount
remains under the Purchase Agreement (the “Registration Period”). The Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading.

 

b.
Rule 424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file with the
SEC, pursuant to Rule 424 promulgated under the Securities Act, the prospectus and prospectus supplements, if any, to be used
in connection with sales of the Registrable Securities under the Registration Statement. The Investor and its counsel shall have
a reasonable opportunity to review and comment upon such prospectus prior to its filing with the SEC, and the Company shall give
due consideration to all such comments. The Investor shall use its reasonable best efforts to comment upon such prospectus within
one (1) Business Day from the date the Investor receives the final pre-filing version of such prospectus.

 

c.
Sufficient Number of Shares Registered. In the event the number of shares available under the Registration Statement is
insufficient to cover all of the Registrable Securities, the Company shall amend the Registration Statement or file a new Registration
Statement (a “New Registration Statement”), so as to cover all of such Registrable Securities (subject to the
limitations set forth in Section 2(a)) as soon as practicable, but in any event not later than ten (10) Business Days after the
necessity therefor arises, subject to any limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act.
The Company shall use it reasonable best efforts to cause such amendment and/or New Registration Statement to become effective
as soon as practicable following the filing thereof. In the event that any of the Put Shares are not included in the Registration
Statement, or have not been included in any New Registration Statement and the Company files any other registration statement
under the Securities Act (other than on Form S-4, Form S-8, or with respect to other employee related plans or rights offerings)
(“Other Registration Statement”) then the Company shall include in such Other Registration Statement first
all of such Put Shares that have not been previously registered, second all of such Underlying Shares that not have been previously
registered, and third any other securities the Company wishes to include in such Other Registration Statement. The Company agrees
that it shall not file any such Other Registration Statement unless all of the Put Shares and Underlying Shares have been included
in such Other Registration Statement or otherwise have been registered for resale as described above.

 

    	 	2	 

    	 	 	 

    

 

d.
Offering. If the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant
to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities that does not permit such
Registration Statement to become effective and be used for resales by the Investor under Rule 415 at then-prevailing market prices
(and not fixed prices), or if after the filing of the initial Registration Statement with the SEC pursuant to Section 2(a), the
Company is otherwise required by the Staff or the SEC to reduce the number of Registrable Securities included in such initial
Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such initial Registration
Statement (with the prior consent, which shall not be unreasonably withheld, of the Investor and its legal counsel as to the specific
Registrable Securities to be removed therefrom) until such time as the Staff and the SEC shall so permit such Registration Statement
to become effective and be used as aforesaid. In the event of any reduction in Registrable Securities pursuant to this paragraph,
the Company shall file one or more New Registration Statements in accordance with Section 2(c) until such time as all Registrable
Securities have been included in Registration Statements that have been declared effective and the prospectus contained therein
is available for use by the Investor. Notwithstanding any provision herein or in the Purchase Agreement to the contrary, the Company’s
obligations to register Registrable Securities (and any related conditions to the Investor’s obligations) shall be qualified
as necessary to comport with any requirement of the SEC or the Staff as addressed in this Section 2(d).

 

3.
RELATED OBLIGATIONS.

 

With
respect to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Section 2 including
on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following
obligations:

 

a.
The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to
any registration statement and the prospectus used in connection with such registration statement, which prospectus is to
be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statement
or any New Registration Statement effective at all times during the Registration Period, and, during such period, comply
with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company
covered by the Registration Statement or any New Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set
forth in such registration statement.

 

b.
The Company shall permit the Investor to review and comment upon the Registration Statement or any New Registration Statement
and all amendments and supplements thereto at least two (2) Business Days prior to their filing with the SEC, and not file any
document in a form to which Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the
Registration Statement or any New Registration Statement and any amendments or supplements thereto within two (2) Business Days
from the date the Investor receives the final version thereof. The Company shall furnish to the Investor, without charge any correspondence
from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or any New Registration
Statement.

 

    	 	3	 

    	 	 	 

    

 

c.
Upon request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of such registration statement and any amendment(s) thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any registration statement, a
copy of the prospectus included in such registration statement and all amendments and supplements thereto (or such other number
of copies as the Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final
prospectus, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor. For the avoidance of doubt, any filing available to the Investor via the SEC’s live EDGAR
system shall be deemed “furnished to the Investor” hereunder.

 

d.
The Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by a registration
statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor
reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period,
(iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section
3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in
any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company
of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice
of the initiation or threatening of any proceeding for such purpose.

 

e.
As promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor in writing of the
happening of any event or existence of such facts as a result of which the prospectus included in any registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly
prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and deliver a copy
of such supplement or amendment to the Investor (or such other number of copies as the Investor may reasonably request). The Company
shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness
shall be delivered to the Investor by email or facsimile on the same day of such effectiveness and by overnight mail), (ii) of
any request by the SEC for amendments or supplements to any registration statement or related prospectus or related information,
and (iii) of the Company’s reasonable determination that a post-effective amendment to a registration statement would be
appropriate.

 

f.
The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness
of any registration statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment
and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation
or threat of any proceeding for such purpose.

 

    	 	4	 

    	 	 	 

    

 

g.
The Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the
same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) secure designation and quotation of all the Registrable Securities on the Principal
Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.

 

h.
The Company shall cooperate with the Investor to facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered pursuant to any registration statement and enable such
certificates to be in such denominations or amounts as the Investor may reasonably request and registered in such names as the
Investor may request.

 

i.
The Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.

 

j.
If reasonably requested by the Investor, the Company shall (i) immediately incorporate in a prospectus supplement or post-effective
amendment such information as the Investor believes should be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase
price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of
such prospectus supplement or post-effective amendment as soon as practicable upon notification of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any registration statement.

 

k.
The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any registration statement to
be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition
of such Registrable Securities.

 

l.
Within one (1) Business Day after any registration statement which includes the Registrable Securities is ordered effective by
the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investor) confirmation that such registration statement has been declared effective by the SEC
in the form attached hereto as Exhibit A. Thereafter, if requested by the Buyer at any time, the Company shall require
its counsel to deliver to the Buyer a written confirmation whether or not the effectiveness of such registration statement has
lapsed at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration
statement is current and available to the Buyer for sale of all of the Registrable Securities.

 

m.
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to any registration statement.

 

    	 	5	 

    	 	 	 

    

 

4.
OBLIGATIONS OF THE INVESTOR.

 

a.
The Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection
with any registration statement hereunder. The Investor shall furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required
to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.

 

b.
The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and
filing of any registration statement hereunder.

 

c.
The Investor agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the
kind described in Section 3(f) or the first sentence of 3(e), the Investor will immediately discontinue disposition of Registrable
Securities pursuant to any registration statement(s) covering such Registrable Securities until the Investor’s receipt of
the copies of the supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock without any restrictive
legend in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect
to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of
the happening of any event of the kind described in Section 3(f) or the first sentence of Section 3(e) and for which the Investor
has not yet settled.

 

5.
EXPENSES OF REGISTRATION.

 

All
reasonable expenses, other than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.

 

6.
INDEMNIFICATION.

 

a.
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each
Person, if any, who controls the Investor, the members, the directors, officers, partners, employees, agents, representatives
of the Investor and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) (each, an “Indemnified Person”), against
any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in
settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court
or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an
indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement, any New Registration
Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under
the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue
Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained
in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law,
or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to the Registration
Statement or any New Registration Statement or (iv) any material violation by the Company of this Agreement (the matters in the
foregoing clauses (i) through (iv) being, collectively, “Violations”). The Company shall reimburse each Indemnified
Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and in conformity with information about the Investor furnished
in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration
Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) or Section 3(e); (ii) with respect to any superseded prospectus, shall not inure
to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are
the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material
fact contained in the superseded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such
revised prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person
was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified
Person, notwithstanding such advice, used it; (iii) shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9.

 

    	 	6	 

    	 	 	 

    

 

b.
Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to
the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained
by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party
and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified
Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully
apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party
shall be liable for any settlement of any action, claim or proceeding effectuated without its written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party or Indemnified Person of a release from all liability in respect to such claim or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person
with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

    	 	7	 

    	 	 	 

    

 

c.
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages are incurred.

 

d.
The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.

 

7.
CONTRIBUTION.

 

To
the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent
permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited
in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

 

8.
REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.

 

With
a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without
registration (“Rule 144”), the Company agrees, at the Company’s sole expense, to:

 

a.
make and keep public information available, as those terms are understood and defined in Rule 144;

 

b.
file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the
Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is
required for the applicable provisions of Rule 144;

 

c.
furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting and or disclosure provisions of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant
to Rule 144 without registration; and

 

    	 	8	 

    	 	 	 

    

 

d.
take such additional action as is requested by the Investor to enable the Investor to sell the Registrable Securities pursuant
to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions
to the Company’s Transfer Agent as may be requested from time to time by the Investor and otherwise fully cooperate with
Investor and Investor’s broker to effect such sale of securities pursuant to Rule 144.

 

The
Company agrees that damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that
Investor shall, whether or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary
or permanent injunctions, without having to post any bond or other security, upon any breach or threatened breach of any such
terms or provisions.

 

9.
ASSIGNMENT OF REGISTRATION RIGHTS.

 

The
Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.
The Investor may not assign its rights under this Agreement without the written consent of the Company.

 

10.
AMENDMENT OF REGISTRATION RIGHTS.

 

No
provision of this Agreement may be amended or waived by the parties from and after the date that is one Business Day immediately
preceding the initial filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, no provision
of this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than
in a written instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise
any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate
as a waiver thereof.

 

11.
MISCELLANEOUS.

 

a.
A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the
same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered
owner of such Registrable Securities.

 

b.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses for such communications shall be:

 

    	 	9	 

    	 	 	 

    

 

	 	If
    to the Company:
	 	 	 	 
	 	 	 	Quantum
    Materials Corp.
	 	 	 	3055
    Hunter Road
	 	 	 	San
    Marcos, TX 78666
	 	 	 	Email:
    inquiries@qmcdots.com
	 	 	 	Attention:
    Stephen Squires, CEO
	 	 	 	 
	 	 	With
    a copy to (which copy shall not constitute notice):
	 	 	 	 
	 	 	 	Steven
    Morse, Esq.
	 	 	 	Morse
    & Morse, PLLC
	 	 	 	1400
    Old Country Rd., Ste. 302
	 	 	 	Westbury,
    NY 11590
	 	 	 	Email:
    morgold@aol.com
	 	 	 	 
	 	If to the Investor:
	 	 
	 	 	 	L2
    Capital, LLC
	 	 	 	8900
    State Line Rd., Suite 410
	 	 	 	Leawood,
    KS 66206
	 	 	 	E-mail:
    investments@ltwocapital.com
	 	 	 	Attention:
    Adam Long, Managing Partner
	 	 	 	 
	 	 	 	SBI
    Investments LLC, 2014-1
	 	 	 	369
    Lexington Avenue, 2nd Floor
	 	 	 	New
    York, NY 10017
	 	 	 	E-mail:
    juchno@seaotterglobal.com​
	 	 	 	Attention:
    Peter Wisniewski; Jonathan Juchno
	 	 	 	 
	 	 	With
    a copy to (which copy shall not constitute notice):
	 	 	 	 
	 	 	 	Legal
    & Compliance, LLC
	 	 	 	330
    Clematis Street, Ste. 217
	 	 	 	West
    Palm Beach, FL 33401
	 	 	 	Attn:
    Chad Friend, Esq., LL.M.
	 	 	 	E-mail:
    CFriend@LegalAndCompliance.com

 

or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or email account containing the time, date, recipient facsimile number or email
address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

    	 	10	 

    	 	 	 

    

 

c.
The corporate laws of the State of Kansas shall govern all issues concerning this Agreement. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of
Kansas, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Kansas or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Kansas. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the State of Kansas, County of
Johnson, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such 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
manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or
the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY 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
HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

d.
This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred
to herein and therein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

 

e.
Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties hereto.

 

f.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

g.
This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission or by e-mail in a “.pdf” format data file of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.

 

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

 

i.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party.

 

j.
This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

*
* * * * *

 

    	 	11	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of day and year first above written.

 

	 	THE
    COMPANY:
	 	 	 
	 	QUANTUM
    MATERIALS CORP.
	 	 	 
	 	By:	 
	 	Name:	Stephen
    Squires
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	INVESTOR:
	 	 	 
	 	L2
    CAPITAL, LLC
	 	 	 
	 	By:	 
	 	Name:	Adam
    Long
	 	Title:	Managing
    Partner
	 	 	 
	 	SBI
    INVESTMENTS LLC, 2014-1
	 	 	 
	 	By:	 
	 	Name:	Peter
    Wisniewski
	 	Title:	President

 

    	 	12	 

    	 	 	 

    

 

EXHIBIT
A

 

TO
REGISTRATION RIGHTS AGREEMENT

 

FORM
OF NOTICE OF EFFECTIVENESS

OF
REGISTRATION STATEMENT

 

______,
2017

 

Empire
Stock Transfer, Inc.

1859
Whitney Mesa Dr.

Henderson,
NV 89014

 

Re:
[__________]

 

Ladies
and Gentlemen:

 

We
are counsel to QUANTUM MATERIALS CORP., a Nevada corporation (the “Company”), and have represented the
Company in connection with that certain Purchase Agreement, dated as of March 29, 2017 (the “Purchase Agreement”),
entered into by and between the Company, as well as L2 Capital, LLC and SBI Investments LLC, 2014-1 (collectively the “Buyer”),
pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Common Stock, $0.001 par value (the
“Common Stock”), in an amount up to Five Million Dollars ($5,000,000.00) (the “Put Shares”),
in accordance with the terms of the Purchase Agreement. In connection with the transactions contemplated by the Purchase Agreement,
the Company has registered with the U.S. Securities & Exchange Commission the following shares of Common Stock:

 

(1)
__________ Put Shares to be issued to the Buyer upon purchase from the Company by the Buyer from time to time in accordance with
the Purchase Agreement; and

 

(2)
__________Underlying Shares to be issued to the Buyer pursuant to the Commitment Note.

 

Pursuant
to the Purchase Agreement, the Company also has entered into a Registration Rights Agreement, of even date with the Purchase Agreement
with the Buyer (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things,
to register the Put Shares and Underlying Shares under the Securities Act of 1933, as amended (the “Securities Act”).
In connection with the Company’s obligations under the Purchase Agreement and the Registration Rights Agreement, on [_____],
2017, the Company filed a Registration Statement (File No. 333-[_________]) (the “Registration Statement”)
with the Securities and Exchange Commission (the “SEC”) relating to the resale of the Put Shares and/or the
Underlying Shares.

 

In
connection with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has
entered an order declaring the Registration Statement effective under the Securities Act at [_____] [A.M./P.M.] on [__________],
2017 and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Put
Shares and Underlying Shares are available for resale under the Securities Act pursuant to the Registration Statement and may
be issued without any restrictive legend.

 

	 	Very
    truly yours,
	 	[Company
    Counsel]
	 	 	 
	 	By:	 

 

	cc:
    	 	L2
    Capital, LLC; SBI Investments LLC, 2014-1NEITHER
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) , 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: $147,000.00	Issue
    Date: March 29, 2017

 

PROMISSORY
NOTE

 

FOR
VALUE RECEIVED, QUANTUM MATERIALS CORP., a Nevada corporation (hereinafter called the “Borrower”) , hereby
promises to pay to the order of L2 CAPITAL, LLC, a Kansas limited liability company, or registered assigns (the “Holder”)
the principal sum of $147,000.00 (the “Principal Amount”) , together with interest at the rate of eight percent (8%)
per annum, at maturity or upon acceleration or otherwise, as set forth herein (the “Note”) . The maturity date shall
be nine (9) months from the Issue Date (the “Maturity Date”) , and is the date upon which the principal sum, as well
as any accrued and unpaid interest and other fees, shall be due and payable. This Note is being issued by the Borrower to the
Holder as a commitment fee, pursuant to that certain $5,000,000.00 equity purchase agreement of even date. This Note may not
be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note,
which is not paid by the first business day of the third calendar month after the Maturity Date, shall bear interest at the rate
of the lesser of (i) twenty four percent (24%) per annum or (ii) the maximum amount allowed by law, from the due date thereof
until the same is paid (“Default Interest”) . Interest shall commence accruing on the date that the Note is fully
paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to
the extent not converted into the Borrower’s common stock (the “Common Stock”) in accordance with the terms
hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder
shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on
the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this
Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount
of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order
to remain closed.

 

    	1 

    	 

    

 

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

 

The
following additional terms shall also apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1
 Conversion Right. The Holder shall have
the right at any time on or after an Event of Default (as defined herein) occurs under the Note, 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 shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”)
determined as provided herein (a “Conversion”) ; provided, however, that in no event shall the Holder
be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted
portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to
which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of
more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) , and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in
the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”) , delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile
or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New
York, New York time on such conversion date (the “Conversion Date”) . The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred
to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof.

 

    	2 

    	 

    

 

1..2 
Conversion Price.

 

(a) 
Calculation of Conversion Price. The Conversion
Price shall be the Variable Conversion Price (as defined herein) (subject, in each case, to equitable adjustments for stock splits,
stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary
of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events) (also subject
to adjustment as further described herein) . The “Variable Conversion Price” shall mean 65% multiplied by the Market
Price (as defined herein) (representing a discount rate of 35%) . “Market Price” means the lowest one (1) Trading
Price (as defined below) for the Common Stock during the thirty (30) Trading Day period ending on the last complete Trading Day
prior to the Conversion Date. “Trading Price” means, for any security as of any date, the lowest traded price on the
Over-the- Counter Pink Marketplace, OTCQB, or applicable trading market (the “OTCQB”) as reported by a reliable reporting
service (“Reporting Service”) designated by the Holder (i.e. www.Nasdaq.com) or, if the OTCQB is not the principal
trading market for such security, on the principal securities exchange or trading market where such security is listed or traded
or, if the lowest intraday trading price of such security is not available in any of the foregoing manners, the lowest intraday
price of any market makers for such security that are quoted on the OTC Markets. If the Trading Price cannot be calculated for
such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading
Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which
the Common Stock is tradable for any period on the OTCQB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded. If at any time while this Note is outstanding, an Event of Default (as defined herein)
occurs, then an additional discount of five percent (5%) for each Event of Default shall be factored into the Variable Conversion
Price until this Note is no longer outstanding. All expenses incurred by Holder, for the issuance and clearing of the Common Stock
into which this Note is convertible into, shall immediately and automatically be added to the balance of the Note at such time
as the expenses are incurred by Holder.

 

Each
time, while this Note is outstanding, the Borrower enters into a Section 3(a) (9) transaction (including but not limited to the
issuance of new promissory notes or of a replacement promissory note) , or Section 3(a) (10) transaction, in which any 3rd party
has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement or otherwise) at a discount
to market greater than the Variable Conversion Price in effect at that time (prior to all other applicable adjustments in the
Note) , then the Variable Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable
adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, the Borrower enters
into a Section 3(a) (9) transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory
note) , or Section 3(a) (10) transaction, in which any 3rd party has a look back period greater than the look back period in effect
under the Note at that time (currently a thirty (30) Trading Day look back period as described in this Section 1.2(a) applies)
, then the Holder’s look back period shall automatically be adjusted to such greater number of days until this Note is no
longer outstanding. The Borrower shall give written notice to the Holder, with the adjusted Variable Conversion Price and/or adjusted
look back period (each adjustment that is applicable due to the triggering event) , within one (1) business day of an event that
requires any adjustment described in the two immediately preceding sentences. So long as this Note is outstanding, if any security
of the Borrower contains any term more favorable to the holder of such security or with a term in favor of the holder of such
security that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional
or more favorable term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder.

 

    	3 

    	 

    

 

(b) 
Authorized Shares. The Borrower covenants
that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a
sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion
of this Note. The Borrower is required at all times to have authorized and reserved three times the number of shares that is actually
issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved
Amount”) . The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations
hereunder. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non- assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and
agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty
of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with
the terms and conditions of this Note.

 

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

 

1..3  Method of Conversion.

 

(a)
 Mechanics of Conversion. Subject to Section
1.1, this Note may be converted by the Holder in whole or in part at any time on or after an Event of Default occurs under the
Note, by submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched
on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b) , surrendering this Note
at the principal office of the Borrower.

 

    	4 

    	 

    

 

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

 

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

 

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

 

(e)
 Obligation of Borrower to Deliver Common Stock.
Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock
issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall
be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I,
all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given
a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock
shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same,
any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective
of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.
The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as
the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time, on such date.

 

    	5 

    	 

    

 

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

 

(g)
 Failure to Deliver Common Stock Prior to Deadline.
Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief,
the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline
(other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section)
the Borrower shall pay to the Holder $3,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver
such Common Stock (unless such failure results from war, acts of terrorism, an epidemic, or natural disaster) . Such cash amount
shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder
(by written notice to the Borrower by the first day of the month following the month in which it has accrued) , shall be added
to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and
such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower
agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate,
interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the
liquidated damages provision contained in this Section 1.4(g) are justified.

 

1..4 
Concerning the Shares. The shares of Common
Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective
registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect
that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii)
such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv)
such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise
transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided (and
subject to the removal provisions set forth below) , until such time as the shares of Common Stock issuable upon conversion of
this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number
of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable
upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant
to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in
the following form, as appropriate:

 

    	6 

    	 

    

 

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

 

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

 

    	7 

    	 

    

 

1...5
 [Intentionally Omitted].

 

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

 

ARTICLE
II. CERTAIN COVENANTS

 

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

 

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

 

ARTICLE
III. EVENTS OF DEFAULT

 

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

 

3.1
Failure to Pay Principal or Interest.
The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration
or otherwise, and such breach continues for a period of five (5) days.

 

    	8 

    	 

    

 

3.2
Conversion and the Shares. The Borrower
fails to reserve a sufficient amount of shares of common stock as required under the terms of this Note (including Section 1.3
of this Note) (and such breach continues for a period of three (3) days) , fails to issue shares of Common Stock to the Holder
(or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or
hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) shares of Common Stock to be
issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove
(or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any shares of Common Stock issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement
or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured
(or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2)
business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current
in its obligations to its transfer agent. It shall be an event of default of this
Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent.
If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion,
such advanced funds shall be paid by the Borrower to the Holder within five (5) business days, either in cash or as an addition
to the balance of the Note, and such choice of payment method is at the discretion of the Borrower.

 

3.3
Breach of Covenants. The Borrower breaches
any material covenant or other material term or condition contained in this Note and any collateral documents and such breach
continues for a period of three (3) days after written notice thereof to the Borrower from the Holder or after five (5) days after
the Borrower should have been aware of the breach.

 

3.4
Breach of Representations and Warranties.
Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant
hereto or in connection herewith, shall be false or misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note.

 

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

 

3.6
Judgments. Any money judgment, writ or
similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of ten (10) days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld.

 

    	9 

    	 

    

 

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

 

3.8
Delisting of Common Stock. The Borrower
shall fail to maintain the listing or quotation of the Common Stock on the OTCQB or an equivalent replacement exchange, the Nasdaq
Global Market, the Nasdaq Capital Market, the New York Stock Exchange, or the NYSE MKT.

 

3.9
Failure to Comply with the Exchange Act.
The Borrower shall fail to comply with the reporting requirements of the Exchange Act (including but not limited to becoming delinquent
in its filings) , and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10
Liquidation. Any dissolution, liquidation,
or winding up of Borrower or any substantial portion of its business.

 

3.11
Cessation of Operations. Any cessation
of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided,
however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission
that the Borrower cannot pay its debts as they become due.

 

3.12
Financial Statement Restatement. The Borrower
replaces its auditor, or any restatement of any financial statements filed by the Borrower with the SEC for any date or period
from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder
with respect to this Note.

 

3.13
Reverse Splits. The Borrower effectuates
a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

 

3.14
Replacement of Transfer Agent. In the
event that the Borrower replaces its transfer agent, and the Borrower fails to provide prior to the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions (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.

 

    	10 

    	 

    

 

3.15
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 convertible promissory notes, currently issued, or hereafter issued, by the Borrower, to the
Holder or any 3rd party (the “Other Agreements”) , after the passage of all applicable notice and cure or grace periods,
shall, at the option of the Holder, be considered a default under this Note, 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.

 

3.16
Inside Information. Any attempt by the
Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or
disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the Borrower,
to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing of a Form 8-K pursuant
to Regulation FD on that same date.

 

3.17
No Bid. At any time while this Note is
outstanding, the lowest Trading Price on the OTCQB or other applicable principal trading market for the Common Stock is equal
to or less than $0.0001.

 

3.18
No Shop. So long as this Note is outstanding,
the Borrower shall not enter into any transaction or arrangement with any party other than the Holder, structured in accordance
with, based upon, or related or pursuant to, in whole or in part, Section 3(a) (9) or 3(a) (10) of the Securities Act (a “3(a)
(9) Transaction”) , without prior written consent of the Holder, provided, however, that this Section 3.18 shall not encompass
any 3(a) (9) Transaction entered into by the Company prior to March 28, 2017 so long as the terms of such respective 3(a) (9)
Transaction have not been materially altered on or after March 28, 2017. For purposes of this Note, Section 3(a) (9) shall be
defined to be an exchange of securities of the Borrower where the securities issued have variable conversion prices based upon
the then market conditions at the time of conversion.

 

3.19
Failure to Repay Upon Qualified Offering.
The Borrower fails to repay the Note, in its entirety, pursuant to the terms of the Note, with funds received from its next completed
offering of $1,000,000.00 or more (consummated on or after the Issue Date) .

 

UPON
THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY
DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO:
(Y) THE DEFAULT SUM (AS DEFINED HEREIN) ; MULTIPLIED BY (Z) TWO (2) . Upon the occurrence and during the continuation of any Event
of Default specified in Sections 3.1, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18
and/or 3.19 exercisable through the delivery of written notice to the Borrower by such Holder (the “Default Notice”)
, the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to 140% (plus an additional 5% per each additional Event of Default that occurs hereunder) multiplied
by the then outstanding entire balance of the Note (including principal and accrued and unpaid interest) plus Default
Interest, if any, plus any amounts owed to the Holder pursuant to Sections 1.4(g) hereof (collectively, in the aggregate
of all of the above, the “Default Sum”) , and all other amounts payable hereunder shall immediately become due and
payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity.

 

    	11 

    	 

    

 

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

 

Upon
the occurrence and during the continuation of any Event of Default, and in addition to any other right or remedy of the Holder
hereunder, at law or in equity, the Borrower and Stephen Squires (the “Guarantor”) hereby irrevocably authorizes and
empowers Holder or its legal counsel, each as the Borrower’s and Guarantor’s attorney-in-fact, to appear ex parte
and without notice to the Borrower and Guarantor to confess judgment against the Borrower and Guarantor for the unpaid amount
of this Note, pursuant to the terms of this Note. The Affidavit shall set forth the amount then due hereunder, plus attorney’s
fees and cost of suit, and to release all errors, and waive all rights of appeal. The Borrower and Guarantor waives the right
to contest Holder’s rights under this paragraph, including without limitation the right to any stay of execution and the
benefit of all exemption laws now or hereafter in effect. No single exercise of the foregoing right and power to confess judgment
will be deemed to exhaust such power, whether or not any such exercise shall be held by any court to be invalid, voidable, or
void, and such power shall continue undiminished and may be exercised from time to time as the Holder may elect until all amounts
owing on this Note have been paid in full.

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

    	12 

    	 

    

 

4..2
Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
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:

 

If
to the Borrower, to:

 

QUANTUM
MATERIALS CORP.

3055
Hunter Road

San
Marcos, TX 78666

e-mail:
inquiries@qmcdots.com

 

With
a copy to (which copy shall not constitute notice) :

 

Steven
Morse, Esq.

Morse
& Morse, PLLC

1400
Old Country Rd., Ste. 302

Westbury,
NY 11590

Email:
morgold@aol.com

 

If
to the Holder:

 

L2
CAPITAL, LLC

8900
State Line Rd., Suite 410 Leawood, KS 66206

e-mail:
investments@ltwocapital.com

 

With
a copy to (which copy shall not constitute notice) :

 

Legal
& Compliance, LLC

330
Clematis Street, Ste. 217

West
Palm Beach, FL 33401

Attn:
Chad Friend, Esq., LL.M.

E-mail:
CFriend@LegalAndCompliance.com

 

4..3
Amendments. This Note and any provision
hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and
all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented.

 

    	13 

    	 

    

 

4.4
Assignability. This Note shall be binding
upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.
Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act) . Notwithstanding
anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement.

 

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

 

4.6
Governing Law. This Note shall be governed
by and construed in accordance with the laws of the State of Kansas 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 of Johnson County, Kansas. The parties to this Note hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and
consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

 

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

 

    	14 

    	 

    

 

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

 

4.9
Prepayment. Notwithstanding anything to
the contrary contained in this Note, the Borrower may prepay any amount outstanding under this Note, at any time, by making a
payment to the Holder of an amount in cash equal to 150% multiplied the amount that the Borrower is prepaying. In order to prepay
this Note, the Borrower shall provide notice to the Holder five (5) business days prior to such respective prepayment date, and
the Holder must receive such prepayment within twelve (12) business days of the Holder’s receipt of the respective prepayment
notice, but not sooner than ten (10) business days from the date of notice (the “Prepayment Period”) . The Holder
may convert the Note in whole or in part at any time during the Prepayment Period, subject to the terms and conditions of this
Note.

 

4.10
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 (a “3(a) (10) Transaction”)
, then a liquidated damages charge of 100% 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, an addition to the balance of the Note,
or a combination of both forms of payment, as determined by the Holder.

 

4.11
Reverse Split Penalty. If at any time
while this Note is outstanding, the Borrower effectuates a reverse split with respect to the Common Stock, then a liquidated damages
charge of 30% 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, an addition to the balance of the Note, or a combination of both
forms of payment, as determined by the Holder.

 

4.12
Right of First Refusal. If at any time
while this Note is outstanding, the Borrower has a bona fide offer of debt financing containing variable rate conversion terms
from any 3rd party, that the Borrower intends to act upon, then the Borrower must first
offer such opportunity to the Holder to provide such financing to the Borrower on the same terms as each respective 3rd party’s
terms. Should the Holder be unwilling or unable to provide such financing to the Borrower within 3 trading days from Holder’s
receipt of written notice of the offer (the “Offer Notice”) from the Borrower, then the Borrower may obtain such financing
from that respective 3rd 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. Borrower shall, within two (2) business days
of the respective closing, utilize 50% of all proceeds received by Borrower by each respective 3rd party that provides
financing to the Borrower, to prepay this Note. If the Borrower does not receive
the financing from the respective 3rd party within 30 days after the date of the respective Offer Notice, then the
Borrower must again offer the 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 toinvestments@ltwocapital.com

 

    	15 

    	 

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this March 29, 2017.

 

	QUANTUM
    MATERIALS CORP.	 
	 	 	 
	By:	 	 
	Name:	Stephen
    Squires	 
	Title:	Chief
    Executive Officer	 

 

    	16 

    	 

    

 

EXHIBIT
A — NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock
to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of QUANTUM MATERIALS CORP.,
a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as
of March 29, 2017 (the “Note”) , as of the date written below. No fee will be charged to the Holder for any conversion,
except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	[  ]	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the
    undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”) .
	 	 	 
	 	 	Name of DTC Prime Broker:
	 	 	Account Number:
	 	 	 
	 	[  ]	The undersigned
    hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below
    (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or,
    if additional space is necessary, on an attachment hereto:

 

	 	L2 CAPITAL, LLC	 
	 	8900 State Line Rd., Suite 410 Leawood, KS 66206	 
	 	e-mail: investments@ltwocapital.com	 
	 	 	 
	 	Date of Conversion:	 _________________________
	 	Applicable Conversion Price:	$ ________________________
	 	Number
of Shares of Common Stock to be issued

Pursuant to Conversion of the Notes:
	  _________________________
	 	Amount of Principal Balance Due remaining	  _________________________
	 	Under the Note after this conversion:	 

 

	 	L2 CAPITAL, LLC	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Date:	 	 

 

    	17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}]]