Document:

EX-10.1

 Exhibit 10.1 

WARRANT REPURCHASE AGREEMENT 

This Warrant Repurchase Agreement (“Agreement”), dated as of April 2, 2017 and effective as of March 31, 2017
(“Effective Date”), is entered into by and between Delcath Systems, Inc., a Delaware corporation (the “Company”), and
                     (“Investor”). The parties agree as follows: 

RECITALS 
 A. Investor
holds warrants (each a “Warrant” and collectively, the “Warrants”, whether correctly listed on Exhibit A) to purchase shares of the Company’s common stock (“Common Stock”) that are listed
on Exhibit A hereto. Such Warrants were originally issued pursuant to a Securities Purchase Agreement, dated June 6, 2016 (the “Securities Purchase Agreement”). All terms used and not defined herein are
used as defined in the Securities Purchase Agreement. 
 B. The Company and the Investor desire to enter into this Agreement, pursuant
to which, the Company shall repurchase from the Investor the Warrants for the amount of cash set forth herein and shall cancel such Warrants simultaneously therewith. 

C. Concurrently herewith, the Company is entering into agreements with holders of other warrants to purchase its Common Stock (each, an
“Other Investor”, and such agreements, each an “Other Agreement”) substantially in the form of this Agreement (other than with respect to the identity of the Investor, any provision regarding the reimbursement of
legal fees and proportional changes reflecting the different aggregate number of shares of Common Stock issuable upon exercise of such warrants of such Other Investor then outstanding). 

AGREEMENT 
 In
consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 

1. Repurchase and Cancellation of Warrants. On the terms and subject to the conditions set forth herein, upon the execution hereof
(the “Closing Date”), the Investor hereby sells, assigns, delivers and transfers to the Company all of its right, title and interest in and to the Warrants (the “Repurchase”) in exchange for payment by the Company
of $         (the “Warrant Extinguishment Payment”). In order for the Company to be able to make the Warrant Extinguishment Payment, the Investor agrees to a Controlled Account Release (as defined in
the Note of the Investor) in an amount equal to $         to the Company (“$         Release”). The Company hereby authorizes the payment of the
$         Release directly to the Investor. Simultaneously with the receipt of the $         Release by the Investor, the Warrants are deemed cancelled, terminated, null
and void ab initio, and the Investor shall deliver the Warrants to the address specified by the Company as soon as commercially practicable following the $         Release. The Company acknowledges and
agrees that the $         Release shall be effected by the delivery of an instruction by the Investor to the Controlled Account Bank to release $         to the Investor
(or its designee) from the Master Restricted Account related to the Note of the Investor. 
 2. Representations and Warranties of
the Company. The Company represents and warrants to Investor as of the date hereof as follows: 
 (a) Organization, Good
Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a Material Adverse Effect (as defined below) on its business or properties. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the
business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken as a whole, or on the transactions contemplated hereby
or on the Exchange Documents (as defined below) or by the agreements and instruments to be entered into (or entered into) in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under this
Agreement. 

 (b) Authority. The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby (i) are within the power of the Company and (ii) have been duly authorized by all necessary actions on the part of the Company. 

(c) Enforceability. This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of
creditors’ rights generally and general principles of equity. 
 (d) Non-Contravention. The authorization, execution and
delivery by the Company of this Agreement and the performance and consummation of the transactions contemplated thereby do not and will not (i) violate the Company’s Certificate of Incorporation or Bylaws or any material judgment, order,
writ, decree, statute, rule or regulation applicable to the Company; or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party or by which it is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities or “blue sky” laws) applicable to the Company. 
 (e) Public Filings. The Company
is current in its filings of all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). 
 (f) Information. The Company confirms that neither it nor to its knowledge any other Person acting on its behalf
has provided the Investor or any of its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company or any of its subsidiaries, other than the
existence of the transactions contemplated by this Agreement. The Company understands and confirms that the Investor will rely on the foregoing representations in effecting transactions in securities of the Company. 

3. Representations and Warranties of Investor. Investor represents and warrants to the Company as of the date hereof as follows: 

(a) Warrants. The aggregate number of shares currently underlying the Warrants as of the date hereof is described accurately
on Exhibit A. 
 (b) Authority. The execution, delivery and performance by the Investor of this Agreement and the
consummation of the transactions contemplated hereby (i) are within the power of the Investor and (ii) have been duly authorized by all necessary actions on the part of the Investor. 

(c) Enforceability. This Agreement has been duly executed and delivered by Investor and is a valid and binding agreement,
enforceable against Investor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to
general principles of equity. 
 (d) Ownership of Securities. Investor owns and has valid title to the Warrants referenced
on Exhibit A, free and clear of all liens. Investor has not sold, assigned or otherwise transferred to any third party any of the Investor’s right, title or interest in or to any of such Warrants, and the Investor has not agreed to do the
same. 
 (e) No Tax or Legal Advice. Investor understands that nothing in this Agreement, any other agreement or any other
materials presented to Investor in connection with the transactions contemplated hereby constitutes legal, tax or investment advice. Investor has consulted such legal, tax and investment advisors as Investor, in Investor’s sole discretion,
has deemed necessary or appropriate in connection with its decision to enter into this Agreement. 

 4. Covenants. 

(a) Disclosure of Transactions and Other Material Information. The Company shall, on or before 8:30 a.m., New York City
Time, on the first Business Day after the date of this Agreement, publicly issue a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby. From and after the issuance of the Form 8-K, the Investor shall
not be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the Form 8-K. In addition, effective upon the
issuance of the Form 8-K, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and the Investor or any of its affiliates, on the other hand, shall terminate. The Company shall not, and shall cause each of its Subsidiaries and each of their respective officers,
directors, employees and agents, not to, provide the Investor with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the date hereof without the express written consent of the Investor. To the extent
that the Company delivers any material, non-public information to the Investor without the Investor’s consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality with respect to, or a duty not
to trade on the basis of, such material, non-public information. The Company shall not disclose the name of the Investor in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation, except this initial
Form 8-K and any further disclosure in any Securities Act and Exchange Act filings covering the same subject matter. 

(b) Terms. The parties hereto herby acknowledge and agree that, in accordance with the terms of the Securities Purchase Agreement
(as defined in the Warrant), the Company is obligated to present the terms of this offering to each Other Investor; provided that each Other Agreement shall be negotiated separately with each Other Investor and shall not in any way be construed as
the Investor or any Other Investor acting in concert or as a group with respect to the purchase, disposition or voting of securities of the Company or otherwise. The Company hereby represents and warrants as of the date hereof and covenants and
agrees that none of the terms offered to any Person with respect to the Repurchase, including, without limitation with respect to any consent, release, amendment, settlement, or waiver relating to the Repurchase (each an “Settlement
Document”), is or will be more favorable to such Person than those of the Investor and this Agreement. If, and whenever on or after the date hereof, the Company enters into an Settlement Document, then (i) the Company shall provide
notice thereof to the Investor immediately following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the Investor or the Company, automatically amended and modified in an
economically and legally equivalent manner such that the Investor shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company at
any time the Investor may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Investor as it was in effect immediately prior to such
amendment or modification as if such amendment or modification never occurred with respect to the Investor. The provisions of this Section 4(b) shall apply similarly and equally to each Settlement Document. 

(c) Fees and Expenses. Each party to this Agreement shall pay the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. 

5. Miscellaneous. 
 (a)
Waivers and Amendments. Except as expressly provided otherwise herein, this Agreement may not be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and
Investor. Furthermore, except as expressly provided herein, the Purchase Agreement and the Note shall not be deemed to have been amended and shall remain in full force and effect as originally drafted. 

(b) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be
governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts sitting in The City of New York, 

 
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

(c) Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and
delivery of this Agreement. 
 (d) Successors and Assigns. The rights and obligations of the Company and Investor shall be
binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. 
 (e) Assignment by the
Company. The rights, interests or obligations hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Investor. 

(f) Entire Agreement. This Agreement constitutes and contains the entire agreement among the Company and Investor regarding the
subject matter hereof and supersedes any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof. 

(g) Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall
be in writing and faxed, mailed or delivered to each party as follows: (i) if to Investor, at Investor’s address or facsimile number set forth on Exhibit B, or at such other address as Investor shall have furnished the
Company in writing, or (ii) if to the Company, at 1633 Broadway, 22nd Floor, Suite C New York, NY 10019, Attn: Chief Executive Officer, or at such other address or facsimile number as the Company shall have furnished to the Investor in
writing. All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one business day after being deposited with an overnight courier service of recognized standing or (v) four days after being deposited in the U.S. mail, first class with postage prepaid. 

(h) Separability of Agreements; Severability of this Agreement. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as
this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to
replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). 

(i) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of
which together will constitute the same agreement. Electronic copies of signed signature pages will be deemed binding originals. 
 (j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 

 (k) No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 

(l) Independent Nature of Investor’s Obligations and Rights. The obligations of the Investor under this Agreement are several and
not joint with the obligations of any Other Investor, and the Investor shall not be responsible in any way for the performance of the obligations of any Other Investor under any Other Agreement. Nothing contained herein or in any Other Agreement,
and no action taken by the Investor pursuant hereto, shall be deemed to constitute the Investor and Other Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investor and Other
Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Agreement and the Company acknowledges that, to the best of its knowledge, the Investor and the
Other Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any Other Agreement. The Company and the Investor confirm that the Investor has independently participated
in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this
Agreement, and it shall not be necessary for any Other Investor to be joined as an additional party in any proceeding for such purpose. 

[Signature Page Follows] 

 The parties have caused this Warrant Repurchase Agreement to be duly executed and delivered as of
the date and year first written above. 
  

			
	COMPANY:
	
	DELCATH SYSTEMS, INC.
	a Delaware corporation
		
	By:	 	  

		 	 Barbra Keck
 Chief Financial
Officer

  

			
	INVESTOR:
	
	  

		
	By:	 	  

		 	Name:
		 	Title:

 [Signature Page for Warrant Repurchase Agreement] 

 EXHIBIT A 

The table below sets forth the number of shares of Common Stock underlying the Warrants held by Investor as of the Agreement Date. 

 

													
	 Investor
	  	Date Warrant
Initially Issued	 	  	Shares
Currently
Underlying
Warrants	 	  	Shares Issuable	 
	 Total
	  				  				  			
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 EXHIBIT B 

ADDRESSES FOR NOTICE 
  

			
	 INVESTOR
	  	 ADDRESS FOR NOTICEEXHIBIT 10.44

 

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: $100,000.00	Issue
    Date: March 22, 2017

 

8
% CONVERTIBLE NOTE

 

FOR
VALUE RECEIVED, PROGREEN US, INC., a Delaware corporation (“Borrower” or “Company”), hereby
promises to pay to the order of SILO EQUITY PARTNERS VENTURE FUND LLC, a Delaware limited liability company, or its registered
assigns (the “Holder”), on September 22, 2017, (“Maturity Date”), the sum of $100,000.00
as set forth herein, together with interest on the unpaid principal balance hereof at the rate of eight (8%) per annum (the “Interest
Rate”) from the date of issuance hereof until this Note plus any and all amounts due hereunder are paid in full, and any
additional amounts set forth herein, including without limitation any Additional Principal (as defined herein). Interest shall
be computed on the basis of a 365-day year and the actual number of days elapsed. Any amount of principal or interest on this
Note which is not paid when due shall bear interest at the rate of twenty-four (24%) per annum from the due date thereof until
the same is paid (“Default Interest”). All payments due hereunder 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 entered into
by and between the Company and Holder dated on or about 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. Subject to the terms hereof and restrictions and limitations contained herein, at any time after 180 days from the
Issue Date of this Note, the Holder shall have the right, in its sole and absolute discretion, from time to time, to convert all
or any part of the outstanding amount due under this Note into fully paid and non-assessable shares of Common Stock, as such Common
Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock
shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided
herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert
any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security
of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number
of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of
this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation
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 (“Conversion Shares”) 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 11:59 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) accrued and
unpaid interest, if any, on such principal amount being converted at the interest rates provided in this Note to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2), plus (4) any Additional Principal for such Conversion, plus (5) at the Holder’s option,
any amounts owed to the Holder pursuant to Sections 1.2(c) and 1.4(g) hereof.

 

    	 	1	 

     

    

 

1.2.       Conversion
Price.

 

a)       Calculation
of Conversion Price. The conversion price hereunder (the “Conversion Price”) shall equal the lower of: (i) the
closing sale price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Closing Date, and
(ii) 50% of the lowest sale price for the Common Stock on the Principal Market during the fifteen (15) consecutive Trading Days
immediately preceding the Conversion Date provided, however, 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, be reduced to a fixed conversion price of 0.00001 (if lower than the conversion price otherwise), and
provided, that if on the date of delivery of the Conversion Shares to the Holder, or any date thereafter while Conversion
Shares are held by the Holder, the closing bid price per share of Common Stock on the Principal Market on the Trading Day on which
the Common Shares are traded is less than the sale price per share of Common Stock on the Principal Market on the Trading Day
used to calculate the Conversion Price hereunder, then such Conversion Price shall be automatically reduced such that the Conversion
Price shall be recalculated using the new low closing bid price (“Adjusted Conversion Price”) and shall replace the
Conversion Price above, and Holder shall be issued a number of additional shares such that the aggregate number of shares Holder
receives is based upon the Adjusted Conversion Price, and provided, further, that the Conversion Price shall be subject
to Section 1.2(b) below. For the purpose of clarity, any shares required to be issued as a result of an Adjusted Conversion Price
shall be deemed to be “Conversion Shares” under this Note. If an Event of Default under Section 3.9 of the Note has
occurred, Holder, in its sole discretion, may elect to use a Conversion Price which shall equal the lower of: (i) the closing
sale price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Closing Date; (ii) 50% of
the lowest sale price for the Common Stock on the Principal Market during any Trading Day in which the Event of Default has not
been cured. If such Common Stock is not traded on the OTCBB, OTCQB, OTC Pink, NASDAQ or NYSE, then such sale price shall be the
sale price of such security on the principal securities exchange or trading market where such security is listed or traded or,
if no sale 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. If such sale
price cannot be calculated for such security on such date in the manner provided above, such price shall be the fair market value
as mutually determined by the Borrower and the Holder. If the Borrower’s Common stock is chilled for deposit at DTC, becomes
chilled at any point while this Note remains outstanding or deposit or other additional fees are payable due to a Yield Sign,
Stop Sign or other trading restrictions, or if the closing sale price at any time falls below $0.002 (as appropriately and equitably
adjusted for stock splits, stock dividends, stock contributions and similar events), then such 50% figure specified in clause
1.2(a)(ii) above shall be reduced to 35%. In the event that the shares of the Borrower’s Common Stock are not deliverable
via DWAC following the conversion of any amount hereunder, an additional 5% discount will be attributed to the Conversion Price.
Additionally, the Borrower acknowledges that it will take all reasonable steps necessary or appropriate, including providing a
board of directors resolution authorizing the issuance of common stock and an opinion of counsel confirming the rights of Holder
to sell shares of Common Stock issuable or issued to Holder on conversion of this Note pursuant to Rule 144 as promulgated by
the SEC (“Rule 144"), as such Rule may be in effect from time to time. If the Borrower does not promptly provide a
board of directors’ resolution and an opinion from Company counsel, and so long as the requested sale may be made pursuant
to Rule 144, the Company agrees to accept an opinion of counsel to the Holder which opinion will be issued at the Company’s
expense and the conversion dollar amount will be reduced by $1,000.00 to cover the cost of such legal opinion. “Trading
Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, or on the principal securities
exchange or other securities market on which the Common Stock is then being traded. Additionally, if the Company ceases to be
a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after 181 days from the
issuance date, an additional 15% discount will be attributed to the Conversion Price.

 

    	 	2	 

     

    

 

b)       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(b).

 

c)       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 (as defined below) the Borrower shall pay to the
Holder $1,000.00 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such
cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option
of the Holder, 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 this Note is a valuable right to the Holder. The damages resulting
from a failure, attempt to frustrate, or interference with such conversion right are difficult if not impossible to quantify.
Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section are justified.

 

1.3.      Authorized
Shares. The Borrower covenants that the Borrower will at all times while this Note is outstanding 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 or adjustment of this Note. The Borrower is required at all times to have authorized and reserved a minimum
of Five (5) times the number of shares that is actually issuable upon full conversion or adjustment of this Note (based on
the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). Initially, the Company will
instruct the Transfer Agent to reserve sixty-five million (65,000,000) shares of common stock in the name of the Holder for issuance
upon conversion hereof. 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 this Note 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 this Note in full. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this
Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note.

 

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

 

    	 	3	 

     

    

 

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 and from time
to time after the Issue Date, by submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means
of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time).

 

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

 

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

 

d)       Delivery
of Common Stock upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4 or upon an event triggering the calculation of an Adjusted Conversion Price, 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 or such an event (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 duly and properly executed Notice of Conversion or
upon an event triggering the calculation of an Adjusted Conversion Price, the Holder shall be deemed to be the holder of record
of the Common Stock issuable upon such conversion or as a result of an Adjusted Conversion Price, the outstanding principal amount
and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion or adjustment, 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 or upon an event triggering the calculation
of an Adjusted Conversion Price, 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 11:59 p.m., New York, New York time, on such date.

 

    	 	4	 

     

    

 

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

 

g)       Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
or adjustment of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $1,000.00 per day in cash, for
each day beyond the Deadline that the Borrower fails to deliver such Common Stock to the Holder. 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, 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 and/or receive shares in the event of an adjustment is a valuable right to the Holder.
The damages resulting from a failure, attempt to frustrate, or interference with such conversion or adjustment right are difficult
if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section
1.4(g) are justified.

 

h)       The
Borrower agrees to accept an opinion of counsel to the Holder, which opinion will be issued at the Holder’s expense, confirming
the rights of Holder to sell shares of Common Stock issued to Holder on conversion or adjustment of this Note pursuant to Rule
144 as promulgated by the SEC (“Rule 144"), as such Rule may be in effect from time to time.

 

1.5.       Restricted
Securities. The shares of Common Stock issuable upon conversion or adjustment 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). Any legend set forth on any stock certificate evidencing any
Conversion Shares 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 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 acceptable to the Company, or (ii) in the case of the Common
Stock issued or 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.

 

    	 	5	 

     

    

 

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.

 

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, for clarification, the Holder shall be entitled to convert this Note) and
(b) the resulting successor or acquiring entity 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. Such assets shall be held in escrow by the Company pending any such conversion

 

d)       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.

 

    	 	6	 

     

    

 

e)       Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (A) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any securities convertible
into or exercisable for Common Stock; (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (D) issues,
in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion
Price (and each sale or bid price used in determining the Conversion Price) shall be multiplied by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

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.       Revocation.
If any Conversion Shares are not received by the Deadline, the Holder may revoke the applicable Conversion pursuant to which such
Conversion Shares were issuable. This Note shall remain convertible after the Maturity Date hereof until this Note is repaid or
converted in full.

 

1.8.       Prepayment. Notwithstanding anything to the contrary contained
in this Note, subject to the terms of this Section, for as long as any amount is due and owed on the Note, Borrower shall have
the right, exercisable on not more than five (5) Trading Days prior written notice to the Holder of this Note, to prepay the outstanding
balance on this Note (principal and accrued interest), in full, in accordance with this Section. An intention of the Borrower
to Prepay all or a portion of amounts owed on the Note does not eliminate its obligation to facilitate Conversions on the Note
submitted by the Holder. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to
the Holder of the Note at its registered addresses or via electronic mail and shall state: (1) that the Borrower is exercising
its right to prepay the Note, and (2) the date of prepayment which shall be not more than five (5) Trading Days from the date
of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower
shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the
Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises
its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional Prepayment
Amount”) equal to the Prepayment Factor (as defined below), multiplied by the sum of: (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment
Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to
pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment
Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section. For purposes hereof, the “Prepayment
Factor” shall be equal to the following factors that will be applied to amounts owed on the Note over the following schedule:
If Prepayment is made between the date of the Note and 60 days then a factor of 115% plus accrued interest and any default penalties;
If Prepayment is made between 60 days from the date of the Note and 120 days from the date of the Note then a factor of 120% plus
accrued interest and any default penalties; If Prepayment is made any time after 120 days from the date of the Note, then a factor
of 125% plus accrued interest and any default penalties.

 

    	 	7	 

     

    

 

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

 

2.4.       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 in
the ordinary course of Borrrower’s real estate development business, or that are in existence or committed on the date hereof.

 

2.5.       Charter.
So long as the Borrower shall have any obligations under this Note, the Borrower shall not amend its charter documents, including
without limitation its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights
of the Holder.

 

ARTICLE
III. EVENTS OF DEFAULT

 

Any
one or more of the following events which shall occur and/or be continuing shall constitute an event of default (each, an “Event
of Default”):

 

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, which default continues for more than 5 Trading Days after the due date.

 

3.2.       Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so at any time following the execution hereof or) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or
delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate
for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described
in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor
its obligations shall not be rescinded in writing) for five (5) business days after the Holder shall have delivered a Notice of
Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event
of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower
to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in
order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of
a demand from the Holder.

 

    	 	8	 

     

    

 

3.3.       Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any
collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of seven (7) days
after written notice thereof to the Borrower from the Holder.

 

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

 

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

 

3.6.       Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or
any of its property or other assets for more than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

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

 

3.8.       Delisting
of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB, or OTCQB,
OTC Pink or an equivalent replacement exchange, NASDAQ, the NYSE or AMEX.

 

3.9.       Failure
to Comply with the Exchange Act. The Borrower shall fail to comply in any material respect with the reporting requirements
of the Exchange Act as to the filing of Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q; and/or the Borrower shall
cease to be subject to the reporting requirements of the Exchange Act.

 

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

 

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

 

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

 

3.13.     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.

 

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

 

3.15.     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.

 

    	 	9	 

     

    

 

3.16.     Cross-Default.
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all
applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note 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, including, without limitation, promissory notes; provided, however,
the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions
will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

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

 

If
the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable,
then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that
there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then
in effect. The Holder may still convert any amounts due hereunder, including without limitation the Default Sum, until such time
as this Note has been repaid in full.

 

    	 	10	 

     

    

 

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, email or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile or email, with accurate confirmation generated by the transmitting
facsimile machine or computer, at the address, email or number designated in the Purchase Agreement (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.

 

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

 

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

 

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

 

4.6.       Governing
Law. This Note shall be governed by and construed in accordance with the laws of the
State of New York without regard to conflicts of laws principles that would result in the application of the substantive laws
of another jurisdiction. Any action brought by either party against the other concerning the transactions contemplated by this
Agreement must be brought only in the civil or state courts of New York or in the federal courts located in the State and county
of New York. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction
of such courts. 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 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s
obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other
decision in favor of the Holder. This Note shall be deemed an unconditional obligation of Borrower for the payment of money
and, without limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New
York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought.
For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower
delivered to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s obligations
to Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith or was
executed apart from this Note.

 

    	 	11	 

     

    

 

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.       Disclosure.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within four (4) Trading Days after any such receipt or delivery, publicly disclose
such material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that
a notice contains material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate
to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be
allowed to presume that all matters relating to such notice do not constitute material, non-public information relating to the
Company or its Subsidiaries.

 

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.

 

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

 

4.11.     Usury.
This Note shall be subject to the anti-usury limitations contained in the Purchase Agreement.

 

    	 	12	 

     

    

 

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

 

PROGREEN
US, INC.

 

	By:	/s/
Jan Telander	 
	Name:	Jan Telander	 
	Title:	CEO 	 

 

SILO
EQUITY PARTNERS VENTURE FUND LLC

 

	By:	/s/
Richard Stilitino	 
	Name:	Richard Stilitino	 
	Title:	Authorized
    Signature	 

 

    	 	13	 

     

    

 

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 8% Convertible Note of PROGREEN US, INC., a Delaware corporation (the
Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions
hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions
as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except
for such transfer taxes, if any. 

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 1.1 of this Note, as determined in accordance with Section 13(d) of
the Exchange Act. 

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock pursuant to any prospectus. 

 

Conversion
calculations:

 

Date
to Effect Conversion: _________________________

 

Conversion
Price: ________________________________

 

Principal
Amount of Note to be Converted: _____________

 

Interest
Accrued on Account of Conversion at Issue: _____

 

Additional
Principal on Account of Conversion

Pursuant
to Section 1.2(b) of the Note: _________________

 

Number
of shares of Common Stock to be issued: _________

 

Signature:
_______________________________________

 

Name:
__________________________________________

 

Address
for Delivery of Common Stock Certificates:

 

________________________________________________

________________________________________________

 

Or

 

DWAC
Instructions: 

Broker
No: ______________________

Account
No: ____________________

 

 

14

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