RORAN CAPITAL LLC

and

WATERSIDE CAPITAL CORPORATION

19 September 2017

CONVERTIBLE LOAN AGREEMENT

I

PARTIES

THIS CONVERTIBLE LOAN AGREEMENT (the “Agreement”) is entered into effective as of the 19 ^th day of September, 2017 (the “ Closing Date ”, or the “ Closing ”), by and between RORAN CAPITAL LLC, a Wyoming limited liability company (“Roran”); and , WATERSIDE CAPITAL CORPORATION, a Virginia corporation (“ Waterside ”). Roran and Waterside are sometimes referred to collectively herein as the “Parties”, and each individually as a “Party”.

II

RECITALS

A. Waterside desires that Roran make available to Waterside credit in the form of a loan under this Agreement (the “ Loan ”).

B. Roran is willing to make the Loan subject to the terms and conditions set forth in this Agreement and the Loan Documents (as defined in Article III, below).

C. Roran represents that it has adequate capital to fund the Loan.

D. NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

III

DEFINED TERMS AND INTERPRETATION

3.1 Definitions . The following capitalized terms shall have the respective meanings specified in this Article III. Other terms defined elsewhere herein shall have meanings so given them.

3.1.1. Advance . “Advance” means an advance of funds under the Loan.

3.1.2. Affiliate . “Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners.

3.1.3. Change in Control . “Change in Control” shall mean a transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of the lesser of (i) ten percent (10%) of Waterside’s capital stock or (ii) a sufficient number of shares, of all classes of stock then outstanding of Waterside ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of Waterside, who did not have such power before such transaction.

3.1.4. Credit Extension . “Credit Extension” means each Advance or any other extension of credit by Roran for the benefit of Waterside hereunder.

3.1.5. Event of Default . “Event of Default” has the meaning assigned in Section 11.1.

3.1.6. Indebtedness . “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and (d) and all other monetary obligations of any kind, whether not contingent.

3.1.7. Insolvency Proceeding . “Insolvency Proceeding” means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors under State or Federal law, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

3.1.8. Investment . “Investment” means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance, or capital contribution to any Person.

3.1.9. IRC . “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

3.1.10. Lien . “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

3.1.11. Loan Documents . “Loan Documents” means, collectively, this Agreement and any other agreement entered into between Waterside and Roran in connection with this Agreement, all as amended or extended from time to time.

3.1.12. Material Adverse Effect . “Material Adverse Effect” means a material adverse effect on (i) the business, operations, condition (financial or otherwise) or prospects of Waterside and its Subsidiaries taken as a whole or (ii) the ability of Waterside to repay the Obligations or otherwise perform its obligations under the Loan Documents.

3.1.13. Obligations . “Obligations” means all debt, principal, interest, Roran Expenses and other amounts owed to Roran by Waterside pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Waterside to others that Roran may have obtained by assignment or otherwise.

3.1.14. Permitted Indebtedness . “Permitted Indebtedness” means: (i) Indebtedness of Waterside in favor of Roran arising under this Agreement or any other Loan Document; and, (ii) Indebtedness existing on the Closing Date and disclosed in the SEC Filings.

3.1.15. Permitted Liens . “Permitted Liens” means the following: (i) Any Liens existing on the Closing Date and disclosed in the SEC Filings, or arising under this Agreement or the other Loan Documents; (ii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; and, (iii) Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) through (ii) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

3.1.16. Person . “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity, or governmental agency.

3.1.17. Responsible Officer . “Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, and the Chief Financial Officer of Waterside.

3.1.18. Roran Expenses . “Roran Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; audit fees; and Roran’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

3.1.19. SEC Filings . “SEC Filings” means all filings made by Waterside with the Securities and Exchange Commission in compliance with the applicable provisions of the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended.

3.1.20. Subsidiary . “Subsidiary” means any corporation, company or partnership in which (i) any general partnership interest or (ii) more than 50% of the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is being made, is owned by Waterside, either directly or through an Affiliate.

3.1.21. Waterside’s Books . “Waterside’s Books” means all of Waterside’s books and records, including but not limited to its ledgers; records concerning Waterside’s assets or liabilities, business operations or financial condition; and, all computer programs, or tape files, and the equipment, containing such information.

3.2. Accounting Terms and Determinations . All accounting terms used in this Agreement and not otherwise defined shall have the meaning accorded to them in accordance with GAAP and, except as expressly provided herein, all accounting determinations shall be made in accordance with GAAP, consistently applied. When used herein, the term “financial statements” shall include the notes and schedules attached thereto. The term “GAAP” means generally accepted accounting principles consistently applied as in effect from time to time.

3.3 Interpretation .

3.3.1. Provision Not Construed Against Party Drafting Agreement . This Agreement is the result of negotiations by and between the Parties, and each Party has had the opportunity to be represented by independent legal counsel of its choice. This Agreement is the product of the work and efforts of all Parties, and shall be deemed to have been drafted by all Parties. In the event of a dispute, no Party shall be entitled to claim that any provision should be construed against any other Party by reason of the fact that it was drafted by one particular Party.

3.3.2. Agreement Provisions, Exhibits, and Schedules . When a reference is made in this Agreement to an Article, Section, Subsection, Exhibit, or Schedule, such reference shall be to said item of this Agreement unless otherwise indicated. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set out in full herein.

3.3.3. Entire Agreement . This Agreement, and all references, documents, or instruments referred to herein, contains the entire agreement and understanding of the Parties in respect to the subject matter contained herein. The Parties have expressly not relied upon any promises, representations, warranties, agreements, covenants, or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes (i) any and all prior written or oral agreements, understandings, and negotiations between the Parties with respect to the subject matter contained herein; and, (ii) any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

3.3.4. Severability . Each and every provision of this Agreement is severable and independent of any other term or provision of this Agreement. If any term or provision hereof is held void or invalid for any reason by a court of competent jurisdiction, such invalidity shall not affect the remainder of this Agreement.

3.3.5. Successors and Assigns . Except as expressly provided in this Agreement, each and all of the covenants, terms, provisions, conditions, and agreements herein contained shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties. This Agreement is not assignable by either Party without the expressed written consent of all Parties.

3.3.6. Time . All Parties agree that time is of the essence as to this Agreement.

3.3.7. Governing Law . This Agreement shall be governed by the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. If any court action is necessary to enforce the terms and conditions of this Agreement, the Parties hereby agree that the Supreme Court of New York, County of New York, shall be the sole jurisdiction and venue for the bringing of such action.

3.4 Additional Definitions and Interpretation Provisions . For purposes of this Agreement, (i) those words, names, or terms which are specifically defined herein shall have the meaning specifically ascribed to them; (ii) wherever from the context it appears appropriate, each term stated either in the singular or plural shall include the singular and plural; (iii) wherever from the context it appears appropriate, the masculine, feminine, or neuter gender, shall each include the others; (iv) the words “hereof”, “herein”, “hereunder”, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement; (v) all references to “Dollars” or “$” shall be construed as being United States Dollars; (vi) the term “including” is not limiting and means “including without limitation”; and, (vii) all references to all statutes, statutory provisions, regulations, or similar administrative provisions shall be construed as a reference to such statute, statutory provision, regulation, or similar administrative provision as in force at the date of this Agreement and as may be subsequently amended.

IV

LOAN AND CERTAIN TERMS

4.1 General Provisions of the Loan .

4.1.1. Availability . Subject to and upon the terms and conditions of this Agreement, Roran agrees to establish and make available to Waterside an aggregate outstanding amount not to exceed the total principal amount of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000), the proceeds of which Waterside shall use exclusively for use in its business for purposes reasonably acceptable to Roran.

4.1.2. Funding of the Loan . All Advances under the Loan shall be delivered in accordance with the terms and conditions of this Agreement and the Loan Documents.

4.1.3. Advances . Waterside may request Advances of all or any portion of the Loan during the Term of this Agreement, and Roran shall provide the funds under each such Advance so long as all other terms and conditions of this Agreement are satisfied. Advances may be made in any amount so long as the total amount of all outstanding Advances do not exceed the total of the Loan hereunder, $150,000.

4.1.4. Advance Request . Waterside may request an Advance by executing and delivering an Advance Request to Roran dated as of the date of that Advance Request. An Advance Request shall be delivered in the form attached hereto as Exhibit 4.1.4.

4.2 Interest Rates, Payments, and Calculations .

4.2.1. Interest Rate . Except as otherwise set forth herein, each Advance shall bear interest at a fixed rate equal to twelve percent (12%) per annum, calculated on the basis of a 360-day year and the actual number of days elapsed. Nothing contained herein shall be deemed to require the payment of interest at a rate in excess of the maximum rate permitted by applicable law. In the event that the amount required to be paid hereunder for any calendar month exceeds the maximum rate permitted by law, such amounts shall be automatically reduced for such month to the maximum rate permitted by applicable law; and

4.2.2. Late Fee; Default Rate . If any payment is not made within ten (10) days after the date such payment is due, Waterside shall pay Roran a late fee equal to the lesser of (i) ten percent (10%) of the amount of such unpaid amount; or, (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, automatically, from and after the occurrence and during the continuance of an Event of Default (unless waived in writing by Roran), at a rate equal to the lesser of (a) six (6.0) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default; or, (b) the maximum rate allowed under applicable law.

4.2.3. Payment Date . All Advances and all other amounts due on the Advances shall be due and payable eighteen (18) months after the Closing Date, unless earlier as provided for herein upon an Event of Default.

4.2.4. Prepayment. Waterside may prepay any portion of the Loan before its due date.

4.2.5. Payments.

(a) All amounts payable by Waterside under this Agreement will be paid without set-off or counterclaim, and without any deductions or withholdings whatsoever.

(b) Subject to the provisions hereof, all payments received by Roran on account of the Obligations will be applied first in payment of outstanding interest and secondly in reduction of the principal balance of the Loan then outstanding. If any payment is received at any time while an Event of Default remains outstanding or after demand has been made for the repayment of the Obligations, Roran may appropriate such payment to such part or parts of the Waterside’s Obligations as Roran in its sole discretion may determine and Roran may from time to time revoke and change any such appropriation.

(c) Notwithstanding anything in this Agreement to the contrary, any payment of principal of or interest on the Loan that is due on a date other than a business day will be made on the next succeeding business day. If the date for any payment on the Loan is extended to the next succeeding business day by reason of the preceding sentence, the period of such extension will not be included in the computation of the interest payable on such business day.

4.2.6. Books of Account . Roran is hereby authorized to open and maintain books of account and other books and records evidencing all advances under the Loan, interest accruing thereon, fees, charges, and other amounts from time to time charged to the Waterside under the Loan Documents; and amounts from time to time owing, paid, or repaid by the Waterside under this Agreement. All such books, accounts, and records will constitute prima facie evidence of the amount owing by the Waterside under the Loan Documents; but the failure to make any entry or recording in such books, accounts, and records will not limit or otherwise affect the obligations of the Waterside under the Loan Documents.

4.3 Other Loan Fees .

4.3.1. Roran Expenses . On the Closing Date, all Roran Expenses incurred through the Closing Date shall be paid by Waterside. All Roran Expenses incurred after the Closing Date shall be paid by Waterside as and when they become due.

4.3.2. Additional Costs . In case any law, regulation, treaty or official directive or the interpretation or application thereof by any court or any governmental authority charged with the administration thereof or the compliance with any guideline or request of Roran or any other governmental authority (whether or not having the force of law):

(a) subjects Roran to any tax with respect to payments of principal or interest or any other amounts payable hereunder by Waterside or otherwise with respect to the transactions contemplated hereby (except for taxes on the overall net income of Roran imposed by the United States of America or any political subdivision thereof);

(b) imposes, modifies or deems applicable any deposit insurance, reserve, special deposit or similar requirement against assets held by, or deposits in or for the account of, or loans by, Roran; or

(c) imposes upon Roran any other condition with respect to its performance under this Agreement, and the result of any of the foregoing is to increase the cost to Roran, reduce the income receivable by Roran or impose any expense upon Roran with respect to the Obligations, Roran shall notify Waterside thereof. Waterside agrees to pay to Roran the amount of such increase in cost, reduction in income or additional expense as and when such cost, reduction or expense is incurred or determined, upon presentation by Roran of a statement of the amount and setting forth Roran’s calculation thereof, all in reasonable detail, which statement shall be deemed true and correct absent manifest error.

4.4 Term . This Agreement shall become effective on the Closing Date and, unless terminated earlier as provided for herein, shall continue in full force and effect for so long as any Obligations remain outstanding. However, Roran shall be required to make Advances hereunder for no longer than eighteen (18) months after the Closing Date. Roran shall have the right to terminate its obligation to make Advances under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default.

4.5 Acceleration . Immediately upon the occurrence of any Event of Default (as defined in Section 11.1, below) and during any continuance thereof, Roran may declare the Loan, all interest thereon, and all other amounts and obligations payable, to be forthwith due and payable to Roran, or may take any other action as provided in Section 11.2, below.

4.6 Conditions of the Loan . The obligation of Roran to make any Advance is subject to the condition precedent that Roran shall have received, in form and substance satisfactory to Roran, the following:

(a) This Agreement;

(b) The Convertible Note;

(c) A signed Advance Request; and

(d) Such other documents, and completion of such other matters, as Roran may reasonably deem necessary or appropriate.

4.7 Prior Advances . Any and all amounts previously expended by Roran on behalf of and for the benefit of Waterside, and which would have otherwise been treated as an Advance hereunder, shall be treated as an Advance as of the Closing and treated accordingly hereunder and under the Convertible Note.

V

CONVERTIBLE NOTE

Upon execution of this Agreement Waterside shall deliver to Roran an executed version of a convertible promissory note in the form attached hereto as Exhibit V (the “ Convertible Note ”). The Convertible Note shall document all Advances and shall have terms and conditions in accordance with this Agreement.

VI

REPRESENTATION AND WARRANTIES OF WATERSIDE

Waterside represents and warrants to Roran as follows upon execution of this Agreement and at Closing:

6.1 Organization . Waterside is a corporation, duly organized, validly existing, and in good standing under the laws of the State of Virginia.

6.2 Authorization .

6.2.1. Operation of Business . Waterside has the requisite corporate power and authority and all requisite licenses, permits and franchises necessary to own and operate its properties and to carry on its business as now being conducted.

6.2.2 Execution of Agreement . Waterside has the requisite corporate power and authority and has obtained all approvals and consents necessary to enter into and carry out the terms and conditions of this Agreement and each of the Loan Documents to which it is a party, as well as all transactions contemplated hereunder. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary to authorize the execution, delivery, and performance by Waterside of this Agreement, and each of the Loan Documents to which it is a party. This Agreement has been duly and validly executed and delivered by Waterside and constitutes the valid and binding obligations of Waterside, enforceable in accordance with the respective terms.

6.3 Effect of Agreement . As of the Closing, the consummation by Waterside of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement and the Loan Documents to which it is a party, will not:

(a) Violate any judgment, statute, law, code, act, order, writ, rule, ordinance, regulation, governmental consent or governmental requirement, or determination or decree of any arbitrator, court, or other governmental agency or administrative body, which now or at any time hereafter may be applicable to and enforceable against the relevant party, work, or activity in question or any part thereof (collectively, “ Requirement of Law ”) applicable to or binding upon Waterside or any of the Collateral;

(b) Violate (i) the terms of the Articles of Incorporation or Bylaws of Waterside; or, (ii) any material agreement, contract, mortgage, indenture, bond, bill, note, or other material instrument or writing binding upon Waterside or to which Waterside is subject;

(c) Accelerate or constitute an event entitling the holder of any indebtedness of Waterside to accelerate the maturity of such indebtedness or to increase the rate of interest presently in effect with respect to such indebtedness; or

(d) Result in the breach of, constitute a default under, constitute an event which with notice or lapse of time, or both, would become a default under, or result in the creation of any lien, security interest, charge or encumbrance upon any part of the Collateral (other than those in favor of Roran pursuant to the Loan Documents) or any other properties of Waterside under any agreement, commitment, contract (written or oral) or other instrument to which Waterside is a party, or by which the Collateral (or any part thereof) is bound or affected.

6.4 Consents . No consents, approvals or other authorizations or notices, other than those which have been obtained and are in full force and effect, are required by any state or federal regulatory authority or other Person or entity in connection with the execution and delivery of the Loan Documents and the performance of any obligations contemplated thereby.

6.5 Litigation . There are no actions, suits, proceedings or governmental investigations or inquiries pending, or to the best knowledge of Waterside threatened, against Waterside that could, if adversely determined, have a Material Adverse Effect on the performance of any obligation contemplated in or arising under the Loan Documents.

6.6 Regulatory Compliance . Waterside has not violated any Requirement of Law, the violation of which would be reasonably likely to have a Material Adverse Effect. Waterside is delinquent in its SEC Filings, which Roran acknowledges will not have a Material Adverse Effect.

6.7 Taxes . Waterside has filed or caused to be filed all tax returns required to be filed, and has paid, or has made adequate provision for the payment of, all taxes reflected therein (unless contested in good faith and for which adequate reserves under GAAP have been provided).

6.8 Government Consents . Waterside has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of its business as currently conducted, except where the failure to obtain any such consent, approval, or authorization, to make any such declaration or filing, or to be given any such notice, would not be reasonably likely to have a Material Adverse Effect.

6.9 Full Disclosure . No representation, warranty, or other statement made by Waterside in any certificate or written statement furnished to Roran directly or indirectly related to the Loan contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. All facts known to Waterside which are material to an understanding of the transactions contemplated hereunder have been disclosed to Roran.

6.10 No Burdensome Restrictions; No Defaults .

(a) Waterside is not a party to any contractual obligation the compliance with which would have a Material Adverse Effect or the performance of which, either unconditionally or upon the happening of an event, will result in the creation of a lien on Waterside or any of its assets;

(b) No Event of Default or event which, with the lapse of time and/or notice, would become an Event of Default has occurred and is continuing; and

(c) There is no Requirement of Law the compliance with which by Waterside would have a Material Adverse Effect.

VII

REPRESENTATIONS AND WARRANTIES OF ENGLE

Roran represents and warrants to Waterside as follows upon execution of this Agreement and at Closing:

7.1 Organization . Roran is a limited liability company, duly organized, validly existing, and in good standing under the laws of the State of Wyoming.

7.2 Authorization .

7.2.1. Operation of Business . Roran has the requisite power and authority and all requisite licenses, permits and franchises necessary to own and operate its properties and to carry on his business as now being conducted.

7.2.2 Execution of Agreement . Roran has the requisite power and authority to enter into and carry out the terms and conditions of this Agreement and each of the Loan Documents to which he is a party, as well as all transactions contemplated hereunder. All proceedings have been taken and all authorizations have been secured which are necessary to authorize the execution, delivery, and performance by Roran of this Agreement, and each of the Loan Documents to which he is a party. This Agreement has been duly and validly executed and delivered by Roran and constitutes the valid and binding obligations of Roran, enforceable in accordance with the respective terms.

7.3 Effect of Agreement . As of the Closing, the consummation by Roran of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement and the Loan Documents to which it is a party, will comply with all applicable law and will not violate any Requirement of Law applicable or binding upon Roran.

7.4 No Burdensome Restrictions; No Defaults .

(a) Roran is not a party to any contractual obligation the compliance with which would have a Material Adverse Effect or the performance of which, either unconditionally or upon the happening of an event, will result in its inability to timely perform its obligations hereunder and the Loan Documents to which it is a party; and

(b) There is no Requirement of Law the compliance with which by Roran would have a Material Adverse Effect.

7.5 Ability to Fund . Roran has sufficient assets and the financial ability to fund Loan in compliance with the terms and conditions of this Agreement.

7.6 SEC Filings . Roran is aware that Waterside is delinquent in its SEC Filings, which Roran acknowledges will not have a Material Adverse Effect.

VIII

AFFIRMATIVE COVENANTS

Waterside covenants and agrees that until full and complete satisfaction by Waterside of all Obligations, Waterside shall at all times do each and every one of the following:

8.1 Good Standing . Waterside shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law. Waterside shall maintain, and shall cause each of its Subsidiaries to maintain in force all licenses, approvals and agreements necessary for the conduct of its business as conducted on the Closing Date.

8.2 SEC Compliance . Waterside shall exercise its best efforts to bring current its SEC Filings as quickly as possible. Upon becoming current, Waterside shall be expressly required to continue to be current in its SEC Filings at all times thereafter.

8.3 Financial Statements, Reports, Certificates . Roran shall have the right to:

(a) Receive, as soon as made available in its SEC Filings, all financial statements contained therein;

(b) Receive, as soon as available, but in any event within thirty (30) days after the end of each calendar month, the identity and contact information of all of Waterside’s account debtors, employees, customers, vendors or other similar parties related to the operation of Waterside’s business;

(c) Receive, on the fifteenth day of each month, copies of Waterside’s bank statements;

(d) Receive such budgets, sales projections, operating plans or other financial information as Roran may reasonably request from time to time; and

(e) Inspect, from time to time hereafter, Waterside’s books and records so long as such inspection does not unreasonably interfere with the conduct of Waterside’s business.

8.4 Additional Reporting Requirements . Waterside shall furnish to Roran:

(a) Promptly after the commencement thereof, notice of all legal actions, suits and proceedings before any domestic or foreign governmental authority or arbitrator, affecting Waterside, except those which in the aggregate, if adversely determined, would have no Material Adverse Effect;

(b) Promptly upon completion of such meetings copies of the minutes of all meetings of Waterside’s Board of Directors and all committees thereof, and, if applicable, copies of all statements, reports and notices sent or made available generally by Waterside to its security holders or to any holders of debt;

(c) Promptly (and in any event within two (2) business days) after Waterside becomes aware of the existence of (i) any breach or non-performance of, or any default under, any contractual obligation which is material to the financial condition of Waterside, or (ii) any event, development or other circumstances which has any reasonable likelihood of causing or resulting in a Material Adverse Effect, written notice in reasonable detail specifying the nature of the breach, non-performance, default, event, development or circumstance, including without limitation, the anticipated effect thereof, which notice shall be promptly confirmed in writing within five (5) days; and

(d) Such other information respecting the financial condition of Waterside as Roran may from time to time reasonably request.

8.5 Taxes . Waterside shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Roran, on demand, appropriate certificates attesting to the payment or deposit thereof; and Waterside will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Roran with proof satisfactory to Roran indicating that Waterside or a Subsidiary has made such payments or deposits; provided that Waterside or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Waterside.

8.6 Depository Accounts . Waterside shall maintain all its depository and operating accounts with financial institutions reasonably acceptable to Roran. Waterside shall further cause each such financial institution to allow Roran to be granted all information regarding said accounts as it may request.

8.7 Material Agreements . Waterside shall provide Roran with copies of all material agreements entered into after the Closing Date that commit Waterside to pay or deliver goods or services to any Person with a value of more than Ten Thousand Dollars ($10,000) over the term of such agreement.

8.8 Further Assurances . At any time and from time to time Waterside shall execute and deliver such further instruments and take such further action as may reasonably be requested by Roran to effect the purposes of this Agreement.

IX

NEGATIVE COVENANTS

Waterside covenants and agrees that until full and complete satisfaction by Waterside of all Obligations, Waterside shall at no time do any of the following except with the express written consent of Roran, in the sole and absolution discretion of Roran:

9.1 Securities . Issue any of its own securities, including, without limitation, shares of stock of any class, convertible promissory notes, options, or warrants.

9.2 Change in Business; Change in Control or Executive Office . Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by Waterside and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Waterside as of the Closing Date; or suffer or permit a Change in Control; or relocate its chief executive office or state of incorporation; or amend its articles of incorporation or bylaws or change the date on which its fiscal year ends.

9.3 Non-Disclosure Agreements . Permit the inclusion in any agreement to which it or a Subsidiary becomes a party of any provisions that could prohibit Waterside from disclosing the terms of such agreement to Roran or restrict Roran’s access to information in connection with the underlying subject matter of such agreement.

9.4 Mergers or Acquisitions . Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person.

9.5 Indebtedness . Create, incur, assume, or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness.

9.6 Encumbrances . Create, incur, assume, or suffer to exist any Lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens or agree with any Person other than Roran not to grant a security interest in, or otherwise encumber, any of its property, or permit any Subsidiary to do so.

9.7 Distributions . Pay any dividends or make any other distribution or payment on account of or in redemption, retirement, or purchase of any capital stock, or permit any of its Subsidiaries to do so.

9.9 Investments . Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, unless such Person has entered into a control agreement with Roran, in form and substance satisfactory to Roran; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Waterside.

9.10 Transactions with Affiliates . Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Waterside except for transactions that are in the ordinary course of Waterside’s business, upon fair and reasonable terms that are no less favorable to Waterside than would be obtained in an arm’s length transaction with a non-affiliated Person.

X

INDEMNIFICATION

10.1. Waterside’s Obligation . Waterside hereby covenants and agrees that notwithstanding any investigation made at any time by or on behalf of Roran or any information Roran may have and regardless of the Closing of the Loan, Waterside shall indemnify Roran and its directors, officers, partners, affiliates, attorneys and each of their successors and assigns (each individually referred to herein as a “ Roran Indemnified Party ”) and hold each harmless from, against and in respect of any and all costs (including interest which may be imposed in connection therewith, court costs and reasonable fees and disbursements of legal counsel) losses, claims, liabilities, fines, penalties, damages, demands, judgments, debts, obligations, causes of action and expenses (cumulatively referred to as the “Indemnified Claims”) arising by reason of or in connection with any of the following:

(a) Any and all Indemnified Claims against a Roran Indemnified Party of any nature, whether accrued, absolute, contingent or otherwise, arising out of the business of Waterside (whether known or unknown to Waterside or any Roran Indemnified Party);

(b) Any material breach of, or any material inaccuracy in, any of the representations, warranties, covenants or agreements made by Waterside in this Agreement, any other agreement referred to herein, any Exhibit or Schedule hereto, any of the Loan Documents, or any certificate, instrument or writing delivered in connection therewith;

(c) Any attempt (whether or not successful) by any person to cause or require a Roran Indemnified Party to pay or discharge any debt, obligation, liability or commitment of Waterside;

(d) Any action, suit, proceeding, compromise, settlement, assessment or judgment arising out of or incidental to any of the matters indemnified against in this Section 10.1. However , Waterside shall not be obligated to indemnify a Roran Indemnified Party and hold it harmless under this Section 10.1 with respect to any settlement of a claim to which Waterside has not consented, which consent shall not unreasonably be withheld;

(e) Any tax liabilities, and all interest, penalties, assessments and all other Indemnified Claims in respect thereof, arising out of the business of Waterside; and

(f) Any and all Indemnified Claims arising by reason of or in connection with any act or omission pursuant to, or in breach of this Agreement, any other agreement referred to herein, any Exhibit or Schedule to this Agreement, any of the Loan Documents, or any certificate, instrument or writing delivered in connection therewith, by Waterside.

10.2 Right to Defend . If the facts giving rise to any claim for indemnification under this Article X shall involve any actual claim or demand by any third person against an Roran Indemnified Party, then Waterside shall be entitled to notice of and entitled to (without prejudice to the right of any Roran Indemnified Party to participate at its own expense with counsel if its own choosing) defend or prosecute such claim at its own expense and through counsel of its own choosing if it gives written notice of its intention to do so no later than the time by which the interests of the Roran Indemnified Party would be materially prejudiced as a result of its failure to have received such notice. However , if the defendants in any action shall include both Waterside and an Roran Indemnified Party, and the Roran Indemnified Party shall have reasonably concluded that counsel selected by Waterside has a conflict of interest because of the availability of different or additional defenses to the Roran Indemnified Party, the Roran Indemnified Party shall have the right to select separate counsel to participate in the defense of such action on its behalf, at the expense of Waterside. The Roran Indemnified Party shall cooperate fully in the defense of such claim and shall make available to Waterside pertinent information under its control relating thereto, but shall be entitled to be reimbursed, as provided in this Article X, for all costs and expenses incurred by it in connection therewith.

XI

EVENTS OF DEFAULT; REMEDIES

11.1 Events of Default . Each of the following shall constitute an “Event of Default” by Waterside under this Agreement:

(a) Waterside shall fail to make any payment of principal or interest on any portion of the Loan or other amounts due under the Loan Documents on the date which such payment is due;

(b) Waterside shall violate or fail to perform any material term, provision, condition, covenant, or agreement of this Agreement or any of the Loan Documents and such failure shall continue for fifteen (15) days after the earlier of the date on which (i) Waterside becomes aware of such failure; or, (ii) written notice of such failure has been given to Waterside by Roran;

(c) Any representation or warranty of Waterside in any Loan Document shall prove to have been false in any material respect upon the date when made;

(d) Waterside shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator; (ii) be generally unable to pay its debts as such debts become due; (iii) make a general assignment for the benefit of its creditors; (iv) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect); (v) file a petition seeking to take advantage of any other law of any jurisdiction relating to bankruptcy, insolvency, or composition or readjustment of debts; (vi) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against Waterside in an involuntary case under the United States Bankruptcy Code, or (vii) take any action for the purpose of effecting any of the foregoing;

(e) If any portion of Waterside’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if Waterside is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Waterside’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Waterside’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten (10) days after Waterside receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Waterside;

(f) A proceeding or case shall be commenced, without the application or consent of Waterside, in any court of competent jurisdiction, seeking (i) the liquidation of the assets of Waterside, or the composition or readjustment of the debts of Waterside; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of any substantial part of the assets of Waterside; or (iii) similar relief in respect of Waterside under any law of any jurisdiction relating to bankruptcy, insolvency, or the composition or readjustment of debts, and such proceedings or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect for a period of sixty (60) days; or an order for relief against Waterside shall be entered in an involuntary case under any bankruptcy, insolvency, composition, readjustment of debt, liquidation of assets or similar law of any jurisdiction;

(g) Waterside shall liquidate or dissolve;

(h) If there is a default or other failure to perform in any agreement to which Waterside is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Twenty Five Thousand Dollars ($25,000), or that could have a Material Adverse Effect;

(i) If there occurs any circumstance or circumstances that could have a Material Adverse Effect;

(j) Any necessary approval or qualification of any governmental entity required in connection with any Loan Document or the transactions contemplated thereby shall be revoked, terminated, withdrawn, suspended, modified, withheld, or not renewed, which in Roran’s judgment, would individually or in the aggregate have a Material Adverse Effect; or

(k) If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Twenty Fifty Thousand Dollars ($25,000) shall be rendered against Waterside and shall remain unsatisfied and unstayed for a period of ten (10) days.

11.2 Remedies Upon Default . Immediately upon the occurrence of any Event of Default and during the continuance thereof, Roran may declare the Loan, all interest thereon and all other amounts and obligations payable under any Loan Document to be forthwith due and payable, without presentment, demand, protest, or further notice of any kind, all of which are expressly waived by Waterside. However, upon the occurrence of an Event of Default specified in subparagraph (d), (e), (f), or (g), above, the Loan, all such interest and all such amounts and obligations payable under any Loan Document shall automatically become due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Waterside. In addition to the remedies set forth above, Roran shall have, at its election, without notice of its election and without demand, all of which are authorized by Waterside, the rights and remedies: (a) in any other instrument or agreement evidencing or relating to any of the obligations of Waterside hereunder; and, (b) to offset any amounts otherwise payable from Roran to Waterside by the amount of such unpaid principal and/or interest.

XII

ADDITIONAL OBLIGATIONS AND AGREEMENTS

12.1 Survival of Representations . All covenants, representations, and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Roran has any obligation to make Credit Extensions to Waterside. The obligations of Waterside to indemnify Roran, as described in Section 10.1, shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Roran have run.

12.2 Brokers . Each Party represents and warrants that no other broker or finder has acted for it in connection with this Agreement or the transactions contemplated hereby and that no broker or finder is entitled to any brokerage or finder’s fee or other commission. Each Party agrees to indemnify and hold harmless the other Party hereto with respect to any claim for any brokerage or finder’s fee or other commission.

12.3 Expenses . Whether or not any Advances are made pursuant to the Loans, Waterside agrees to pay all costs and expenses in connection with the preparation, execution, delivery, administration, and enforcement of the Loan and the Loan Documents and the perfection and continuation of the security interest in the Collateral.

XIII

ADDITIONAL PROVISIONS

13.1 Executed Counterparts . This Agreement may be executed in any number of counterparts, all of which when taken together shall be considered one and the same agreement, it being understood that all Parties need not sign the same counterpart. In the event that any signature is delivered by Fax or by E-Mail, such signature shall create a valid and binding obligation of that Party (or on whose behalf such signature is executed) with the same force and effect as an original thereof. Any photographic, photocopy, or similar reproduction copy of this Agreement, with all signatures reproduced on one or more sets of signature pages, shall be considered for all purposes as if it were an executed counterpart of this Agreement.

13.2 Enforcement . The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, it is agreed that the Parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. The remedies of the Parties under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled.

13.3 Waiver . No failure by any Party to insist on the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy on a breach shall constitute a waiver of any such breach or of any other covenant, duty, agreement, or condition.

13.4 Recovery of Fees by Prevailing Party . In the event of any legal action (including arbitration) to enforce or interpret the provisions of this Agreement, the non-prevailing Party shall pay the reasonable attorneys’ fees and other costs and expenses including expert witness fees of the prevailing Party in such amount as the court shall determine. In addition, such non-prevailing Party shall pay reasonable attorneys’ fees incurred by the prevailing Party in enforcing, or on appeal from, a judgment in favor of the prevailing Party. The preceding sentence is intended by the Parties to be severable from the other provisions of this Agreement and to survive and not be merged into such judgment.

13.5 Recitals . The facts recited in Article II, above, are hereby conclusively presumed to be true as between and affecting the Parties.

13.6 Amendment . This Agreement may be amended or modified only by a writing signed by all Parties.

13.7 Assignability . This Agreement is not assignable by either Party without the expressed written consent of all Parties.

13.8 Further Assurances . Each Party agrees (i) to furnish upon request to each other Party such further information; (ii) to execute and deliver to each other Party such other documents; and, (iii) to do such other acts and things, all as another Party may reasonably request for the purpose of carrying out the intent of this Agreement and the transactions envisioned hereunder. However , this provision shall not require that any additional representations or warranties be made and no Party shall be required to incur any material expense or potential exposure to legal liability pursuant to this Section 13.8.

13.9 Notices .

13.9.1. Method and Delivery . All notices, requests and demands hereunder shall be in writing and delivered by hand, by Electronic Transmission, by mail, or by recognized commercial over-night delivery service (such as Federal Express or UPS), and shall be deemed given (a) if by hand delivery, upon such delivery; (b) if by Electronic Transmission, upon telephone confirmation of receipt of same; (c) if by mail, forty-eight (48) hours after deposit in the United States mail, first class, registered or certified mail, postage prepaid; or, (d) if by recognized commercial over-night delivery service, upon such delivery.

13.9.2. Consent to Electronic Transmission . Each Party hereby expressly consents to the use of Electronic Transmission for communications and notices under this Agreement. For purposes of this Agreement, “Electronic Transmission” means a communication (i) delivered by Fax or E-Mail when directed to the Fax number or E-Mail address, respectively, for that recipient on record with the sending Party; and, (ii) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.

13.9.3. Address Changes . Any party may alter the Fax number, E-Mail address, physical address, or postage address to which communications or copies are to be sent by giving notice of such change of address to the other Parties in accordance with the provisions of this Section 13.9.

13.10 Best Efforts . Each Party shall cooperate in good faith with the other Parties generally, and in particular, the Parties shall use and exercise their best efforts, taking all reasonable, ordinary and necessary measures to ensure an orderly and smooth relationship under this Agreement, and further agree to work together and negotiate in good faith to resolve any differences or problems which may arise in the future. However , the obligations under this Section 13.10 shall not include any obligation to incur substantial expense or liability.

XIV

EXECUTION

IN WITNESS WHEREOF , this CONVERTIBLE LOAN AGREEMENT has been duly executed by the Parties, and shall be effective as of and on the Closing Date. Each of the undersigned hereby represents and warrants that (i) the respective Party has the requisite power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder; and, (ii) the undersigned is duly authorized and empowered to execute and deliver this Agreement.

EXHIBIT 4.1.4.

ADVANCE REQUEST

TO: WATERSIDE CAPITAL CORPORATION

The Advance Request is delivered pursuant to the terms of that certain Convertible Loan Agreement dated the ____ day of ____________, 2018 (the “ Loan Agreement ”). All capitalized terms in this Advance Request shall, unless otherwise specified herein, have the meaning given to them in the Loan Agreement.

The undersigned hereby requests an Advance on account of the Loan in the amount of ___________ _____ ________________ Dollars ($___________________).

We hereby certify that as at the date of this Advance Request:

1. The Advance requested will be utilized solely for working capital and general corporate purposes;

2. No Event of Default has occurred and is outstanding;

3. The warranties and representations made by us in the Loan Documents are true and correct as of the date of this Advance Request; and

4. Each of the Loan Documents are true and correct as though made on and as of the date hereof;

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 (THE “ ACT ”), 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 ACT, 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.

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED , WATERSIDE CAPITAL CORPORATION, a Virginia corporation (“ Borrower ” or “ Company ”), hereby promises to pay to the order of RORAN CAPITAL LLC , a Wyoming limited liability company, or its registered assigns (“ Holder ”) the sum of up to US $150,000.00, together with any interest as set forth herein, on or before 19 March 2019 (the “ Maturity Date ”), and to pay interest on the unpaid principal balance hereof at the rate of twelve percent (12%) (the “ Interest Rate ”) per annum from the date of each Advance, until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise.

This Convertible Promissory Note (the “ Note ”) may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall bear an additional interest at the rate of ten percent (10%) per annum from the due date thereof until the same is paid (the “ Default Interest ”). All interest charged hereunder shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder, to the extent not converted into Company common stock, $1.00 par value per share (the “ Common Stock ”) in accordance with the terms hereof, shall be made in lawful money of the United States of America.

All payments shall be made at such address as Holder shall hereafter give to 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 Convertible Loan Agreement dated the date hereof, pursuant to which this Note was originally issued (the “ Loan Agreement ”). This Note is subject to all terms and conditions of the Loan 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 Borrower and will not impose personal liability upon the holder thereof.

The following additional terms and conditions shall apply to this Note:

Article I. CONVERSION RIGHTS

1.1 Conversion Right . Holder shall have the right, in its sole and absolute discretion, from time to time, and at any time following 90-days after the Issue Date, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a “ Conversion ”). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the Notice of Conversion, in the form attached hereto as Exhibit “A” (the “ Notice of Conversion ”), delivered to Borrower by Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by Fax or E-Mail (or by other means resulting in, or reasonably expected to result in, notice) to 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) at Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however, that Borrower shall have the right to pay any or all interest in cash, plus (3) at 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 Conversions, plus (5) at Holder’s option, any amounts owed to Holder pursuant to any other provision of this Note.

1.2 Conversion Price .

(a) Calculation of Conversion Price . Subject to the adjustments described herein, the conversion price (the “ Conversion Price ”) shall equal the lesser of (i) 60% multiplied by the lowest Trading Price (as defined below) (representing a discount rate of 40%) during the previous twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Issue Date; and, (ii) the Alternate Conversion Price (as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by Borrower relating to Borrower’s securities or the securities of any subsidiary of Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The “ Alternate Conversion Price ” shall mean 60% multiplied by the Market Price (as defined herein) (representing a discount rate of 40%). “ Market Price ” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “ Trading Price ” means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “ OTC Market ”) as reported by a reliable reporting service (“ Reporting Service ”) designated by Holder or, if the OTC Market is not the principal trading market for such security, the trading price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no trading price of such security is available in any of the foregoing manners, the average of the trading prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc.; or, (ii) the lowest closing bid price on the OTC Market as reported by a Reporting Service designated by Holder or, if the OTC Market is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “ Trading Day ” shall mean any day on which the Common Stock is tradable for any period on the OTC Market or on the principal securities exchange or other securities market on which the Common Stock is then being traded. Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. In the event of any dispute or discrepancy, the records of Holder shall be controlling and determinative in the absence of manifest error.

(b) Adjustment to Conversion Price . At any time after the Issue Date, (i) if in the case that Borrower’s Common Stock is not deliverable by DWAC (including if Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of Borrower’s Common Stock specified in a Notice of Conversion) within 90-days after the Issue Date; (ii) if Borrower ceases to be a reporting company pursuant or subject to the Exchange Act; (iii) if Borrower loses a market (including the OTCBB, OTCQB or an equivalent replacement exchange) for its Common Stock; (iv) if Borrower fails to maintain its status as “DTC Eligible” for any reason within 90-days after the Issue Date; (v) if the Note cannot be converted into free trading shares on or after six months from the Issue Date; (vi) if at any time Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of Holder; (vii) if Borrower fails to maintain the listing of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT; (viii) if Borrower fails to comply with the reporting requirements necessary to satisfy the availability of Rule 144 to Holder or its assigns, including but not limited to the timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, the requirements for XBRL filings and , the requirements for disclosure of financial statements on its website, within 90-days after the Issue Date; (ix) if Borrower effectuates a reverse split of its Common Stock without ten (10) days prior written notice to Holder; (x) the restatement of any financial statements filed by 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 Holder with respect to this Note or the Loan Agreement; (xi) any cessation of trading of the Common Stock on at least one of the OTC Markets or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the NYSE MKT, and such cessation of trading shall continue for a period of five consecutive (5) Trading Days; and/or, (xii) Borrower loses the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2), then Holder shall be entitled to increase, by 10% for each occurrence, cumulative or otherwise, the discount to the Conversion Price for all future conversions under the Note. Holder maintains the option and sole discretion to increase by Five Thousand and No/100 United States Dollars ($5,000) per each occurrence described above (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) the principal amount of the Note instead of applying further discounts to the Conversion Price. Under no circumstances shall the principal amount exceed an additional Twenty Five Thousand and No/100 United States Dollars ($25,000) or the Conversion Price be less than 30% multiplied by the Market Price due to cumulative effect.

(c) DTC Chill . If in the case that the Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, then an additional 15% discount to the Conversion Price shall apply for all future conversions under all Notes while the “chill” is in effect.

(d) Certain Other Conversions . Each time, while this Note is outstanding, and with regard only to any transaction entered into by Borrower after the Issue Date, Borrower enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3 ^rd party has the right to convert monies owed to that 3 ^rd party (or receive shares pursuant to a settlement or otherwise) at a discount to market greater than the Alternate Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the Alternate Conversion Price shall be automatically adjusted to such greater discount percentage (prior to all applicable adjustments in this Note) until this Note is no longer outstanding. Each time, while this Note is outstanding, Borrower enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory notes or of a replacement promissory note), or Section 3(a)(10) transaction, in which any 3 ^rd party has a look back period greater than the look back period in effect under the Note at that time (a fifteen (15) Trading Day look back period is contained in Section 1.2(a)), then Holder’s look back period shall automatically be adjusted to such greater number of days until this Note is no longer outstanding. Borrower shall give written notice to Holder, with the adjusted Alternate Conversion Price and/or adjusted look back period (each adjustment that is applicable due to the triggering event), within one (1) business day of an event that requires any adjustment described in the two immediately preceding sentences.

(e) Par Value Adjustments . To the extent the Conversion Price of Borrower’s Common Stock closes below the par value per share, Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. Borrower agrees to honor all conversions submitted pending this adjustment unless Holder, in its sole and absolute discretion elects instead to set the Conversion Price to par value for such Conversion(s) and the Conversion Amount for such Conversion(s) 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(s) 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(e).

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

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

1.3 Authorized Shares . Borrower covenants that during the period the conversion right exists, Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. Borrower is required at all times to have authorized and reserved three (3) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “ Reserved Amount ”). Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.

Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions.

1.4 Method of Conversion .

(a) Mechanics of Conversion . Subject to Section 1.1, this Note may be converted by Holder in whole or in part at any time following 90-days after the Issue Date, by (A) submitting to Borrower a Notice of Conversion (by Fax, E-Mail, or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of Borrower.

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

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

(d) Delivery of Common Stock Upon Conversion . Upon receipt by Borrower from Holder of a Fax 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, Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “ Deadline ”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Loan Agreement.

(e) Obligation of Borrower to Deliver Common Stock . Upon receipt by Borrower of a Notice of Conversion, Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless 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 Holder shall have given a Notice of Conversion as provided herein, 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 Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by Holder of any obligation to Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of Borrower to Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by Borrower before 11:59 p.m., New York, New York time, on such date.

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

(g) Failure to Deliver Common Stock Prior to the Deadline . Without in any way limiting 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 Borrower shall pay to Holder $2,000 per day in cash, for each day beyond the Deadline that Borrower fails to deliver such Common Stock until Borrower issues and delivers a certificate to Holder or credit Holder’s balance account with OTC for the number of shares of Common Stock to which Holder is entitled upon such Holder’s conversion of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages will tack back to the Issue Date). Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of Holder (by written notice to Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. Borrower agrees that the right to convert is a valuable right to Holder. The damages resulting from a failure, attempt to frustrate, and interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified.

(h) Rescindment of a Notice of Conversion . If (i) Borrower fails to respond to Holder within one (1) business day from the Conversion Date confirming the details of Notice of Conversion; (ii) Borrower fails to provide any of the shares of Borrower’s Common Stock requested in the Notice of Conversion within three (3) business days from the Conversion Date specified therein; (iii) Holder is unable to procure a legal opinion required to have the shares of Borrower’s Common Stock issued unrestricted and/or deposited to sell for any reason related to Borrower’s standing; (iv) Holder is unable to deposit the shares of Borrower’s Common Stock requested in the Notice of Conversion for any reason related to Borrower’s standing; (v) at any time after a missed Deadline, at Holder’s sole discretion; or, (vi) if, within three (3) business days of the transmittal of the Notice of Conversion to Borrower, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion, then Holder maintains the option and sole discretion to rescind the applicable Notice of Conversion (“ Rescindment ”) pursuant to which such Conversion Shares were issuable with a “Notice of Rescindment”. This Note shall remain convertible before and after the Maturity Date hereof until this Note is repaid or converted in full.

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

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

The legend set forth above shall be removed and Borrower shall issue to Holder a new certificate therefore free of any transfer legend if (i) Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be reasonably accepted by Borrower so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that Borrower does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.1 of the Note.

1.6 Effect of Certain Events .

(a) Effect of Merger, Consolidation, Etc . At the option of Holder, the sale, conveyance or disposition of all or substantially all of the assets of Borrower, the effectuation by Borrower of a transaction or series of related transactions in which more than 50% of the voting power of Borrower is disposed of, or the consolidation, merger or other business combination of Borrower with or into any other Person (as defined below) or Persons when Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which Borrower shall be required to pay to 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 amounts owed under the Note, 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 Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of Borrower other than in connection with a plan of complete liquidation of Borrower, then 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 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 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. 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 Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers, or share exchanges.

(c) Adjustment Due to Distribution . If 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 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 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 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.

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

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

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

(e) Purchase Rights . If, at any time when this Note remains issued and outstanding, 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 Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(f) Notice of Adjustments . Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. Borrower shall, upon the written request at any time of 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 Status as Shareholder . Upon submission of a Notice of Conversion by Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the third (3rd) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless Holder otherwise elects to retain its status as a holder of Common Stock by so notifying Borrower) Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and Borrower shall, as soon as practicable, return such unconverted Note to Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for Borrower’s failure to convert this Note.

1.8 Repayment . Notwithstanding anything to the contrary contained in this Note, subject to the terms of this Section 1.8, at any time Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Holder of this Note, to repay the outstanding balance on this Note (principal, accrued interest, and all other amounts due hereunder), in full. Any notice of repayment hereunder (a “ Repayment Notice ”) shall be delivered to the Holder and shall state: (1) that the Borrower is exercising its right to repay the Note; and (2) the date of repayment which shall be not more than ten (10) Trading Days from the date of the Repayment Notice. On the date fixed for repayment (the “ Repayment Date ”), the Borrower shall make payment of the Repayment 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 Repayment Date. If the Borrower exercises its right to repay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “ Repayment Amount ”) equal to the Repayment Factor (as defined below), multiplied by the sum of: (i) the then outstanding principal amount of this Note; (ii) accrued and unpaid interest on the unpaid principal amount of this Note to the Repayment Date; (iii) Default Interest, if any, on the amounts referred to in clauses (i) and (ii); and, (iv) all other amounts owed to Holder under this Note. For purposes hereof, the “ Repayment Factor ” shall equal the percentage set forth below with respect to each Repayment Date beside such Repayment Factor:

Article II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock . So long as Borrower shall have any obligation under this Note, Borrower shall not without 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 Borrower’s disinterested directors.

2.2 Restriction on Stock Repurchases . So long as Borrower shall have any obligation under this Note, Borrower shall not without 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 Common Stock or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings; Liens . So long as Borrower shall have any obligation under this Note, Borrower shall not, without Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof; (b) indebtedness to trade creditors financial institutions or other lenders incurred in the ordinary course of business; (c) borrowings, the proceeds of which shall be used to repay this Note; or, (d) enter into, create or incur any liens, claims or encumbrances of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, securing any indebtedness occurring after the date hereof.

2.4 Sale of Assets . So long as Borrower shall have any obligation under this Note, Borrower shall not, without 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.

2.5 Advances and Loans . So long as Borrower shall have any obligation under this Note, Borrower shall not, without 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 Borrower, except loans, credits or advances (a) in existence or committed on the date hereof; (b) made in the ordinary course of business; or, (c) not in excess of $10,000.

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

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

2.8 Charter . So long as Borrower shall have any obligations under this Note, 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 Holder hereunder.

Article III. EVENTS OF DEFAULT

3.1 Event of Default . Any of the following events shall constitute an event of default hereunder (each, an “ Event of Default ”):

(a) Failure to Pay Principal or Interest . Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise. Any amount of principal on this Note which is not paid when due shall bear additional interest at the Default Interest rate.

(b) Conversion and the Shares . Borrower fails to reserve the Reserved Amount required for Holder at all times, issue shares of Common Stock to Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by Holder of the conversion rights of 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 Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to 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 Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after Holder shall have delivered a Notice of Conversion. It is an obligation of Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered, or frustrated due to a balance owed by Borrower to its transfer agent. If at the option of Holder, Holder advances any funds to Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by Borrower to Holder within forty eight (48) hours of a demand from Holder.

(c) Breach of Covenants . 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 Loan Agreement.

(d) Breach of Representations and Warranties . Any representation or warranty of Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Loan 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 Holder with respect to this Note or the Loan Agreement.

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

(f) Bankruptcy . Bankruptcy, insolvency, reorganization, or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against Borrower or any subsidiary of Borrower, or Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.

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

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

(i) Cross-Default . Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by Borrower of any covenant or other term or condition contained in any of the Other Agreements (as defined herein), after the passage of all applicable notice and cure or grace periods, shall, at the option of Holder, be considered a default under this Note and the Other Agreements, in which event Holder shall be entitled (but in no event required) to apply all rights and remedies of 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: (i) Borrower, and (ii) Holder or any other third party, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include 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 Holder.

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

(k) Replacement of Transfer Agent . In the event that Borrower proposes to replace its transfer agent and 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 Loan 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 Borrower.

(l) Bid Price . If Borrower loses the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2) and/or a market (including the OTCBB, OTCQB or an equivalent replacement exchange) for its Common Stock.

(m) SEC Reporting Obligations . If at any time after the first 120-days following the Issue Date Borrower, for any reason, is delinquent in its filing obligations with the SEC.

3.2 Result of Event of Default . Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1, above:

(a) Amount Due . The Note shall become immediately due and payable, and Borrower shall pay to Holder, in full satisfaction of its obligations hereunder, an amount equal to two hundred percent (200%) times the sum of (i) the then outstanding principal amount of this Note; (ii) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “ Mandatory Prepayment Date ”); (iii) Default Interest, if any, on the amounts referred to in clauses (i) and/or (ii); (iv) and, all costs, including, without limitation, legal fees and expenses, of collection; and, (v) any and all other amounts owed to Holder hereunder, collectively referred to herein as “ Default Amount ”. All amounts shall be due without demand, presentment, or notice, all of which hereby are expressly waived.

(b) Conversion Price . If Borrower fails to pay the Default Amount within two (2) business days of written notice that such amount is due and payable, then Holder shall have the right at any time, so long as Borrower remains in default to require Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of Borrower equal to the Default Amount divided by the Conversion Price or Alternate Conversion Price, as chosen by Holder, by applying a discount rate of sixty percent (60%).

(c) Other Remedies . Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

Article IV. MISCELLANEOUS

4.1 Failure or Indulgence Not a Waiver . No failure or delay on the part of 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 .

(a) Method and Delivery . All notices, requests and demands hereunder shall be in writing and delivered by hand, by Electronic Transmission, by mail, or by recognized commercial over-night delivery service (such as Federal Express or UPS), and shall be deemed given (a) if by hand delivery, upon such delivery; (b) if by Electronic Transmission, twenty-four (24) hours after transmission; (c) if by mail, forty-eight (48) hours after deposit in the United States mail, first class, registered or certified mail, postage prepaid; or, (d) if by recognized commercial over-night delivery service, upon such delivery.

(b) Consent to Electronic Transmission . Each party hereby expressly consents to the use of Electronic Transmission for communications and notices under this Note. For purposes of this Note, “Electronic Transmission” means a communication (i) delivered by Fax or E-Mail when directed to the Fax number or E-Mail address, respectively, for that recipient on record with the sending party; and, (ii) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.

(c) Address Changes . Any Party may alter the Fax number, E-Mail address, physical address, or postage address to which communications or copies are to be sent by giving notice of such change of address to the other party in accordance with the provisions of this Section 4.2.

4.3 Amendments . This Note and any provision hereof may only be amended by an instrument in writing signed by Borrower and Holder.

4.4 Assignability . Holder may assign or transfer this Note to any transferee at its sole discretion. This Note shall be binding upon Borrower and its successors and assigns, and shall inure to be the benefit of Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 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. Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

4.5 Cost of Collection . Upon an Event of Default, Borrower shall pay Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

4.6 Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. The parties hereby warrant and represent that the selection of New York law as governing under this Note (i) has a reasonable nexus to each of the parties and to the transactions contemplated by the Note; and (ii) does not offend any public policy of New York, Virginia, or of any other state, federal, or other jurisdiction. Any action brought by either party against the other arising out of or related to this Note, or any other agreements between the parties, shall be commenced only in the state or federal courts of general jurisdiction located in the City of New York, State of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens .

BORROWER AND HOLDER EACH HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY .

The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note or any other related transaction document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this 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 other manner permitted by law.​

4.7 Certain Amounts . Whenever pursuant to this Note 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, Borrower and Holder agree that the actual damages to Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by Borrower represents stipulated damages and not a penalty and is intended to compensate 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. Borrower and Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Loan Agreement . By its acceptance of this Note, each party agrees to be bound by all terms and conditions of the Loan Agreement.

4.9 Notice of Corporate Events . Except as otherwise provided below, Holder shall have no rights as a shareholder of Borrower unless and only to the extent that it converts this Note into Common Stock. Borrower shall provide Holder with prior notification of any meeting of Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by 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 Borrower or any proposed liquidation, dissolution or winding up of Borrower, Borrower shall mail a notice to 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. Borrower shall make a public announcement of any event requiring notification to Holder hereunder substantially simultaneously with the notification to Holder in accordance with the terms of this Section 4.9 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

4.10 Usury . Notwithstanding any provision in this Note or the related transaction documents to the contrary, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such sums by Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the parties that the Company does not intend or expect to pay, nor does Holder intend or expect to charge or collect any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

4.11 Remedies . Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, 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 Borrower of the provisions of this Note, that Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. No provision of this Note shall alter or impair the obligation of Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

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

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

4.14 Terms of Future Financings . So long as this Note is outstanding, upon any issuance by Borrower or any of its subsidiaries of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Holder in this Note, then Borrower shall notify Holder of such additional or more favorable term and such term, at Holder’s option, shall become a part of the transaction documents with Holder. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts, stock sale price, private placement price per share, and warrant coverage.

4.15 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 one (1) Trading Day 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, 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.

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

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________principal amount of the Note (defined below) together with $________________ of accrued and unpaid interest thereto, totaling $_____________ into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Waterside Capital Corporation, a Virginia corporation (the “Borrower”), according to the conditions of the convertible note of Borrower dated as of 19 September 2017 (the “Note”), as of the date written below. No fee will be charged to Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions: