UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
MAGELLAN GOLD
CORPORATION
(Name of Issuer)
Common Stock, $0.001 par value per share
(Title of Class of Securities)
559078 100
(CUSIP Number)
John P. Ryan
6½ North 2nd Ave., Suite 201
Walla Walla, WA 99362
201-509-3797
With a copy to:
Joseph Walsh, Esq.
Troutman Pepper Hamilton Sanders LLP
875 Third Ave.
New York, New York 10022
(212) 704-6000
(Name, Address and Telephone Number of Person Authorized
to
Receive Notices and Communications)
January 3, 2023
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box. ☐
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise
subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| 1 |
NAMES OF REPORTING PERSONS
Gold Express Mines, Inc.
|
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)[_]
(b)[_] |
| 3 |
SEC USE ONLY |
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
[_] |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America |
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH |
7 |
SOLE VOTING POWER
7,959,402 (1) |
| 8 |
SHARED VOTING POWER
0 |
| 9 |
SOLE DISPOSITIVE POWER
7,959,402 (1) |
| 10 |
SHARED DISPOSITIVE POWER
0 |
| |
|
|
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,959,402 (1) (2) |
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
¨ |
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.96% (32) |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS
CO |
| (1) | John P. Ryan, Howard Crosby,
James Czirr and Terrence Dunne are the four directors of the Reporting Person. Any action by the Reporting Person with respect to the
shares, including voting and dispositive decisions, requires a vote of three out of the four directors of the board of directors. Under
the so-called “rule of three,” because voting and dispositive decisions are made by three out of the four directors
of the board of directors, none of the directors is deemed to be a beneficial owner of securities held by the Reporting Person. Accordingly,
none of the directors on the Reporting Person’s board of directors are deemed to have or share beneficial ownership of the shares
held by the Reporting Person. |
| | | |
| (2) | Consists of (i) 6,250,000 shares of Common Stock and (ii) 1,709,402
shares of Common Stock issuable upon conversion of a Promissory Note at an exercise price of $0.0585, which is 90% of the $0.065, the
lowest trading price during the previous twenty (20) trading days prior to the filing of this Schedule 13D. |
| | | |
| (3) | Based on 21,536,474 shares of Common Stock outstanding on January
13, 2024. |
ITEM 1.
SECURITY AND ISSUER
This statement on Schedule 13D
(the “Schedule 13D”) relates to the common stock, par value $0.001 per share (the “Common Stock”), of Magellan
Gold Corporation, a Nevada corporation (the “Issuer”). The address of the Issuer’s
principal executive offices is 602 Cedar Street, Suite 205, Wallace, Idaho 83873.
ITEM 2.
IDENTITY AND BACKGROUND
(a)-(c)This Schedule 13D is
being filed by Gold Express Mines, Inc. (the “Reporting Person”).
The principal business of the Reporting
Person is the discovery, development and production of precious and base metal
assets and its business address is 6½ North 2nd Ave., Suite 201, Walla Walla, Washington 99362.
(d)The
Reporting Person has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e)The
Reporting Persons has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction where, as a result of such proceeding, it became subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such
laws.
(f)The
Reporting Person is governed by the laws of Nevada.
ITEM 3.
SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On January 3, 2023, the Issuer
and the Reporting Person entered into a purchase agreement pursuant to which, among other things,
the Company agreed to purchase certain mineral assets owned and controlled by the Reporting Person for a purchase price equal to 5,000,000
shares of Common Stock. The transaction closed on January 5, 2023.
On March 23, 2023, the Issuer
completed a sale of 1,000,000 shares of Common Stock to the Reporting Person, for an aggregate purchase price of $140,000.
On December 29, 2023, the Issuer,
the Reporting Person and AJB Capital Investments LLC, a Delaware limited liability company (“AJB”),
entered into an assignment and assumption agreement (the “Assignment and Assumption Agreement”), pursuant to which, among
other things, AJB assigned to the Reporting Person all of AJB’s right, title, obligation, liability and interest in, to and under
that certain Promissory Note, dated February 2021 in the original principal amount of $200,000 (the “Promissory Note”) issued
by the Issuer to AJB. The aggregate principal amount of the Promissory Note outstanding is $100,000. The Promissory Note bears
interest at a rate of 10% per annum. The unpaid principal amount of the Promissory Note is convertible into shares of the Company’s
common stock during an Event of Default at the option of the holder of the Promissory Note, at a conversion price equal to the lesser
of 90% of the lowest trading price during the previous twenty (20) trading day period ending on the issuance date, or during the previous
twenty (20) trading day period ending on date of conversion of this note. Based on an estimated conversion price of $0.0585, which is
90% of $0.065, the lowest trading price during the previous twenty (20) trading days prior to the filing of this Schedule 13D, the Promissory
Note is convertible into 1,709,402 shares of Common Stock. The Promissory Note is past due and payable and an Event of Default has occurred
and is continuing.
On December 29, 2023, the
Issuer and the Reporting Person entered into an agreement (the “Agreement”), pursuant to which, among other things (i) the
Company consented to the assignment by AJB to the Reporting Person of al of AJB’s right, title, obligation, liability and interest
in, to and under the Promissory Note; (ii) the Issuer represented that it has taken all necessary corporate action to accept the resignations
of Mark Rodenbeck and Deepak Maholtra as members of the board of directors (the “Board”) of the Issuer and appoint John P.
Ryan, President, Chief Executive Officer and a director of the Reporting Person, and Howard Crosby, a director of the Reporting Person,
to the Board; (iii) the Issuer agreed that at any time prior to December 29, 2026, if the Reporting Person provides notice to the Issuer
to designate a person to serve as a member of the Board, the Issuer will use its reasonable best efforts to elect such person to the Board
as promptly as practicable following receipt of such notice; and (iv) the Issuer issued to the Reporting Person 250,000 shares of Common
Stock.
On January 7, 2024, the Issuer
and the Reporting Person entered into a purchase agreement, pursuant to which, among other things (i) the Company agreed to purchase certain
mineral assets owned and controlled by GEM for a purchase price equal to 5,500,000 shares of Common Stock; and (ii) GEM agreed to assign
to the Company a certain lease for mineral properties (the “Cuprum Lease”) for a purchase price of 500,000 shares of Common
Stock (collectively, the “Transactions”).
The Reporting Person expects
the closing of the Transactions to occur no later than January 31, 2024, subject to certain closing conditions, including, but not limited
to, (i) the Reporting Person delivering a quitclaim deed transferring the unpatented mining claims; and (ii) the Reporting Person receiving
all required consents to transfer Cuprum Lease.
The information set forth in
or incorporated by reference into Items 4, 5 and 6 of this Schedule 13D is hereby incorporated by reference in its entirety into this
Item 3.
ITEM 4.
PURPOSE OF TRANSACTION
Effective December 27, 2023,
(i) John P. Ryan, President, Chief Executive Officer and a director of the Reporting Person, was appointed Chief Financial Officer and
a Director of the Issuer, and (ii) Howard Crosby, a director of the Reporting Person, was appointed a Director of the Issuer. Because
of the foregoing, the Reporting Person may have influence over the corporate activities of the Issuer, including activities which may
relate to items described in subparagraphs (a) through (j) of Item 4 of Schedule 13D and may propose or take action in relation to the
business of the Issuer that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4
of Schedule 13D, including, changes in the present
board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill
any existing vacancies on the board; the business and operations of the Issuer; share repurchases by the Issuer; distributions by the
Issuer, including the amounts, makeup and timing thereof; the terms of any new issuances of an existing or new class of securities by
the Issuer; sales of assets; changes in the Issuer's charter or by-laws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person; and any such other matters. Any such proposals or actions by the
Reporting Person may be based on the Reporting Person’s views of its best interest, its obligations to the Issuer (to the
extent required by applicable law or agreement), and other factors in light of (i) the Issuer's financial position, future actions taken
by the Board, price levels of the Common Stock or other equity or debt securities of the Issuer and (ii) general economic, political,
or industry conditions, including conditions in the securities market, or changes in laws, rules, regulations or customs, and any other
conditions or changes thereto, in the Reporting Person’s sole determination.
The Reporting Persons may, from
time to time, purchase additional securities of the Issuer either in the open market or in privately negotiated transactions, depending
upon the Reporting Person’s evaluation of the Issuer’s business, prospects and financial condition, the market for such securities,
other opportunities available to the Reporting Person, general economic conditions, stock market conditions and other factors. Depending
upon the factors noted above, the Reporting Person may also decide to hold or dispose of all or part of their investments in securities
of the Issuer and/or enter into derivative transactions with institutional counterparties with respect to the Issuer’s securities.
The information set forth in
or incorporated by reference into Items 3, 5 and 6 of this Schedule 13D is hereby incorporated by reference in its entirety into this
Item 4.
ITEM 5.
INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) As of the date of
this Schedule 13D, the aggregate number of shares of Common Stock beneficially owned by the Reporting Persons is 7,959,402, which represents
36.96% of the issued and outstanding shares of Common Stock. Of these shares of Common Stock, (i) 6,250,000 shares of Common Stock are
held by the Reporting Person and (ii) 1,709,402 shares of Common Stock are issuable upon conversion of the Promissory Note, at an exercise
price of $0.0585, which is 90% of the $0.065, the lowest trading price during the previous twenty (20) trading days prior to the filing
of this Schedule 13D.
John
P. Ryan, Howard Crosby, James Czirr and Terrence Dunne are the four directors of the Reporting Person. Any action by the Reporting Person
with respect to the shares of Common Stock, including voting and dispositive decisions, requires a vote of three out of the four directors
of the board of directors. Under the so-called “rule of three,” because voting and dispositive decisions are made
by three out of the four directors of the board of directors, none of the directors is deemed to be a beneficial owner of securities held
by the Reporting Person.
(c)Except
as set forth in Item 3 and 4 above, which descriptions are incorporated herein by reference, there
have been no transactions with respect to the shares of Common Stock during the sixty (60) days prior to the date hereof by any of the
Reporting Person.
(d)No
person is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the
shares of the Common Stock beneficially owned by any of the Reporting Person, other than the Reporting Person itself.
(e)Not
applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 – Asset
Purchase Agreement, dated December 15, 2022, between Magellan Gold Corporation and Gold Express Mines, Inc.
Exhibit 2 – Subscription Agreement, dated March 23, 2023, between Magellan Gold Corporation and Gold Express Mines, Inc.
Exhibit 3 – Agreement, dated as of December 29, 2023, between Magellan Gold Corporation and Gold Express Mines, Inc. (incorporated
by reference to Exhibit 10.1 to Magellan Gold Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission
on January 8, 2024)
Exhibit 4 – Assignment and Assumption Agreement, dated as of January 2, 2024, among AJB Capital Investment LLC, Gold Express Mines, Inc. and Magellan Gold Corporation
Exhibit 5 – Purchase Agreement, dated January 7, 2024, between Magellan Gold Corporation and Gold Express Mines, Inc. (incorporated by reference to Exhibit 10.1 to Magellan
Gold Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 11, 2024).
Exhibit 6 – Promissory Note of Magellan Gold Corporation dated February 2021.
Exhibit 7 – Modification of Promissory Note, dated February 9, 2022.
Exhibit 8 – Modification of Promissory Note, dated May 11, 2022.
Exhibit 9 – Modification of Promissory Note, dated August 9, 2022.
Exhibit 10 –
Modification of Promissory Note, dated January 11, 2023.
Exhibit 11 – Modification of Promissory Note, dated August 9, 2023.
SIGNATURE
After reasonable inquiry and
to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: January 16, 2024
GOLD EXPRESS MINES, INC.
By: _/s/ John P. Ryan____________________________
Name: John P. Ryan
Title: Chief Executive Officer
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (See 18 U.S.C. 1001).
Exhibit 1
Asset Purchase Agreement
THIS AGREEMENT is made on January 3, 2023 between Gold Express
Mines, Inc., with its principal place of business at 6 1/2 N. 2nd Ave. Suite 201, Walla Walla, Washington,
99362 hereinafter the "Seller", and Magellan Gold Corporation ("Buyer") with its principal place of business at 602
Cedar St., Ste. 205 Wallace, Idaho 83873
IN CONSIDERATION of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Purchase of Assets.
A) Mineral Projects: Seller shall sell to Buyer
and Buyer shall purchase from Seller, on the terms and conditions set forth in this Agreement, the mineral properties listed in Appendix
A attached herein.
All of the assets listed in the Appendix A shall be
referred to herein as the "Purchased Assets".
2. Purchase Price and Reimbursements
The purchase price for the assets shall be 5,000,000 (five million)
shares of the common stock of the Buyer.
3. Shares Valuation.
The shares issued in this transaction shall be valued at $0.20 per
share based upon recent market quotes on the common stock of the Buyer.
4. Closing and Escrow.
a.
The Closing date shall be January 5, 2023, provided there are no unforeseen delays. Closing shall not be later than 10 calendar
days after the designated closing date unless a further extension is agreed upon in writing between the Buyer and Seller.
b.
Within thirty days of the closing date all of the purchased claims shall be transferred to the Buyer by quitclaim deed and an assignment
of the "Big-It" mineral lease shall have been completed.
d.Buyer shall issue
to the Seller 5,000,000 shares of the common stock of Buyer valued at $1,000,000 in the form of a physical stock certificate. The Buyer
may hold the physical certificate until all of the claims and the mineral lease have been successfully transferred by the Seller to the
Buyer.
5. Representations of Seller.
Seller covenants and represents:
a.That Seller
is the sole Owner of the Purchased Assets with full right to sell or dispose of it as Seller may choose. Seller has the right to assign
the Big-It lease to the Buyer.
b.
That Seller has no undischarged obligations affecting the Purchased Assets being sold under this Agreement.
c.
That there are presently and will be at the time of closing, no liens or security interests against the Purchased Assets being
transferred herein, and all claim fees shall have been paid to date and all lease payments shall be current and paid to date.
d.
Consents. A majority of the Board of Directors of the Seller have approved this agreement.
h.
Licenses. Permits and Consents. There are no licenses or permits currently required by the Seller for the satisfaction of the sale
of Assets or execution of this Agreement.
i.
Litigation. There are no actions, suits, proceedings, or investigations pending or, to the knowledge of the Seller, threatened
against or involving Seller or brought by Seller or affecting any of the purchased property at law or in equity or admiralty or before
or by any federal, state, municipal, or other governmental department, commission, board, agency, or instrumentality, domestic or foreign.
j.
Compliance with Laws. To the best of its knowledge, Seller has complied with and is operating its business in compliance with all
laws, regulations, and orders applicable to the business conducted by it, and the present uses by the Seller of the purchased property
do not violate any such laws, regulations, and orders. Seller has no knowledge of any material present or future expenditures that will
be required with respect to any of Seller's facilities to achieve compliance with any present statute, law, or regulation, including those
relating to the environment or occupational health and safety.
k.
Disclosure. No representation or warranty by the Seller contained in this Agreement, and no statement contained in any certificate
or other instrument furnished or to be furnished to Buyer pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact that is necessary in
order to make the statements contained therein not misleading.
m.Environmental. To
the best of the knowledge of the Seller there presently is not, nor ever has been, any dumping or storage of toxic or hazardous wastes
on the premises of the Purchased Assets. Seller is not aware nor has Seller been notified by any private parties or government agencies
of any environmental or reclamation requirements or responsibilities with respect to the properties or any liabilities with respect to
Superfund laws.
6. Representations of Buyer.
The Buyer covenants and represents to the Seller as follows:
| a. | The shares to be issued to the Seller to be delivered at the closing date are validly issued and properly
approved by the Board of Directors of the Buyer and issued pursuant to a validly existing exemption from registration. |
| b. | The transaction contemplated by this agreement has been approved by a majority of the Members of the
Board of Directors of the Buyer. |
7. Appendices.
The Appendices
and other documents attached or referred to in this Agreement are an integral part of this Agreement.
8. Entire Agreement.
This Agreement constitutes the sole and only agreement between
Buyer and Seller respecting the Business or the sale and purchase of it. This Agreement correctly sets forth the obligations of Buyer
and Seller to each other as of its date. Any additional agreements or representations respecting the Business or its sale to Buyer not
expressly set forth in this Agreement are null and void, unless otherwise required by law. Both parties agree to waive rights as to any
conflicting laws which may nullify this Agreement to the full extent allowable by law.
9. Conditions Precedent of Buyer.
The obligations
of the Buyer hereunder are subject to the conditions that on or prior to the closing date:
a.
Representations and Warranties True at Closing. The representations and warranties of the Seller contained in the Agreement or
any certificate or document delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall
be true on and as of the closing date as though such representations and warranties were made at and as of such date, except if such representations
and warranties were made as of a specified date and such representations and warranties shall be true as of such date.
b.
Seller's Compliance with Agreement. The Seller shall have performed and complied with all agreements and conditions required
by this Agreement to be performed or complied with by it prior to or at the closing of the Agreement.
c.
Adverse Change. There shall have been between the purchase date and the closing date no material adverse change in the purchased
assets.
10. Arbitration.
In the event the parties are not able to resolve any dispute
between them arising out of or concerning this Agreement, or any provisions hereof, whether in contract, tort, or otherwise at law or
in equity for damages or any other relief, then such dispute shall be resolved only by final and binding arbitration pursuant to the Federal
Arbitration Act and in accordance with the American Arbitration Association rules then in effect, conducted by a single neutral arbitrator
and administered by the American Arbitration Association in a location mutually agreed upon by the parties. The arbitrator's award shall
be final, and judgment may be entered upon it in any court having jurisdiction. In the event that any legal or equitable action, proceeding
or arbitration arises out of or concerns this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorney's
fees. The parties agree to arbitrate all disputes and claims in regards to this Agreement or any disputes arising as a result of this
Agreement, whether directly or indirectly, including Tort claims that are a result of this Agreement. The parties agree that the Federal
Arbitration Act governs the interpretation and enforcement of this provision. The entire dispute, including the scope and enforceability
of this arbitration provision shall be determined by the Arbitrator. This arbitration provision shall survive the termination of this
Agreement.
11. Costs and Expenses.
Except as expressly provided to the contrary in this Agreement,
each party shall pay all of its own costs and expenses incurred with respect to the negotiation, execution and delivery of this Agreement
and the exhibits hereto.
12. Miscellaneous Provisions.
a.
Applicable Law and
Forum. This Agreement shall be construed under and in accordance with the laws of the State of Idaho. Both parties agree that the jurisdiction
of any disputes between the parties shall be resolved in the courts of the State of Idaho, and that any arbitration between the parties
shall be undertaken as indicated in paragraph 10 above.
b.
Parties Bound. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective
heirs, executors, administrators, legal representatives, successors and assigns as permitted by this Agreement.
c.
Legal Construction. This Agreement shall be construed as to effectuate the intended purpose of the Agreement. In the event any
one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect,
this Agreement shall be modified to otherwise effectuate the sale under the original intentions of the Parties. This may include striking
the invalid, illegal, or unenforceable provision as if they had never been contained in this Agreement, or modifying the invalid, illegal
or unenforceable provisions to make them compliant without modifying the original purpose of the Parties.
d.
Amendments. This Agreement may be amended by the Parties only by a written agreement.
e.
Attorneys' Fees. Should any arbitration or litigation be commenced between the parties to this Agreement concerning the rights
and duties of either party in relation to the Business or this Agreement, the prevailing party in the arbitration or litigation shall
be entitled to (in addition to any other relief that may be granted) a reasonable sum and attorneys' fees in the arbitration or litigation,
which sum shall be determined by the court or other person presiding in the arbitration or litigation or in a separate action brought
for that purpose.
f.
Board Seat. The Seller shall be granted the right to nominate one board member to the Board of Directors of the Buyer for a period
of four years. The four-year period shall run from the date of the nomination of Directors for the next annual meeting of the Buyer in
2023 continuing to the date of the nomination of Directors for the annual meeting of the Buyer in 2026.
f.Signatories.
This Agreement shall be executed on behalf of Magellan Gold Corporation by Mike Lavigne and on behalf of Gold Express Mines, Inc. by John
Ryan.
The Agreement shall be effective as of the date first written
above.
Seller:
Gold Express Mines, Inc.
Buyer:
Magellan Gold Corporation
INERAL PROJECTS
("Purchased Assets")
| 1) | GOLDEN, IDAHO PROJECT — located in Idaho County, Idaho and consisting
of seventy-two unpatented mining claims. |
| 2) | SEAFOAM DISTRICT - located in Custer County, Idaho and consisting of five unpatented mining claims. |
| 3) | BLACKTAIL DISTRICT — located in Lemhi County, Idaho and consisting of eight unpatented
mining claims. |
| 4) | BIG-IT PROJECT — located in Shoshone County, Idaho consisting of twenty-five unpatented mining claims and a mineral lease
over three unpatented mining claims and 94.86 acres of real property. |
| 5) | TERROR GULCH (CAPPARELLI GROUP) located in Shoshone County, Idaho consisting
of twelve unpatented mining claims. |
DETAILED LIST OF CLAIMS AND/OR
MINERAL LEASES OF EACH
PROJECT
GOLDEN PROJECT - 72 CLAIMS TOTAL
ICM 1-13, 20-37 2
| CLAIM NAME |
BLM SERIAL # |
| ICM 1 |
ID101958937 |
| ICM 2 |
ID101958938 |
| ICM 3 |
ID101958939 |
| ICM 4 |
ID101958940 |
| ICM 5 |
ID101958941 |
| ICM 6 |
ID101958942 |
| ICM 7 |
ID101958943 |
| ICM 8 |
ID101958944 |
| ICM 9 |
ID101958945 |
| ICM 10 |
ID101958946 |
| ICM 11 |
ID101958947 |
| ICM 12 |
ID 105278070 |
| ICM 13 |
ID105278071 |
| ICM 20 |
ID 105278072 |
| ICM 21 |
ID105278073 |
| ICM 22 |
ID 105278074 |
| ICM 23 |
ID 105278075 |
| ICM 24 |
ID 105278076 |
| ICM 25 |
ID 105278077 |
| ICM 26 |
ID105278078 |
| ICM 27 |
ID 105278079 |
| ICM 28 |
ID105278080 |
| ICM 29 |
ID105278081 |
| ICM 30 |
ID 105278082 |
| ICM 31 |
ID105278083 |
| ICM 32 |
ID 105278084 |
| ICM 33 |
ID105278085 |
| ICM 34 |
ID105278086 |
| ICM 35 |
ID 105278087 |
| ICM 36 |
ID105278088 |
| ICM 37 |
ID105278089 |
(GOLDEN PROJECT, Cont'd)
IL 1-13, 15, 17, 19, 21, 23, 27-31 (23)
| CLAIM NAME |
BLM SERIAL # |
| IL 1 |
ID101830376 |
| IL 2 |
ID101830377 |
| IL 3 |
ID101830378 |
| IL 4 |
ID101830379 |
| IL 5 |
ID101830380 |
| IL 6 |
ID101830381 |
| IL 7 |
ID101830382 |
| IL 8 |
ID101830383 |
| IL 9 |
ID101830384 |
| IL 10 |
ID101830385 |
| IL 11 |
ID101830386 |
| IL 12 |
ID101830387 |
| IL 13 |
ID101830388 |
| IL 15 |
ID101830389 |
| IL 17 |
ID101830390 |
| IL 19 |
ID101830391 |
| IL 21 |
ID101578180 |
| IL 23 |
ID101578181 |
| IL 27 |
ID101578182 |
| IL 28 |
ID101578183 |
| IL 29 |
ID101578184 |
| IL 30 |
ID101578185 |
| IL 31 |
ID101578180 |
HM 1-6 (6)
| CLAIM NAME |
BLM SERIAL # |
| HM1 |
ID101578181 |
| HM2 |
ID101578182 |
| HM3 |
ID101578183 |
| HM4 |
ID101578184 |
| HM5 |
ID101578185 |
| HM6 |
ID101578180 |
(GOLDEN PROJECT, Cont'd)
PM 1-12 (12
| CLAIM NAME |
BLM SERIAL # |
| PM1 |
ID101922038 |
| PM2 |
ID101922039 |
| PM3 |
ID 101922040 |
| PM4 |
ID101922041 |
| PM5 |
ID 101922042 |
| PM6 |
ID 101922043 |
| PM7 |
ID 101922044 |
| PM8 |
ID 101922045 |
| PM9 |
ID 101922046 |
| PM10 |
ID 101922047 |
| PM11 |
ID 101922048 |
| PM12 |
ID 101922049 |
GA 1-2 (2)
| CLAIM NAME |
BLM SERIAL # |
| GA 1 |
ID101958395 |
| GA 2 |
ID101958396 |
SEAFOAM DISTRICT - 5
CLAIMS TOTAL
CLAIMS (5)
| CLAIM NAME |
BLM SERIAL # |
| GOLDEN PROMISE |
ID105221836 |
| LONGSHOT #1 |
ID105221837 |
| LONGSHOT #3 |
ID105221838 |
| BETTY RUTH #1 |
ID 105221839 |
| INDEPENDENCE |
ID 105221840 |
BLACKTAIL DISTRICT - 8 CLAIMS TOTAL
FOURTH OF JULY 1-2 (2
| CLAIM NAME |
BLM SERIAL # |
| FOURTH OF JULY 1 |
ID 105221841 |
| FOURTH OF JULY 2 |
ID 105221842 |
SUNSET 1-3 (3)
| CLAIM NAME |
BLM SERIAL # |
| SUNSET 1 |
ID 105221843 |
| SUNSET 2 |
ID105221844 |
| SUNSET 3 |
ID 105221845 |
BLACKTAIL 1-3 (3
| CLAIM NAME |
BLM SERIAL # |
| BLACKTAIL 1 |
ID 105221846 |
| BLACKTAIL 2 |
ID 105221847 |
| SUNSET 3 |
ID 105221848 |
BIG IT PROJECT (LEASED CLAIMS)-
*28 CLAIMS
TOTAL BIG EXT LEASED (25
| CLAIM NAME |
BLM SERIAL # |
| BIG EXT 11 |
ID105771063 |
| BIG EXT 12 |
ID105771064 |
| BIG EXT 15 |
ID105771065 |
| BIG EXT 16 |
ID 105771066 |
| BIG EXT 19 |
ID105771067 |
| BIG EXT 20 |
ID105771068 |
| BIG EXT 23 |
ID 105771069 |
| BIG EXT 24 |
ID105771070 |
| BIG EXT 27 |
ID105771071 |
| BIG EXT 28 |
ID 105771072 |
| BIG EXT 47 |
ID 105771073 |
| BIG EXT 48 |
ID105771074 |
| BIG EXT 49 |
ID105771075 |
| BIG EXT 50 |
ID105771076 |
| BIG EXT 51 |
ID 105771077 |
| BIG EXT 52 |
ID105771078 |
| BIG EXT 53 |
ID105771079 |
| BIG EXT 54 |
ID 105771080 |
| BIG EXT 55 |
ID 105278081 |
| BIG EXT 56 |
ID 105771082 |
| BIG EXT 57 |
ID105771083 |
| BIG EXT 59 |
ID105771084 |
| BIG EXT 60 |
ID105771085 |
| BIG EXT 61 |
ID 105771086 |
| BIG EXT 65 |
ID105771087 |
LEASED CLAIMS (3)
| CLAIM NAME |
BLM SERIAL # |
| BIG IT # 1 |
ID 101487684 |
| BIGIT# 2 |
ID101487685 |
| DELLA 1 |
ID 101487686 |
BIG IT PROJECT (LEASED CLAIMS)- *28 CLAIMS TOTAL
PARCELS (2) *See exclusions below
*Shoshone County Parcel #48N02E-28-6100 (66.412 acres) *see
exclusion below
Shoshone County Parcel #48N02E-33-2600 (28.452 acres) further
legally described as:
Government Lots 6 and 7, Section 28,
and Government Lots 5, 6, 7, and 8, Section 33, all in Township 48 North, Range 2 E., B.M. Shoshone County, State of Idaho; Except a
tract of ground situated in the NW1/4 NW1/4 of Section 33, T48N, R2E, B.M. Shoshone County,
State of Idaho, more particularly described as follows: Beginning at the NE corner of the tract whence the claim corner marked 1 Big
It No. 1 and 4 - Della Bears N. 14° 57' W., 925.14' distant and the NW corner of Section 33, Township 48 North, R2E, B.M., bears
N. 49° 22' W., 1354.39' distant, running thence N. 82° 14' W., 219.95' distant to the SW corner; thence S. 82° 14' E., 220.6'
distant to the SE corner; thence N. 20° O' W., 170.12' distant to a point; thence N. 24° 54' W., 299.08' distant to the NE corner
and the place of beginning (EXCLUDING surface rights for portion shown in RED). The Lessee will NOT have the right to perform the activities
described in Article 4 of this Lease document on the surface of the excluded area. Lessee will be granted mineral rights to excluded
area, and in the event extractable minerals are identified under this area, Lessee will have the right to extract them utilizing underground
methods from points of access outside of the excluded area.
TERROR GULCH (CAPPARELLI GROUP)
- 12 CLAIMS TOTAL ROYAL CAP (12
| CLAIM NAME |
BLM SERIAL # |
| ROYAL CAP 1 |
ID105787871 |
| ROYAL CAP 31 |
ID 105793605 |
| ROYAL CAP 32 |
ID105793606 |
| ROYAL CAP 33 |
ID105793607 |
| ROYAL CAP 34 |
ID105793608 |
| ROYAL CAP 35 |
ID 105793609 |
| ROYAL CAP 36 |
ID105793610 |
| ROYAL CAP 37 |
ID105793611 |
| ROYAL CAP 38 |
ID105793612 |
| ROYAL CAP 39 |
ID105793613 |
| ROYAL CAP 40 |
ID105793614 |
| ROYAL CAP 41 |
ID105793615 |
Exhibit 2
Exhibit 4
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION
AGREEMENT (this “Agreement”), dated as of January 2, 2024, by and between, (i) AJB CAPITAL INVESTMENTS LLC,
a limited liability company organized and existing under the laws of the State of Delaware (the “Assignor”), (ii) GOLD
EXPRESS MINES, INC., a corporation incorporated and existing under the laws of the State of Nevada (the “Assignee”)
and (iii) MAGELLAN GOLD CORPORATION, a corporation incorporated and existing under the laws of the State of Nevada (the “Company”).
W I T N E S E T H
WHEREAS, reference
is made to (i) that certain Securities Purchase Agreement, dated February 2021 (the “Purchase Agreement”), by and between
the Assignor and the Company, (ii) that certain Promissory Note dated February 2021 in the original principal amount of $200,000 issued
by Assignor in favor of Assignor pursuant to the Purchase Agreement (as amended by extensions thereto 1-5, the “Note”),
attached hereto as Exhibit A, and (iii) the related Transaction Documents;
WHEREAS, as of
the date hereof the amounts outstanding in respect of the Note to the Assignor consists of outstanding principal amount of $100,000.00
and accrued and unpaid interest of $23,086.66 and the Note accrues an accrued interest at a rate of $40.00 per day (collectively, the
“Debt”);
WHEREAS, the Assignor wishes
to irrevocably sell, grant, assign, transfer and set over unto Assignee the entire right, title, obligation, liability and interest of
the Assignor in, to and under the Note and the Debt, except as otherwise provided herein, and Assignee wishes to purchase and accept the
same, upon the terms and conditions contained in this Agreement;
NOW THEREFORE, in consideration
of the premises and the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and agreed, Assignor and Assignee hereby covenant and agree as follows:
1.
Recitals. The recitations set forth in the preamble of this Agreement are true and correct and are incorporated herein by
this reference.
2.
Defined Terms. Capitalized terms used herein but not otherwise defined shall the meanings ascribed to them in the Purchase
Agreement or Note, as applicable.
3.
Assignment and Assumption. The Assignor does hereby sell, grant, assign, transfer and set over unto the Assignee, the Assignor’s
entire right, title, obligation, liability and interest in, to and under the Note and the Debt, except for the Reset Right (as defined
below) to the Assignee, and the Assignee hereby (i) accepts and receives Note and the Debt and (ii)
agrees to issue to the Assignor a Promissory Note, in the initial principal amount of $$123,086.66,
in the form Exhibit B attached hereto (the “Consideration Note”). Nothing herein shall be deemed to be a transfer or
assign to the Assignee the Assignor’s right to receive additional shares of Common Stock from the Company pursuant to Section 4(p)(i)
of the Purchase Agreement (the “Reset Right”), which the Assignor explicitly retains.
4.
Selling Restriction. The Assignor agrees that during the period commencing on the date hereof and ending on the one-year
anniversary of the date hereof, the Assignor shall not:
| a. | offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of common stock
of the Company or other capital stock of the Company or any securities convertible into or exercisable or exchangeable for common stock
of the Company or other capital stock of the Company, in each case, for a price per share of less than $0.30; or |
| b. | enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in
whole or in part, directly or indirectly, any of the economic consequences of ownership of common stock of the Company or other capital
stock of the Company or any securities convertible into or exercisable or exchangeable for common stock of the Company or other capital
stock of the Company. |
5.
Representations and Warranties. The Assignor hereby represents and warrants to Assignee as follows:
| a. | The Assignor has not executed any prior or superior assignment, pledge or conveyance of any of Note or
the Debt in favor of any party other than the Assignee. |
| b. | The Assignor is the owner and holder of the indebtedness evidenced by the Note. |
| c. | The Assignor may legally and validly assign the Note and the Debt without penalty or default or otherwise. |
| d. | The execution and delivery of this Assignment and the performance of Assignor’s obligations hereunder,
have been duly authorized by all necessary and appropriate action of Assignor. |
| e. | The outstanding principal balance under the Note, on the date hereof, is $100,000 and the accrued and
unpaid interest on the Note, on the date hereof, is $23,086.66. |
6.
Consent and Acknowledgement of Rights. The Company acknowledges and agrees
that effective as of the date hereof, (i) the Company hereby consents to the assignment of all of
Assignor’s right, title, obligation, liability and interest in, to and under the Note and the Debt, except for the Reset
Right to the Assignee, (ii) all obligations of the Company under the Note and Debt other than the
Reset Right are validly assigned to Assignee, constitute valid and existing debt obligations of the Company, (iii) the Company has no
defenses to its obligations to pay its obligations under the Note and Debt, and (iv) the
Company has no right to any offset or other deduction from its obligations under the Note and Debt.
7.
Governing Law. Except in the case of the Mandatory Forum Selection clause set forth herein, this AGREEMENT shall be construed
and interpreted in accordance with the laws of the State of WYOMING without regard to the principles of conflicts of laws.
8.
MANDATORY FORUM SELECTION. ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT OR RELATED TO ANY
MATTER WHICH IS THE SUBJECT OF OR INCIDENTAL TO THIS AGREEMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL
BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK. THIS PROVISION IS
INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW YORK LAW.
9.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
10.
Headings. The headings of the paragraphs of this Agreement have been included only for convenience, and shall not be deemed
in any manner to modify or limit any of the provisions of this Agreement or used in any manner in the interpretation of this Agreement.
11.
Interpretation. Whenever the context so requires in this Agreement, all words used in the singular shall be construed to
have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word “Person”
shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other
entity.
12.
Partial Invalidity. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
If any provision of this Agreement or the application of such provision to any Person or circumstances shall, to any extent, be invalid
or unenforceable, then the remainder of this Agreement, or the application of such provision to Persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.
13.
Execution. In the event that any signature is delivered by facsimile transmission or by e- mail delivery of a “.pdf”
format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding
obligation of the party executing same with the same force and effect as if such facsimile or “.pdf” signature page was an
original thereof.
[Signatures
on the following page]
IN WITNESS WHEREOF, the parties hereto have executed
this Assignment and Assumption Agreement as of the date first above written.
ASSIGNOR:
AJB CAPITAL INVESTMENTS LLC
Re:_/s/ Ari Blaine____________________________
Name: Ari Blaine
Title:President
[Signature Page to Assignment and Assumption
Agreement]
ASSIGNEE:
GOLD EXPRESS MINES, INC.
Re: /s/ John P. Ryan
Name: John P. Ryan
Title:President
MAGELLAN GOLD CORPORATION
Re: /s/ Michael Lavigne
Name:Michael Lavigne
Title: CEO
[Signature Page to Assignment and Assumption
Agreement]
EXHIBIT A
NOTE
EXHIBIT B
FORM OF CONSIDERATION NOTE
Exhibit 6
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.
| Principal Amount: US$200,000.00 |
Issue Date: February
___, 2021 |
| Purchase Price: US$184,000.00 |
|
PROMISSORY NOTE
FOR VALUE RECEIVED, MAGELLAN
GOLD CORPORATION, a Nevada corporation (hereinafter called the “Borrower”) (Trading Symbol: MAGE), hereby promises to pay
to the order of AJB Capital Investments LLC, a Delaware limited liability company, or registered assigns (the “Holder”) the
sum of US$200,000.00 (the “Principal”) together with guaranteed interest (the “Interest”) on the Principal balance
hereof in the amount of ten percent (10%) (the “Interest Rate”) per calendar year from the date hereof (the “Issue Date”).
All Principal and Interest owing hereunder, along with any and all other amounts, shall be due and owing on July , 2021
(the “Maturity Date”). A lump-sum interest payment for six months shall be immediately due on the Issue Date and shall be
added to the principal balance and payable on the first of each month following the Issue Date or upon acceleration or by prepayment or
otherwise, notwithstanding the number of days which the Principal is outstanding. Notwithstanding the forgoing, the final payment of Principal
and Interest shall be due on the Maturity Date. This Note may be prepaid in whole or in part as set forth herein. Any amount of Principal
or Interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) twelve percent (12%) per annum
and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”).
Default Interest shall commence accruing upon an Event of Default and shall be computed on the basis of a 360-day year and the actual
number of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be
made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this
Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date
on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain
closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”). The
Maturity Date may be extended by mutual consent of the Holder and the Borrower to up to six (6) months following the date of the Original
Maturity Date hereunder. In the event that the Maturity Date is extended, the interest rate shall equal fifteen percent (15%) per annum
for any period following the Original Maturity Date, payable monthly.
This Note carries an original
issue discount of $16,000 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale
of the Note, which is included in the principal balance of this Note. Thus, the purchase price of this Note shall be $184,000 computed
as follows: the Principal Amount minus the OID.
This Note is free from all
taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.
The following terms shall
also apply to this Note:
Article
I. CONVERSION RIGHTS UPON EVENT OF DEFAULT
1.1.
Conversion Right. The Holder shall have the right from time to time following an Event of Default, and ending on the date
of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect
of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal, interest,
penalties, and all other amounts under this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists
on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided,
however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note
upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes
or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous
to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this
Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The number of shares of Common
Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4
below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower or Borrower’s transfer agent 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 the Holder’s option, accrued
and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, provided however,
that the Borrower shall have the right to pay any or all interest in cash plus (3) at the Holder’s option, Default Interest,
if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.
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 90% (representing a 10% discount) multiplied by the lowest trading price (i) during the previous
twenty (20) Trading Day period ending on the Issuance Date, or (ii) during the previous twenty (20) Trading Day period ending on date
of conversion of this Note. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share,
the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible
under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may be adjusted
downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower or Borrower’s transfer
agent, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the Borrower’s
Common Stock have not been delivered within three (3) business days to the Borrower or Borrower’s transfer agent, the Notice of
Conversion may be rescinded. At any time after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable
by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s
Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for all future conversions under all Notes. If
in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing
deposit, an additional 15% discount shall apply for all future conversions under all Note. If in the case of both of the above, an additional
cumulative 25% discount shall apply. Additionally, if the Borrower ceases to be a reporting company pursuant to the 1934 Act or if the
Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the Issue Date, an additional 15% discount
will be attributed to the Conversion Price. If the trading price cannot be calculated for such security on such date in the manner provided
above, the trading price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest
of the Notes being converted for which the calculation of the trading price is required in order to determine the Conversion Price of
such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or
on the principal securities exchange or other securities market on which the Common Stock is then being traded. The Borrower shall be
responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. Holder shall be entitled to deduct
$750.00 from the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion.
While this Note is outstanding,
each time any 3rd party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a
settlement or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount to market greater than
the Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then the Holder, in Holder’s
sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this Note) until this Note is no
longer outstanding. While this Note is outstanding, each time any 3rd party has a look back period greater than the look back
period in effect under the Note at that time, including but not limited to under Section 3(a)(9) and Section 3(a)(10), then the Holder,
in Holder’s sole discretion, may utilize such greater number of look back days until this Note is no longer outstanding. The Borrower
shall give written notice to the Holder within one (1) business day of becoming aware of any event that could permit the Holder to make
any adjustment described in the two immediately preceding sentences.
(b)
Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary,
in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than
a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all
or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender
offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred
to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective
upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower
of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion
Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be
determined as set forth in this Section 1.2(b). For purposes hereof, “Adjusted Conversion Price Termination Date” shall
mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by
this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity
(in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender
offer (or takeover scheme) which caused this Section 1.2(b) to become operative.
(c)
Pro Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder
in connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock not in dispute
and resolve such dispute in accordance with Section 4.13.
(d)
If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock,
then the Conversion Price hereunder shall equal such par value for such conversion and the Conversion Amount for such conversion shall
be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the
Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number
of conversion shares as would have been issued had the Conversion Price not been subject to the minimum price set forth in this Section
1.2(c).
1.3.
Authorized Shares. The Borrower covenants that during the period while any outstanding balance is owing hereunder or any
conversion of the Note is available, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares,
free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the
Purchase Agreement. The Borrower is required at all times to have authorized and reserved ten (10) times the number of shares that is
actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved
Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant
to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully
paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would
change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower
shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its
issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note. Notwithstanding
the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions.
If, at any time the Borrower
does not maintain or replenish the Reserved Amount within three (3) business days of the request of the Holder, the principal amount of
the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s and Borrower’s expectation
that any principal amount increase will tack back to the Issue Date) per occurrence.
1.4.
Method of Conversion.
(a)
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at
any time from time to time after an Event of Default, by (A) submitting to the Borrower or Borrower’s transfer agent a Notice of
Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New
York, New York time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.
(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire
unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower,
so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records
of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing,
if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders
this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof.
(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property
unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.
(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail
(or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for
the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely
in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and
the Purchase Agreement.
(e)
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall
be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount
of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the
right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall
have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common
Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or
consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any
failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion
Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower
before 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 the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1
and in this Section 1.4, the Borrower shall use its commercially reasonable best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal At Custodian (“DWAC”) system.
(g)
DTC Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason,
or, if the Conversion Price is less than $0.05 at any time after the Issue Date, the principal amount of the Note shall increase by Fifteen
Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal amount
increase will tack back to the Issue Date) and the Variable Conversion Price shall be redefined to mean thirty percent (30%) multiplied
by the Market Price, subject to adjustment as provided in this Note.
(h)
Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue
other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon
conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder or
credit the Holder’s balance account with OTC for the number of shares of Common Stock to which the Holder is entitled upon such
Holder’s conversion of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages will tack back
to the Issue Date).. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued),
shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower
agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference
with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages
provision contained in this Section 1.4(h) are justified.
(i)
Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the
Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the Borrower’s
Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of the Note of Conversion,
(iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s Common Stock issued unrestricted
and/or deposited to sell for any reason related to the Borrower’s standing, (iv) the Holder is unable to deposit the shares of the
Borrower’s Common Stock requested in the Notice of Conversion for any reason related to the Borrower’s standing, (v) at any
time after a missed Deadline, at the Holder’s sole discretion, or (vi) if OTC Markets changes the Borrower’s designation to
`Limited Information’ (Yield), `No Information’ (Stop Sign), `Caveat Emptor’ (Skull & Crossbones), `OTC’,
`Other OTC’ or `Grey Market’ (Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion
Date, the Holder maintains the option and sole discretion to rescind the Notice of Conversion (“Rescindment”) with a “Notice
of Rescindment.”
1.5.
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule
144”) or other applicable exemption or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of
the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions
set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act
or otherwise may be sold pursuant to Rule 144 or other applicable exemption 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 OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.”
The legend set forth above
shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower
or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which
opinion shall be reasonably accepted by the Borrower so that the sale or transfer is effected or (ii) in the case of the Common Stock
issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed
under the Act or otherwise may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of
securities as of a particular date that can then be immediately sold. In the event that the Borrower does not accept the opinion of counsel
provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation
S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.
1.6.
Effect of Certain Events.
(a)
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than
50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with
or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event
of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation
of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated
pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.
(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion
of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another
class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially
all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this
Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which
the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower
shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty
(30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting
of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b)
the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
(c)
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire
its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend
or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been
payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such
shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.
(d)
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells,
or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued directly
to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers (provided, however, that such vendors
or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to the issuance of such shares),
any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance
(or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance,
the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.
The Borrower shall be deemed
to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including
employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities
convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall
be equal to such price per share. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable
upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower
as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable
upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the
Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.
Additionally, the Borrower
shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities,
whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share
for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion
Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share for which Common
Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable
by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities.
(e)
Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities
or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders
of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
(f)
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the
events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and
prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder
a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note.
1.7.
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other
than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved
Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of
such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common
Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower
to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common
Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this
Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower)
the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall,
as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect
that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including,
without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby
for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent
conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.
1.8.
Prepayment. Provided that an Event of Default has not occurred under this Note and the Holder provides written consent to
the Borrower with respect to the Borrower’s prepayment of this Note at the time of such prepayment, the Borrower may prepay the
amounts outstanding hereunder by making a payment to the Holder of an amount in cash equal to the sum of: (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest,
if any.
1.9.
Prepayment Notice. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to
the Holder of the Note at its registered addresses by physical mail and shall state: (1) that the Borrower is requesting to prepay the
Note, and (2) the date of the requested prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment
Notice. If the Holder provides written consent of such prepayment, then on the date fixed for prepayment (the “Optional Prepayment
Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder as specified by the
Holder in writing to the Borrower. If the Borrower delivers an Optional Prepayment Notice which has been consented to in writing by the
Holder, and Borrower fails to pay the applicable prepayment amount due to the Holder of the Note within two (2) business days following
the Optional Prepayment Date, the Borrower shall forever forfeit its right to request a prepayment pursuant to Section 1.9.
Article
II. CERTAIN COVENANTS
2.1.
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether
in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of
additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect
of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.
2.2.
Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or
other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.
2.3.
Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the 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 and of which the
Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors financial institutions or other
lenders incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.
2.4.
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any
consent to the disposition of any assets shall be conditioned on a specified use of the proceeds towards the repayment of this Note.
2.5.
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including,
without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in
existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in
the ordinary course of business or (c) not in excess of $100,000.
2.6.
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction
or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the
Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(10) of the Securities Act (a “3(a)(10) Transaction”).
In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10) Transaction
while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than
Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder at its election in the form
of cash payment or addition to the balance of this Note.
2.7.
Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries
that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.
2.8.
Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate
or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required
to protect the rights of the Holder.
2.9.
Repayment from Proceeds. While any portion of this Note is outstanding, if the Company receives cash proceeds from any source
or series of related or unrelated sources, including but not limited to, from payments from customers, the issuance of equity or debt,
the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower
or the sale of assets, the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder
of such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all
or any portion of such proceeds to repay all or any portion of the outstanding amounts owed under this Note. Failure of the Borrower to
comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by the Holder prior to the
Maturity Date, the required prepayment shall be subject to the terms of Section 1.8 herein.
Article
III. EVENTS OF DEFAULT
If any of the following events
of default (each, an “Event of Default”) shall occur:
3.1.
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise.
3.2.
Conversion and the Shares. The Borrower (i) fails to issue shares of Common Stock to the Holder (or announces or threatens
in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, (iii) directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring
(or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, (iv) fails to remove (or directs its transfer agent not
to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend
to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement
or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered
a Notice of Conversion, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note is
delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty
eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower’s transfer agent in order to process
a conversion, (viii) fails to reserve sufficient amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails
to provide a Rule 144 opinion letter from the Borrower’s legal counsel to the Holder, covering the Holder’s resale into the
public market of the respective conversion shares under this Note, within two (2) business days of the Holder’s submission of a
Notice of Conversion to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that Holder submits
the respective Notice of Conversion and the date of the respective Notice of Conversion must be on or after the date which is six (6)
months after the date that the Holder funded the Purchase Price under this Note), and/or (x) an exemption under Rule 144 is unavailable
for the Holder’s deposit into Holder’s brokerage account and resale into the public market of any of the conversion shares
under this Note at any time after the date which is six (6) months after the date that the Holder funded the Purchase Price under this
Note.
3.3.
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined
in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.
3.4.
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note
and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days
after written notice thereof to the Borrower from the Holder.
3.5.
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement),
shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material
adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.
3.6.
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors
or commence proceedings for its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business, or such a receiver or trustee shall otherwise be appointed for the Borrower or for a substantial part
of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment.
3.7.
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.8.
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary
of the Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an
involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower admits in writing its inability
to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under international,
federal or state laws as applicable.
3.9.
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC
Pink, OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange
3.10.
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange
Act (including but not limited to becoming delinquent in its filings); and/or the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.
3.11.
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.
3.12.
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to
pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.
3.13.
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property
or other assets which are necessary to conduct its business (whether now or in the future), or any disposition or conveyance of any material
asset of the Borrower.
3.14.
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any
date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such
restatement would, by comparison to the =restated financial statement, have constituted a material adverse effect on the rights of the
Holder with respect to this Note or the Purchase Agreement.
3.15.
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.
3.16.
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails
to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock
in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.
3.17.
Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTC Pink, OTCQB, Nasdaq National
Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, or an equivalent replacement exchange, and such cessation of trading
shall continue for a period of five consecutive (5) Trading Days.
3.18.
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements (as defined herein),
after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under
this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies
of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other
Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit
of, (2) the Holder (and any affiliate of the Holder) or any other third party, including, without limitation, promissory notes; provided,
however, the term “Other Agreements” shall not include the agreements and instruments defined as the Documents. Each of the
loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to
the Holder.
3.19.
Bid Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement exchange).
3.20.
OTC Markets Designation. OTC Markets changes the Borrower’s designation to `No Information’ (Stop Sign), `Caveat
Emptor’ (Skull and Crossbones), or `OTC’, `Other OTC’ or `Grey Market’ (Exclamation Mark Sign).
3.21.
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose,
or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing
of a Form 8-K pursuant to Regulation FD on that same date.
3.22.
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion
of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and (ii) thereupon deposit
such shares into the Holder’s brokerage account.
3.23.
Delisting or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common
Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level
of the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American.
UPON THE OCCURRENCE OF ANY
EVENT OF DEFAULT SPECIFIED IN SECTION ARTICLE III OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY AND AUTOMATICALLY DUE AND PAYABLE
WITHOUT DEMAND, PRESENTMENT, OR NOTICE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN
AMOUNT EQUAL TO: (A) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN OF SECTION 3.2, 3.9, 3.10,
3.16, 3.17, 3.19, 3.20, 3.22 OR 3.23, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS
(X) ACCRUED AND UNPAID INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT (THE “MANDATORY PREPAYMENT DATE”)
PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED TO IN CLAUSES (W) AND/OR (X) PLUS (Z) ANY AMOUNTS OWED TO THE
HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF, MULTIPLIED BY TWO (2); OR (B) IN THE EVENT OF THE OCCURRENCE OF ANY EVENT
OF DEFAULT SPECIFIED IN ANY OTHER SECTION, THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE PLUS (X) ACCRUED AND UNPAID INTEREST
ON THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE TO THE MANDATORY PREPAYMENT DATE, PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS
REFERRED TO IN CLAUSES (W) AND/OR (X) PLUS (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G)
HEREOF (THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT PLUS THE AMOUNTS REFERRED TO IN CLAUSES (X),
(Y) AND (Z) SHALL COLLECTIVELY BE KNOWN AS THE “DEFAULT SUM”) or (ii) at the option of the Holder, the “parity value”
of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of
or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory
Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default
Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion
Date), multiplied by (b) the highest trading price for the Common Stock during the period beginning on the date of first occurrence
of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled
to exercise all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or
3.19 occurs or is continuing after the six (6) month anniversary of this Note, then the principal amount of the Note shall increase
by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal
amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest trading price during the delinquency
period as a base price for the conversion with the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied
by the Market Price, subject to adjustment as provided in this Note. For example, if the lowest trading price during the delinquency period
is $0.50 per share and the conversion discount is 50%, then the Holder may elect to convert future conversions at $0.25 per share. If
this Note is not paid at Maturity Date, then the outstanding principal due under this Note shall increase by Fifteen Thousand and No/100
United States Dollars ($15,000).
The Holder shall have the
right at any time after an Event of Default occurs under this Note to require the Borrower, to immediately issue, in lieu of the Default
Amount and/or Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or Default Sum divided
by the Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial ownership limitations
contained herein). This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need
for any party to give any notice or take any other action.
If the Holder shall commence
an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder
prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys’ fees and other costs and expenses incurred
in the investigation, preparation and prosecution of such action or proceeding.
If the Holder shall commence
an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, the Holder shall
be entitled to use the lowest trading price during the delinquency period as a base price for the conversion and the Variable Conversion
Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note.
Article
IV. MISCELLANEOUS
4.1.
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.
4.2.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, electronic mail, or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by electronic mail or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Borrower, to:
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn: CEO
E-mail:
If to the Holder:
AJB Capital Investments LLC
4700 Sheridan Street, Suite J
Hollywood, FL 33021 Attn:
Email:
4.3.
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and
the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and
the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended
or supplemented.
4.4.
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to
any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of
its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending
arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of
this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the
face hereof.
4.5.
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable
costs of collection, including reasonable attorneys’ fees.
4.6.
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Wyoming without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Note shall be brought only in the state courts located in the State of New York or federal courts located in the 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. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement
delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.
Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other
provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any
suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
4.7.
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt
of a cash payment without the opportunity to convert this Note into shares of Common Stock.
4.8.
Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase
Agreement.
4.9.
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder
of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with
prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled
to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way
of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive
any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or
conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower,
the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days
prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for
the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend,
distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring
notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of
this Section 4.9 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.
4.10.
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed
interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will not seek to claim
or take advantage of any law that would prohibit or forgive the Borrower from paying all or a portion of the principal or interest on
this Note.
4.11.
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy
at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by
the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach
of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required. No provision of this Note shall alter or impair the obligation of the Borrower, which is absolute
and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.
4.12.
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
4.13.
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the
arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder
shall submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days after receipt of the
applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time
after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such
determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation (as the case may be)
being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) Business Days, submit via facsimile (a) the disputed
determination of the Conversion Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable
investment bank selected by the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price,
Conversion Amount, any prepayment amount or Default Amount, Default Sum to an independent, outside accountant selected by the Holder that
is reasonably acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the
determinations or calculations and notify the Borrower and the Holder of the results no later than ten (10) Business Days from the time
it receives such disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation
shall be binding upon all parties absent demonstrable error.
4.14.
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that
was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more favorable
term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The types of terms contained
in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion
discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts, stock sale price, private placement
price per share, and warrant coverage.
4.15.
Registration Rights. The Borrower shall file a registration statement with the SEC registering, at the option of the holder,
all shares issuable upon conversion of this Note, the Commitment Fee Shares(as defined in the Purchase Agreement), and the shares issuable
pursuant to Sections 4(p)(i) and 4(p)(ii) of the Purchase Agreement, within forty five (45) days of the Borrower’s filing of its
Form 10-K for the fiscal year ended December 31, 2020, and the Holder may demand registration one or more times. The Holder shall determine
the number of shares to be registered in its sole and absolute discretion. The Borrower’s failure to comply with this Section
4.15 shall result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand
and No/100 United States Dollars ($15,000), being immediately due and payable to the Holder at its election in the form of cash payment
or addition to the balance of this Note.
4.16.
Future Raises; Repayment from Proceeds. The Borrower shall not consummate any capital raising transactions (including but
not limited to from the issuance of debt and/or equity securities) during the initial sixty (60) days after the Issue Date. Until the
Note is satisfied in full, if the Borrower receives cash proceeds from any source or series of related or unrelated sources, including
but not limited to, from the issuance of equity and/or debt securities, the conversion of outstanding warrants of the Borrower, the issuance
of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business
day of Borrower’s receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in
its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of this
Note. Failure of the Borrower to comply with this provision shall constitute an Event of Default under Section 3.4 of the Note.
In the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the
terms of Section 1.8 herein.
[signature page follows]
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.
MAGELLAN GOLD CORPORATION
By: ______________________________
Name: Mike Lavigne
Title: Chief Executive Officer
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 Magellan Gold Corporation, a Nevada corporation (the “Borrower”), according to the conditions of the convertible
note of the Borrower dated as of January ____, 2021 (the “Note”), as of the date written below. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any.
Box Checked as to applicable
instructions:
☐The Borrower
shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal At Custodian system (“DWAC Transfer”).
Name of DTC Prime Broker:
Account Number:
☐The undersigned
hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space
is necessary, on an attachment hereto:
Name: [NAME]
Address: [ADDRESS]
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Date of Conversion: |
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Applicable Conversion
Price: |
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Number of Shares of
Common Stock to be
Issued Pursuant to Conversion of
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Amount of Principal
Balance Due remaining
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Accrued and unpaid
interest remaining: |
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[HOLDER] |
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By: _______________________ |
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Name: [NAME] |
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Exhibit 7
February 9, 2022
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn:
E-mail: contact@magellangoldcorp.com
VIA ELECTRONIC MAIL
Re: One-Time Modification
Dear Mike:
Reference is made to that certain (i) Securities
Purchase Agreement, dated as February 2021 (the "Purchase Agreement"), between Magellan Gold Corporation (the "Company")
and AJB Capital Investments, LLC (the "Purchaser"; and, together with the Company, the "Parties") and
(ii) Promissory Note of the Company in favor of the Purchaser, dated February 2021 (the "Purchaser Note"). Defined terms
used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
For good and valuable consideration, including
the Modification Fee Shares (as described below), the receipt and adequacy of which are hereby acknowledged, the Purchaser consents to
extend the maturity date of the Purchaser's Note to May 10, 2022 (the "One-time Modification").
In consideration for the foregoing
One-time Modification, the Company shall pay to Purchaser a fee of Fifty-Four Thousand and No/100 United States Dollars (US$54,000.00;
the "Modification Fee") by issuing to Purchaser 180,000 shares of the Company's Common Stock at a price per share of
$0.30 (the "Modification Fee Shares"). The Company shall instruct its transfer agent (the "Transfer Agent")
to issue a certificate or book entry statement representing the Modification Fee Shares, issuable to the Purchaser immediately upon
the Company's execution of this letter agreement (the "Letter Agreement") and shall cause its Transfer Agent to deliver
such certificates or book entry statements to Purchaser. The Purchaser shall never be in possession of an amount of Common Stock greater
than 4.99% of the issued and outstanding Common Stock of the Company; provided, however, that this ownership restriction described
in this paragraph may be waived by Purchaser, in whole or in part, upon 61 days' prior written notice. In the event such certificates
or book entry statement representing the Modification Fee Shares issuable hereunder shall not be delivered to the Purchaser, it shall
be an immediate default under Section 3.2 of the Purchaser Note and the other Transaction Documents. The Modification Fee Shares, when
issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company's Common Stock. The Modification Fee
Shares shall be deemed fully earned as of the date hereof.
It is the intention of the Company and Purchaser
that the Purchaser shall be able to sell into the public markets (if Purchaser so elects, in Purchaser's sole and absolute discretion)
the Modification Fee Shares and generate net proceeds (net of all brokerage commissions and other fees or charges payable by Purchaser
in connection with the sale thereof) from such sale equal to $54,000. The Purchaser shall use its best efforts to sell the Modification
Fee Shares in the principal trading market of the Company's Common Stock or otherwise, at any time in accordance with applicable securities
laws, none of which sales, for the sake of clarity, may commence before the date that is the earlier of (i) six months from the date hereof,
and (ii) the date upon which a registration statement covering the Modification Fee Shares shall be declared effective. At any time following
the Purchaser's receipt of Modification Fee Shares, the Purchaser may deliver to the Company a reconciliation statement showing the net
proceeds actually r eceived by the Purchaser from the sale of the Modification Fee Shares (the "Sale Reconciliation"). If,
as of the date of the delivery by Purchaser of the Sale Reconciliation, the Purchaser has not realized net proceeds from the sale of all,
and not less than all, of the Modification Fee Shares equal to at least $54,000, as shown on the Sale Reconciliation, then the Company
shall immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to
the Purchaser in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds from the sale of
any of the previously issued and sold Modification Fee Shares, the Purchaser shall have received total net funds equal to $54,000. If
additional shares of Common Stock are issued pursuant to the immediately preceding sentence, and after the sale of such additional issued
shares of Common, the Purchaser still has not received net proceeds equal to at least $54,000, then the Company shall again be required
to immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to the
Purchaser as contemplated above, and such additional issuances shall continue until the Purchaser has received net proceeds from the sale
of such Common Stock equal to $54,000. In the event additional Common Stock is required to be issued as outlined above, the Company shall
instruct its Transfer Agent to issue certificates or book entry statements representing such additional shares of Common Stock to the
Purchaser immediately subsequent to the Purchaser's notification to the Company that additional shares of Common Stock are issuable hereunder,
and the Company shall in any event cause its Transfer Agent to deliver such certificates or book entry statements to Purchaser within
three (3) Business Days following the date Purchaser notifies the Company that additional shares of Common Stock are to be issued hereunder.
In the event such certificates or book entry statements representing such additional shares of Common Stock issuable hereunder shall not
be delivered to the Purchaser within said three (3) Business Day period, same shall be an immediate default under this Letter Agreement
and the Transaction Documents. Nothing herein contained shall be interpreted to in any way limit the net proceeds from the sale of the
Modification Fee Shares. The Company's obligation to pay $54,000 contemplated by this thereunder thru the sale of Modification Fee Shares,
shall be an Obligation under the Purchase Agreement, secured by all Transaction Documents, and failure by the Company to pay $54,000 in
full as required by this Letter Agreement shall be an immediate Event of Default under the Transaction Documents.
The One-time Modification set forth in this letter
constitute a one-time extension in the Purchaser's Note maturity date and is limited to the matters expressly set forth herein and should
not be construed as an indication that the Purchaser has agreed to any other modifications to, consents of, or waivers of any other terms
or provisions of the Purchase Agreement or any Transaction Document or of the terms of any other agreement, instrument or security or
any modifications to, consents of, or waivers of any default that may exist or occur thereunder.
The Company hereby represents and warrants and
covenants to the Purchaser that nothing contained herein or otherwise disclosed to the Purchaser by the Company connection herewith constitutes
material non-public information. As of the date hereof, the Company shall have disclosed all material, non-public information (if any)
provided up to the date hereof to the Purchaser by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with the Securities and Exchange
Commission.
The Company hereby covenants and agrees that,
as of the date hereof, (i) the Purchaser has no confidentiality or similar obligation under any agreement to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchaser has not made any agreement with
the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent not to purchase or
sell, long and/or short, the Common Stock or any other securities of the Company.
This letter agreement shall be governed by and
construed in accordance with the laws of the State of Wyoming without regard to` choice of law principles. Any dispute arising under or
relating to or in connection with this letter agreement shall be subject to the exclusive jurisdiction and venue of the State and/or Federal
courts located in New York. This letter agreement may be executed in any number of counterparts, each of which shall be an original but
all of which together shall constitute one and the same instrument.
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Very Truly Yours, |
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|
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AJB Capital Investments, LLC |
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By: _______________________ |
| |
Name: |
| |
Title |
| |
|
| |
|
Acknowledged and Agreed:
Magellan Gold Corporation
By: __________________________
Name:
Title
Exhibit 8
May 11, 2022
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn:
E-mail: contact@magellangoldcorp.com
VIA ELECTRONIC MAIL
Re: Modifications
Dear Mike:
Reference is made to that certain (i)
Securities Purchase Agreement, dated as February 2021 (the "Purchase Agreement"), between Magellan Gold Corporation (the
"Company") and AJB Capital Investments, LLC (the "Purchaser"; and, together with the Company, the "Parties")
and (ii) Promissory Note of the Company issued in favor of the Purchaser, dated February 2021, as subsequently modified (the "Purchaser
Note"). Defined terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
For good and valuable consideration,
including, without limitation, the Modification Fee Shares (as described below), the receipt and adequacy of which are hereby acknowledged,
the Purchaser consents to (i) extend the maturity date of the Purchaser Note to August 10, 2022, and (ii) amend the Interest Rate of the
Purchaser Note as of the date hereof to ten (10%) percent per annum (together, the "Modifications").
In consideration for the foregoing
Modifications, the Company shall pay to Purchaser a fee of Seventy Thousand and No/100 United States Dollars (US$70,000.00; the "Modification
Fee") by issuing to Purchaser 233,334 shares of the Company's Common Stock at a price per share of $0.30 (the "Modification
Fee Shares"). The Company shall instruct its transfer agent (the "Transfer Agent") to issue a certificate or
book entry statement representing the Modification Fee Shares, issuable to the Purchaser immediately upon the Company's execution of this
letter agreement (this "Letter Agreement") and shall cause its Transfer Agent to deliver such certificates or book entry
statements to Purchaser. The Purchaser shall never be in possession of an amount of Common Stock greater than 4.99% of the issued and
outstanding Common Stock of the Company; provided, however, that this ownership restriction described in this paragraph may be
waived by Purchaser, in whole or in part, upon 61 days' prior written notice. In the event such certificates or book entry statement representing
the Modification Fee Shares issuable hereunder shall not be delivered to the Purchaser, it shall be an immediate default under Section
3.2 of the Purchaser Note and the other Transaction Documents. The Modification Fee Shares, when issued, shall be deemed to be validly
issued, fully paid, and non-assessable shares of the Company's Common Stock. The Modification Fee Shares shall be deemed fully earned
as of the date hereof.
It is the intention of the Company
and Purchaser that the Purchaser shall be able to sell into the public markets (if Purchaser so elects, in Purchaser's sole and absolute
discretion) the Modification Fee Shares and generate net proceeds (net of all brokerage commissions and other fees or charges payable
by Purchaser in connection with the sale thereof) from such sale equal to $70,000. The Purchaser shall use its best efforts to sell the
Modification Fee Shares in the principal trading market of the Company's Common Stock or otherwise, at any time in accordance with applicable
securities laws, none of which sales, for the sake of clarity, may commence before the date that is the earlier of (i) six months from
the date hereof, and (ii) the date upon which a registration statement covering the Modification Fee Shares shall be declared effective.
At any time following the Purchaser's receipt of Modification Fee Shares, the Purchaser may deliver to the Company a reconciliation statement
showing the net proceeds actually received by the Purchaser from the sale of the Modification Fee Shares (the "Sale Reconciliation").
If, as of the date of the delivery by Purchaser of the Sale Reconciliation, the Purchaser has not realized net proceeds from the sale
of all, and not less than all, of the Modification Fee Shares equal to at least $70,000, as shown on the Sale Reconciliation, then the
Company shall immediately take all required action necessary or required in order to cause the issuance of additional shares of Common
Stock to the Purchaser in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds from the
sale of any of the previously issued and sold Modification Fee Shares, the Purchaser shall have received total net funds equal to $70,000.
If additional shares of Common Stock are issued pursuant to the immediately preceding sentence, and after the sale of such additional
issued shares of Common, the Purchaser still has not received net proceeds equal to at least $70,000, then the Company shall again be
required to immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock
to the Purchaser as contemplated above, and such additional issuances shall continue until the Purchaser has received net proceeds from
the sale of such Common Stock equal to $70,000. In the event additional Common Stock is required to be issued as outlined above, the Company
shall instruct its Transfer Agent to issue certificates or book entry
statements representing such additional shares of Common Stock to the Purchaser immediately subsequent to the Purchaser's notification
to the Company that additional shares of Common Stock are issuable hereunder, and the Company shall in any event cause its Transfer Agent
to deliver such certificates or book entry statements to Purchaser within three (3) Business Days following the date Purchaser notifies
the Company that additional shares of Common Stock are to be issued hereunder. In the event such certificates or book entry statements
representing such additional shares of Common Stock issuable hereunder shall not be delivered to the Purchaser within said three (3) Business
Day period, same shall be an immediate default under this Letter Agreement and the Transaction Documents. Nothing herein contained shall
be interpreted to in any way limit the net proceeds from the sale of the Modification Fee Shares. The Company's obligation to pay $70,000
contemplated by this thereunder thru the sale of Modification Fee Shares, shall be an Obligation under the Purchase Agreement, secured
by all Transaction Documents, and failure by the Company to pay $70,000 in full as required by this Letter Agreement shall be an immediate
Event of Default under the Transaction Documents.
The Modifications set forth in this
Letter Agreement are limited to the matters expressly set forth herein and should not be construed as an indication that the Purchaser
has agreed to any other modifications to, consents of, or waivers of any other terms or provisions of the Purchase Agreement or any Transaction
Document or of the terms of any other agreement, instrument or security or any
modifications to, consents of, or waivers of any default that may exist or occur thereunder.
The Company hereby represents and warrants
and covenants to the Purchaser that nothing contained herein or otherwise disclosed to the Purchaser by the Company connection herewith
constitutes material non-public information. As of the date hereof, the Company shall have disclosed all material, non-public information
(if any) provided up to the date hereof to the Purchaser by the Company or any of its Subsidiaries or any of their respective officers,
directors, employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with the Securities
and Exchange Commission.
The Company hereby covenants and agrees
that, as of the date hereof, (i) the Purchaser has no confidentiality or similar obligation under any agreement to the Company, any of
its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchaser has not made any
agreement with the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent not
to purchase or sell, long and/or short, the Common Stock or any other securities of the Company.
This letter agreement shall be governed by and
construed in accordance with the laws of the State of Wyoming without regard to` choice of law principles. Any dispute arising under or
relating to or in connection with this letter agreement shall be subject to the exclusive jurisdiction and venue of the State and/or Federal
courts located in New York. This letter agreement may be executed in any number of counterparts, each of which shall be an original but
all of which together shall constitute one and the same instrument.
| |
Very Truly Yours, |
| |
|
| |
AJB Capital Investments, LLC |
| |
|
| |
By: _______________________ |
| |
Name: |
| |
Title |
| |
|
| |
|
Acknowledged and Agreed:
Magellan Gold Corporation
By: __________________________
Name:
Title
Exhibit 9
August 9, 2022
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn:
E-mail:
contact@magellangoldcorp.com
VIA ELECTRONIC MAIL
Re: Modifications
Dear Mike:
Reference is made to that certain
(i) Securities Purchase Agreement, dated as February 2021, as amended (the "Purchase Agreement"), between Magellan Gold Corporation
(the "Company") and AJB Capital Investments, LLC (the "Purchaser"; and, together with the Company, the "Parties")
and (ii) Promissory Note of the Company in favor of the Purchaser, dated February 2021. as amended (the "Purchaser Note"). Defined
terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement or the Purchaser Note.
For good and valuable consideration,
including, without limitation, the Modification Fee Shares (as described below), the receipt and adequacy of which are hereby acknowledged,
the Purchaser consents to (i) extend the Maturity Date of the Purchaser Note to November 9, 2022, (ii) amend the Purchaser Note to provide
for the accrual of Interest at a rate of twelve (12%) percent per annum beginning on September 1, 2022 through and including the
Maturity Date, and (iii) amend Section 4(p) of the Purchase Agreement to provide that the Commitment Fee Shares issuable thereunder shall
be the number of shares of the Company's Common Stock equal to the Commitment Fee at a price per share of $0.40 and the number of shares
of Common Stock issuable to Purchaser under Section 4(p) shall be 500,000 (collectively, the "Modifications").
In connection with the Modifications
set forth in under clause (iii) above, the Company shall issue to Purchaser
233,334 shares of the Company's Common Stock (the "Additional Commitment Fee Shares"). The Company shall instruct its
transfer agent (the "Transfer Agent") to issue a certificate or book entry statement representing the Additional
Commitment Fee Shares, issuable to the Purchaser immediately upon the Company's execution of this letter agreement and shall cause its
Transfer Agent to deliver such certificates or book entry statements to Purchaser. The Purchaser shall have the right, without any further
action of confirmation by the Company, to request and receive additional shares of Common Stock from the Transfer Agent pursuant to the
Purchase Agreement in connection with the payment of the Commitment Fee. The Purchaser shall never be in possession of an amount of Common
Stock greater than 4.99% of the issued and outstanding Common Stock of the Company; provided, however, that this ownership restriction
described in this paragraph may be waived by Purchaser, in whole or in part, upon 61 days' prior written notice. In the event such certificates
or book entry statement representing the Additional Commitment Fee Shares issuable hereunder shall not be delivered to the Purchaser,
it shall be an immediate default under Section 3.2 of the Purchaser Note and the other Transaction Documents. The Additional Commitment
Fee Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company's Common Stock. The
Additional Commitment Fee Shares shall be deemed fully earned as of the date of the Purchase Agreement.
The Modifications set forth in
this letter agreement are limited to the matters expressly set forth herein and should not be construed as an indication that the Purchaser
has agreed to any other modifications to consents of, or waivers of any other terms or provisions of the Purchase Agreement or any Transaction
Document or of the terms of any other agreement, instrument or security or any modifications to, consents of, or waivers of any default
that may exist or occur thereunder.
The Company hereby represents and
warrants and covenants to the Purchaser that nothing contained herein or otherwise disclosed to the Purchaser by the Company connection
herewith constitutes material non-public information. As of the date hereof, the Company shall have disclosed all material, non-public
information (if any) provided up to the date hereof to the Purchaser by the Company or any of its Subsidiaries or any of their respective
officers, directors, employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with
the Securities and Exchange Commission.
The Company hereby covenants and
agrees that, as of the date hereof, (i) the Purchaser has no confidentiality or similar obligation under any agreement to the Company,
any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchaser has not
made any agreement with the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or
agent not to purchase or sell, long and/or short, the Common Stock or any other securities of the Company.
This letter agreement shall be
governed by and construed in accordance with the laws of the State of Wyoming without regard to choice of law principles. Any dispute
arising under or relating to or in connection with this letter agreement shall be subject to the exclusive jurisdiction and venue of the
State and/or Federal courts located in New York. This letter agreement may be executed in any number of counterparts, each of which shall
be an original but all of which together shall constitute one and the same instrument.
| |
Very Truly Yours, |
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|
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AJB Capital Investments, LLC |
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|
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By: _______________________ |
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Name: |
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Title |
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|
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|
Acknowledged and Agreed:
Magellan Gold Corporation
By: __________________________
Name:
Title
Exhibit 10
January 11, 2023
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn:
E-mail: contact@magellangoldcorp.com
VIA ELECTRONIC MAIL
Re: Modifications
Dear Mike:
Reference is made to that certain (i) Securities
Purchase Agreement, dated as February 2021 (as amended, the "Purchase Agreement"), between Magellan Gold Corporation
(the "Company") and AJB Capital Investments, LLC (the "Purchaser"; and, together with the Company, the
"Parties") and (ii) Promissory Note of the Company issued in favor of the Purchaser, dated February 2021, as subsequently
modified (the "Purchaser Note"). Defined terms used herein but not defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement.
For good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Purchaser consents (the "Modifications") to (i) increase the principal amount of the Purchaser
Note by $10,000, which amount shall bear interest as set forth in the Purchaser Note and (ii) extend the Maturity Date of the Purchaser
Note to August 11, 2023. In the event that the Purchaser Note is not paid in full on or before August 11, 2023, such failure shall be
an event of default under all Transaction Documents between the Company and Purchaser.
The Purchase Agreement, the Purchaser Note and
all of the other Transaction Documents, in each case as amended hereby, shall remain in full force and effect and are hereby ratified
and confirmed, including, without limitation, with respect to the Commitment Fee Shares and Modification Fee Shares, (a) the terms and
conditions under the Transaction Documents with respect to the Commitment Fee Shares and Modification Fee Shares and (b) the Company's
obligations under the Transaction Documents with respect to the Commitment Fee Shares and Modification Fee Shares.
The Modifications set forth in this Letter Agreement
are limited to the matters expressly set forth herein and should not be construed at an indication that the Purchaser has agreed to any
other modifications to, consents of, or waivers of any other terms or provisions of the Purchase Agreement or any Transaction Document
or of the terms of any other agreement, instrument or security or any modifications to, consents of, or waivers of any default that may
exist or occur thereunder.
The Company hereby represents and warrants and
covenants to the Purchaser that nothing contained herein or otherwise disclosed to the Purchaser by the Company connection herewith constitutes
material non-public information. As of the date hereof, the Company shall have disclosed all material, non-public information (if any)
provided up to the date hereof to the Purchaser by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with the Securities and Exchange
Commission.
The Company hereby covenants and agrees that,
as of the date hereof, (i) the Purchaser has no confidentiality or similar obligation under any agreement to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchaser has not made any agreement with
the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent not to purchase or
sell, long and/or short, the Common Stock or any other securities of the Company.
This Letter Agreement shall be governed by and construed in accordance
with the laws of the State of Wyoming without regard to choice of law principles. Any dispute arising under or relating to or in connection
with this Letter Agreement shall be subject to the exclusive jurisdiction and venue of the State and/or Federal courts located in New
York. This Letter Agreement may be executed in any number of counterparts. each of which shall be an original but all of which together
shall constitute one and the same instrument.
| |
Very Truly Yours, |
| |
|
| |
AJB Capital Investments, LLC |
| |
|
| |
By: _______________________ |
| |
Name: |
| |
Title |
| |
|
| |
|
Acknowledged and Agreed:
Magellan Gold Corporation
By: __________________________
Name:
Title
Exhibit 11
August 9, 2023
Magellan Gold Corporation
602 Cedar Street, Suite 205
Wallace, Idaho 83873
Attn:
E-mail: contact@magellangoldcorp.com
VIA ELECTRONIC MAIL
Re: Modifications
Dear Mike:
Reference is made to that certain (i) Securities
Purchase Agreement, dated as February 2021 (as amended, the "Purchase Agreement"), between Magellan Gold Corporation
(the "Company") and AJB Capital Investments, LLC (the "Purchaser"; and, together with the Company, the
"Parties") and (ii) Promissory Note of the Company issued in favor of the Purchaser, dated February 2021, as subsequently
modified (the "Purchaser Note"). Defined terms used herein but not defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement.
For good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Purchaser consents (the "Modifications") to (i) increase the principal amount of the Purchaser
Note by $10,000, which amount shall bear interest as set forth in the Purchaser Note and (ii) extend the Maturity Date of the Purchaser
Note to September 11, 2023. In the event that the Purchaser Note is not paid in full on or before September 11, 2023, such failure shall
be an event of default under all Transaction Documents between the Company and Purchaser.
The Purchase Agreement, the Purchaser Note and
all of the other Transaction Documents, in each case as amended hereby, shall remain in full force and effect and are hereby ratified
and confirmed, including, without limitation, with respect to the Commitment Fee Shares and Modification Fee Shares, (a) the terms and
conditions under the Transaction Documents with respect to the Commitment Fee Shares and Modification Fee Shares and (b) the Company's
obligations under the Transaction Documents with respect to the Commitment Fee Shares and Modification Fee Shares.
The Modifications set forth in this Letter Agreement
are limited to the matters expressly set forth herein and should not be construed as an indication that the Purchaser has agreed to any
other modifications to, consents of, or waivers of any other terms or provisions of the Purchase Agreement or any Transaction Document
or of the terms of any other agreement, instrument or security or any modifications to, consents of, or waivers of any default that may
exist or occur thereunder.
The Company hereby represents and warrants and
covenants to the Purchaser that nothing contained herein or otherwise disclosed to the Purchaser by the Company connection herewith constitutes
material non-public information. As of the date hereof, the Company shall have disclosed all material, non-public information (if any)
provided up to the date hereof to the Purchaser by the Company or any of its Subsidiaries or any of their respective officers, directors,
employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with the Securities and Exchange
Commission.
The Company hereby covenants and agrees that,
as of the date hereof, (i) the Purchaser has no confidentiality or similar obligation under any agreement to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchaser has not made any agreement with
the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent not to purchase or
sell, long and/or short, the Common Stock or any other securities of the Company.
This Letter Agreement shall be governed by and construed in accordance
with the laws of the State of Wyoming without regard to choice of law principles. Any dispute arising under or relating to or in connection
with this Letter Agreement shall be subject to the exclusive jurisdiction and venue of the State and/or Federal courts located in New
York. This Letter Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
| |
Very Truly Yours, |
| |
|
| |
AJB Capital Investments, LLC |
| |
|
| |
By: _______________________ |
| |
Name: |
| |
Title |
| |
|
| |
|
Acknowledged and Agreed:
Magellan Gold Corporation
By: __________________________
Name:
Title
Magellan Gold (PK) (USOTC:MAGE)
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