Document:

Code Green Apparel Corp. S-1/A

 

 Exhibit 10.5 

   

 ORIGINAL
ISSUE DISCOUNT CONVERTIBLE
PROMISSORY NOTE 

   

   

	 Face
    Amount:  $175,000.00 	 December
    3, 2015 
	 Purchase
    Price: $150,000.00 	   

   

 FOR
VALUE RECEIVED, Code
Green Apparel Corp.,
a Nevada corporation
(the “Maker or Company”),
with its principal
offices located at
4739 S. Durfee
Ave., Pico Rivera,
CA 90660promises to pay
to the order
of BEAUFORT CAPITAL
PARTNERS LLC (the “Payee”),
upon the terms
set forth below,
the principal amount
of One Hundred
Fifty Thousand Dollars ($150,000.00)
(this “Note”). 

   

 1. 

 Payments. 

   

 (a) 

 The
purchase price ($150,000.00)
of this Note
shall be due
on December 3, 2016
or such later
date as is
agreed to in
writing by the
Payee (the “Maturity
Date”), unless due earlier
in accordance with
the terms of
this Note (see
Section c below). 

   

 (b) 

 All
overdue unpaid principal
to be paid
hereunder shall entail
a late fee
at the rate of
14% per annum
(or such lower
maximum amount of
interest permitted to
be charged under applicable
law) which will
accrue daily, from
the date such
principal is due hereunder
through and including
the date of
payment. 

   

 (c) 

 Absent
the occurrence of
an Event of
Default (unless such
Event of Default is
waived in writing
by the Payee),
the Maker may
prepay this Note
for a net
payment of $175,000.00 at
any time prior
to December 3,
2016. 

   

 2. 

 Payment. 

   

 (a) 

 Disbursement:
If the Company
is not current
with its dues
to its service
providers, payments will be
made to the
Company’s Service Providers
such as, but
not limited to; their
transfer agent, accounting/auditing
Firm, and/or corporate
attorney. Beaufort will make
payments to these
entities and deduct
from the $150,000.00
to the Company
if these entities are
owed monies over
$500.00 as of
December 3, 2015.
Payments shall be released
in accordance to
the enclosed Disbursement
Memorandum. If applicable
to the Disbursement Memorandum,
subsequent payments may
be subject to
termination upon fifteen (15)
days’ written notice
to the Company. 

   

 3. 

 Events
of Default. 

   

 (a) 

 “Event
of Default”, wherever
used herein, means
any one of
the following events (whatever
the reason and
whether it shall
be voluntary or
involuntary or effected
by operation of law
or pursuant to
any judgment, decree
or order of
any court, or
any order, rule or
regulation of any
administrative or governmental
body): 

   

 (i) 

 [Intentionally
omitted]; 

 

    	 

    	 

    

 

 (iii) 

 Maker
or any of
its subsidiaries shall
fail to observe
or perform any
of their respective obligations
owed to Payee
under this Note
or any other
covenant, agreement, representation or
warranty contained in,
or otherwise commit
any breach hereunder or
in any other
agreement executed in
connection herewith and such
failure or breach
shall not have
been remedied within
ten days after
the date on which
notice of such
failure or breach
shall have been
delivered; 

   

 (iv) 

 Maker
or any of
its subsidiaries shall
commence, or there
shall be commenced against
Maker or any
subsidiary, a case
under any applicable bankruptcy
or insolvency laws
as now or
hereafter in effect
or any successor thereto,
or Maker or
any subsidiary commences
any other proceeding
under any reorganization, arrangement,
adjustment of debt,
relief of debtors,
dissolution, insolvency or liquidation
or similar law
of any jurisdiction
whether now or hereafter
in effect relating
to Maker or
any subsidiary, or
there is commenced against
Maker or any
subsidiary any such
bankruptcy, insolvency or
other proceeding which remains
undismissed for a period
of 60 days; or Maker
or any subsidiary is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such
case or proceeding
is entered; or
Maker or any
subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property
which continues undischarged
or unstayed for
a period of
60 days; or Maker or any subsidiary
makes a general assignment for the benefit of creditors; or Maker or any subsidiary
shall call a meeting of
its creditors with a view
to arranging a composition, adjustment or restructuring of its debts; or Maker or any subsidiary shall by any act or failure
to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action
is taken by
Maker or any
subsidiary for the
purpose of effecting
any of the foregoing; 

   

 (v) 

 Maker
or any subsidiary
shall default in
any of its
respective obligations under any
other note or
any mortgage, credit
agreement or other
facility, indenture agreement, factoring
agreement or other
instrument under which
there may be issued,
or by which there may be secured
or evidenced any indebtedness for borrowed money
or money due
under any long
term leasing or
factoring arrangement of Maker
or any subsidiary,
whether such indebtedness
now exists or shall
hereafter be created
and such default
shall result in
such indebtedness becoming or being
declared due and payable prior to the date on
which it would otherwise become due and payable; or 

   

 (vi) 

 Maker shall
(a) be a party
to any Change of Control
Transaction (as defined below), (b)
agree to sell
or dispose all
or in excess
of 33% of
its assets in
one or more transactions
(whether or not
such sale would
constitute a Change
of Control Transaction), (c)
redeem or repurchase
more than a
de minimis number of
shares of Common Stock
or other equity
securities of Maker
or (d) make
any distribution or declare
or pay any
dividends (in cash
or other property,
other than common
stock) on, or purchase,
acquire, redeem, or
retire any of
Maker’s capital stock,
of any class, whether
now or hereafter
outstanding. “Change of
Control Transaction” means the
occurrence of any of: (i) an acquisition after the date hereof by an individual or
legal entity or “group”
(as described in Rule 13d-5(b)(1)
promulgated under the Securities Exchange Act of 1934, as amended) of effective control (whether through legal or beneficial ownership
of capital stock of Maker, by contract or otherwise) of in excess of 33% of the voting securities of Maker, (ii) a replacement
at one time or over time of more than one-half of the members of Maker’s board of DIRECTOR(S) which is not approved by a
majority of those individuals who are members of the board of DIRECTOR(S) on the date hereof (or by those individuals who are
serving as members of the board of DIRECTOR(S) on any date whose nomination to the board of DIRECTOR(S) was approved by a majority
of the members of the board of DIRECTOR(S) who are members on the date hereof), (iii) the merger of Maker with or into another
entity that is not wholly- owned by Maker, consolidation or sale of 33% or more of the assets of Maker in one or a series of related
transactions, or (iv) the execution by Maker of an agreement to which Maker is a party or by which it is bound, providing for
any of the events set forth above in (i), (ii) or (iii). 

 

    	 

    	 

    

 

 (vii) 

 Failure
to complete the
preparation and filing
of the financial
statements with OTC Markets.
Beaufort must be
notified seven (7)
business days ahead
of failure to complete
the preparation and
filing of the
financial statements with
OTC Markets in a
timely manner. Failure
to notify as
stated above shall
result in and immediate
penalty of $1,200.00
which shall be
applied to the
principal amount owed. 

   

 (b) 

 If
any Event of
Default occurs (unless
such Event of
Default is waived
in writing by the
Payee), the full
principal amount of
this Note shall
become, at the
Payee’s election, immediately due
and payable in
cash. Commencing 5
days after the
occurrence of any Event
of Default that
results in the
acceleration of this
Note, the interest
rate on this
Note shall accrue at
the rate of
10% per annum,
or such lower
maximum amount of
interest permitted to be
charged under applicable
law. The Payee
need not provide
and Maker hereby waives any
presentment, demand, protest or other
notice of any kind, and
the Payee may immediately and
without expiration of
any grace period
enforce any and
all of its rights
and remedies hereunder
and all other
remedies available to
it under applicable
law. Such declaration may
be rescinded and
annulled by Payee
at any time
prior to payment hereunder.
No such rescission
or annulment shall
affect any subsequent
Event of Default or impair any
right consequent thereon. 

   

 4. 

 Section
4. Conversion. 

   

 (a) 

 (i)
Holder’s Conversion Right.
At any time
after the Maturity
Date until this
Note is no
longer outstanding, this Note,
including interest and
principal, shall be
convertible into shares
at a 32.5%
discount from lowest
closing price within
the fifteen (15)
days prior to
a notice of
conversion. 

   

 The
Holder shall effect
conversions by delivering
to the Company
the form of
Notice of Conversion attached
hereto as Annex
A (a “Notice
of Conversion”), specifying
the date on
which such conversion is
to be effected
(a “Conversion Date”).
If no Conversion
Date is specified
in a Notice of
Conversion, the Conversion
Date shall be
the date that
such Notice of
Conversion is provided hereunder.
To effect conversions
hereunder, the Holder
shall not be
required to physically surrender
Notes to the
Company until the
entire amount of
this Note has
been satisfied. 

 

    	 

    	 

    

 

 The Company shall deliver
any objection to any Notice of Conversion within TWO (2) Business Days of receipt of such notice. In the event of any dispute
or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. If the Company
does not request the issuance of the shares underlying this Note after receipt of a Notice of Conversion within TWO (2) Business
days following the period allowed for any objection, the Company shall be responsible for any differential in the value of
the converted shares underlying this Note between the value of the closing price on the date the shares should have been delivered
and the date the shares are delivered . In addition, if the Company fails to timely (within 72 hours, 3 business days), deliver
the shares per the instructions of the Payee, if permitted under the rules and regulations of the Securities and Exchange Commission,
free and clear of all legends in legal free trading form, the Company shall allow Payee to add two (2) days to the look-back (the
mechanism used to obtain the conversion price along with discount) for each day the Company fails to timely (within 72 hours,
3 business days) deliver shares, on the next conversion. 

   

 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 may be less than the amount stated
on the face hereof. Any Opinion Letter required to effectuate the issuance of the shares pursuant to this Paragraph4 (a) and the
Notice of Conversion shall be provided and issued by BEAUFORT CAPITAL PARTNERS LLC. The parties hereby agree that the Payee will
cover all reasonable legal costs associated with the issuance of the Opinion Letter to the Transfer Agent. 

   

 (ii) 

 [Intentionally omitted] 

   

 (iii) 

 Whenever the Set Price is adjusted pursuant
to any of Section 4, the Company shall promptly mail to each Holder a notice setting forth the Set Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment. 

   

 (iv) 

 If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock; (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company
is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of the Notes, and shall cause to be mailed to the Holders at
their last addresses as they shall appear upon the stock books of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. Holders are entitled to
convert Notes during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice. 

 

    	 

    	 

    

 

 (v) 

 If, at any time while this Note is outstanding,
(A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale
of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this Note, the Holder shall
have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental
Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of
Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the Set Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable
in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Set Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate consideration it receives upon any conversion of this Note
following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions
and evidencing the Holder’s right to convert such note into Alternate Consideration. The terms of any agreement pursuant
to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply
with the provisions of this paragraph and insuring that this Note (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes 

 or
results in a Change of Control Transaction, then at the request of the Holder delivered before the 90th day after such Fundamental
Transaction, the Company (or any such successor or surviving entity) will purchase the Note from the Holder for a purchase price,
payable in cash within 5 trading days after such request (or, if later, on the effective date of the Fundamental Transaction),
equal to the 200% of the remaining unconverted principal amount of this Note on the date of such request, plus all accrued and
unpaid interest thereon, plus all other accrued and unpaid amounts due hereunder. 

   

 (b) 

 The Company covenants that it will at all
times; reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance
upon conversion of this Note. 

 

    	 

    	 

    

 

 (c) 

 Any and all notices or other communications
or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing
and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Company, at
the address set forth or such other address or facsimile number as the Company may specify for such purposes by notice to the
Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by
the Company hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Company,
or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30
p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier
than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. 

   

 (d) 

 Notwithstanding anything to the contrary herein
contained, the Holder may not convert this Note to the extent such conversion would result in the Holder, together with any affiliate
thereof, beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares
of Common Stock, including shares issuable upon such conversion and held by the Holder after application of this section. The
provisions of this section may be waived by the Holder (but only as to itself and not to any other Holder) upon not less than
61 days prior notice to the Company. Other Holders shall be unaffected by any such waiver. 

   

 5. 

 Negative Covenants. So long as any
portion of this Note is outstanding, the Maker will not and will not permit any of its Subsidiaries to directly or indirectly,
unless consented to in writing by the Payee: 

   

 i. 

 amend its certificate of incorporation,
bylaws or other charter documents so as to adversely affect any rights of the Payee; 

   

 6. 

 No Waiver of Payee’s Rights.
All payments of principal and interest shall be made without setoff, deduction or counterclaim. No delay or failure on the part
of the Payee in exercising any of its options, powers or rights, nor any partial or single exercise of its options, powers or
rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the part of the Payee of any
of its options, powers or rights shall constitute a waiver of any other option, power or right. Maker hereby waives presentment
of payment, protest, and all notices or demands in connection with the delivery, acceptance, performance, default or endorsement
of this Note. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no way limit the right of
the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof. 

   

    	 

    	 

    

 

 7. 

 Modifications. No term or provision
contained herein may be modified, amended or waived except by written agreement or consent signed by the party to be bound thereby. 

   

 8. 

 Cumulative Rights and Remedies; Usury.
The rights and remedies of Payee expressed herein are cumulative and not exclusive of any rights and remedies otherwise available
under this. The election of Payee to avail itself of any one or more remedies shall not be a bar to any other available remedies,
which Maker agrees Payee may take from time to time. If it shall be found that any interest due hereunder shall violate applicable
laws governing usury, the applicable rate of interest due hereunder shall be reduced to the maximum permitted rate of interest
under such law. 

   

 9. 

 Use of Proceeds. Maker shall use the
proceeds from this Note hereunder for general working capital purposes. 

   

 10. 

 Collection Expenses. If Payee shall
commence an action or proceeding to enforce this Note, then Maker shall reimburse Payee for its costs of collection and reasonable
attorney’s fees incurred with the investigation, preparation and prosecution of such action or proceeding. 

   

 11. 

 Severability. If any provision of this
Note is declared by a court of competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this
Note shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due
hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of interest. 

   

 12. 

 Successors and Assigns. This Note shall
be binding upon Maker and its successors and shall inure to the benefit of the Payee and its successors and assigns. The term
“Payee” as used herein, shall also include any endorsee, assignee or other holder of this Note. 

   

 13. 

 Lost or Stolen Promissory Note. If
this Note is lost, stolen, mutilated or otherwise destroyed, Maker shall execute and deliver to the Payee a new promissory note
containing the same terms, and in the same form, as this Note. In such event, Maker may require the Payee to deliver to Maker
an affidavit of lost instrument and customary indemnity in respect thereof as a condition to the delivery of any such new promissory
note. 

   

 14. 

 Due Authorization. This Note has been
duly authorized, executed and delivered by Maker and is the legal obligation of Maker, enforceable against Maker in accordance
with its terms except as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally. No consent of any other party
and no consent, license, approval or authorization of, or registration or declaration with, any governmental authority, bureau
or agency is required in connection with the execution, delivery or performance by the Maker, or the validity or enforceability
of this Note other than such as have been met or obtained. The execution, delivery and performance of this Note and all other
agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto or the securities
issuable upon conversion of this Note will not violate any provision of any existing law or regulation or any order or decree
of any court, regulatory body or administrative agency or the certificate of incorporation or by-laws of the Maker or any mortgage,
indenture, contract or other agreement to which the Maker is a party or by which the Maker or any property or assets of the Maker
may be bound. 

 

    	 

    	 

    

 

 15. 

 Governing Law. All questions concerning
the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each of Maker and
Payee agree that all legal proceedings concerning the interpretations, enforcement and defense of this Note shall be commenced
in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each
of Maker and Payee hereby irrevocably submit to the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder (including with respect to the enforcement of this Note), 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 improper. Each of Maker and Payee hereby irrevocably waive personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to the other at the address in effect for notices to it under this Note 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 of Maker and Payee hereby irrevocably waive,
to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Note or the transactions contemplated hereby. 

   

 16. 

 Notice. Any and all notices or other communications
or deliveries to be provided by the Payee hereunder, including, without limitation, any conversion notice, shall be in writing
and delivered personally, by facsimile, sent by a nationally recognized overnight courier service or sent by certified or registered
mail, postage prepaid, addressed to the Maker, or such other address or facsimile number as the Maker may specify for such purposes
by notice to the Payee delivered in accordance with this paragraph. Any and all notices or other communications or deliveries
to be provided by the Maker hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service or sent by certified or registered mail, postage prepaid, addressed to the Payee at the address of the
Payee appearing on the books of the Maker, or if no such address appears, at the principal place of business of the Payee. Any
notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission
if delivered by hand or by telecopy that has been confirmed as received by 5:00 p.m. on a business day, (ii) one business day
after being sent by nationally recognized overnight courier or received by telecopy after 5:00 p.m. on any day, or (iii) five
business days after being sent by certified or registered mail, postage and charges prepaid, return receipt requested. 

   

 17. 

 Equity Blocker. The Holder shall not
convert this debenture into shares of common stock in an amount greater than 4.99% (9.99% if the Company is not a fully reporting
company under the Securities Exchange Act of 1934 (“Non-Reporting”) of the total issued and outstanding shares of
common stock of the Company, at any time during the term of this Debenture. Any attempt to do so by the Holder or Payee shall
not be effectuated. 

   

    	 

    	 

    

   

 The undersigned signs this Note as a maker and not as
a surety or guarantor or in any other capacity. 

   

	   	 CODE
    GREEN APPAREL CORP. 
	   	   	   
	   	 By:  	  /s/
    George Powell, III 
	   	   	 Name:
    GEORGE POWELL, III 
	   	   	 Title: CEO 
	   	   	   
	   	 BEAUFORT
    CAPITAL PARTNERS LLC 
	   	   	   
	   	 By:  	  /s/
    Robert P Marino 
	   	   	 ROBERT P MARINO  
	   	   	 MANAGING  MEMBER 

   

    	 

    	 

    

   

 Code Green Apparel
Corp. 

NON-SHELL LETTER 

   

   

 In connection
with the above referenced agreement and exhibits and related agreements and instruments, herein the Agreement, and any present
and any future conversion requests of Beaufort Capital Partners, LLC (“Beaufort”) we irrevocably confirm: 

   

 1. 

 While Code Green Apparel Corp.
(“CGAC”) was previously a shell issuer as described in Rule 144 promulgated with reference to the Securities Act of
1933, as amended (the “Securities Act”), it is not currently a “shell” as commonly understood; 

   

 2. 

 Code Green Apparel Corp. is,
unless noted “Not Applicable,” subject to the reporting requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). 

   

 3. 

 Code Green Apparel Corp. has
to the extent it has been subject to Exchange Act requirements for filing reports, filed all reports and other materials required
to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 6 months and or has filed with the
trading exchange or over the counter disclosure system all such reports and information to be deeded current in all public reporting; 

   

 4. 

 Code Green Apparel Corp. is
now and will remain current with all obligations with its stock transfer agent and the Securities and Exchange Commission and
the state of incorporation. Beaufort Capital Partners LLC, its officers, owners and affiliates are not officers, DIRECTOR(S) or
material shareholders of Code Green Apparel Corp. 

   

 Representations herein survive the
issuance or closing of any instrument or matter, and we will cooperate as needed to give effect to and protect your rights including
as to the transfer agent and you may rely upon these promises and representations. 

   

 Effective Date: December 3,
2015 

   

   

 Very truly yours, 

   

	   	   	   
	   	   	   
	   	 By:  	   
	   	   	 Name: George Powell, III 
	   	   	 Title: CEO 

   

    	 

    	 

    

   

 Resolution approved
by the Board of DIRECTOR(S) of Code Green Apparel Corp. 

   

 UNANIMOUS CONSENT IN LIEU OF A SPECIAL 

 MEETING OF DIRECTOR(S) OF Code Green
Apparel Corp. 

   

 The undersigned, being
the director of Code Green Apparel Corp.; a corporation of the State of Nevada, (the “Corporation”), do hereby authorize
and approve the actions set forth in the following resolutions without the formally of convening a meeting, and do hereby consent
to the following actions of this Corporation, which actions are hereby deemed affective as of the date hereof: 

   

 RESOLVED: that the officer of this
Corporation is authorized and directed to 

 Enter an Original Issue Discount Convertible
Promissory Note in the amount of $150,000.00 with 

 Beaufort Capital Partners, LLC, dated December
3, 2015 to provide conversion features 

 at a 32.5% discount from lowest closing
price within the fifteen (15) days prior to a notice of conversion. 

   

 RESOLVED: that the officer of this Corporation
hereby certify this corporation has never been a “blank check company” and is in compliance with Rule 144 (i)(2).;
and 

   

 FURTHER RESOLVED, that
each of the officer of the Corporation be, and they hereby are authorized and empowered to execute and deliver such documents,
instruments and papers and to take any and all other action as they or any of them may deem necessary or appropriate of the purpose
of carrying out the intent of the foregoing resolutions and the transactions contemplated thereby; and that the authority of such
officers to execute and deliver any such documents, instruments and papers and to take any such other action shall be conclusively
evidenced by their execution and delivery thereof or their taking thereof. 

   

 The undersigned, by affixing his/her signature hereto,
do hereby consent to, authorize and approve the foregoing actions in their capacity as a majority of the direction of Code Green
Apparel Corp. 

   

 Effective Date: December 3, 2015 

   

	 By: 	   	   
	   	 Name: George Powell,
    III  	   
	   	 Title: CEO 	   

   

    	 

    	 

    

   

 Annex
A 

   

 NOTICE OF CONVERSION 

   

 The undersigned hereby elects
to convert principal under the Original Issue Discount Promissory Note of Code Green Apparel Corp. (the “Company”)
dated December 3, 2015 into shares of common stock (the “Common Stock”) according to the conditions hereof, as of
the date written below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay
a reasonable transfer expense payable with respect thereto. Payee shall be responsible for any fees for any conversion, including
transfer expenses, if any. 

   

 Conversion calculations: 

   

 Company Name: Code Green Apparel Corp. Date to
Effect Conversion: ____/____/____ 

   

 Conversion
Price: At any time after the Maturity Date until this Note is no longer outstanding, this Note, including interest and principal,
shall be convertible into shares at a 32.5% discount from lowest closing price within the fifteen (15) days prior to a notice
of conversion. 

   

   

   

 Principal Amount of Agreement to be converted: $ ______________ 

 Interest Amount of Agreement to be converted: $______________ 

 Number of shares of Common Stock to be issued: ______________ 

 Principal to Remain: $______________ 

   

   

	 By: 	   	   
	   	 Name: ROBERT MARINO  	   
	   	 Title: MANAGING MEMBER 	   

   

 BEAUFORT CAPITAL PARTNERS LLC 

 660 White Plains Rd, Suite 455 

 Tarrytown, NY 10591 

   

    	 

    	 

    

   

 DISBURSEMENT REQUEST 

   

   

 Code Green Apparel Corp.and Beaufort Capital Partners,
LLC hereby request disbursement of funds in the amount and manner described below. 

   

   

   

	   	 Please
    disburse to: 	   	 Code
    Green Apparel Corp. 

   

   

   

   

   

	   	 Form of distribution: 

                       Payee: 
	   	 Bank Wire 

   

	   	 Bank Name: 	   	   
	   	   	   	   
	   	 Bank Address: 	   	   
	   	   	   	   
	   	 ABA: 	   	   
	   	   	   	   
	   	 Account #: 	   	   

   

   

   

   

   

   

   

	   	   	   	 Total:
    $150,000.00 
	   	   	   	   
	   	 Code Green Apparel
    Corp. 	   	   
	   	   	   	   
	 By: 	   	   	 Dated:  December
    3, 2015 
	   	 Signatory:  George
    Powell, III 	   	   
	   	   	   	   
	   	   	   	   
	   	   	   	   
	   	 Beaufort Capital
    Partners, LLC 	   	   
	   	   	   	   
	 By: 	   	   	 Dated:  December
    3, 2015  
	   	 Name:  Robert
    P MarinoExhibit
10.1

OPEN
INNOVATION DRUG DISCOVERY PROGRAM AND MATERIAL TRANSFER AGREEMENT

This
Open Innovation Drug Discovery Program and Material Transfer Agreement (the “Program Agreement”) is effective
on the date of last signature of the parties who agree to the following terms and conditions.

 

I.
PARTIES The parties to this Program Agreement are: Eli Lilly and Company and its affiliates, having its principal offices
at Lilly Corporate Center, Indianapolis, IN 46285 (“Lilly”) and the institution executing this Program Agreement
(“Institution”).

 

II.
BACKGROUND

A.
Lilly is engaged in the research, development, manufacture and marketing of pharmaceutical products and is interested in further
development of compounds suitable for use as pharmaceutical products. Lilly has established an Open Innovation Drug Discovery
Program to promote opportunities for collaborations with select institutions.

 

B.
Institution is interested in participating in the Open Innovation Drug Discovery Program.

 

III.
DEFINITIONS

 

A.
“Affiliates” shall mean a corporation, firm, partnership or other entity which directly or indirectly controls,
is controlled by, or is under common control with a party.

 

B.
“Affiliation Coordinator” shall mean the individual employed by and selected by the Institution to allow creation
of Affiliation Submitter accounts and have general overview of the affiliation activity in the OIDD Program.

 

C.
Affiliation Submitter(s)” shall mean one or more individuals employed by and selected by the Institution to submit
Structural Information and Material through the OIDD platform.

 

D.
“Biological Panel” shall mean the collection of biological assays including the Open Innovation Drug Discovery
Panel and the Not-for-Profit Research Panel.

 

E.
“Chemical Structure” shall mean the chemical name and/or structure of the Material.

 

F.
“Informatics Profile” shall mean results from the Informatics Screening diversity evaluation and the results
from the in silico calculations and evaluations of physical properties and molecular descriptors.

 

G.
“Informatics Screening” shall mean the diversity evaluation, in silico calculations and evaluation of
physical properties and molecular descriptors based upon the Structural Information supplied by an Authorized User.

 

H.
“Institution” shall mean the entity identified below on the signature page, including the Affiliation Coordinator,
the Affiliation Submitter(s), and persons working under their direction and control.

 

I.
“Material” shall mean a physical sample of the compound or mixture of compounds corresponding to the Structural
Information for which Lilly has requested for evaluation in the OIDD Program.

 

J.
“Not-for-Profit Research Panel” shall mean a biological assay or a collection of biological assays performed
by or for a Not-for-Profit Organization. Assays may be conducted using in vitro experimental methods and/or in silico computer
models designed to assess biological activity. Assays may be added to or deleted from the Not-for-Profit Research Panel for scientific
reasons or business reasons. Any such changes will be communicated to Affiliation Submitters and the Institution via the OIDD
Site.

 

K.
“Open Innovation Drug Discovery Panel” shall mean a biological assay or a collection of biological assays performed
by or for the Open Innovation Drug Discovery Program. Assays may be conducted using in vitro experimental methods and/or
in silico computer models designed to assess biological activity. Assays may be added to or deleted from the Open Innovation
Drug Discovery Panel for scientific reasons or business reasons. Any such changes will be communicated to Affiliation Submitters
and the Institution via the OIDD Site.

 

L.
“Open Innovation Drug Discovery Program or OIDD Program” shall mean the Informatics Screening; requests, submissions,
and handling of the Material; and use of the Materials in the Research including the Open Innovation Drug Discovery Panel Structure
Reveal Letter, and the Not-for-Profit Research Panel as defined in this Program Agreement.

 

M.
“OIDD Site or OIDD Website” shall mean the Open Innovation Drug Discovery website and application software
maintained by or for Lilly and presently located at openinnovation.lilly.com.

 

N.
“Research” shall mean the performance by Lilly and the Affiliation Submitter including the evaluation of the
Structural Information and Material as further defined in Section IV, RESEARCH below.

 

O.
“Report” shall mean the Research Results and other information as identified by Lilly provided to the Affiliation
Submitter.

 

P.
“Research Results” shall mean all results generated from the Research including the Structural Information,
the Informatics Profile and all summarized results from the Biological Panel for the Material, if submitted.

 

Q.
“Research Tools” shall mean additional individual research, related offerings or opportunities for the Affiliation
Submitter administered via the OIDD Site. Such additional opportunities may include, by way of example only, virtual modeling,
synthetic opportunities and resources, and biological resources.

 

R.
“Structural Information” shall mean the information, in whatever form, identifying a compound or mixture of
compounds submitted by an Affiliation Submitter to the OIDD Program for Informatics Screening. The Structure Information should
not include the Chemical Structure of the Material.

 

S.
Structure Reveal Letter” shall mean written notification by Lilly to the Affiliation Submitter and/or Institution
requesting the Chemical Structure and related information of a Material.

 

IV.
RESEARCH

 

A.
An Affiliation Submitter may submit Structural Information for one or more compounds or mixtures of compounds for Informatics
Screening to generate the Informatics Profile. Lilly will provide the Affiliation Submitter with the Informatics Profile.

 

B.
Lilly may request the Affiliation Submitter provide a physical sample (the “Material”) of one or more compounds or
mixture of compounds for further evaluation in the Open Innovation Drug Discovery Program.

 

C.
The Affiliation Submitter shall have sole discretion whether or not to supply the Material to Lilly for further evaluation in
the OIDD Program.

 

D.
If the Affiliation Submitter agrees to provide the Material for evaluation in the OIDD Program the Affiliation Submitter shall
make reasonable efforts to provide the Material in quantities necessary (at least 3-5 mg) to perform the Research along with any
relevant information required to perform the testing contemplated under this Program Agreement. The Material should be greater
than 80% pure as determined by current state of the art analysis.

 

E.
After receipt of the Material from the Affiliation Submitter, Lilly will diligently evaluate the Material in the Open Innovation
Drug Discovery Panel to provide single point results from one or more of the biological assays. Lilly, at its discretion, may
evaluate the Material in one or more of the corresponding follow-up assays if the Material is deemed sufficiently active based
upon the single point results. Lilly may request the Affiliation Submitter submit additional compounds or analogs for evaluation
in the OIDD Program. Any such submission of additional compounds or analogs shall be at the Affiliation Submitter’s sole
discretion. If submitted, the additional compounds or analogs shall be considered Material(s).

 

F.
Lilly may provide Material to one or more Not-for-Profit Organizations for evaluation in one or more Not-for-Profit Research Panels.
As they become available, Lilly will notify Affiliation Submitters of the availability of such Not-for-Profit Organizations and
the collection of assays specified for or by the Not-for-Profit Organization through the OIDD Site. Unless specifically notified
by Institution to the contrary within 30 days of such notification, Lilly may forward Material to the Not-for Profit Institution
for evaluation in the respective Not-for Profit Research Panel(s).

 

G.
Lilly will diligently provide the Affiliation Submitter the Report, which includes all the Research Results generated at that
time. The Report may be revised and/or updated as additional Research Results become available to Lilly.

 

H.
As part of the Research, Lilly in a written Structure Reveal Letter may request the Affiliation Submitter provide the Chemical
Structure for the Material to OIDD personnel.

 

I.
After receipt of the Structure Reveal Letter, the Affiliation Submitter in her/his sole discretion may provide the Chemical Structure
for the Material or Materials within fourteen (14) days to be considered by Lilly for further research opportunities.

 

J.
From time to time Lilly at its sole discretion may offer additional Research Tools to the Affiliation Submitter for use in the
Open Innovation Drug Discovery Program. The Research Tools shall be identified and provided to the Affiliation Submitter via the
OIDD Site.

 

K.
Lilly, at its discretion, will manage and coordinate the Research including the Informatics Screening, request for Material, the
Biological Panel, Research Tools, Other Offerings, and the Structure Reveal Letter via the OIDD Site. In addition, all other communications
from Lilly to the Institution, Affiliation Coordinator and/or Affiliation Submitter will be transmitted through the OIDD Site
unless specifically notified by Lilly in writing to the contrary.

 

V.
COMPLIANCE WITH ANTI-BRIBERY LAWS

 

By
signing this Program Agreement, Institution agrees that Lilly has not entered into this Program Agreement in order to influence
any decision regarding Lilly’s products, in particular decisions regarding reimbursement, pricing, registration, prescribing
or purchasing decisions, or to otherwise influence any pending or future Lilly business. Institution further agrees that Lilly
has not given, offered, promised, or authorized, and will not give, offer, promise, or authorize, any payment, benefit, or gift
of money or anything else of value, directly or through a third party, to any official or employee of Institution for purposes
of influencing any act or decision of such individual in his/her official capacity, inducing such individual to do or omit to
do any act in violation of the individual’s duty, inducing the individual to use the individual’s official influence
to affect or influence an act or decision of the government, or to secure any improper advantage in order to assist in obtaining
or retaining business for Lilly as it relates to this Program Agreement.

 

VI.
MATERIAL TRANSFER; SHIPPING AND INTERNATIONAL SHIPPING

 

A.
The Affiliation Submitter will package, label, and ship Material in compliance with applicable laws, as reasonably requested by
Lilly and at Lilly’s expense. More information concerning the required procedures for shipping Material shall be available
on the OIDD Site and the Affiliation Submitter shall comply with the shipping guidelines provided on the OIDD Site at the time
Lilly requests the Material.

 

B.
When shipping Material to Lilly for Research, the Affiliation Submitter agrees to assume all risk for any Material that is lost
or damaged while in transit. Should any Material

be
lost or damaged while in transit, the Affiliation Submitter will be provided the opportunity to submit replacement Material for
Research.

 

C.
If any Material is being transferred across international boundaries, the Affiliation Submitter and/or the Institution may need
to communicate with applicable governmental agencies for any regulations which may apply to the export of pharmaceutical materials
from its country. Institution is responsible for determining whether an export/import license or any other approval is required
by law for shipping Material to Lilly for the Research and fulfillment of such requirements. Should Institution require further
assistance with shipping, it must notify Lilly by electronic mail at the following address: openinnovation@lilly.com and include
subject line: “Shipping Question”. Compliance with laws and regulations in connection with the shipment of Material
and Research shall be the sole obligation of the Institution and the Institution assures Lilly that the Material shall be shipped
for Research in

compliance
with the applicable laws and regulatory requirements.

 

D.
The Affiliation Submitter agrees not to submit Material that is derived from natural products protected by:

 

1)
CITES (the Convention on International Trade in Endangered Species of Wild Fauna);

 

2)
the government of the country where the natural product was collected; or

 

3)
the government of the country in which the Institution is based.

 

VII.
LILLY’S USE OF MATERIALS

 

A.
As consideration of Affiliation Submitter sending Material to Lilly, Lilly agrees:

 

B.
to use the Informatics Profile solely to select Materials for further biological evaluation in the Biological Panel and/or identify
opportunities for collaboration and licensing, in the absence of any Chemical Structure and other information;

 

C.
to use the Material solely for the Research;

 

D.
to generate Research Results from the Research and to provide the Affiliation Submitter the Report including the Research Results;

 

E.
that the Institution shall own the Research Results;

 

F.
not to use the Material in processes for making marketed products or for any commercial use;

 

G.
not to sell or distribute the Material to any third party except as permitted by this Program Agreement; however, for the avoidance
of doubt, it is understood that Material may be supplied to a Not-for-Profit Organization in accordance with this Program Agreement;

 

H.
not to use the Material on human subjects;

 

I.
to limit access to the Material, and/or Research Results, to Lilly employees, and to consultants or contractors working with Lilly
who are bound to terms and conditions at least as restrictive as this Program Agreement;

 

J.
that no Lilly employee, consultant or contractor working with the Material will attempt to determine the chemical structure of
the Material, or otherwise alter its composition except as may be necessary to generate the Research Results;

 

K.
Lilly will not provide the Chemical Structure nor identify the Institution, Affiliation Submitter or Affiliation Coordinator to
the Not-for Profit Institution without the Express written permission from the Institution.

 

L.
to maintain the same degree of security with respect to this Material, and data generated from Informatics Screening and Research
as is maintained by Lilly for its own confidential, proprietary, and valuable material;

 

M.
to comply with all United States federal and state rules, regulations and guidelines applicable to the use or transfer of the
Material, including without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations,
and to assume full responsibility for any claims or liabilities which may arise as a result of Lilly’s use or possession
of the Material other than as a result of Institution’s gross negligence or willful misconduct;

 

N.
that the distribution of the Material to Lilly does not constitute a representation on the part of Institution that the possession
or use of the Material will not infringe any patent or proprietary rights of any third party; and

 

O.
that the parties acknowledge that Lilly may currently or in the future independently, without the use of Material, develop compounds
similar or identical to Material.

 

VIII.
REPRESENTATIONS AND WARRANTIES

 

A.
Lilly hereby represents that, to the best of its knowledge, the data and information in the Report provided to the Institution
will be accurate and what it purports to be.

 

B.
LILLY MAKES NO EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO THE OPEN INNOVATION DRUG DISCOVERY PROGRAM AND/OR THE OIDD SITE.
LILLY MAKES NO EXPRESS OR IMPLIED WARRANTY AS TO THE ACCURACY OF THE REPORT ON THE MATERIALS PROVIDED TO THE INSTITUTION INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE DATA PROVIDED.

 

C.
LILLY AGREES THAT THE MATERIAL IS BEING SUPPLIED WITH NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY
RIGHTS.

 

D.
Except to the extent prohibited by law, Lilly assumes all liability for damages which may arise from its use, storage or disposal
of the Material provided however, that Lilly

does
not assume liability for Material supplied to any Not-for-Profit Organization. Institution will not be liable to Lilly for
any loss, claim, or demand made by Lilly, or made against Lilly by any other party, due to or arising from the Material, except
to the extent permitted by law when caused by the gross negligence or willful misconduct of Institution.

 

E.
Institution represents that it has the right to enter into this Program Agreement.

 

F.
Institution warrants and represents, with respect to any Material it submits under this Program Agreement, that it shall comply
with all national and local laws regarding access, use and export of the Material.

 

IX.
CONFIDENTIALITY

 

A.
Lilly shall keep any information received from Affiliation Submitter pursuant to this Open Innovation Drug Discovery Program,
including but not limited to the Research Results as communicated to Affiliation Submitter, and any supporting data and Chemical
Structural and related information as it relates to the Material (“Confidential Information”) secret and confidential
as is maintained by Lilly for its own confidential, proprietary, and valuable material, but in no event less than a reasonable
degree of care, and shall not disclose to any person or make known in any manner any part of the Research Results as relates to
the Material without the prior written consent of Institution. Furthermore, Lilly shall not use any of the foregoing for any purpose
other than to evaluate a possible business relationship with Institution. Such obligations of confidentiality and non-use shall
commence on the date that Confidential Information is submitted to Lilly, and shall continue for five (5) years from that date.

 

B.
Notwithstanding the foregoing, Lilly may disclose Confidential Information to a limited number of authorized support individuals
including contractors necessary to manage the OIDD Site who may have access to the location that stores the molecular structures
of the submitted compounds and such individuals are bound by the terms of confidentiality and use contained herein.

 

C.
In addition, after the Affiliation Submitter provides the Chemical Structure and other information to the Open Innovation Drug
Discovery Program in response to the Structure Reveal Letter, a limited number of Lilly employees and contractors each on a need-to-know
basis may be given access to the Chemical Structure, the Informatics Profile, and the Research Results for further evaluation.
These individuals shall not use any of the foregoing for any purpose other than to evaluate a possible business relationship with
Institution and are bound by the terms of confidentiality and use contained herein.

 

D.
The above obligations of confidentiality shall not apply to the Confidential Information which:

 

1.
was known to Lilly or any of its affiliates prior to receipt, as evidenced by Lilly’s competent documentary records;

 

2.
was in the public domain or generally accessible prior to receipt;

 

3.
entered the public domain or became generally accessible after receipt for reasons other than Lilly’s breach of this Program
Agreement;

 

4.
was made available to Lilly or any of its affiliates at any time by an authorized third party who did not obtain the same, directly
or indirectly, from the Institution;

 

5.
is independently developed by or for Lilly or any of its affiliates without use of, reliance upon, or reference to the Confidential
Information, as evidenced by Lilly’s competent documentary records; or

 

6.
is required to be disclosed by applicable statute or regulation or by judicial or administrative process, in which case Lilly
will provide prompt written notice to allow Institution to seek a protective order or other appropriate remedy, will disclose
only such information as is legally required, and will use reasonable efforts to assist Institution in obtaining confidential
treatment for such disclosures.

 

X.
INTELLECTUAL PROPERTY

 

A.
Lilly agrees that all of Institution’s existing intellectual property rights in the Material will remain with the Institution
except as set forth by this Program Agreement unless agreed otherwise by the parties in writing. Lilly is not indicating that
it agrees that the Material was not previously known to Lilly.

 

B.
Institution agrees Lilly may have existing intellectual property rights in the Material as a result of Lilly’s independent
research and as evidenced by Lilly’s competent documentary records Lilly’s competent documentary records may demonstrate
that the Material was previously known to Lilly or independently developed by or for Lilly without the use of Material.

 

C.
The Parties agree that this Program Agreement shall not impact the determination of inventorship of any compound that was known
to Lilly, as evidenced by Lilly’s competent documentary records.

 

XI.
LICENSE AND OPTION

 

A.
Institution certifies to its reasonable knowledge at the time of signing this Program Agreement that subject to any retained rights
of any relevant government entity, it has the right to grant and Institution shall grant an exclusive option to Lilly, but which
grant is conditioned upon Institution at its sole discretion providing Lilly the Chemical Structure for the Material pursuant
to a Structure Reveal Letter, and also subject to Section XII,

 

PUBLICATION.
The exclusive option shall be for the right to negotiate an agreement including but not restricted to a compound purchase agreement,
a license agreement, or a research collaboration agreement for further research and development of Material (collectively the
“Research Opportunities”). The option shall expire sixty (60) days (the “Option Period”) after Lilly has
received the Chemical Structure for the subject Material from Institution pursuant to a Structure Reveal Letter. The option may
be exercised by Lilly in writing at any time prior to its expiration. The option period may be extended by mutual written agreement
of the parties. Any agreement executed pursuant to the exercise of the option granted hereunder shall be negotiated in good faith
within one hundred eighty (180) days (the “Negotiation Period”) after Lilly has exercised the option. The Negotiation
Period may be extended by mutual agreement of the parties as long as they continue negotiating in good faith. The parties acknowledge
that if Institution elects not to submit the Chemical Structure, or if the parties have not completed a compound purchase, license
or collaboration agreement within the Negotiation Period (or any extension thereof), then the option no longer exists and Institution
shall have no further obligations to Lilly with respect to the Material.

 

B.
If Lilly elects the option to a license agreement, any such license agreement shall contain terms consistent with Institution
policy for an exclusive, sublicenseable, worldwide license from Institution to make, use, offer for sale, sell and import Material
under any intellectual property owned or controlled at that time by Institution required to practice such license on commercially
reasonable terms. The license agreement agreed to pursuant to the negotiations conducted by the parties hereunder shall contain
provisions reasonable and customary to an agreement of this type.

 

C.
If Lilly elects the option to enter into a research collaboration agreement, the parties shall discuss in good faith the terms
and conditions of such an agreement and shall endeavor to reach a mutually acceptable set of terms and conditions to govern such
research collaboration agreement, including terms and conditions related to funding, scope and intellectual property created during
the course of such research.

 

D.
Institution reserves for itself and other non-profit research and academic institutions the non-exclusive rights to use the Material
and Research Results subject to the above agreements for academic, educational, and scholarly non-commercial research purposes.

 

E.
The above notwithstanding, after the Material is evaluated in the Not-for-Profit Research Modules, the Institution may be contacted
by a representative for the Open Innovation Drug Discovery Program on behalf of the Not-for-Profit Organization and be afforded
the opportunity on a compound-by-compound basis, to participate in further research with the Not-for-Profit Organization, which
participation shall be at the Institution’s sole discretion. If the Institution elects to participate, the Not-for-Profit
Organization may request that the Affiliation Submitter share the Chemical Structure Research Results and other physical data,
as available, for the Material and for permission for further research and evaluation of Material. In addition, if the Institution
and the Notfor- Profit Organization agree to collaborate to develop the Material, the Institution shall notify Lilly accordingly.
The terms for any such agreement shall be negotiated between the Institution and the Not-for-Profit Organization. However for
the avoidance of doubt, Lilly may continue to perform Research on the Material unless the Institution or the Not-for- Profit Organization
specifically notifies Lilly to the contrary in writing.

 

XII.
PUBLICATION

 

A.
Institution is free to publish the data and Research Results obtained from Lilly generated from the Research for any Material
whose Chemical Structure is not requested in writing in a Structure Reveal Letter and for which the exclusive option described
in Section XI, LICENSE AND OPTION is not triggered.

 

B.
Affiliation Submitter and/or Institution shall acknowledge the Open Innovation Program and/or a Not-for-Profit Organization for
the support and source of any results generated for the Material in an assay in the Panel that is disclosed in the publication.

 

C.
However if Lilly requests the Chemical Structure of a Material in a Structure Reveal Letter and the Affiliation Submitter agrees
to provide such information and supporting data for the Material, thereby triggering the option described in Section XI, LICENSE
AND OPTION, then the Affiliation Submitter agrees to keep the Research Results confidential during the Negotiation Period. In
addition, Affiliation Submitter agrees to keep the Chemical Structure and related data, if not already publicly disclosed, confidential
and shall delay publication of said data for sixty (60) days after the receipt of the Report of the Research and to extend such
delay period as reasonably necessary for Lilly or Institution to consider actions to preserve any potential intellectual property
rights related to the Material, provided such total delay does not exceed ninety (90) days from institution’s receipt of
the Report.

 

D.
Institution agrees that Lilly may perform population-based computational analyses of submitted, accepted, or active compounds
as a group, including assessment of molecular properties and structural features of those groups, so long as these analyses and
methods do not allow identification of individual structures, the Institutions, or the Affiliation Submitters that submitted such
structures. Such analyses may, from time-to-time, be disclosed publically.

 

XIII.
TERM

 

A.
The term of this Program Agreement shall begin on the date of last signature by the parties and shall continue until:

 

1.
the termination of the Open Innovation Drug Discovery Program by Lilly upon thirty (30) days written notice to Institution;

 

2.
termination by Lilly upon thirty (30) days written notice to Institution;

 

3.
replacement with a revised Program Agreement signed by the parties; or

 

4.
the termination of Institution’s participation in the Open Innovation Drug Discovery Program and this Program Agreement
by thirty (30) days written notice to Lilly.

 

B.
In any such termination, the provisions of this Program Agreement shall continue to survive with respect to any Material then
held by Lilly, but the parties shall not transfer any new Material hereunder. Upon termination of this Program Agreement, Lilly
shall, at Institution’s written request, destroy any remaining Material and if requested shall confirm such destruction
in writing to Institution. Execution of this Program Agreement automatically terminates any Open Innovation Drug Discovery Program
Material Transfer Agreement previously entered into between Institution and Lilly.

 

XIV.
NOTICE

 

A.
Any written notice required to be provided to Lilly under this Program Agreement shall be provided to the Lilly Open Innovation
Drug Discovery support team or by electronic mail delivery to openinnovation@lilly.com (subject line: “Written notice for
legal team”).

 

B.
Any written notice required to be provided to Institution shall be provided to the email address listed on Institution’s
counterpart signature page with a copy to the relevant Affiliation Submitter if indicated on the Institution’s profile on
the OIDD Site.

 

XV.
MISCELLANEOUS

 

A.
Institution shall be responsible for and supply to each Affiliation Submitter affiliation codes and any special instructions required
by Institution (i.e., relevant policies of the Institution). Each Affiliation Submitter as part of his or her registration for
the OIDD Site will acknowledge that this Program Agreement governs the Open Innovation Drug Discovery Program and will be required
to agree to Lilly’s Terms of Use for the OIDD Site, which may be updated from time to time. Institution, on behalf of itself
and for its Affiliation Submitter(s) agrees to use the OIDD Site in good faith and in compliance with the Terms of Use for the
OIDD Site as published on the OIDD Site.

 

B.
Institution at its discretion will approve use of the OIDD Site by its Affiliation Submitters and may request that Lilly revoke
the rights of any of its Affiliation Submitters.

 

C.
Lilly at its discretion may revoke the rights to use the OIDD Site by any Institution, Affiliation Coordinator, or Affiliation
Submitter if Lilly determines that any such use is abusive or improper.

 

D.
Institution shall have the status of an independent contractor under this Program Agreement and nothing in this Program Agreement
shall be construed as authorization for either party to act as agent for the other. Lilly shall not incur any liability for any
act or failure to act by employees of Institution and Institution shall not incur any liability for any act or failure to act
by employees of Lilly.

 

E.
Neither party shall use the name of the other party without express written permission from the other party except as required
by law.

 

F.
Neither party may assign its rights and obligations under this Program Agreement without the prior written consent of the other.
Notwithstanding the foregoing, Lilly shall have the right to assign this Program Agreement to an affiliate and/or to any successor
in interest to which this Program Agreement relates.

 

G.
This Program Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements andunderstandings between the parties, whether written or oral, relating to the subject matter
hereof.

 

H.
The Terms of Use for this OIDD Site shall be construed consistent with this Program Agreement and any provision in this Program
Agreement that is not consistent with the Terms of Use shall supersede the conflicting provision in the Terms of Use.

 

I.
No provision of this Program Agreement can be waived or amended except by means of a written instrument that is validly executed
on behalf of both of the Parties and that refers specifically to the particular provision or provisions being waived or amended.

 

J.
Each party agrees that, should any provision of this Program Agreement be determined by a court of competent jurisdiction to violate
or contravene any applicable law or policy, such provision will be severed or modified by the court to the extent necessary to
comply with the applicable law or policy, and such modified provision and the remainder of the provisions hereof will continue
in full force and effect.

 

K.
This Program Agreement may be executed in one or more counterparts by the parties by signature of a person having authority to
bind the party, each of which when executed and delivered by electronic transmission, or by mail delivery, will be an original
and all of which shall constitute but one and the same Program Agreement.

 

 

IN
WITNESS WHEREOF, the parties have executed this Program Agreement.

 

INSTITUTION
SIGNATURE TO OPEN INNOVATION DRUG DISCOVERY PROGRAM AND PROGRAM AGREEMENT

 

If
Institution wishes to participate in the Open Innovation Drug Discovery Program, it will need to complete this counterpart signature
page, obtain all required signatures and return one (1) fully executed copy via electronic transmission to Lilly Open Innovation
Drug Discovery Program, support team or by electronic mail delivery to openinnovation@lilly.com (subject line: “New MTA).

 

The
undersigned Institution hereby agrees to the terms of the Open Innovation Drug Discovery Program and the Program Agreement with
Eli Lilly and Company.

NAME
OF INSTITUTION: Regen BioPharma, Inc.

By:
/s/ Harry Lander (Signature)

Authorized
Representative

Name:
Harry Lander PhD.      Date:2/16/2016

Title:
President and CSO        Email address: harry.lander@regenbiopharma.com 

 

 

Affiliation
Coordinator of Institution to coordinate participation in Open Innovation Drug Discovery Program, and receive notices and information
updates:

	Name:
                                         Harry M. Lander, Ph.D., MBA

         

	Title(s):
                                         President and CSO

         

	Address:
                                         4700 Spring Street

        La
        Mesa, CA

        91942

         

	Email:
                                         harry.lander@regenbiopharma.com

         

	Telephone:
                                         619-702-1404

         

 

 

By
signing this Program Agreement as an Affiliation Coordinator for the Institution to coordinate participation in the Open Innovation
Drug Discovery Program, I understand and agree that my name, email address, and phone number will be displayed on the OIDD Site
and will be available to view by all global users of this OIDD Site.

 

Name
of Institution: Regen Biopharma, Inc.

 

By:
/s/Harry Lander         Date: 2/16/2016

Affiliation
Coordinator of the Institution

 

ELI
LILLY AND COMPANY

By:/s/
Dorothy Ryan Clippert

 

Dorothy
Ryan Clippert

Contracts
Administrator, Lilly Legal

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