Document:

Exhibit

Exhibit 10.1
                        

	
		
	 

	DATED
	December 1, 2014

(1) GAB ROBINS UK LIMITED

- and -

(2) KIERAN RIGBY

	
			
	 
	

CONTRACT OF EMPLOYMENT FOR EMEA AP EXECUTIVE MANAGEMENT

	 

CONTENTS

1.      DEFINITIONS AND INTERPRETATION ...............................................................................................1
2.      APPOINTMENT ...................................................................................................................................5
3.      PROBATIONARY PERIOD ...................................................................................................................5
4.      TERM ...................................................................................................................................................6
5.      WORKING TIME .................................................................................................................................6
6.      DUTIES ................................................................................................................................................6
7.      REMUNERATION AND EXPENSES ....................................................................................................8
8.      COMPANY CAR ...................................................................................................................................9
9.      CAR ALLOWANCE ...............................................................................................................................9
10.    PENSION SCHEME ...........................................................................................................................10
11.    INSURANCE BENEFITS .....................................................................................................................10
12.    HOLIDAYS AND HOLIDAY PAY .........................................................................................................11
13.    SICKNESS AND ABSENCE ................................................................................................................12
14.    RETIREMENT AGE ............................................................................................................................13
15.    MOBILITY ..........................................................................................................................................13
16.    NO SMOKING POLICY ......................................................................................................................13
17.    CONFIDENTIAL INFORMATION ......................................................................................................13
18.    PROTECTION OF THE COMPANY'S BUSINESS INTERESTS ...........................................................14
19.    INTELLECTUAL PROPERTY ...............................................................................................................15
20.    TERMINATION ..................................................................................................................................17
21.    GARDEN LEAVE ................................................................................................................................19
22.    AMALGAMATION/RECONSTRUCTION ..........................................................................................20
23.    DISCIPLINARY AND GRIEVANCE PROCEDURES ............................................................................20
24.    DATA PROTECTION ..........................................................................................................................20
25.    MONITORING OF INFORMATION OR COMMUNICATION TECHNOLOGY .................................22
26.    NOTICES ............................................................................................................................................22
27.    ENTIRE AGREEMENT .......................................................................................................................22
28.    GENERAL ...........................................................................................................................................22
29.    JURISDICTION ...................................................................................................................................23

THIS CONTRACT OF EMPLOYMENT FOR EMEA AP EXECUTIVE MANAGEMENT is made on 01 December 2014
BETWEEN: 
		
	(1) 
	GAB ROBINS UK LIMITED (company number 01304989) whose registered office is at 35 Great St Helens, London, EC3A 6HB ("Company"); and

		
	(2) 
	KIERAN RIGBY of 80B Brookwood Road, Southfields SW18 5BY ("Executive").  

IT IS AGREED: 

		
	1.
	DEFINITIONS AND INTERPRETATION

In this agreement: 
		
	1.1
	The following terms have the following meanings:

"Applicable Laws" means all laws, bye-laws, common law, regulations, instruments, rules, orders, directives, guidance and codes of conduct or practice that are applicable to the party concerned and/or its obligations or liabilities under this agreement, including the Bribery Act 2010 and the Equality Act 2010;
"Appointment" means the employment of the Executive under the terms of this agreement;
"Board" means the Board of Directors of the Company from time to time;
"Client" means any person who at the date of termination of the Appointment, or at any time during the 12 months immediately prior to such termination, was a client or customer of the Company or any Group Company and from whom the Executive had obtained business on behalf of the Company or any Group Company or to whom the Executive had provided or arranged the provision of goods or services on behalf of the Company or any Group Company or for whom the Executive had management responsibility;
"Company Intellectual Property" means Intellectual Property Rights created, developed, proposed or originated by the Executive (whether jointly or alone) in the course of the Appointment, whether or not during working hours or using Company premises or resources and whether or not recorded in material form;
"Condition" means the issuing of a "found not to qualify" notice by the UK Competition and Markets Authority or a decision by the Competition and Markets Authority to clear the acquisition of GAB Robins Holdings UK Ltd by Crawford & Company Adjusters (UK) Limited;
"Confidential Information" means and shall include any information relating to the business and/or the financial affairs of the Company and/or the Group and the Company's and/or any Group Company's agents, advisers, officers, consultants, employees, Clients (or Potential Clients) or suppliers, and in particular shall include:
		
	(a)
	the business methods and information of the Company and any Group Company, including prices charged, discounts given to Clients or Potential Clients or obtained from suppliers, product development, marketing and advertising programmes, costings, budgets, turnover, sales targets or other financial information;

1

		
	(b)
	lists and particulars of the Company's and any Group Company's suppliers, Clients and Potential Clients and the individual contacts at such suppliers, Clients and Potential Clients;

		
	(c)
	details and terms of the Company's and any Group Company's agreements with suppliers, Clients and Potential Clients;

		
	(d)
	personal data relating to officers or employees of the Group and/or any Client or Potential Client; 

		
	(e)
	secret manufacturing or production processes and know‐how or trade secrets employed by the Company, any Group Company and its and/or their suppliers, Clients or Potential Clients; 

		
	(f)
	all Company Intellectual Property and all Intellectual Property Rights of the Company, any Group Company and its and/or their suppliers, Clients or Potential Clients;

		
	(g)
	any promotions or future promotions or marketing or publicity exercises planned by the Company and/or any Group Company;

		
	(h)
	any budgets or business plans of the Company and/or any Group Company; and

		
	(i)
	any information which may affect the value of the business or the shares of the Company and/or any Group Company,

whether such information is oral or in electronic or written form or otherwise, whether it is or was marked as confidential and whether or not such information is identified or treated by the Company and/or any Group Company as being confidential;
"Garden Leave" means any period in respect of which the Company has exercised its rights under clause ‎21.1;
"Group" means the Company and the Company's subsidiary undertakings, any parent undertaking of the Company and any subsidiary undertakings of such parent undertaking, in each case from time to time (and "Group Company" or any similar phrase shall be construed accordingly);
"Hardware" means any computer, laptop, telephone (mobile or otherwise), machine or other device used to communicate or hold information which is provided by any Group Company to the Executive;
"Incapacitated" means prevented by illness, injury, accident or other incapacity or circumstances beyond the Executive's control from properly fulfilling his/her duties under this agreement (and "Incapacity" shall be constructed accordingly);
"Information or Communication Technology" means Hardware and Software;
"Intellectual Property Rights" means patents, Inventions, copyright and related rights, trade marks, trade names, service marks and domain names, rights in get‐up, goodwill, rights to sue for passing off, design rights, semi‐conductor topography rights, database rights, confidential information, moral rights, proprietary rights and any other intellectual property rights in each case whether registered or unregistered and including all applications or rights to apply for, and 

2

renewals or extensions of such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world;
"Invention" means any invention, idea, discovery, development, improvement or innovation, process, plan, product, design, formula, model or prototype, whether or not patentable or capable of registration, and whether or not recorded in any medium, specification or program (including computer software) and any other matter or work whatsoever, including any and all improvements or modifications made to any Company Intellectual Property or other matter or work, which the Executive may conceive, create or develop (whether jointly or alone), regardless of whether or not conceived, created or generated at the direction of the Company, within the scope of the Executive's employment or during or outside of work hours;
"Potential Client" means any person with whom either the Executive, or any other employee of the Company or any Group Company for whom the Executive had, at the date of the negotiations, management responsibility, carried out negotiations on behalf of the Company or any Group Company at any time during the period of three months immediately prior to the date of termination of the Appointment with a view to such person becoming a Client of the Company or of any Group Company;
"Recognised Investment Exchange" means a recognised investment exchange as defined by section 285 of the Financial Services and Markets Act 2000;
"Restricted Business" means any business or any part of any business which in either case: 
		
	(a)
	is carried on by the Company or any Group Company at the date of termination of the Appointment; and/or

		
	(b)
	was carried on by the Company or by any Group Company at any time during the period of six months immediately prior to the date of termination of the Appointment; and/or

		
	(c)
	is to the knowledge of the Executive to be carried out by the Company or by any Group Company at any time during the period of six months immediately following the date of termination of the Appointment,

and which the Executive was materially concerned with or had management responsibility for (or had substantial confidential information regarding) in either case at any time during the period of 12 months immediately prior to the date of termination of the Appointment;
"Restricted Employee" means any senior employee of the Company or any Group Company employed at the date of termination of the Appointment in the capacity or with the title of director (or a role of similar type or status) or in any research, technical, IT, financial, marketing, loss adjusting or sales function or other managerial role whom the Executive has managed or with whom he/she has worked at any time during the period of 12 months immediately prior to the termination of the Appointment, but shall not include any employee employed in an administrative, clerical, manual or secretarial capacity;
"Restricted Supplier" means any supplier to the Company or to any Group Company with whom the Executive has had material personal contact or for whom the Executive has had managerial responsibility during the period of 12 months immediately prior to the termination of the Appointment;

3

"Restricted Territory" means England, Scotland, Wales and Northern Ireland together with any other country in which the Company or any other Group Company:
		
	(a)
	carried on any Restricted Business or provided any goods or services in connection with any Restricted Business at the date of termination of the Appointment; and/or

		
	(b)
	carried on any Restricted Business or provided any goods or services in connection with any Restricted Business at any time during the period of six months immediately prior to the date of termination of the Appointment; and/or

		
	(c)
	is to the knowledge of the Executive to carry out any Restricted Business at any time during the period of six months immediately following the date of termination of the Appointment,

and regarding which country at any time during the period of 12 months immediately prior to the date of termination of the Appointment the Executive:
		
	(i)
	was materially concerned or worked in; and/or

		
	(ii)
	had management responsibility for; and/or

		
	(iii)
	obtained Confidential Information;

"Salary" means the basic salary payable to the Executive under this agreement from time to time and does not include any benefits (or the value of benefits, including pension benefits), bonus, commission or other remuneration payable to the Executive;
"Software" means any software, whether owned by or licensed to a Group Company or otherwise, including any updates, supplements, add-on components or internet-based services to, or in connection with, any software, which is provided by any Group Company to the Executive (including by being installed on any Hardware);
"subsidiary undertaking" and "parent undertaking" shall have the meanings ascribed to them in sections 1161 and 1162 of the Companies Act 2006 provided that "undertaking" for such purposes shall mean an undertaking incorporated, registered or resident in any jurisdiction (and an undertaking shall be treated, for the purposes only of the membership requirement contained in section 1162, as a member of another undertaking even if its shares in that other undertaking are registered in the name of (a) another person (or its nominee) whether by way of security or in connection with the taking of security or (b) its nominee); and
"Working Time Regulations" means the Working Time Regulations 1998.
		
	1.2
	The headings in this agreement are included for convenience only and shall not affect its interpretation or construction.

		
	1.3
	Where it is appropriate in this agreement, singular words shall include the plural and vice versa.

		
	1.4
	Unless the context otherwise requires a reference to one gender shall include a reference to the other gender.

		
	1.5
	References to any Applicable Laws shall be construed as references to Applicable Laws as from time to time amended, re‐enacted or consolidated.

4

		
	1.6
	References to clauses, the parties and the schedules are respectively to clauses of and the parties and the schedules to this agreement.

		
	1.7
	Save as otherwise defined, words and expressions shall be construed in accordance with the Interpretation Act 1978 and in particular: 

		
	1.7.1
	a reference to a person shall be construed so as to include any individual, firm, body corporate (wherever incorporated), government, state or agency of a state or any joint venture, association, partnership, limited partnership, limited liability partnership, works council or employee representative body (in each case whether or not having separate legal personality); 

		
	1.7.2
	reference to "includes" or "including" will be construed as "includes without limitation" or "including without limitation" (as the case may be); and

		
	1.7.3
	general words shall not be given a restrictive meaning by reason of their being preceded or followed by words indicating a particular class or examples of acts, matters or things.

		
	2.
	APPOINTMENT

		
	2.1
	This agreement shall come into effect only upon the Condition being satisfied.  Once the Condition has been satisfied, this agreement shall come into effect immediately and shall replace any prior terms and conditions in accordance with clause 27.

		
	2.2
	The Company shall employ the Executive and the Executive shall be employed by the Company in the capacity of Senior Vice President Global Markets and/or in such other position or capacity with such job title and powers as the Company may from time to time reasonably decide and subject to the terms and conditions set out in this agreement.

		
	2.3
	The Executive warrants that by entering into this agreement he/she will not be in breach of any express or implied terms of any contract or of any other obligation binding upon him/her.

		
	2.4
	The Executive warrants that he/she satisfies the necessary immigration requirements of and is entitled to work in the United Kingdom and will notify the Company immediately if he/she ceases to be so entitled during the Appointment.  Details of the documents which the Company will accept as proof of entitlement to enter and/or remain in the United Kingdom can be obtained from the HR Department.

		
	2.5
	During the Appointment:

		
	2.5.1
	the Company has no duty to provide any work to or vest any powers in the Executive who shall have no right to perform any services for the Company or for any Group Company; and

		
	2.5.2
	the Company shall be entitled at any time to appoint another person to act jointly with the Executive in any capacity in which he/she may be employed.

		
	3.
	PROBATIONARY PERIOD

The Executive will not be subject to a probationary period.  

		
	4.
	TERM

The Appointment on the terms of this agreement shall commence on the Condition being satisfied and, unless terminated in accordance with clauses 13.6, 20 or 22.2 of this agreement, shall continue until terminated (i) at any time, by at least six months' written notice given by the Company to the Executive, or (ii) by the Executive giving to the Company at least six months' written notice, provided always that the earliest date that such notice by the Executive can expire is 31 December 2018.  It is agreed and acknowledged that the Executive's period of continuous employment with the Company commenced on 1 October 1985.

5

		
	5.
	WORKING TIME

		
	5.1
	The Executive's normal hours of work will be 9.00am - 5.00pm Monday to Friday.

		
	5.2
	The Executive will be required to work such additional hours as may be necessary for the proper performance of his/her duties without being entitled to further remuneration for those additional hours.  This may include the Executive working or making himself/herself available by telephone or for callout in the evenings outside normal office hours, at weekends or on public holidays.

		
	5.3
	The Executive agrees that the limit in Regulation 4(1) of the Working Time Regulations will not apply to his/her employment and that Working Time, as defined in the Working Time Regulations, may therefore exceed an average 48 hours for each seven day period in the applicable reference period.  The Executive can withdraw his/her agreement by giving three months' prior written notice to the Company.

		
	5.4
	For the avoidance of doubt the following will be included as Working Time as defined in the Working Time Regulations:

		
	5.4.1
	travelling time whilst at work, for example to visit Clients or Potential Clients or to attend meetings (and for the avoidance of doubt this does not include travel to and from work);

		
	5.4.2
	entertaining of Clients or Potential Clients during lunch breaks or after office hours, provided it has been authorised by the Executive's line manager; and 

		
	5.4.3
	attendance at seminars, conferences or any other events, at which the Executive's attendance is required by the Company.

		
	6.
	DUTIES

		
	6.1
	During the Appointment the Executive shall:

		
	6.1.1
	perform such duties and exercise such powers and functions as may from time to time be reasonably assigned to or vested in him/her by the Company, whether relating to the Company or any Group Company;

		
	6.1.2
	unless prevented by ill health devote the whole of his/her time and attention, endeavours and abilities to promoting the interests of the Company and of the Group and shall not engage in any activity which may be or may become harmful to or contrary to the interests of the Company or of the Group;

		
	6.1.3
	observe and comply with all lawful and reasonable requests, instructions, resolutions and regulations of the Company and give to the Company such explanations, information and assistance as may reasonably be required;

		
	6.1.4
	observe and comply with all policies and procedures of the Company and/or the Group, including the provisions of any staff or employee handbook;

		
	6.1.5
	carry out his/her duties in a proper, loyal and efficient manner to the best of his/her ability and use his/her best endeavours to maintain, develop and extend the business of the Company and of the Group;

		
	6.1.6
	comply with all Applicable Laws and all legal duties or obligations imposed on him/her;

		
	6.1.7
	not commit any criminal offence (except a road traffic offence not involving a custodial sentence) and will conduct himself/herself in a manner at all times that will not bring himself/herself, the Company or any Group Company or any Client into disrepute;

		
	6.1.8
	not commit or be party to any act of bribery, corruption, fraud or dishonesty and, for the avoidance of doubt, the Executive undertakes that he/she will not receive or give any gifts or gratuities except in strict compliance with any relevant Company or Group policy;

		
	6.1.9
	ensure that at all times during and after the Appointment he/she takes all reasonably practicable steps to protect and maintain the integrity, confidentiality and performance of the Information or Communication Technology and data contained therein, and does not do anything to damage, disrupt, delay, disable overburden or impair any Information or Communication Technology or data contained therein;

		
	6.1.10
	report to the Company in writing any matter relating to the Company or any Group Company or any of its or their officers or employees which he/she becomes aware of and which could be the subject of a qualifying disclosure as defined by section 43B of the Employment Rights Act 1996;

		
	6.1.11
	report his/her own wrongdoing and any wrongdoing or proposed wrongdoing of any other officer or employee of the Company or of any Group Company to the Company immediately on becoming aware of it;

		
	6.1.12
	perform his/her duties at such place or places in the United Kingdom and/or elsewhere (including internationally) as the Company shall decide but unless otherwise agreed the Executive shall not be required to work outside the United Kingdom for a continuous period exceeding one month;

		
	6.1.13
	work such hours and travel within and outside the United Kingdom as may reasonably be required for the proper performance of his/her duties; and

		
	6.1.14
	accept (if offered) appointment as a statutory director of the Company or any Group Company, with or without such executive powers as the Board (or the relevant Group Company) shall decide in its absolute discretion, and resign any such appointment if requested by the Company without any claim for damages or compensation.  

		
	6.2
	In the event that the Executive is appointed as a statutory director of the Company or any Group Company:

		
	6.2.1
	that appointment does not amount to a term of employment and the Company reserves the right to remove the Executive from any such directorship at any time for any reason, and where the Company exercises this right, this shall not amount to a breach or the termination of this agreement and shall not give rise to a claim for damages or compensation;

		
	6.2.2
	if the Executive fails to resign any such appointment, the Company is hereby irrevocably authorised to appoint some person in the Executive's name and on his/her behalf to sign and execute all documents and do all things necessary to constitute and give effect to such resignation; and

		
	6.2.3
	the Executive consents to any Group Company making this agreement available for inspection notwithstanding that it contains his/her residential address.

		
	6.3
	During the Appointment the Executive shall not without the written consent of the Company:

		
	6.3.1
	be engaged or interested either directly or indirectly (through any member of his/her family or household or otherwise) in any capacity in any trade, business or occupation whatsoever other than the business of the Company or the Group from time to time provided that the Executive shall not be prohibited from holding (whether directly or indirectly), for investment purposes only, up to three per cent of the shares or stock of any class of any public company quoted or dealt in on a Recognised Investment Exchange;

		
	6.3.2
	pledge the credit of the Company or any Group Company other than in the day to day running of its business; or

		
	6.3.3
	become a member of the Territorial Army or another reservist force, a member of Parliament, a councillor of a local authority or a magistrate, or occupy or be engaged in public office.

		
	7.
	REMUNERATION AND EXPENSES

		
	7.1
	The Company shall pay to the Executive a Salary at a rate of £265,000 per annum or at such other rate as may from time to time be agreed between the Company and the Executive.

		
	7.2
	The Salary shall be deemed to accrue evenly from day to day and shall be payable in arrears by equal monthly instalments on the 27th of each month and otherwise in accordance with the Company's normal pay policy into a bank account nominated by the Executive and shall be inclusive of any fees and/or remuneration to which the Executive may be entitled as a director of the Company or any Group Company. The Executive is not entitled to payment of overtime or time off in lieu for hours worked outside normal working hours.

		
	7.3
	The Salary and benefits payable under the terms of this agreement replace any and all entitlements (including allowances) applicable prior to the date of this agreement.  Such allowances shall cease to be payable from the date this agreement becomes effective.

		
	7.4
	The Company shall reimburse the Executive for all reasonable and authorised out of pocket expenses (including hotel and travelling expenses) wholly, necessarily and exclusively incurred by the Executive in the discharge of his/her duties, subject to the production of appropriate receipts or such other evidence as the Company may reasonably require as proof of such expenses and in accordance with the Company's rules and policies relating to expenses as may be in force from time to time.  The Executive shall submit all expenses in a timely manner, and in any event by the end of the month in which they were incurred.  If the Executive is provided with a credit 

6

or charge card by the Company this must only be used for expenses which he/she incurs in performing the Appointment.

7

		
	8.
	COMPANY CAR

		
	8.1
	The Company shall provide the Executive with a motor car via the Company's chosen provider of a type that the Company shall consider appropriate for the Executive having regard to the capacity in which he/she is employed for use in the performance of his/her duties.  The Executive shall also be permitted to use the motor car for private purposes, including use on holiday within the United Kingdom and use by his/her partner or spouse who are authorised in writing by the Company and are legally entitled to drive and insured for that purpose.

		
	8.2
	The Company shall pay all insurance premiums, maintenance and repair expenses in respect of the motor car and the cost of taxing the car and, whilst the motor car is being used wholly, necessarily and exclusively for the purpose of the Company or any Group Company's business (but not otherwise), shall reimburse the Executive for all petrol used in accordance with the Company's rules and policies relating to petrol expenses as may be in force from time to time (which may be amended or terminated in any way at any time).

		
	8.3
	The Executive shall at all times:

		
	8.3.1
	take good care of the motor car and procure that the provisions of any insurance policy relating to it are observed in full; 

		
	8.3.2
	ensure that the motor car is not taken out of the United Kingdom without the prior written consent of the Company; and

		
	8.3.3
	comply with the Company's rules and policies relating to the provision of company cars as may be in force from time to time (which may be amended or terminated in any way at any time).

		
	8.4
	The Company reserves the right to withdraw this benefit if the Executive is convicted of any motoring offence (including any offence relating to the consumption of alcohol or drugs) or if the Executive is in breach of clause ‎8.3 above.

		
	8.5
	The Company may from time to time, for any reason and at its complete discretion, replace the make or type of car.

		
	8.6
	The benefit of a Company car (and the benefit of clause ‎8.2 above) will cease on the termination of the Executive's employment or on transfer to another position that does not require a car to perform the role.  

		
	9.
	CAR ALLOWANCE

		
	9.1
	As an alternative to receiving the benefit of a motor car under clause 8 above, the Executive can elect to receive a car allowance in lieu of a company motor car for use on the Executive's own car of £9,720 per annum, which shall be payable together with and in the same manner as the Salary in accordance with clause ‎7.2.  The car allowance shall not be treated as part of the Executive's Salary for any purpose and shall not be pensionable.  The Company reserves the right to vary or withdraw the car allowance payable to the Executive in any way at any time, including by reducing the amount payable, upon giving reasonable notice.

		
	9.2
	The Company shall reimburse the Executive in respect of fuel costs for business miles at the Company's approved rates from time to time.  The Company reserves the right to vary such rates at any time at its discretion.

		
	9.3
	The Executive shall immediately inform the Company if he/she is disqualified from driving and shall cease to be entitled to receive the allowance under clause ‎9.1 or reimbursement of fuel expenses under clause ‎9.2.

		
	9.4
	The Executive must at all times ensure that his/her own car remains fit for business use as defined by the company car policy.

		
	10.
	PENSION SCHEME

		
	10.1
	The Executive is eligible to join the Company Pension Scheme (the "Scheme"), subject to its terms and rules from time to time in force and HM Revenue & Customs limits from time to time.  Further details are available on request from the HR Department. Upon the Executive entering the Scheme, the Company shall contribute (in equal monthly instalments) an amount equal to 10% of such part of the Executive's Salary during his employment hereunder (subject to the tax reliefs and exemptions available from HM Revenue & Customs, as amended from time-to-time) to the Scheme.

		
	10.2
	Upon entering the Scheme, the Executive will automatically become enrolled into any pension salary exchange scheme in operation at the time unless the Executive decides to "opt out".  Further details are available from the HR Department.

		
	10.3
	The Company reserves the right to vary or terminate the pension arrangements referred to above in any way and at any time, and to substitute alternative pension arrangements.

		
	11.
	INSURANCE BENEFITS

		
	11.1
	During the Appointment the Company shall, subject to clause ‎11.3 below and to the Company's right to terminate the Appointment in accordance with clauses ‎4, ‎13.6, ‎20 or ‎22.2 of this agreement, allow the Executive to opt for the following benefits: 

		
	11.1.1
	private medical expenses insurance for the Executive and the Executive's spouse or partner and children in accordance with arrangements made between the Company and such insurer as the Company may decide from time to time and subject to the terms and conditions applicable to any such insurance.  The Company reserves the right to discontinue or vary any such insurance in any way at any time at its discretion;

		
	11.1.2
	life insurance at a rate of four times the Salary in accordance with arrangements made between the Company and such insurer as the Company may decide from time to time and subject to the terms and conditions applicable to any such insurance.  The Company reserves the right to discontinue or vary any such life insurance in any way at any time at its discretion; and

		
	11.1.3
	permanent health insurance in accordance with the arrangements made between the Company and such insurer as the Company may decide from time to time and subject to the terms and conditions applicable to any such insurance (the "PHI Scheme").  The Company reserves the right to discontinue or vary any such insurance in any way at any time at its discretion.  

		
	11.2
	During any period in which the Executive is eligible to receive benefits under the PHI Scheme the Company's obligations under this agreement shall be limited to paying to the Executive such sums as it receives in respect of the Executive under the PHI Scheme and for the avoidance of doubt the Executive agrees in such circumstances to accept such sums in place of further payment of Salary and any other remuneration or benefits, including the provision of a company car, under the terms of this agreement.  During any such period the Executive shall continue to be bound by all his/her obligations (other than to provide his/her services) under this agreement.

		
	11.3
	The benefits referred to in each paragraph of clauses ‎11.1.1 to ‎11.1.3 above are conditional on the relevant insurer accepting cover for the Executive at a premium the rate of which the Company considers reasonable and accepting liability for any particular claim.  In the event that the relevant insurer does not accept cover or liability in respect of the Executive or any claim by the Executive in respect of any of the benefits referred to in clause ‎11.1 above, the Company shall have no obligation to provide any alternative benefits or cover in this regard.  The provision of the benefits referred to in clause ‎11.1 shall not restrict the Company's ability to terminate the Appointment in accordance with clauses 4, 13.6, 20 or 22.2 of this agreement for any reason, including because the Executive is Incapacitated.  All and any benefits provided under clause ‎11.1 above shall cease with effect from the date of termination of the Appointment.

		
	12.
	HOLIDAYS AND HOLIDAY PAY

		
	12.1
	The Company's holiday year runs between 1 November and 31 October.  In addition to the normal bank and public holidays applicable in England and Wales the Executive shall be entitled to 30 working days' paid holiday during each holiday year, to be taken at such time as the Company may from time to time approve and paid at the rate of basic Salary ("Holiday Entitlement").  Holiday Entitlement is inclusive of statutory holiday under the Working Time Regulations ("Statutory Holiday").

		
	12.2
	Untaken Holiday Entitlement in any holiday year may not be carried forward to any following holiday year and such Holiday Entitlement will be forfeited without any right to payment in lieu.

		
	12.3
	Upon termination of the Appointment the Executive shall either be entitled to Salary in lieu of any outstanding Holiday Entitlement or be required to repay to the Company any Salary received in respect of Holiday Entitlement taken in excess of his/her proportionate Holiday Entitlement, and any sums repayable by the Executive may be deducted from any outstanding Salary or other payments due to the Executive.  

		
	12.4
	The Company reserves the right to require the Executive to take any accrued but unused Holiday Entitlement during any period of notice given to terminate the Appointment or at any other time, or, if applicable, any such holiday shall be deemed to be taken during any period of Garden Leave.

		
	12.5
	During any period in which the Executive is Incapacitated he/she shall not accrue any holiday in excess of his/her entitlement to Statutory Holiday.  In any holiday year, the first 5.6 weeks of any holiday taken by the Executive shall be deemed to be Statutory Holiday.

		
	12.6
	If the Executive is in receipt of benefits under the PHI Scheme then the Holiday Entitlement will be limited to Statutory Holiday under the Working Time Regulations.  Holiday pay will be at the applicable rate of pay that the Company receives for the Executive under the PHI Scheme.

		
	13.
	SICKNESS AND ABSENCE

		
	13.1
	If the Executive is Incapacitated, he/she shall immediately notify the UK Human Resources Director and inform him/her of the reason for his/her absence together with the likely date of return.  This should be done by telephone as early as possible but no later than one hour prior to the start of the Executive's working day on the first day of absence.  Contact by text, email of social media is not acceptable.

8

		
	13.2
	Each time the Executive is absent from work, he/she shall provide evidence to the Company of the reason for such absence.  This evidence shall be provided by way of a self-certification form, which shall be completed by the Executive on the first day of his/her resumption of duty.  In addition, in the case of illness or injury lasting for more than seven consecutive days, the Executive shall provide a doctor's certificate on the eighth day of illness or injury and weekly thereafter.

		
	13.3
	Subject to compliance with the provisions of clauses ‎13.1 and ‎13.2 above (and subject to the Company's right to terminate the Appointment for any reason, including Incapacity), if the Executive is at any time Incapacitated, other than when the Executive is in receipt of benefits under the PHI Scheme, he/she shall be paid sick pay consisting of:

		
	13.3.1
	his/her Salary for up to 26 weeks' absence in aggregate in any period of 12 months; and

		
	13.3.2
	thereafter such remuneration (if any) as the Company or Board shall in its absolute discretion allow.

		
	13.4
	Once sick pay under clause ‎13.3 has expired, the Executive shall have no further entitlement to sick pay until he/she has returned to work for a consecutive period of eight weeks.  The Company shall be entitled to deduct from the sick pay or such remuneration as may be paid to the Executive any statutory sick pay to which the Executive may be entitled under the provisions of the Social Security Contributions and Benefits Act 1992 and/or any other sickness or injury benefits otherwise recoverable by or payable to the Executive.  For statutory sick pay purposes the Executive's qualifying days shall be his/her normal working days.

		
	13.5
	The Executive agrees that at any time during the Appointment he/she will consent, if required by the Company, to a medical examination by a medical practitioner appointed by the Company at its expense and shall authorise such medical practitioner to disclose to and discuss with the Company, the Board, the UK Human Resources Director or the HR Department, the results of any such medical examination.

		
	13.6
	If the Executive shall at any time be Incapacitated during the Appointment for a total of 26 or more weeks in any 12 consecutive calendar months the Company may terminate the Appointment immediately by notice in writing given to the Executive at any time during the period for which he/she is Incapacitated.

		
	13.7
	If the Executive is incapacitated for a consecutive period of 20 or more working days the Company may (without prejudice to the provisions of clause 2.5.2) appoint another person or persons to perform the Executive's duties until such time as the Executive is able to resume fully the performance of his/her duties.

		
	13.8
	If the Executive is Incapacitated by the action of a third party in respect of which damages are or may be recoverable the Executive shall notify the UK Human Resources Director of that fact and of any claim, compromise, settlement or judgment awarded as soon as is reasonably practicable.  The Executive shall include in any claim for damages against such third party a claim in respect of monies paid by the Company under this clause ‎13 and shall receive the payments referred to in clause ‎13.3 above as loans by the Company to the Executive (notwithstanding that as an interim measure income tax has been deducted from such payments as if they were emoluments of employment).  The Executive shall repay such loans (net of costs) when and to the extent that the Executive recovers compensation for loss of earnings from the third party by action or otherwise.

		
	14.
	RETIREMENT AGE

The Company does not operate a compulsory retirement age; if the Executive wishes to retire he/she will be required to give notice in accordance with clause ‎4 above.

9

		
	15.
	MOBILITY

		
	15.1
	The Executive will be expected to travel throughout the United Kingdom and internationally and stay away as necessary for the proper performance of his/her duties.

		
	15.2
	The Company may require the Executive to transfer permanently to any office within an accepted "travel to work area", being a home to office each way journey of 90 minutes or less in or to London or an hour or less elsewhere.

		
	15.3
	The Company reserves the right following consultation with the Executive to change his/her workplace, within the United Kingdom, for a temporary period of up to three months.

		
	16.
	NO SMOKING POLICY

		
	16.1
	All Company or Group Company premises are designated smoke-free.  Smoking is therefore strictly prohibited on all parts of the Company's premises and in Company provided vehicles, except where there may be a designated outside area.

		
	16.2
	Failure to comply with the Company or Group's smoking policy can lead to disciplinary action.

		
	17.
	CONFIDENTIAL INFORMATION

		
	17.1
	The Executive shall not at any time during the Appointment, nor at any time after its termination, except as reasonably required for the purposes of and during the Appointment, directly or indirectly use or disclose any Confidential Information.

		
	17.1.1
	The Executive shall not be restrained from using or disclosing any Confidential Information which he/she is authorised to use or disclose by the Company or the Board; or

		
	17.1.3
	has entered the public domain unless it enters the public domain as a result of an unauthorised disclosure by the Executive or anyone else employed or engaged by the Company or any Group Company; or

		
	17.1.4
	he/she is required to disclose by law; or

		
	17.1.5
	he/she is entitled to disclose under section 43A of the Employment Rights Act 1996 provided that the disclosure is made in an appropriate way to an appropriate person having regard to the provisions of that Act and clause ‎6.1.10 above,

provided that, in the case of any disclosure under sub-clauses 17.1.4 or 17.1.5 above, the Executive shall (to the extent permitted by the applicable laws) notify the Company in advance of the disclosure.
		
	17.2
	The Executive shall not make copies of any document, memorandum, correspondence (including emails), computer disk, CD-Rom, memory stick, video tape or any similar matter (including for the avoidance of doubt in any electronic format) or remove any such items from the premises of the Company or of any Group Company other than in the proper performance of his/her duties under this agreement and in accordance with the Company's policies and procedures.  

		
	17.3
	The Executive shall not make any public statement, adverse or otherwise (whether written or oral), to the media or otherwise relating to the affairs of the Company or any Group Company and shall not write any article for publication on any matter concerned with the business or other affairs of the Company or the Group without the prior written consent of the Company or the Board.

		
	18.
	PROTECTION OF THE COMPANY'S BUSINESS INTERESTS 

		
	18.1
	The Executive acknowledges that following the termination of the Appointment he/she will be in a position to take advantage of or compete unfairly with the Company or any other Group Company as a result of the Confidential Information and knowledge about the business, 

10

operations, Clients, employees and trade connections of the Company and the Group he/she has acquired or will acquire and through the connections that he/she has developed and will develop during the Appointment.  The Executive therefore agrees to enter into the restrictions in this clause ‎18 for the purpose of protecting the Company's legitimate business interests and in particular the Confidential Information, goodwill and the stable trained workforce of the Company and the Group, and in recognition of the Executive's seniority.  
		
	18.2
	The Executive covenants with the Company and each other Group Company that he/she shall not, directly or indirectly, on his/her own behalf or on behalf of any person, in connection with any business which is or is intended or about to be competitive with the Restricted Business or in relation to the provision of any goods or services similar to or competitive with those sold or provided by the Company or any Group Company in connection with the Restricted Business, for a period of 12 months after the termination of the Appointment:

		
	18.2.1
	solicit or canvass the custom of any Client or Potential Client; and/or

		
	18.2.2
	contract or deal with, in any way, any Client or Potential Client; and/or

		
	18.2.3
	solicit or entice away, or attempt to entice away, from the Company or any Group Company any Restricted Employee; and/or

		
	18.2.4
	employ, offer to employ or enter into partnership with any Restricted Employee.

		
	18.3
	The Executive shall not, without the prior written consent of the Company or the Board, for a period of 12 months after the termination of the Appointment, directly or indirectly, on his/her own behalf, or on behalf of any person:

		
	18.3.1
	within the Restricted Territory set up, carry on, be employed in, provide services to, be associated with, or be engaged or interested in, whether as director, employee, principal, shareholder, partner or other owner, agent or otherwise, any business which is or is intended or about to be competitive with the Restricted Business save as a shareholder of not more than three per cent of any public company whose shares or stocks are quoted or dealt in on any Recognised Investment Exchange; and/or

		
	18.3.2
	endeavour to cause any person who is at the date of termination of the Appointment, or at any time during the 12 months immediately prior to such termination was, a Restricted Supplier to the Company and/or any Group Company, to either cease to supply the Company or any Group Company or materially alter the terms of such supply in a manner detrimental to the Company or any Group Company.

		
	18.4
	During the Appointment and following its termination, the Executive shall not do or omit to do anything which could or does materially damage the reputation or any business of the Company and/or any Group Company and/or any Client.

		
	18.5
	In the event that the Executive receives an offer of employment or request to provide services, either during the Appointment or during the currency of the restrictive periods set out in clauses 18.2 or 18.3,  the Executive shall (and the Company may) provide immediately to such person making such an offer or request a full and accurate copy of this agreement signed by both parties.  The restrictions contained in this clause are considered by the parties to be reasonable in all the circumstances.  Each sub clause constitutes an entirely separate and independent restriction and the duration, extent and application of each of the restrictions are no greater than is necessary for the protection of the interests of the Group.

		
	19.
	INTELLECTUAL PROPERTY

		
	19.1
	The parties acknowledge that the Executive may create, develop, propose or originate Company Intellectual Property (alone or jointly) in the course of the Appointment and that the Executive has a special obligation to further the interests of the Company in relation to all such Company Intellectual Property.  The Executive shall, promptly following their creation, development, proposal or origination, disclose to the Company all such Company Intellectual Property and all works, materials or documents embodying Company Intellectual Property.

		
	19.2
	The Executive acknowledges that all Company Intellectual Property and all works, materials or documents embodying them shall automatically belong to the Company as from their creation, development, proposal or origination for the full term of those rights and the Executive hereby assigns, by way of present and future assignment, any and all right, title and interest therein to the Company. 

		
	19.3
	To the extent that any Company Intellectual Property does not vest in the Company automatically pursuant to clause ‎19.2, the Executive holds such property on trust for the Company and hereby grants to the Company an irrevocable exclusive, royalty free licence to use such property in its discretion until such Company Intellectual Property fully vests in the Company.

		
	19.4
	To the extent that any Company Intellectual Rights created, developed, proposed or originated by the Executive (whether alone or jointly) at any time during the course of the Appointment are prohibited by or prevented in law from automatically vesting in the Company pursuant to clause ‎19.2, the Executive shall, immediately upon the creation, development, proposal or origination of such rights, grant the Company a right of first refusal, in writing, to acquire them on arm's length terms to be agreed between the parties.

		
	19.5
	The Executive agrees:

		
	19.5.1
	to execute all such documents, both during and after the Appointment, as the Company may reasonably require to vest in the Company all right, title and interest in all Company Intellectual Property pursuant to this agreement;

		
	19.5.2
	to provide all such information and assistance and do all such further things as the Company may require to enable it to protect, maintain and exploit the Company Intellectual Property to the best advantage, including, at the Company's request, applying for the protection of Company Intellectual Property throughout the world; 

		
	19.5.3
	to assist the Company in applying for the registration of any registrable Company Intellectual Property, to enable it to enforce the Company Intellectual Property against third parties and to defend claims for infringement of third party Intellectual Property Rights; and

		
	19.5.4
	not to apply for the registration of any Company Intellectual Property in the United Kingdom or any other part of the world without the prior written consent of the Company.

		
	19.6
	As against the Company, its successors and assigns and any licensee of any of the foregoing, the Executive hereby waives all of his/her present and future moral rights which arise under the Copyright Designs and Patents Act 1988 and all similar rights in other jurisdictions relating to the Company Intellectual Property.  

		
	19.7
	The Executive acknowledges that, except as provided by law, no further remuneration or compensation, other than that provided for in this agreement, is or may become due to the Executive in respect of his/her compliance with this clause ‎19.  This clause ‎19 is without prejudice to the Executive's rights under the Patents Act 1977.

		
	19.8
	The Executive warrants that:

		
	19.8.1
	during the Appointment the Executive shall not:

		
	19.8.1.1
	infringe the Intellectual Property Rights of any third party;

		
	19.8.1.2
	involve the use of information in breach of obligations owed to or rights held by any third party;

		
	19.8.2
	the Company will not infringe the Intellectual Property Rights of any third party by exercising all of the rights of the owner of the Intellectual Property Rights assigned by the Executive to the Company under this agreement; and

		
	19.8.3
	the Executive is not bound by any legally enforceable obligations owed to any person other than the Company which would prevent the Executive from complying with the terms of this agreement.

		
	19.9
	The Executive irrevocably appoints the Company as his/her attorney in his/her name to sign, execute, do or deliver on his behalf any deed, document or other instrument and to use his/her name for the purpose of giving full effect to this clause ‎19.

11

		
	20.
	TERMINATION

		
	20.1
	The Appointment may be terminated without notice or pay in lieu of notice with immediate effect by the Company if at any time:

		
	20.1.1
	it is found that the Executive did not comply with any lawful order or direction given to him/her by the Company or the Board; and/or

		
	20.1.2
	the Company or the Board reasonably believes that the Executive has committed any serious breach or repeatedly after warning any breach, or is guilty of a continuing breach of any of the terms of this agreement; and/or

		
	20.1.3
	the Company or the Board reasonably believes that the Executive is guilty of any gross or serious misconduct or (after written warning) wilful neglect in the discharge of his/her duties under this agreement; and/or

		
	20.1.4
	the Company or the Board reasonably believes that the Executive is guilty of any bribery, corruption, fraud, dishonesty or conduct tending to bring himself/herself, the Company or any Group Company or any Client into disrepute, including, for the avoidance of doubt, any criminal offence (except a road traffic offence not involving a custodial sentence); and/or

		
	20.1.5
	the Company or the Board reasonably believes that the Executive has committed a serious breach of any Applicable Laws which may affect or relate to the business of the Company or any Group Company; and/or

		
	20.1.6
	the Executive is declared bankrupt or has a receiving order made against him/her or makes any general composition with his/her creditors or takes advantage of any Applicable Laws affording relief for insolvent debtors; and/or

		
	20.1.7
	the Executive becomes prohibited by law from being or acting as a director of the Company; and/or

		
	20.1.8
	the Executive fails to maintain or becomes disqualified from maintaining registration with any regulatory body, membership of which is reasonably required by the Company for the Executive to carry out his/her duties; and/or

		
	20.1.9
	the Executive refuses or fails to agree to accept employment on the terms and in the circumstances specified in clause ‎22 of this agreement; and/or

		
	20.1.10
	the Executive resigns as a director of the Company other than at the request of the Board; and/or

		
	20.1.11
	the Executive fails to provide an original document proving his/her entitlement to enter and/or remain in the United Kingdom annually on the anniversary of the Appointment or at any other time requested by the Company.

		
	20.2
	In the event of termination under clause ‎20.1 above the Company shall not be obliged to make any further payment to the Executive except such Salary as shall have accrued at the date of termination and in respect of any accrued but untaken Statutory Holiday under the Working Time Regulations.

12

		
	20.3
	Upon notice of termination of the Appointment being given or upon termination of the Appointment or, at the start of a period of Garden Leave or at any time upon request by the Company in writing, the Executive shall:

		
	20.3.1
	immediately and automatically (unless agreed in writing otherwise by the Company) be deemed to have resigned from all (if any) offices held by him/her in the Company or any Group Company and all (if any) trusteeships held by him/her of any pension scheme or any trust established or subscribed to or by the Company and any Group Company and in the event of his/her failure to do so the Company is hereby irrevocably authorised by the Executive to appoint some person in his/her name and on his/her behalf to sign and execute all documents and do all things necessary to constitute and give effect to such resignation;

		
	20.3.2
	immediately return to the Company all Information or Communication Technology, correspondence (including emails), documents, papers, memoranda, notes, records or materials (including Confidential Information) in whatever form (including in magnetic media or other forms of computer storage, videos, tapes (whether or not prepared or produced by him/her) and any copies thereof), charge and credit cards and all other property (including any car) belonging to the Company which may be in the Executive's possession or under his/her control provided that the Executive shall not be obliged to return during any period of Garden Leave any property provided to him/her as a contractual benefit; and

		
	20.3.3
	send to the UK Human Resources Director a signed statement confirming that he/she has complied with sub-clause ‎20.3.2 above.

		
	20.4
	The Executive shall not at any time after the termination of the Appointment represent himself/herself as being in any way connected with or interested in the business of the Company or the Group.

		
	20.5
	At its absolute discretion the Company may at any time (including after notice of termination shall have been given by either party) lawfully terminate this agreement by notice in writing with immediate effect by paying to the Executive a sum in lieu equal to his/her Salary for the applicable then unexpired period of notice referred to in clause ‎4, together with such further amount as is equal to the fair value of any other benefits to which the Executive is contractually entitled under the terms of this agreement during such period (subject to deduction at source of income tax and national insurance contributions) ("Payment in Lieu").  For the avoidance of doubt, the Payment in Lieu shall not include any element in relation to:

		
	20.5.1
	any bonus or commission payments, or payments, rights or benefits under any share option or long term incentive plan, that might otherwise have been due during the period for which the Payment in Lieu is made; and

		
	20.5.2
	any payment in respect of any Holiday Entitlement that would have accrued during the period for which the Payment in Lieu is made.

		
	20.6
	The Executive shall have no right to receive a Payment in Lieu unless the Company has exercised its discretion in clause ‎20.5.  Nothing in this clause ‎20 shall prevent the Company from terminating the Appointment in the event of a breach of this agreement by the Executive.  

		
	20.7
	On termination of the Appointment howsoever arising the Executive shall not have any claim for breach of contract in respect of the loss of any rights or benefits under any share option, 

13

bonus, long-term incentive plan or other profit sharing scheme operated by the Company or by any Group Company in which he/she may participate which would otherwise have accrued during the applicable period of notice to which the Executive is entitled under clause ‎4 of this agreement.
		
	20.8
	The Executive expressly agrees that the Company may make such deductions from Salary or other payments due on the termination of or during the Appointment as may be necessary to reimburse the Company for sums paid out by the Company to or on behalf of the Executive but which are recoverable by it, including loans, advances, relocation expenses, excess holiday payments and any outstanding payments in relation to the company car.

		
	20.9
	Clauses 1, 17, 18, 19, 20, 21, 24, 25, 26, 27, 28 and 29 shall survive the termination of this agreement.

		
	21.
	GARDEN LEAVE

		
	21.1
	Following notice to terminate the Appointment being given by the Company or the Board or the Executive, or if the Executive purports to terminate the Appointment in breach of contract, the Company may by written notice require the Executive not to perform any services (or to perform only specified services) for the Company or for any Group Company for all or part of the applicable notice period required under clause ‎4.  

		
	21.2
	During any period of Garden Leave the Executive shall: 

		
	21.2.1
	continue to receive the Salary and other contractual benefits under this agreement in the usual way and subject to the terms of any benefit arrangements;

		
	21.2.2
	remain an employee of the Company and remain bound by his/her duties and obligations, whether under this agreement or otherwise, which shall continue in full force and effect;

		
	21.2.3
	not contact or deal with (or attempt to contact or deal with) any Client, supplier, agent, distributor, shareholder, officer, employee or other business contact of the Company or any Group Company without the prior written consent of the Company or the Board;

		
	21.2.4
	not (unless otherwise requested) enter onto the premises of the Company or any Group Company without the prior written consent of the Company or the Board;

		
	21.2.5
	not commence any other employment or engagement, including the taking up of any directorships or consultancy services;

		
	21.2.6
	provide such assistance as the Company or any Group Company may require to effect an orderly handover of his/her responsibilities to any individual or individuals appointed by the Company or any Group Company to take over his/her role or responsibilities; and

		
	21.2.7
	make himself/herself available to deal with requests for information, provide assistance, be available for meetings and to advise on matters relating to work.

14

		
	21.3
	In the event that the Company exercises its rights under clause ‎21.1 of this agreement then any Garden Leave shall be set off against and therefore reduce the periods for which the restrictions in clauses 18.2 and 18.3 of this agreement apply.

		
	22.
	AMALGAMATION/RECONSTRUCTION

		
	22.1
	If the Company is wound up for the purposes of reconstruction or amalgamation, the Executive shall not as a result or by reason of any termination of the Appointment or the redefinition of his/her duties within the Company or the Group arising or resulting from any reorganisation or amalgamation of the Group have any claim against the Company or any other Group Company for damages for termination of the Appointment or otherwise so long as he/she shall be offered employment with any concern or undertaking resulting from such reconstruction, reorganisation or amalgamation on terms and conditions no less favourable to the Executive than the terms contained in this agreement.

		
	22.2
	If the Executive shall at any time have been offered but shall have unreasonably refused or failed to agree to the transfer of this agreement by way of novation to a company which has acquired or agreed to acquire not less than 50 per cent of the equity share capital of the Company, the Company may terminate the Appointment by such notice as is required by section 86 of the Employment Rights Act 1996 given within one month of such offer.  

		
	23.
	DISCIPLINARY AND GRIEVANCE PROCEDURES

		
	23.1
	The disciplinary procedure which applies to the Executive's employment with the Company is available on the Company Intranet.  For the avoidance of doubt, this procedure is non- contractual.

		
	23.2
	The Executive shall refer any grievance he/she may have about his/her employment or an appeal in connection with any disciplinary decision relating to him/her to his/her line manager or the UK Human Resources Director in writing in the first instance if appropriate.

		
	23.3
	The Company shall have the right to suspend the Executive from his/her duties on such terms and conditions as the Company shall determine for the purpose of carrying out an investigation into any allegation of misconduct or negligence or an allegation of bullying, harassment or discrimination against the Executive and pending any disciplinary hearing.  The Company shall be required to continue to pay the Salary and provide all other contractual benefits to the Executive during any period of suspension.  The Company shall not be required to give any reason for exercising its right under this clause.

		
	24.
	DATA PROTECTION 

		
	24.1
	The Executive confirms that he/she has read and understood the Company's data protection policy, a copy of which is available on the Company Intranet.  The Company may change its data protection policy in any way at any time.

		
	24.2
	The Company will process and may disclose personal data including sensitive personal data (as such terms are defined in the Data Protection Act 1998) relating to the Executive, and the Executive consents to the processing and disclosure of such data and also to the use by the Company or any other Group Company of his/her image or photograph for any purpose (including marketing).  The Executive's personal data will be held by the Company in its manual and automated filing systems.  

		
	24.3
	The parties confirm that personal data including sensitive personal data can include but is not limited to:

		
	24.3.1
	information about the Executive's physical or mental health or condition for the purpose of the performance of the Appointment and this agreement (including the provision of any benefits under it), monitoring sickness absence, dealing with sick pay and determining the Executive's fitness to carry out duties on behalf of the Group;

		
	24.3.2
	information about the Executive's sex, marital status, race, ethnic origin or disability for the purpose of monitoring to ensure equality of opportunity and compliance with equal opportunities legislation;

		
	24.3.3
	information relating to any criminal proceedings in which the Executive has been involved for insurance purposes and in order to comply with any Applicable Laws  and/or obligations to third parties; and/or

15

		
	24.3.4
	information obtained as a result of a Criminal Records Bureau or credit check or any similar statutory check that may be required under any Applicable Laws (and the Executive hereby consents to the Company carrying out any such checks in respect of him/her at any time). 

		
	24.4
	The Company will process and may disclose any such data referred to above both inside and, where necessary, outside the European Economic Area (including to the United States) for the following purposes: 

		
	24.4.1
	in order for the Appointment and this agreement to be performed;

		
	24.4.2
	in order to comply with any Applicable Laws and/or any legal or regulatory obligations which apply to the Company or any other Group Company (including contractual obligations);

		
	24.4.3
	for decisions to be made regarding the Executive's employment or continued employment, or any of the terms thereof;

		
	24.4.4
	for obtaining or carrying out work from or for Clients or Potential Clients;

		
	24.4.5
	for the purpose of any potential sale of over 50 percent of the shares of the Company or any Group Company or other change of control or any potential transfer of the Executive's employment under the Transfer of Undertaking (Protection of Employment) Regulations 2006; or

		
	24.4.6
	in order to comply with a request for disclosure made by any statutory or regulatory authority, court of law or law enforcement agency.

Disclosure may include, in the case of sale, change of control or transfer, disclosure to the potential purchaser or investor and their advisors, in the case of a service provision change, disclosure to a new service provider, and in the case of obtaining or carrying out work, disclosure to Clients or Potential Clients.
		
	24.5
	The Executive shall use all reasonable endeavours to keep the Company informed of any changes to his/her personal data.

		
	24.6
	The Executive acknowledges that in the course of the Appointment he/she may have access to personal and sensitive data relating to other employees and he/she agrees to keep such information confidential and otherwise to comply with the Company's data protection policy at all times.

		
	25.
	MONITORING OF INFORMATION OR COMMUNICATION TECHNOLOGY

		
	25.1
	The Company will monitor messages sent and received via any Information or Communication Technology and may access and disclose to management the content of messages in order to ensure that the Executive is complying with the Company's policies.

		
	25.2
	In particular, the Executive should be aware that no email, voicemail or other communication sent or received through any Information of Communication Technology is private, and also that emails, voicemails or other communications, or any document created on the Company's computer systems, however confidential or damaging, may have to be disclosed in court or other proceedings.  An email, voicemail or other communication which has been deleted can still be retrieved and may be monitored for training or quality control purposes.

		
	25.3
	The Company further reserves and intends to exercise its right to monitor and disclose to management all use of the internet through its Information or Communication Technology to the extent authorised by law.  

		
	25.4
	The Executive hereby consents to any such monitoring and/or disclosure as is referred to in this clause ‎25.

		
	26.
	NOTICES 

Notices may be given by either party by personal delivery or by letter to the other party at (in the case of the Company) its registered office for the time being (addressed to the UK Human Resources Director) and (in the case of the Executive) his/her last known address.  Any such notice given by personal delivery shall be deemed to have been given at the time of delivery and by letter shall be deemed to have been given 48 hours after posting.

		
	27.
	ENTIRE AGREEMENT

		
	27.1
	This agreement constitutes the entire agreement and understanding between the parties in respect of the matters dealt with in it and supersedes, cancels and nullifies any previous agreement between the parties or any of them relating to such matters notwithstanding the terms of any previous agreement or arrangement expressed to survive termination.  For the avoidance of doubt, any previous contract of employment between the parties, or between the Executive and any other Group Company, is hereby terminated with immediate effect.

		
	27.2
	Each of the parties acknowledges and agrees that in entering into this agreement it does not rely on, and shall have no remedy in respect of, any statement, representation, warranty or understanding (whether negligently or innocently made) other than as expressly set out in this agreement.  The only remedy available to any party in respect of any such statement, representation, warranty or understanding shall be for breach of contract under the terms of this agreement.

		
	27.3
	Nothing in this clause ‎27 shall operate to exclude any liability for fraud.

		
	28.
	GENERAL

		
	28.1
	There are no collective agreements in force which affect the terms and conditions of the Appointment.

16

		
	28.2
	Subject only to any deemed amendment to, or severance of, any provision of this agreement pursuant to clause ‎28.3 below, no amendment or variation of the terms of this agreement will be effective unless it is made or confirmed in a written document signed by all of the parties.

		
	28.3
	In the event that any provision of this agreement is void or unenforceable by reason of any provision of applicable law, such provision will be deemed to be modified to the extent necessary to render it legal, valid and enforceable.  If no such modification is possible, it will be deleted and the remaining provisions of this agreement will continue in full force and effect and, if necessary, be so amended as is necessary to give effect to the spirit of this agreement so far as possible.

		
	28.4
	In relation to the Contracts (Rights of Third Parties) Act 1999:

		
	28.4.1
	where any term of this agreement is expressed to be made in favour of or is capable of applying for the benefit of a Group Company or any officer or employee of any Group Company, such person shall be entitled, with the prior written consent of the Company, to enforce that term in accordance with that Act but may not assign the benefit of their rights under it;

		
	28.4.2
	save as described in clause ‎28.4.1 above, the parties do not intend that any term of this agreement is enforceable under that Act by a person who is not a party; and 

		
	28.4.3
	the consent of any person who is not a party shall not be required for the amendment, variation, rescission or termination of this agreement.

		
	28.5
	The Company shall be entitled to sell, assign, novate or otherwise dispose of this agreement or any of its rights or obligations under this agreement (in whole or in part) to any other Group Company or by way of security to or in favour of any lender(s) which has or have agreed to advance credit facilities to any Group Company without the prior consent of the Executive.  The Executive shall not be entitled to sell, assign, novate, sub-contract or otherwise dispose of this agreement or any of his/her rights under this agreement (in whole or in part) to any person.

		
	28.6
	This agreement shall be binding on and enure for the benefit of the successors and permitted assigns of the parties.

		
	28.7
	This agreement may be executed in any number of counterparts each of which when executed by one or more of the parties hereto shall constitute an original but all of which shall constitute one and the same instrument.

17

		
	29.
	JURISDICTION

		
	29.1
	This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation, including any non-contractual disputes or claims, shall be governed by and construed in accordance with the laws of England and Wales.

		
	29.2
	Each party irrevocably agrees to submit to the exclusive jurisdiction of the Courts of England and Wales over or in respect of any claim or matter arising under or in connection with this agreement.

IN WITNESS whereof the parties have executed this agreement as a deed on the date of this agreement.

18

	
					
	Executed and delivered as a deed, by GAB ROBINS UK LIMITED, by a director in the presence of a witness:
	))))
	Signature
	/s/ P. Brown

	 
	 
	 
	 

	 
	 
	Name (block capitals)
	PAUL BROWN

	 
	 
	 
	Director

	 
	 
	 
	 

	Witness signature:
	/s/ C. Cox
	 
	 

	 
	 
	 
	 

	Witness name:
	CHRISTOPHER COX
	 
	 

	(block capitals)
	 
	 
	 

	 
	 
	 
	 

	Witness address:
	24C Bromfield Street
	 
	 

	 
	London, N1 OPZ
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	
					
	Signed and delivered as a deed by KIERAN RIGBY in the presence of a witness:
	)))
	Signature
	/s/ K. Rigby

	 
	 
	 
	 

	Witness signature:
	/s/ C. Cox
	 
	 

	 
	 
	 
	 

	Witness name:
	CHRISTOPHER COX
	 
	 

	(block capitals)
	 
	 
	 

	 
	 
	 
	 

	Witness address:
	24C Bromfield Street
	 
	 

	 
	London, N1 OPZ
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

19Exhibit
4.1

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT 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: US$210,000.00	Issue
    Date: May 2, 2018
	Purchase
    Price: US$210,000.00	 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, NANOFLEX POWER CORPORATION, a Florida corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of AUCTUS FUND, LLC, a Delaware limited liability company, or registered assigns (the
“Holder”) the sum of US$210,000.00 together with any interest as set forth herein, on February 2, 2019 (the “Maturity
Date”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “Interest
Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at
maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise
explicitly set forth herein with the written consent of the Holder which may be withheld for any reason or for no reason. Any
amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty-four
percent (24%) per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the
“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed
on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted
into common stock, $0.0001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be
made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding
day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in
full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest
due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or
a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain
Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).

 

     

    

    

 

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

 

The
following terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

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

 

Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal the lesser of: (i) the closing price of the Common Stock on the Trading Day immediately prior to the date of this
Note, and (ii) the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends
or rights offerings by the Borrower relating to the Borrower's securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “Variable Conversion
Price” shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of 40%). “Market
Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty-five (25) Trading Day period
ending on the latest complete Trading Day prior to the Conversion Date. The Conversion Price shall be subject to a floor of $0.50
per share for the initial 180 calendar days after the Issue Date. If the Company's share price at any time loses the bid (ex:
0.0001 on the ask with zero market makers on the bid on level 2), then the Conversion Price may, in the Holder's sole and absolute
discretion on each Notice of Conversion thereafter, be reduced to a fixed conversion price of $0.00001. “Trading Price”
means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB or applicable trading
market as reported by a reliable reporting service (“Reporting Service”) designated by the Holder or, if the OTC Pink
is not the principal trading market for such security, the trading price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no trading price of such security is available in any of the
foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink
sheets” by the National Quotation Bureau, Inc., or (ii) the closing bid price on the OTC Pink, OTCQB or applicable trading
market as reported by a Reporting Service designated by the Holder or, if the OTC Pink is not the principal trading market for
such security, the closing bid price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of
the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National
Quotation Bureau, Inc. To the extent the Conversion Price of the Borrower's Common Stock closes below the par value per share,
the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value
possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion
Price may be adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower,
the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the
Borrower's Common Stock have not been delivered within three (3) business days to the Borrower, the Notice of Conversion may be
rescinded. At any time after the Closing Date, if in the case that the Borrower's Common Stock is not deliverable by DWAC (including
if the Borrower's transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower's Common Stock specified
in a Notice of Conversion), an additional 10% discount will apply for all future conversions under all Notes. If in the case that
the Borrower's Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an
additional 15% discount shall apply for all future conversions under all Notes while the “chill” is in effect. If
in the case of both of the above, an additional cumulative 25% discount shall apply. Additionally, if the Borrower ceases to be
a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one hundred eighty-one
(181) days from the Issue Date, an additional 15% discount will be attributed to the Conversion Price. 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 OTC Pink, OTCQB or on the principal securities exchange or
other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its
transfer agent and all DTC fees associated with any such issuance. Holder shall be entitled to deduct $500.00 from the conversion
amount in each Notice of Conversion to cover Holder's deposit fees associated with each Notice of Conversion.

 

    	 	3	 

    

    

 

While
this Note is outstanding, each time any 3rd party has the right to convert monies owed to that 3rd party
(or receive shares pursuant to a settlement or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10),
at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in
the Note), then the H1older, in Holder's sole discretion, may utilize such greater discount percentage (prior to all applicable
adjustments in this Note) until this Note is no longer outstanding. While this Note is outstanding, each time any 3rd
party has a look back period greater than the look back period in effect under the Note at that time, including but not limited
to under Section 3(a)(9) and Section 3(a)(10), then the Holder, in Holder's sole discretion, may utilize such greater number of
look back days until this Note is no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business
day of becoming aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding
sentences.

 

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

 

(b)
Pro Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder
in connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock not
in dispute and resolve such dispute in accordance with Section 4.13.

 

(c)
If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common
Stock, then the Conversion Price hereunder shall equal such par value for such conversion and the Conversion Amount for such conversion
shall be increased to include Additional Principal, where “Additional Principal” means such additional amount to be
added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion
to equal the same number of conversion shares as would have been issued had the Conversion Price not been subject to the minimum
price set forth in this Section 1.2(c).

 

1.3
Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all
times to have authorized and reserved ten times the number of shares that is actually issuable upon full conversion of the Note
(based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). The Reserved Amount
shall be increased from time to time in accordance with the Borrower‟s obligations pursuant to Section 3(d) of the Purchase
Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and
(ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the
duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than
the initial Reserved Amount, regardless of any prior conversions.

 

    	 	4	 

    

    

 

If,
at any time the Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of the
Holder, the principal amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder's
and Borrower's expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

 

1.4
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
from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other
reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time) and (B) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

(b)
Surrender of Note Upon Conversion. 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.

 

    	 	5	 

    

    

 

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

 

(e)
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall
be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the
amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article 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 5:00 p.m., New York, New York time,
on such date.

 

(f)
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained
in Section 1.1 and in this Section 1.4, the Borrower shall use its commercially reasonable 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 At Custodian (“DWAC”) system.

 

(g)
DTC Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason,
or, if the Conversion Price is less than $0.01, the principal amount of the Note shall increase by Fifteen Thousand and No/100
United States Dollars ($15,000) (under Holder's and Borrower's expectation that any principal amount increase will tack back to
the Issue Date). In addition, the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market
Price, subject to adjustment as provided in this Note.

 

    	 	6	 

    

    

 

(h)
 Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder's right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon
conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each
day beyond the Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate
to the Holder or credit the Holder's balance account with OTC for the number of shares of Common Stock to which the Holder is
entitled upon such Holder's conversion of any Conversion Amount (under Holder's and Borrower's expectation that any damages will
tack back to the Issue Date).. 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(h) are justified.

 

(i)
Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from
the Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the
Borrower's Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of the Note
of Conversion, (iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower's Common Stock
issued unrestricted and/or deposited to sell for any reason related to the Borrower's standing, (iv) the Holder is unable to deposit
the shares of the Borrower's Common Stock requested in the Notice of Conversion for any reason related to the Borrower's standing,
(v) at any time after a missed Deadline, at the Holder's sole discretion, or (vi) if OTC Markets changes the Borrower's designation
to 'Limited Information' (Yield), 'No Information' (Stop Sign), 'Caveat Emptor' (Skull & Crossbones), 'OTC', 'Other OTC' or
'Grey Market' (Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder
maintains the option and sole discretion to rescind the Notice of Conversion (“Rescindment”) with a “Notice
of Rescindment.”

 

    	 	7	 

    

    

 

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

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 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 reasonably 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 Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant
to Section 3.2 of the Note.

 

1.6
Effect of Certain Events.

 

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

 

    	 	8	 

    

    

 

(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion
of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number
of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance
of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the
Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis
and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable
upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had
this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this
Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and
of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable
in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but
in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve,
or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The
above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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

 

    	 	9	 

    

    

 

(d)
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or
sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued
directly to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers (provided, however,
that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to
the issuance of such shares), any shares of Common Stock for no consideration or for a consideration per share (before deduction
of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”),
then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share
received by the Borrower in such Dilutive Issuance.

 

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

 

Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and
the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then
in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof
at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

    	 	10	 

    

    

 

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

 

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

 

1.7
[Intentionally Omitted].

 

1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the shares, if any, which cannot be issued because their issuance would exceed such 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.

 

    	 	11	 

    

    

 

1.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay the amounts outstanding
hereunder pursuant to the following terms and conditions:

 

(a)
At any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue
Date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder
of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount
in cash equal to 135%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued
and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(b)
At any time during the period beginning the day which is ninety one (91) days following the Issue Date and ending on the date
which is one hundred eighty (180) days following the Issue Date, the Borrower shall have the right, exercisable on not less than
three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest),
in full by making a payment to the Holder of an amount in cash equal to 150%, multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus
(y) Default Interest, if any.

 

(c)
After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of prepayment.

 

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.

 

2.3
[Intentionally Omitted].

  

    	 	12	 

    

    

 

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

 

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

 

2.6
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction
or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9)
of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).
In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder
at its election in the form of cash payment or addition to the balance of this Note.

 

2.7
Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant
Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification
necessary.

 

2.8
Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate
or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action
as may be required to protect the rights of the Holder.

 

2.9
[Intentionally Omitted].

 

    	 	13	 

    

    

 

ARTICLE
III. EVENTS OF DEFAULT

 

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

 

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

 

3.2
Conversion and the Shares. The Borrower (i) 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, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically
or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, (iii) directs its transfer agent not to transfer or delays, impairs, and/or hinders
its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common
Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, (iv)
fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or
makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph)
and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall
not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion, (v) fails
to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note is delayed, hindered or frustrated
due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty eight (48) hours of a demand
from the Holder, any amount of funds advanced by Holder to Borrower's transfer agent in order to process a conversion, (viii)
fails to reserve sufficient amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails to provide
a Rule 144 opinion letter from the Borrower's legal counsel to the Holder, covering the Holder's resale into the public market
of the respective conversion shares under this Note, within two (2) business days of the Holder's submission of a Notice of Conversion
to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that Holder submits the respective
Notice of Conversion and the date of the respective Notice of Conversion must be on or after the date which is six (6) months
after the date that the Holder funded the Purchase Price under this Note), and/or (x) an exemption under Rule 144 is unavailable
for the Holder's deposit into Holder's brokerage account and resale into the public market of any of the conversion shares under
this Note at any time after the date which is six (6) months after the date that the Holder funded the Purchase Price under this
Note.

 

3.3
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined
in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.

 

3.4
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this
Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of
ten (10) days after written notice thereof to the Borrower from the Holder.

 

    	 	14	 

    

    

 

3.5
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase
Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of
time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.6
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors
or commence proceedings for its dissolution, 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 for the Borrower or
for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after
such appointment.

 

3.7
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 $157,5000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.8
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, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have
filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower
admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for
bankruptcy relief, all under international, federal or state laws as applicable.

 

3.9
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC
Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement
exchange

 

3.10
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.

 

3.11
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.12
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.

 

    	 	15	 

    

    

 

3.13
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property
or other assets which are necessary to conduct its business (whether now or in the future), or any disposition or conveyance of
any material asset of the Borrower.

 

3.14
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any
date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result
of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.15
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.

 

3.16
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails
to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form
as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares
of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.17
Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTC Pink, OTCQB, Nasdaq National
Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange, and such cessation
of trading shall continue for a period of five consecutive (5) Trading Days.

 

3.18
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements (as defined
herein), after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered
a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to
apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under
said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between,
among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder (and any affiliate of the Holder) or any other third
party, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include
the agreements and instruments defined as the Documents. Each of the loan transactions will be cross-defaulted with each other
loan transaction and with all other existing and future debt of Borrower to the Holder.

 

    	 	16	 

    

    

 

3.19
Bid Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement
exchange).

 

3.20
OTC Markets Designation. OTC Markets changes the Borrower's designation to 'No Information' (Stop Sign), 'Caveat Emptor'
(Skull and Crossbones), or 'OTC', 'Other OTC' or 'Grey Market' (Exclamation Mark Sign).

 

3.21
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.

 

3.22
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder,
the Holder's brokerage firm (and respective clearing firm), and the Borrower's transfer agent in order to facilitate the Holder's
conversion of any portion of the Note into free trading shares of the Borrower's Common Stock pursuant to Rule 144, and (ii) thereupon
deposit such shares into the Holder's brokerage account

 

Upon
the occurrence of any Event of Default specified in Sections 3.1, 3.2, 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, 3.19, 3.20, 3.21, and/or 3.22 exercisable through the delivery of written notice to the Borrower
by such Holders (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 (i) 150% (EXCEPT THAT 150% SHALL BE REPLACED
WITH 200% WITH RESPECT TO SECTION 3.2 AND/OR 3.22) times the sum of (w) the then outstanding principal amount of
this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the
“Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or
(x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal
amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively
be known as the “Default Sum”) or (ii) at the option of the Holder, the “parity value” of the Default
Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise
pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment
Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default
Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Trading Price for the Common Stock during the period beginning on the date
of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”)
and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all
of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection,
and the Holder shall be  entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach
of Sections 3.9, 3.10 and/or 3.19 occurs or is continuing after the six (6) month anniversary of this Note, then the principal
amount of the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder's and Borrower's
expectation that any principal amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest
Trading Price during the delinquency period as a base price for the conversion with the Variable Conversion Price shall be redefined
to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note. For example, if the
lowest Trading Price during the delinquency period is $0.0001 per share and the conversion discount is 50%, then the Holder may
elect to convert future conversions at $1.00 per share. If this Note is not paid at Maturity Date, then the outstanding principal
due under this Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000). If an

 

    	 	17	 

    

    

 

The
Holder shall have the right at any time, to require the Borrower, to immediately issue, in lieu of the Default Amount, the number
of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect, pursuant
to the terms of this Note (including but not limited to any beneficial ownership limitations contained herein). This requirement
by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any
notice or take any other action.

 

If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging
an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys' fees
and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

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

 

Nanoflex
Power Corporation

17207
N. Perimeter Dr., Suite 210

Scottsdale,
AZ 85255

Attn:
Dean Ledger

E-mail:
investorrelations@nanoflexpower.com

 

    	 	18	 

    

    

 

If
to the Holder:

 

Auctus
Fund, LLC

177
Huntington Avenue, 17th Floor

Boston,
MA 02115

Attn:
Lou Posner

Facsimile:
(617) 532-6420

 

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

 

Chad
Friend, Esq., LL.M.

Legal
& Compliance, LLC

330
Clematis Street, Suite 217

West
Palm Beach, FL 33401

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
(and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then
as so amended or supplemented.

 

4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder
to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder
or to any of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. 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. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that 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.

 

    	 	19	 

    

    

 

4.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable
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 Nevada 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 courts of Massachusetts or in the federal courts located in the Commonwealth of
Massachusetts. 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing
party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision
of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement
or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any other manner permitted by law.

 

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

 

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

 

    	 	20	 

    

    

 

4.9
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder
of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder
with prior notification of any meeting of the Borrower‟s shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or
any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled
to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or
any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least
twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction
or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution,
right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other
event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the
Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section
4.9 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

 

4.10
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount
deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will
not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all or a portion of the
principal or interest on this Note.

 

4.11
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. No provision of this Note shall alter or impair the obligation
of the Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place,
and rate, and in the form, herein prescribed.

 

4.12
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

    	 	21	 

    

    

 

4.13
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may
be) or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower
or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days
after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise
to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the
Borrower are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination
or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within
two (2) Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the
or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by
the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default
Amount, Default Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower.
The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and
notify the Borrower and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed
determinations or calculations. Such investment bank's or accountant's determination or calculation shall be binding upon all
parties absent demonstrable error.

 

4.14
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security with 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. The types
of terms contained in another security that may be more favorable to the holder of such security include, but are not limited
to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts,
stock sale price, private placement price per share, and warrant coverage.

 

4.15
Piggyback Registration Rights. The Borrower shall include on the next registration statement the Borrower files with SEC
(or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion
of this Note. Failure to do so will result in liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than Fifteen Thousand and No/100 United States Dollars ($15,000), being immediately due and payable to the Holder at
its election in the form of cash payment or addition to the balance of this Note.

 

4.16
Future Raises; Repayment from Proceeds. The Borrower shall not consummate any capital raising transactions (including but
not limited to from the issuance of debt and/or equity securities) during the initial sixty (60) days after the Issue Date. Until
the Note is satisfied in full, if the Borrower receives cash proceeds from any source or series of related or unrelated sources,
including but not limited to, from the issuance of equity and/or debt securities, the conversion of outstanding warrants of the
Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower
shall, within one (1) business day of Borrower‟s receipt of such proceeds, inform the Holder of such receipt, following
which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of
such proceeds to repay all or any portion of this Note. Failure of the Borrower to comply with this provision shall constitute
an Event of Default under Section 3.4 of the Note. In the event that such proceeds are received by the Holder prior to the Maturity
Date, the required prepayment shall be subject to the terms of Section 1.9 herein.

 

[signature
page follows]

 

    	 	22	 

    

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer as of the date first above
written.

 

	 	NANOFLEX
    POWER CORPORATION
	 	 	 
	 	By:	 
	 	 	Name:
    Dean Ledger
	 	 	Title:
    Chief Executive Officer

 

    	 	23	 

    

    

 

EXHIBIT
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert $__________ principal amount of the Note (defined below) together with $                    of accrued and unpaid
interest thereto, totaling $                     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 Nanoflex Power Corporation, a Florida corporation (the
“Borrower”), according to the conditions of the convertible note of the Borrower dated as of May 2, 2018 (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 At Custodian 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:

 

Name:
[NAME]

Address:
[ADDRESS]

 

	 	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:	 	 
	 	Accrued
    and unpaid interest remaining:	 	 

 

[HOLDER]

 

		By:		 

Name:
[NAME]

Title: [TITLE]

Date: [DATE]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00283-of-00352.parquet"}]]