Exhibit
4.1


 


EXHIBIT
A


 


THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES


 


THE
PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS
SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.


 


THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), GRANT JOHNSON,
A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE
HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). GRANT JOHNSON MAY BE REACHED AT TELEPHONE
NUMBER (905) 580-2978.


 


Esports
Entertainment Group, Inc.


 


Senior
Convertible Note


 


	Issuance
    Date: May ___, 2021	Original
    Principal Amount: U.S. $[●]


 


FOR
VALUE RECEIVED, Esports Entertainment Group, Inc., a Nevada corporation (the “Company”), hereby promises to pay
to the order of [BUYER] or its registered assigns (“Holder”) the amount set forth above as the Original Principal
Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from
the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or upon acceleration, conversion, redemption or otherwise and including, without limitation, the Premium (as defined
herein) and other amounts payable hereunder (in each case in accordance with the terms hereof). This Senior Convertible Note (including
all Senior Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of
Senior Convertible Notes (collectively, the “Notes”, and such other Senior Convertible Notes, the “Other
Notes”) issued pursuant to the Securities Purchase Agreement, dated as of May 28, 2021 (the “Subscription Date”),
by and among the Company and the purchasers (the “Purchasers”) referred to therein, as amended from time to time (the
“Purchase Agreement”). Certain capitalized terms used herein are defined Section 31.


 




    	 



     


    

 


1.
PAYMENTS OF PRINCIPAL AND PREMIUM. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing 106%
of all outstanding Principal (such additional amount equal to 6% of the outstanding Principal, the “Premium”), accrued
and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such Principal and Interest. Other than as specifically
permitted by this Note, the Company may not prepay any portion of the outstanding Principal, Premium, accrued and unpaid Interest or
accrued and unpaid Late Charges on Principal and Interest, if any.


 


2.
INTEREST; INTEREST RATE.


 


(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day
months and shall be payable in arrears on each Interest Date and shall compound each calendar month and shall be payable in accordance
with the terms of this Note. Interest shall be paid on each Interest Date in cash.


 


(b)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of
inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption
in accordance with Section 12 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during
the continuance of any Event of Default, the Interest Rate shall automatically be increased to twelve percent (12.0%) per annum (the
“Default Rate”). In the event that such Event of Default is subsequently cured (and no other Event of Default then
exists, including, without limitation, for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest
Date), the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following
the date of such cure; provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event
of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including
the date of such cure of such Event of Default.


 




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3.
CONVERSION OF NOTES. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and non-assessable
shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.


 


(a)
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the Holder shall
be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid
and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall
not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of
a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses
of the Company’s transfer agent (the “Transfer Agent”)) that may be payable with respect to the issuance and
delivery of Common Stock upon conversion of any Conversion Amount.


 


(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a)
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).


 


(i)
“Conversion Amount” means the sum of (w) portion of the Principal to be converted, redeemed or otherwise with respect
to which this determination is being made, (x) the Premium applicable to the amount of the Principal to be converted, redeemed or otherwise
with respect to which this determination is being made, (y) other amounts due pursuant to the terms of this Note, including, without
limitation, Sections 3(c)(ii), 3(d)(ii), 3(e), 4(b), 5(b), 11(b) and 20 herein, and (z) all accrued and unpaid Interest with respect
to such portion of the Principal amount, and accrued and unpaid Late Charges with respect to such portion of such Principal and such
Interest, if any.


 


(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $17.50, subject to adjustment
as provided herein.


 




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(c)
Mechanics of Conversion.


 


(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time,
on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within two (2) Trading Days following a conversion of this Note as aforesaid, the Holder
shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking
with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 18(b)). On or before the first (1st)
Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment
of confirmation, in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to the Holder and the Transfer
Agent which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the
terms herein. On or before the second (2nd) Trading Day following the date on which the Company has received a Conversion Notice (or
such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated
on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery
Date”), the Company shall (1) provided that the Transfer Agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program and either (x) the shares of Common Stock issuable pursuant to such conversion are eligible
to be resold by the Holder pursuant to Rule 144 or (y) the resale of such shares of Common Stock issuable pursuant to such conversion
by the Holder is registered pursuant to a registration statement that has been declared effective by the SEC (assuming that the Company
has not notified the Holder prior thereto that the registration statement is not available pursuant to the terms of the Registration
Rights Agreement) (as applicable, the “DTC Issuance Condition”), credit such aggregate number of shares of Common
Stock to which the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, the DTC Issuance Condition has not been satisfied, or the DTC Fast Automated Securities Transfer Program
is otherwise not available for the issuance of such Common Stock, then upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion. If the shares of Common Stock
issuable upon the conversion are not eligible for legend removal pursuant to Section 4.1 of the Purchase Agreement, then such shares
of Common Stock issued upon conversion shall contain the legend required by Section 4.1 of the Purchase Agreement. If this Note is physically
surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion
of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business
Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with
Section 18(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock
issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock
on the Conversion Date.


 




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(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Date, either (I)(A) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
no DTC Issuance Condition has been satisfied, or the DTC Fast Automated Securities Transfer Program is otherwise not available for the
issuance of such shares of Common Stock, to issue and deliver to the Holder (or its designee) a certificate for the number of shares
of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or (B)
if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program and a DTC Issuance Condition has been satisfied,
to credit the balance account of the Holder or the Holder’s designee with DTC for such number of shares of Common Stock to which
the Holder is entitled upon the Holder’s conversion of this Note pursuant to such conversion (as the case may be) or (II) if, after
the Effectiveness Date (as defined in the Registration Rights Agreement), the Registration Statement covering the resale of the shares
of Common Stock that are the subject of the Conversion Notice (the “Unavailable Conversion Shares”) is not available
for the resale of such Unavailable Conversion Shares and the Holder is unable to sell such Unavailable Conversion Shares without restriction
pursuant to Rule 144 (as defined in the Purchase Agreement) and the Company fails to promptly, but in no event later than as required
pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) if a DTC Issuance Condition was otherwise satisfied, deliver
the shares of Common Stock electronically without any restrictive legend by crediting such aggregate number of shares of Common Stock
to which the Holder is entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred to as
a “Notice Failure” and, together with the event described in clause (I) above, a “Conversion Failure”),
then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder on each day after such
Share Delivery Date that the issuance of such shares of Common Stock is not timely effected an amount equal to 0.5% of the product of
(A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the
Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time
during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Date and (2) the Holder, upon
written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any portion
of this Note that has not been converted pursuant to such Conversion Notice, provided that the voiding of a Conversion Notice shall not
affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section
3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Date if the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver to the Holder (or its designee) a
certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance account of the Holder or the
Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion
hereunder or pursuant to the Company’s obligation pursuant to clause (II) below, and if on or after such Share Delivery Date the
Holder purchases (in an open market transaction or otherwise) shares of Common Stock corresponding to all or any portion of the number
of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has not received
from the Company in connection with such Conversion Failure (a “Buy-In”), then, in addition to all other remedies
available to the Holder, the Company shall, within two (2) Business Days after receipt of the Holder’s request and in the Holder’s
discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person
in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so
issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion
hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation to so
issue and deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the balance account
of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s conversion hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest Closing Sale
Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending
on the date of such issuance and payment under this clause (II) (the “Buy-In Payment Amount”). Nothing shall limit
the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the conversion of this Note as required
pursuant to the terms hereof.


 




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(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the
names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered
Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered
Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its
receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall
record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount
as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided
that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within
two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer
or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion
of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company
following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder
and the Company shall maintain records showing the Principal, Premium, Interest and Late Charges converted and/or paid (as the case may
be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to
the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the
Register to record such Principal, Premium, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such
conversions, and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically
deemed updated to reflect such occurrence.


 


(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such
holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such
date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. 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 Company shall
issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 23.


 




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(d)
Limitations on Conversions.


 


(i)
Beneficial Ownership. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not have the
right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be null and
void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other Attribution
Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common
Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate number of
shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion of this
Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any convertible notes or convertible preferred stock or warrants, including, without limitation, the
Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 3(d)(i). For purposes of this Section 3(d)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder
may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding
shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding
(the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a time when
the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify
the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d)(i), to exceed the Maximum Percentage, the
Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For
any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally
and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and
the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding
shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess
Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective
until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the
Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage
shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the
provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d)(i) to the extent necessary
to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 3(d)(i) or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.


 




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(ii)
Principal Market Regulation The Company shall not issue any shares of Common Stock upon conversion of this Note or otherwise pursuant
to the terms of this Note (taken together with the issuance of such shares upon the exercise of the Warrants) if the issuance of such
shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon conversion of the
Notes or otherwise pursuant to the terms of this Note or the Warrants (as the case may be) without breaching the Company’s obligations
under the rules or regulations of the Principal Market (the number of shares which may be issued without violating such rules and regulations,
including rules related to the aggregate of offerings under NASDAQ Listing Rule 5635(d), the “Exchange Cap”), except
that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable
rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from
counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder. Until such approval
or such written opinion is obtained, no Purchaser shall be issued in the aggregate, upon conversion or exercise (as the case may be)
of any Notes or any of the Warrants or otherwise pursuant to the terms of the Notes or the Warrants, shares of Common Stock in an amount
greater than the product of (i) the Exchange Cap as of the Issuance Date multiplied by (ii) the quotient of (1) the original principal
amount of Notes issued to such Purchaser pursuant to the Purchase Agreement on the Closing Date (as defined in the Purchase Agreement)
divided by (2) the aggregate original principal amount of all Notes issued to the Purchasers pursuant to the Purchase Agreement on the
Closing Date (with respect to each Purchaser, the “Exchange Cap Allocation”). In the event that any Purchaser shall
sell or otherwise transfer any of such Purchaser’s Notes, the transferee shall be allocated a pro rata portion of such Purchaser’s
Exchange Cap Allocation with respect to such portion of such Notes so transferred, and the restrictions of the prior sentence shall apply
to such transferee with respect to the portion of the Exchange Cap Allocation so allocated to such transferee. Upon conversion and exercise
in full of a holder’s Notes and Warrants, the difference (if any) between such holder’s Exchange Cap Allocation and the number
of shares of Common Stock actually issued to such holder upon such holder’s conversion in full of such Notes and such holder’s
exercise in full of such Warrants shall be allocated, to the respective Exchange Cap Allocations of the remaining holders of Notes and
related Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the Notes and related Warrants then held
by each such holder of Notes and related Warrants. If, due to the Company’s failure to obtain Shareholder Approval (as defined
in the Purchase Agreement), the Company is prohibited from issuing shares of Common Stock pursuant to this Section 3(d)(i) (the “Exchange
Cap Shares”), the Company shall pay cash in exchange for the cancellation of such portion of this Note convertible into such
Exchange Cap Shares at a price equal to the sum of (i) the product of (x) such number of Exchange Cap Shares and (y) the greatest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable Conversion
Notice with respect to such Exchange Cap Shares to the Company and ending on the date of such issuance and payment under this Section
3(d)(i) and (ii) to the extent of any Buy-In related thereto, any Buy-In Payment Amount, any brokerage commissions and other out-of-pocket
expenses, if any, of the Holder incurred in connection therewith (collectively, the “Exchange Cap Share Cancellation Amount”).


 




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(e)
Right of Alternate Conversion.


 


(i)
General.


 


(1)
[RESERVED]


 


(2)
Alternate Conversion Upon an Event of Default or Covenant Breach. Subject to Section 3(d), at any time after the fifth (5th) Trading
Day after the occurrence of an Event of Default or a Covenant Breach (regardless of whether such Event of Default or Covenant Breach
has been cured or if the Holder has delivered an Event of Default Redemption Notice to the Company), the Holder may, at the Holder’s
option, convert (each, an “Alternate Event of Default Conversion” or an “Alternate Conversion”,
and the date of such Alternate Event of Default Conversion, each, an “Alternate Event of Default Conversion Date”
or an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion of the Conversion Amount
subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount” or an “Alternate
Conversion Amount”) into shares of Common Stock at the Alternate Conversion Price.


 


(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion
Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes
hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of shares of Common Stock
issuable upon conversion of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the
Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect
to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder
is electing to use the Alternate Conversion Price for such conversion; provided that in the event of the Conversion Floor Price Condition,
on the applicable Alternate Conversion Date the Company shall also deliver to the Holder the applicable Alternate Conversion Floor Amount.
Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers shares of Common
Stock representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the
Holder into shares of Common Stock pursuant to Section 3(c) without regard to this Section 3(e).


 




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4.
RIGHTS UPON EVENT OF DEFAULT.


 


(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the events
in clauses (viii), (ix) and (x) shall constitute a “Bankruptcy Event of Default”:


 


(i)
the suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Stock to be trading or listed
(as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;


 


(ii)
the Company’s (A) failure to cure a Conversion Failure or fail to delivery Warrant Shares by the Warrant Share Delivery Date (as
such terms are defined in the Warrants) by delivery of the required number of shares of Common Stock within five (5) Trading Days after
the applicable Conversion Date or date of delivery of the Notice of Exercise (as defined in the Warrants) (as the case may be) or (B)
notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by way of public announcement or through
any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into shares of
Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d), or a request for
exercise of any Warrants for shares of Common Stock in accordance with the provisions of the Warrants;


 


(iii)
except to the extent the Company is in compliance with Section 11(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 11(a) below) is less than (A) the number of shares of
Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without regard
to any limitations on conversion set forth in Section 3(d) or otherwise), and (B) the number of shares of Common Stock that the Holder
would be entitled to receive upon exercise in full of the Holder’s Warrants (without regard to any limitations on exercise set
forth in the Warrants);


 


(iv)
the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts
when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any redemption
payments or amounts hereunder) or any other Transaction Document (as defined in the Purchase Agreement) or any other agreement, document,
certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the case of
a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of at least
five (5) Trading Days;


 




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(v)
at any time from and after the date that is one hundred twenty (120) days following the Issuance Date, the Company fails to have an effective
shelf registration statement, which, as of such time of determination, has an available dollar offering amount of securities then issuable
by the Company thereunder (as reduced by any limitations on any such issuances by any law, rule or regulations applicable thereto, whether
pursuant to the 1933 Act, the Principal Market or otherwise, including, without limitation, the “baby shelf rules” set forth
in Instruction I.B.6(a) to Form S-3 of the 1933 Act), if applicable (the “Available Shelf Capacity”) of no less than
100% of the Conversion Amount as of such time of determination;


 


(vi)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities (as defined in the Purchase Agreement) acquired by the Holder under the Purchase Agreement
(including this Note) as and when required by such Securities or the Purchase Agreement, unless otherwise then prohibited by applicable
federal securities laws, and any such failure remains uncured for at least five (5) days;


 


(vii)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $500,000 of Indebtedness
(as defined in the Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;


 


(viii)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;


 


(ix)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;


 




    	11



     


    

 


(x)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;


 


(xi)
a final judgment or judgments for the payment of money aggregating in excess of $500,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $500,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;


 


(xii)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $500,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings
and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $500,000, which breach or violation permits the other
party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or
event that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement
binding the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the
business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects
of the Company or any of its Subsidiaries, individually or in the aggregate;


 




    	12



     


    

 


(xiii)
other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other term
or condition that is curable, only if such breach remains uncured for a period of ten (10) consecutive Trading Days;


 


(xiv)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that either (A) the Equity
Conditions are satisfied, (B) there has been no Equity Conditions Failure, or (C) as to whether any Event of Default has occurred;


 


(xv)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 14 of this Note (such breach
or failure, a “Covenant Breach”), except, in the case of a Covenant Breach that is curable, only if such breach remains
uncured for a period of five (5) consecutive Trading Days;


 


(xvi)
The failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or
prior to the date that is ten (10) days after the applicable Filing Date (as defined in the Registration Rights Agreement) or the failure
of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is ten (10) days after the
applicable Effectiveness Date (as defined in the Registration Rights Agreement);


 


(xvii)
While the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop
order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as
defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance with the terms
of the Registration Rights Agreement, and such lapse or unavailability continues for a period of fifteen (15) consecutive days or for
more than an aggregate of twenty five (25) days in any 365 day period;


 


(xviii)
Grant Johnson, the current Chief Executive Officer of the Company, dies, becomes incapacitated or departs from the Company or ceases
to be actively involved in the management of the Company (such event, a “Key Person Event”), unless the Company appoints
a replacement full-time Chief Executive Officer within thirty (30) days of the Key Person Event, which replacement Chief Executive Officer
shall be reasonably acceptable to the Required Holders;


 


(xix)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.


 




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(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within three (3) Business Days deliver written notice thereof via facsimile or electronic mail and overnight
courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier
of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require
the Company to redeem (regardless of whether such Event of Default has been cured) all or any portion of this Note by delivering written
notice thereof (the “Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice
shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company
pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A) the Conversion
Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion
Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the product of (1) the Redemption
Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date immediately preceding such Event of Default and ending on the date the Company makes the entire payment required to be made under
this Section 4(b) (the “Event of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made
in accordance with the provisions of Section 12. To the extent redemptions required by this Section 4(b) are deemed or determined by
a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments.
Notwithstanding anything to the contrary in this Section 4(b), but subject to Section 3(d), until the Event of Default Redemption Price
(together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together
with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note.
In the event of the Company’s redemption of any portion of this Note under this Section 4(b), the Holder’s damages would
be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of
the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section
4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies by the Holder,
and all other rights and remedies of the Holder shall be preserved. In connection with a redemption by the Company pursuant this Section
4(b), the Series B Warrants (as defined in the Purchase Agreement) shall vest as to a number of shares of Common Stock underlying the
Series B Warrants held by the Holder equal to the number of shares of Common Stock issuable upon conversion of the Event of Default Redemption
Price at the Conversion Price, as adjusted hereunder. Upon the receipt by the Company of an Event of Default Redemption Notice from the
Holder, the Company shall acknowledge in writing to the Holder the receipt of such Event of Default Redemption Notice within one (1)
Trading Day of its receipt by the Company and such written acknowledgment by the Company shall set forth the number of shares of Common
Stock underlying the Series B Warrants that have vested in connection with the redemption pursuant to the Event of Default Redemption
Notice.


 




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(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any
conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity
Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, Premium, accrued
and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption Premium, in
addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder or
any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy
Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other
rights in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption
Price or any other Redemption Price, as applicable. In connection with a redemption by the Company pursuant this Section 4(c), the Series
B Warrants shall vest as to a number of shares of Common Stock underlying the Series B Warrants held by the Holder equal to the number
of shares issuable upon conversion of the applicable redemption amount in this Section 4(c) at the Conversion Price, as adjusted hereunder.


 


5.
RIGHTS UPON FUNDAMENTAL TRANSACTION.


 


(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions
of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior
to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the
Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including, without limitation,
having a principal amount and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held
by such holder, including the same Premium as the Notes, having similar conversion rights as the Notes and having similar ranking and
security to the Notes, and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded
corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation
of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon conversion
or redemption of this Note at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock
(or other securities, cash, assets or other property (except such items still issuable under Sections 6 and 15, which shall continue
to be receivable thereafter)) issuable upon the conversion or redemption of the Notes prior to such Fundamental Transaction, such shares
of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which the Holder would
have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted immediately prior to such
Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted in accordance with the provisions
of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of written notice to the Company to
waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note. The provisions of this Section 5 shall
apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion
of this Note.


 




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(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to
the Holder (a “Change of Control Notice”). At any time during the period beginning after the Holder’s receipt
of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the
Holder in accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of
(A) the date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of
the announcement of such Change of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering
written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption
Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant
to this Section 5 shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control
Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium
multiplied by (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the
greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to
occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending
on the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product
of (y) the Change of Control Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied
by (B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common
Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration
constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading
Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately
following the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day
immediately prior to the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect
(the “Change of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance with
the provisions of Section 12 and shall have priority to payments to stockholders in connection with such Change of Control. To the extent
redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note
by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon) is paid in full,
the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon) may be converted, in
whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of the Company’s redemption of any portion
of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for
the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. In connection with a redemption
by the Company pursuant this Section 5(b), the Series B Warrants shall vest as to a number of shares of Common Stock underlying the Series
B Warrants held by the Holder equal to the number of shares issuable upon conversion of the Change of Control Redemption Price at the
Conversion Price, as adjusted hereunder. Upon the receipt by the Company of a Change of Control Redemption Notice from the Holder, the
Company shall acknowledge in writing to the Holder the receipt of such Change of Control Redemption Notice within one (1) Trading Day
of receipt by the Company and such written acknowledgement by the Company shall set forth the number of shares of Common Stock underlying
the Series B Warrants that have vested in connection with the redemption pursuant to the Change of Control Redemption Notice.


 




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6.
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.


 


(a)
Purchase Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any
limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate
Conversion Price as of the applicable record date) immediately prior to 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 shares of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage,
then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be
entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the
extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such Purchase Right has an expiration
date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance, if applicable) for
the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right
has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held in abeyance,
if applicable)) to the same extent as if there had been no such limitation).


 




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(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option (i) in
addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have
been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation
of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares
of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to
receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common
Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.


 




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7.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.


 


(a)
[Reserved]


 


(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6 or
Section 15, if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision
of Section 6 or Section 15, if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any
adjustment pursuant to this Section 7(b) shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this Section 7(b) occurs during the period that a Conversion Price is calculated hereunder,
then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.


 


(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section
7, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible
Securities (any such securities, “Variable Price Securities”), after the Subscription Date that are potentially issuable
pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may
vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of
such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar
transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”),
the Company shall provide written notice thereof via facsimile or electronic mail and overnight courier to the Holder on the date of
such agreement and the issuance of such Convertible Securities or Options. From and after the date the Company enters into such agreement
or issues any such Variable Price Securities (for purposes of clarity, regardless of whether any issuances at a Variable Price have actually
occurred), the Holder shall have the right, but not the obligation, in its sole discretion to substitute the lowest possible Variable
Price for the Conversion Price upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of
this Note that solely for purposes of such conversion the Holder is relying on the Variable Price rather than the Conversion Price then
in effect. The Holder’s election to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder
to rely on a Variable Price for any future conversion of this Note. For purposes of this Section 7(c), Variable Price Securities shall
be deemed to not include (i) the issuance of shares of Common Stock in an “at the market” offering with a bona fide broker-dealer
up to a maximum aggregate offering amount of $20,000,000, provided that the Company’s agreements in connection with such “at
the market” offering shall not conflict with any provision of the Transaction Documents, (ii) the Company’s issuance of securities
in connection with the GG and Helix Transactions (as defined in the Purchase Agreement) and (iii) the Company’s issuance of securities
in the connection with the Holodeck Transaction (as defined in the Purchase Agreement).


 




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(d)
[RESERVED]


 


(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall
in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided
that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant to this Section
7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such
dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank
of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest
error and whose fees and expenses shall be borne by the Company.


 


(f)
Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.


 


(g)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Note, with the prior written consent of the Required Holders (as defined in the Purchase Agreement), reduce the then
current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors of
the Company.


 




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8.
REDEMPTIONS AT THE COMPANY’S ELECTION.


 


(a)
Company Optional Redemption. At any time no Equity Conditions Failure exists, the Company shall have the right to redeem all,
or any part, of the Conversion Amount then remaining under this Note (each, a “Company Optional Redemption Amount”)
on the applicable Company Optional Redemption Date (each as defined below) (each, a “Company Optional Redemption”).
The portion of this Note subject to redemption pursuant to this Section 8(a) shall be redeemed by the Company in cash at a price (each,
a “Company Optional Redemption Price”) equal to the applicable Optional Redemption Percentage of the Conversion Amount
being redeemed as of the Company Optional Redemption Date. The Company may exercise its right to require redemption under this Section
8(a) by delivering a written notice thereof by facsimile or electronic mail and overnight courier to all, but not less than all, of the
holders of Notes (the “Company Optional Redemption Notice” and the date all of the holders of Notes received such
notice is referred to as the “Company Optional Redemption Notice Date”). The Company may deliver only one Company
Optional Redemption Notice hereunder in any sixty (60) Trading Day period and each Company Optional Redemption Notice shall be irrevocable.
The Company Optional Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the “Company
Optional Redemption Date”) which date shall not be less than ten (10) Trading Days following the Company Optional Redemption
Notice Date, (y) certify that there has been no Equity Conditions Failure and (z) state the aggregate Conversion Amount of the Notes
which is being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this
Section 8(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date. Notwithstanding anything herein
to the contrary, (i) if no Equity Conditions Failure has occurred as of the Company Optional Redemption Notice Date but an Equity Conditions
Failure occurs at any time prior to the Company Optional Redemption Date, (A) the Company shall provide the Holder a subsequent notice
to that effect and (B) unless the Holder waives the Equity Conditions Failure, the Company Optional Redemption shall be cancelled and
the applicable Company Optional Redemption Notice shall be null and void and (ii) at any time prior to the date the Company Optional
Redemption Price is paid, in full, the Company Optional Redemption Amount may be converted, in whole or in part, by the Holder into shares
of Common Stock pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice Date
shall reduce the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption Date. Redemptions
made pursuant to this Section 8(a) shall be made in accordance with Section 12. In the event of the Company’s redemption of any
portion of this Note under this Section 8(a), the Holder’s damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 8(a) is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. For the avoidance
of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event of Default has occurred and continuing,
but any Event of Default shall have no effect upon the Holder’s right to convert this Note in its discretion. In connection with
a redemption by the Company pursuant this Section 8(a), the Series B Warrants shall vest as to a number of shares of Common Stock underlying
the Series B Warrants held by the Holder equal to the number of shares issuable upon conversion of the Company Optional Redemption Price
at the Conversion Price, as adjusted hereunder, and the Company shall set forth the number of shares of Common Stock underlying the Series
B Warrants that have vested in connection with the applicable Company Optional Redemption in the Company Optional Redemption Notice.


 




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(b)
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
8(a), then it must simultaneously take the same action with respect to all of the Other Notes.


 


9.
HOLDER OPTIONAL REDEMPTION


 


(a)
General. If at any time after the Subscription Date either the Company or any of its Subsidiaries, directly or indirectly, desires
to incur or guaranty any Indebtedness (each, an “Additional Debt Incurrence”), at least ten (10) Trading Days prior
to the time of execution of definitive documentation with respect to such Additional Debt Incurrence, the Company shall deliver to the
Holder a written notice (a “Pre-Notice”) which Pre-Notice shall ask such Holder if it wants to review the details
of an Additional Debt Incurrence and shall include a confirmation that such Pre-Notice contains no material non-public information. Upon
the request of a Holder, and only upon a request of such Holder, for an Additional Debt Incurrence Notice (as defined below), which request
by the Holder may be made at any time within 3 Trading Days following the Company’s delivery of the Pre-Notice to the Holder, the
Company shall deliver a written notice to the Holder setting forth (x) the terms and conditions of such Additional Debt Incurrence, (y)
the identity of any lender in such Additional Debt Incurrence and (z) designating whether such Indebtedness shall be pari passu
or subordinate to the Notes (each, an “Additional Debt Incurrence Notice”). At any time from and after the earlier
of (A) the date the Holder becomes aware of the occurrence of an Additional Debt Incurrence, (B) the time of a Holder’s receipt
of an Additional Debt Incurrence Notice and (C) the time of execution of any agreement with respect to any Additional Debt Incurrence
(as applicable, the “Holder Notice Date”), the Holder shall have the right, in its sole discretion, to require that
the Company redeem (each a “Holder Optional Redemption”) all, or any portion, of the Conversion Amount under this
Note (the “Eligible Holder Optional Redemption Amount”) by delivering written notice thereof (each, a “Holder
Optional Redemption Notice”, and the date thereof, each, a “Holder Optional Redemption Notice Date”) to
the Company. Notwithstanding anything to the contrary in this Section 9(a) and unless otherwise agreed to by such Holder, the Company
shall either confirm in writing to such Holder that the transaction with respect to the Additional Debt Incurrence has been abandoned
or shall publicly disclose its intention to effect the Additional Debt Incurrence, in either case in such a manner such that such Holder
will not be in possession of any material, non-public information, by the twentieth (20th) Trading Day following the Company’s
delivery of the Pre-Notice. If by such twentieth (20th) Trading Day, no public disclosure regarding the Additional Debt Incurrence
has been made, and no notice regarding the abandonment of such transaction has been received by such Holder, such transaction shall be
deemed to have been abandoned and such Holder shall not be deemed to be in possession of any material, non-public information with respect
to the Company or any of its Subsidiaries. For purposes of clarity, nothing in this Section 9(a) shall be deemed a waiver by the Holder
of the obligations of the Company pursuant to this Note or the Transaction Documents with respect to an Additional Debt Incurrence. Each
Additional Debt Incurrence shall be subject to terms of the Transaction Documents, including, without limitation, Section 14 of this
Note.


 




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(b)
Mechanics. Each Holder Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth in the applicable
Holder Optional Redemption Notice, of the Eligible Holder Optional Redemption Amount the Holder is electing to have redeemed (the “Holder
Optional Redemption Amount”) and the date of such Holder Optional Redemption (the “Holder Optional Redemption Date”),
which shall be the later of (x) the fifth (5th) Business Day after the date of the applicable Holder Optional Redemption Notice
and (y) the date of the consummation of such Additional Debt Incurrence. The portion of this Note subject to redemption pursuant to this
Section 9 shall be redeemed by the Company in cash at a price equal to the applicable Optional Redemption Percentage of the Conversion
Amount being redeemed as of the Holder Optional Redemption Date (the “Holder Optional Redemption Price”). Redemptions
required by this Section 9 shall be made in accordance with the provisions of Section 12. In the event of the Company’s redemption
of any portion of this Note under this Section 9, the Holder’s damages would be uncertain and difficult to estimate because of
the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 9 is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Notwithstanding
anything to the contrary in this Section 9, but subject to Section 3(d), until the Holder Optional Redemption Price (together with any
Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 9 (together with any Late Charges
thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In connection with a redemption
by the Company pursuant this Section 9, the Series B Warrants shall vest as to a number of shares of Common Stock underlying the Series
B Warrants held by the Holder equal to the number of shares issuable upon conversion of the Holder Optional Redemption Price at the Conversion
Price, as adjusted hereunder. Upon the receipt by the Company of a Holder Optional Redemption Notice from the Holder, the Company shall
acknowledge in writing to the Holder the receipt of such Holder Optional Redemption Notice within one (1) Trading Day of receipt by the
Company and such written acknowledgement shall set forth the number of shares of Common Stock underlying the Series B Warrants that have
vested in connection with the redemption pursuant to the Holder Optional Redemption Notice.





 


10.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation
(or similar charter documents) 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 of the provisions of this Note and take all action as may
be required to protect the rights of the Holder of this Note. Without limiting the generality of the foregoing or any other provision
of this Note or the other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable
upon conversion of this Note above the Conversion Price then in effect, and (b) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of this
Note. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date, the Holder
is not permitted to convert this Note in full for any reason (other than pursuant to restrictions set forth in Section 3(d) hereof),
the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals
as necessary to permit such conversion into shares of Common Stock.


 




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11.
RESERVATION OF AUTHORIZED SHARES.


 


(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least the sum of (i) 200% of the
number of shares of Common Stock as shall from time to time be necessary to effect the conversion, including without limitation, Alternate
Conversions, of all of the Notes then outstanding (without regard to any limitations on conversions and assuming such Notes remain outstanding
until the Maturity Date) at the Alternate Conversion Price then in effect (the “Note Required Reserve Amount”) and
(ii) 200% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Warrants
then outstanding (without regard to any limitations on exercise) (the “Warrant Required Reserve Amount” and, collectively
with the Note Required Reserve Amount, the “Required Reserve Amount”). The Note Required Reserve Amount (including,
without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes based
on the original principal amount of the Notes held by each holder on the Closing Date or increase in the number of reserved shares, as
the case may be, and Warrant Required Reserve Amount shall be allocated pro rata among the holders of the Warrants held by each holder
on the Closing Date or increase in the number of reserved shares, as the case may be (the aggregate shares of Common Stock allocated
to a Holder pursuant to this sentence, the “Authorized Share Allocation”). In the event that a holder shall sell or
otherwise transfer any of such holder’s Notes or Warrants, each transferee shall be allocated an applicable pro rata portion of
such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person under the Note Required
Reserve Amount which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount
of the Notes then held by such holders.


 


(b)
Insufficient Authorized Shares. If, notwithstanding Section 11(a), and not in limitation thereof, at any time while any of the
Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Note Required
Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase
the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Note Required Reserve
Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date
of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized
Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its
best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board
of directors to recommend to the stockholders that they approve such proposal (or, if a majority of the voting power then in effect of
the capital stock of the Company consents to such increase, in lieu of such proxy statement, deliver to the stockholders of the Company
an information statement that has been filed with (and either approved by or not subject to comments from) the SEC with respect thereto).
In the event that the Company is prohibited from issuing shares of Common Stock pursuant to the terms of this Note due to the failure
by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable
number of shares of Common Stock, the “Authorized Failure Shares”), in lieu of delivering such Authorized Failure
Shares to the Holder, the Company shall pay cash in exchange for the redemption of such portion of the Conversion Amount convertible
into such Authorized Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorized Failure Shares and
(y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers
the applicable Conversion Notice with respect to such Authorized Failure Shares to the Company and ending on the date of such issuance
and payment under this Section 11(a); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized Failure Shares, any brokerage commissions and other
out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in Section 11(a) or this Section 11(b)
shall limit any obligations of the Company under any provision of the Purchase Agreement.


 




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12.
REDEMPTIONS.


 


(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business
Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change
of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price
to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation
of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall
deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. The
Company shall deliver the applicable Holder Optional Redemption Price to the Holder in cash on the applicable Holder Optional Redemption
Date. Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to
receive a cash payment under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company,
the applicable Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction
Document and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such
other Transaction Document. In the event of a redemption of less than all of the Conversion Amount of this Note, the Company shall promptly
cause to be issued and delivered to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal which
has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period
required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in
lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion
Amount that was submitted for redemption and for which the applicable Redemption Price (together with any Late Charges thereon) has not
been paid. Upon the Company’s receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect
to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in accordance with Section 18(d)),
to the Holder, and in each case the principal amount of this Note or such new Note (as the case may be) shall be increased by an amount
equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 12,
if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption and (z) the Conversion Price of this
Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter by the
Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided and (B)
the Alternate Conversion Price. The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its rights following
such notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued prior to the date
of such notice with respect to the Conversion Amount subject to such notice.


 




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(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b), Section
5(b) or Section 9(a) (each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1)
Business Day of its receipt thereof, forward to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives
a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the
date which is two (2) Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending
on and including the date which is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption
Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other
Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder
of the Notes (including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice
and such Other Redemption Notices received by the Company during such seven (7) Business Day period.


 


13.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without
limitation, Chapter 78 of the Nevada Revised Statute) and as expressly provided in this Note.


 


14.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:


 


(a)
Rank. All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other
Indebtedness of the Company and its Subsidiaries.


 


(b)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the Other
Notes and (ii) other Permitted Indebtedness).


 




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(c)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other
than Permitted Liens.


 


(d)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other
than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the
time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default
has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default
has occurred and is continuing.


 


(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, (i) redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock or (ii)
issue any Convertible Securities or Options or other security or enter into any agreement that includes any provision that provides for
the Company’s payment of cash to the holder or other party, upon a redemption or pursuant to any right of the holder or other party
or any obligation of the Company or any Subsidiary (each, a “Payment Obligation”) as long as any payment obligations
pursuant to the Transaction Documents remain outstanding.


 


(f)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights
of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other
than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company
and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in
the ordinary course of business.


 


(g)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date, other than Indebtedness
on Schedule 3.1(bb) to the Purchase Agreement.


 


(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental
thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose.


 




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(i)
Preservation of Existence, Etc. The Company 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 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.


 


(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.


 


(k)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary
or advisable to maintain all of the Intellectual Property Rights (as defined in the Purchase Agreement) of the Company and/or any of
its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.


 


(l)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts
and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated.


 


(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend
or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the
ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an affiliate thereof.


 


(n)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority
in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Purchase Agreement
and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes or the Warrants.


 




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(o)
Available Cash Test; Announcement of Operating Results.


 


(i)
Available Cash Test. The Company’s Available Cash as of the Fiscal Quarter ended September 30, 2021 shall equal or exceed
$10 million and Company’s Available Cash as of each Fiscal Quarter commencing on December 31, 2021 and thereafter shall equal or
exceed $15 million (each, the “Available Cash Test”), provided that any breach of the Available Cash Test may be cured
within ten (10) Trading Days.


 


(ii)
Minimum Revenue. Commencing on June 30, 2022, and at any time thereafter that any Notes remains outstanding, the Company’s
Revenue aggregated across the trailing twelve months ending on as of each Fiscal Quarter shall equal or exceed $70 million (the “Revenue
Test”).


 


(iii)
Ratio of Outstanding Indebtedness Amount to Market Capitalization Test. Commencing on September 30, 2021, the ratio of the dollar
amount equal to the sum of (1) aggregate amounts outstanding under each of the Notes, plus (2) other outstanding Indebtedness, plus (3)
the aggregate maximum cash payment obligation of the Company under any outstanding Payment Obligations, as of such time of determination,
to the quotient of (x) the sum of the Market Capitalization for each Business Day during the thirty (30) consecutive Business Days immediately
prior to such time of determination, divided by (y) thirty (30) shall not exceed 25%; provided further that the Market Capitalization
shall at no time be less than $100 million (the “Ratio of Outstanding Indebtedness Amount to Market Capitalization Test”).


 


(iv)
Minimum Cash Flow Test. Commencing on September 30, 2021, and at any time thereafter that any Notes remains outstanding, the Company’s
Free Cash Flow shall not be less than $0 (the “Free Cash Flow Test”, and together with the Available Cash Test, the
Revenue Test and the Ratio of Outstanding Indebtedness Amount to Market Capitalization Test, the “Financial Tests”).


 


(v)
Operating Results Announcement. Commencing with the Fiscal Quarter ending June 30, 2021, the Company shall publicly disclose and
disseminate (such date, the “Announcement Date”), if any Financial Test has not been satisfied for such Fiscal Quarter
or Fiscal Year, as applicable, a statement to that effect no later than the tenth (10th) day after the end of such Fiscal
Quarter or Fiscal Year, as applicable, and such announcement shall include a statement to the effect that the Company is (or is not,
as applicable) in breach of a Financial Test for such Fiscal Quarter or Fiscal Year, as applicable. On the Announcement Date, the Company
shall also provide to the Holder a certification, executed on behalf of the Company by the Chief Financial Officer of the Company, certifying
that the Company satisfied the Financial Tests for such Fiscal Quarter if that is the case. If the Company has failed to meet one or
more Financial Tests for a Fiscal Quarter (a “Financial Covenant Failure”), on or prior to the Announcement Date,
the Company shall provide to the Holders a written certification, executed on behalf of the Company by the Chief Financial Officer of
the Company, certifying that such Financial Test(s) has not been met for such Fiscal Quarter (a “Financial Covenant Failure
Notice”). Concurrently with the delivery of each Financial Covenant Failure Notice to the Holders, the Company shall also make
publicly available (as part of a Quarterly Report on Form 10-Q, Annual Report on Form 10-K or on a Current Report on Form 8-K, or otherwise)
the Financial Covenant Failure Notice and the fact that an Event of Default has occurred under the Notes.


 




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(p)
Most Favored Terms. As long as any Notes remain outstanding, no term or condition in any Convertible Securities and/or Options
issued by the Company or any of its Subsidiaries to any Person after the Subscription Date and/or any agreement to acquire Common Stock,
Convertible Securities and/or Options or other securities entered into by the Company or any of its Subsidiaries with any Person after
the Subscription Date or any other related document or agreement with respect thereto (each, a “Subsequent Document”)
shall, directly or indirectly, be more favorable to such Person than the terms and conditions in this Note and any related Transaction
Document. If, and whenever on or after the date hereof, the Company enters into a Subsequent Document, then (i) the Company shall provide
notice thereof to the Holder immediately following the occurrence thereof and (ii) in addition to any other remedies of the Holder in
law or equity, the terms and conditions of this Note and any related Transaction Document shall be, without any further action by the
Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall
receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Subsequent Document, provided
that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term
or condition, in which event the term or condition contained in this Note and any related Transaction Document shall apply to the Holder
as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect
to the Holder. The provisions of this Section 14(p) shall apply similarly and equally to each Subsequent Document. This Section 14(p)
shall not apply in respect of an Exempt Issuance (as defined in the Purchase Agreement) and shall not apply to the issuance of shares
of Common Stock in an “at the market” offering with a bona fide broker-dealer up to a maximum aggregate offering amount of
$20,000,000, provided that the Company’s agreements in connection with such “at the market” offering shall not conflict
with any provision of the Transaction Documents.


 


(q)
Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default or a Covenant Breach has
occurred and is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an
Event of Default or a Covenant Breach or (z) at any time the Holder reasonably believes an Event of Default or a Covenant Breach may
have occurred or be continuing, the Company shall hire an independent, reputable investment bank selected by the Company and approved
by the Holder to investigate as to whether any breach of this Note has occurred (the “Independent Investigator”).
If the Independent Investigator determines that such breach of this Note has occurred, the Independent Investigator shall notify the
Company of such breach and the Company shall deliver written notice to each holder of a Note of such breach. In connection with such
investigation, the Independent Investigator may, during normal business hours, inspect all contracts, books, records, personnel, offices
and other facilities and properties of the Company and its Subsidiaries and, to the extent available to the Company after the Company
uses reasonable efforts to obtain them, the records of its legal advisors and accountants (including the accountants’ work papers)
and any books of account, records, reports and other papers not contractually required of the Company to be confidential or secret, or
subject to attorney-client or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof
as the Independent Investigator may reasonably request. The Company shall furnish the Independent Investigator with such financial and
operating data and other information with respect to the business and properties of the Company as the Independent Investigator may reasonably
request. The Company shall permit the Independent Investigator to discuss the affairs, finances and accounts of the Company with, and
to make proposals and furnish advice with respect thereto to, the Company’s officers, directors, key employees and independent
public accountants or any of them (and by this provision the Company authorizes said accountants to discuss with such Independent Investigator
the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as
may be reasonably requested.


 




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15.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make any dividend
or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return
of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon
complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and
assuming for such purpose that the Note was converted at the Alternate Conversion Price as of the applicable record date) immediately
prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (provided, however, that to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder
shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial
ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its
right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent
Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).


 


16.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d), which may not be amended, modified or waived by the parties hereto,
the prior written consent of the Required Holders (as defined in the Purchase Agreement) shall be required for any change, waiver or
amendment to this Note.


 




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17.
TRANSFER. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred
by the Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Purchase Agreement, provided,
however, that any purchaser, assignee, or transferee of this Note shall agree in writing to be bound by the terms of the Purchase Agreement
and this Note.


 


18.
REISSUANCE OF THIS NOTE.


 


(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a
new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion
or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on
the face of this Note.


 


(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal.


 


(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.


 


(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note
(i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by the Holder which,
when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as
this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the
Issuance Date.


 




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19.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any
of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Note (including, without limitation, compliance with Section 7).


 


20.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that no amounts
due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original
Principal amount hereof.


 




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21.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be
construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form
part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead
of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note.
Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.


 


22.
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 privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 22 shall
permit any waiver of any provision of Section 3(d).


 


23.
DISPUTE RESOLUTION.


 


(a)
Submission to Dispute Resolution.


 


(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a
VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable Redemption Price (as the case may be)
(including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case
may be) shall submit the dispute to the other party via facsimile or electronic mail (A) if by the Company, within two (2) Business Days
after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder learned of
the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to
such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such VWAP or such fair market
value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price (as the case may be), at any time after
the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute
to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment
bank to resolve such dispute.


 




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(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 23 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).


 


(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.


 


(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 23 constitutes an agreement to arbitrate between
the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and
Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR §
7503(a) in order to compel compliance with this Section 23, (ii) a dispute relating to a Conversion Price includes, without limitation,
disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 7(a), (B) the consideration
per share at which an issuance or deemed issuance of Common Stock occurred, (C) [reserved], (D) whether an agreement, instrument, security
or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Note
and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable
dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like
that such investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute
and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Note and
any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit
any dispute described in this Section 23 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu
of utilizing the procedures set forth in this Section 23 and (v) nothing in this Section 23 shall limit the Holder from obtaining any
injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 23).


 




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24.
NOTICES; CURRENCY; PAYMENTS.


 


(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given
in accordance with Section 9(f) of the Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without limiting the
generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Conversion
Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior
to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common
Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.


 


(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated
with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).


 


(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly
set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account
of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Purchaser s, shall initially be as set forth on the signature page to the Purchase Agreement),
provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company
with prior written notice setting out such request and the Holder’s wire transfer instructions. 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. Any amount of Principal or other amounts due under the Transaction Documents which is not paid when due
shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of
eighteen percent (18%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).


 




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25.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid
in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.


 


26.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Purchase
Agreement.


 


27.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 23 above,
the Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder,
to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the
Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 23. THE COMPANY 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.


 


28.
JUDGMENT CURRENCY.


 


(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:


 


(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or


 




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(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 28(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).


 


(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.


 


(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.


 


29.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply
to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).


 


30.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Purchase Agreement, nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess
of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.


 


31.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:


 


(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.


 




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(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.


 


(c)
[RESERVED]


 


(d)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.


 


(e)
“Alternate Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately available
funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A)
the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding the relevant Alternate Conversion
Date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common
Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Date with respect to such Alternate Conversion from
(II) the quotient obtained by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable
Alternate Conversion, by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.


 


(f)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of
(i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion and (ii) the
greater of (x) the Floor Price and (y) the lowest of (A) 90% of the VWAP of the Common Stock as of the Trading Day immediately preceding
the delivery or deemed delivery of the applicable Conversion Notice, (B) 90% of the VWAP of the Common Stock as of the Trading Day of
the delivery or deemed delivery of the applicable Conversion Notice and (C) 90% of the price computed as the quotient of (I) the sum
of the VWAP of the Common Stock for each of the two (2) Trading Days with the lowest VWAP of the Common Stock during the ten (10) consecutive
Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion
Notice, divided by (II) two (2) (such period, the “Alternate Conversion Measuring Period”). All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately
decreases or increases the Common Stock during such Alternate Conversion Measuring Period.


 


(g)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.


 




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(h)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.


 


(i)
“Available Cash” means, with respect to any date of determination, an amount equal to the aggregate amount of the
Cash of the Company and its Subsidiaries (excluding for this purpose cash held in restricted accounts or otherwise unavailable for unrestricted
use by the Company or any of its Subsidiaries for any reason) as of such date of determination held in bank accounts of financial banking
institutions in the United States of America.


 


(j)
[RESERVED]


 


(k)
“Bloomberg” means Bloomberg, L.P.


 


(l)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.


 


(m)
“Cash” of the Company and its Subsidiaries on any date shall be determined from such Persons’ books maintained
in accordance with GAAP, and means, without duplication, the cash, cash equivalents and Eligible Marketable Securities accrued by the
Company and its wholly owned Subsidiaries on a consolidated basis on such date.


 


(n)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity
or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.


 




    	41



     


    

 


(o)
“Change of Control Redemption Premium” means 115%.


 


(p)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 23. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock
combinations, recapitalizations or other similar transactions during such period.


 


(q)
“Closing Date” shall have the meaning set forth in the Purchase Agreement, which date is the date the Company initially
issued Notes pursuant to the terms of the Purchase Agreement.


 


(r)
“Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.


 


(s)
“Consolidated Capital Expenditures” means, for any period, any cash payments to any Person by the Company or any of
its Subsidiaries, in the aggregate, for property, plant and equipment during such period, reported in accordance with GAAP.


 




    	42



     


    

 


(t)
“Consolidated Lease Expense” means, for any period, any lease payments to any Person by the Company or any of its
Subsidiaries, in the aggregate, related to any capital leases and equipment leases made in such period (other than such payments included
in Consolidated Capital Expenditures), recorded in accordance with GAAP.


 


(u)
“Consolidated Net Operating Cash” means, for any period, the net Cash provided by (used in) the business of the Company
and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP.


 


(v)
“Conversion Floor Price Condition” means that the relevant Alternate Conversion Price is being determined based on
clause (x) of such definitions.


 


(w)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.


 


(x)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Principal Market.


 


(y)
“Eligible Marketable Securities” as of any date means marketable securities which would be reflected on a consolidated
balance sheet of the Company and its Subsidiaries prepared as of such date in accordance with GAAP, and which are permitted under the
Company’s investment policies as in effect on the Issuance Date or approved thereafter by the Company’s Board of Directors.


 




    	43



     


    

 


(z)
“Equity Conditions” means, with respect to any given date of determination: (i) on each day during the period beginning
ten (10) Trading Days prior to the applicable date of determination and ending on and including the applicable date of determination
(the “Equity Conditions Measuring Period”), the Common Stock (including all shares of Common Stock issuable upon conversion
and/or exercise of the Notes and the Warrants (without regards to any limitation on conversion or exercise set forth therein)) is listed
or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market
(other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements
by the Company) nor shall delisting or suspension of the Common Stock by an Eligible Market have been threatened (with a reasonable prospect
of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to
occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance
requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (ii) during
the Equity Conditions Measuring Period, either (x) one or more Registration Statements (as defined in the Registration Rights Agreement)
filed pursuant to the Registration Rights Agreement shall be effective and the prospectus contained therein shall be available on such
applicable date of determination (with, for the avoidance of doubt, any shares of Common Stock previously sold pursuant to such prospectus
deemed available) for the resale of all shares of Common Stock to be issued in connection with the event requiring this determination
(or issuable upon conversion of the Conversion Amount being redeemed), as applicable, in the event requiring this determination at a
Conversion Price then in effect (without regard to any limitations on conversion set forth herein) and including the shares of Common
Stock issuable upon exercise of all of the Warrants (each, a “Required Minimum Securities Amount”), in each case,
in accordance with the terms of the Registration Rights Agreement or (y) all Registrable Securities (as defined in the Registration Rights
Agreement) shall be eligible for sale pursuant to Rule 144 (as defined in the Purchase Agreement) without the need for registration under
any applicable federal or state securities laws (in each case, disregarding any limitation on conversion of the Notes or limitation on
exercise of the Warrants) and no Public Information Failure (as defined in the Purchase Agreement) exists or is continuing; (iii) during
the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of this
Note on a timely basis as set forth in Section 3 hereof, all shares of Common Stock issuable upon exercise of the Warrants on a timely
basis as set forth in Section 2 of the Warrants and all other shares of capital stock required to be delivered by the Company on a timely
basis as set forth in the other Transaction Documents; (iv) any shares of Common Stock to be issued in connection with the event requiring
determination (or issuable upon conversion of the Conversion Amount being redeemed in the event requiring this determination) may be
issued in full without violating Section 3(d)(i) and (ii) hereof or violating Section 2(e) and 2(f) of the Warrant; (v) any shares of
Common Stock to be issued in connection with the event requiring determination (or issuable upon conversion of the Conversion Amount
being redeemed in the event requiring this determination (without regards to any limitations on conversion set forth herein) or issuable
upon exercise of the Warrants subject to a Call pursuant to Section 2(g) of the Warrants (without regards to any limitations on exercise
set forth therein)) may be issued in full without violating the rules or regulations of the Eligible Market on which the Common Stock
is then listed or designated for quotation (as applicable); (vi) on each day during the Equity Conditions Measuring Period, no public
announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated
or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause any Registration Statement
required to be filed pursuant to the Registration Rights Agreement to not be effective or the prospectus contained therein to not be
available for the sale of all of the Registrable Securities in accordance with the terms of the Registration Rights Agreement, (viii)
the Holder (or, as applicable, the holder of the Warrant) shall not be in (and no other holder of Notes (or, as applicable, no other
holder of Warrants) shall be in) possession of any material, non-public information provided to any of them by the Company, any of its
Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like; (ix) on each day during
the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with each, and shall not have breached any
representation or warranty in any material respect (other than representations or warranties subject to material adverse effect or materiality,
which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, including, without
limitation, the Company shall not have failed to timely make any payment pursuant to any Transaction Document; (x) on each Trading Day
during the Equity Conditions Measuring Period, there shall not have occurred any Volume Failure as of such applicable date of determination;
(xi) on the applicable date of determination (A) no Authorized Share Failure shall exist or be continuing and number of shares of Common
Stock to be issued in connection with the event requiring this determination equal to the Required Minimum Securities Amount are available
under the certificate of incorporation of the Company and reserved by the Company to be issued pursuant to the Notes and the Warrants
and (B) all shares of Common Stock to be issued in connection with the event requiring this determination (or issuable upon conversion
of the Conversion Amount being redeemed in the event requiring this determination (without regards to any limitations on conversion set
forth herein) or issuable upon exercise of the Warrants subject to a Call pursuant to Section 2(g) of the Warrants (without regards to
any limitations on exercise set forth therein)) may be issued in full without resulting in an Authorized Share Failure; (xii) on each
day during the Equity Conditions Measuring Period, there shall not have occurred and there shall not exist an Event of Default or an
event that with the passage of time or giving of notice would constitute an Event of Default; (xiii) no bona fide dispute shall exist,
by and between any of holder of Notes or Warrants, the Company, the Principal Market (or such applicable Eligible Market in which the
Common Stock of the Company is then principally trading) and/or FINRA with respect to any term or provision of any Note, Warrant or any
other Transaction Document, (xiv) as of such time of determination, a custodian or prime broker designated by the Holder at its sole
discretion is available to receive such shares of Common Stock with DTC through its Deposit/Withdrawal at Custodian system and take custody
of such shares of Common Stock, and (xv) the shares of Common Stock issuable pursuant the event requiring the satisfaction of the Equity
Conditions are duly authorized and listed and eligible for trading without restriction on an Eligible Market.


 




    	44



     


    

 


(aa)
“Equity Conditions Failure” means that on any day during the period commencing twenty (20) Trading Days prior to the
applicable Company Optional Redemption Notice Date through the applicable Company Optional Redemption Date, the Equity Conditions have
not been satisfied (or waived in writing by the Holder).


 


(bb)
[RESERVED]


 


(cc)
[RESERVED]


 


(dd)
“Fiscal Quarter” means each of the fiscal quarters adopted by the Company for financial reporting purposes that correspond
to the Company’s fiscal year as of the date hereof that ends on December 31.


 


(ee)
“Fiscal Year” means the fiscal year adopted by the Company for financial reporting purposes as of the date hereof
that ends on December 31.


 


(ff)
“Floor Price” means $2.1832 (or such lower amount as permitted, from time to time, by the Principal Market), subject
to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events.


 




    	45



     


    

 


(gg)
“Free Cash Flow” means, with respect to any given Fiscal Quarter, the difference of (i) Consolidated Net Operating
Cash, less (ii) the sum of (x) Consolidated Capital Expenditures, and (y) Consolidated Lease Expense, in each case, measured as of the
last day in such Fiscal Quarter. Free Cash Flow shall be adjusted to the extent that any portion of (x) or (y) is already captured in
Consolidated Net Operating Cash. Payments, to the extent captured in (x) or (y) that would otherwise be partially or fully deducted in
deriving Consolidated Net Operating Cash, shall be added back to derive Free Cash Flow, and receipts, to the extent captured in (x) or
(y) that would otherwise be partially or fully included in deriving Consolidated Net Operating Cash, shall be deducted to derive Free
Cash Flow. In addition, Consolidated Capital Expenditures shall be exclusive of any payments or receipts derived from (y). Notwithstanding
anything to the contrary in this Note, it is the intent of the Company and the Holder that no amounts will be double counted in the calculation
of Free Cash Flow, such that any amounts already captured in any clause (or definition of any defined term in any clause) of the foregoing
definition of Free Cash Flow above shall not be counted more than once in such clause (including in any definition of any defined term
in such clause) or counted in any other clause of Free Cash Flow (including in any other definition of any defined term referenced therein).


 


(hh)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.


 




    	46



     


    

 


(ii)
“GAAP” means United States generally accepted accounting principles, consistently applied.


 


(jj)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.


 


(kk)
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this Note
on the Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers
pursuant to the Purchase Agreement on the Closing Date.


 


(ll)
“Indebtedness” shall have the meaning ascribed to such term in the Purchase Agreement.


 


(mm)
“Interest Date” means, with respect to any given calendar month, the first Trading Day of such calendar month.


 


(nn)
“Interest Rate” means eight percent (8%) per annum, as may be adjusted from time to time in accordance with Section
2.


 




    	47



     


    

 


(oo)
“Market Capitalization” means, as of any date of determination, the product of (x) the shares of Common Stock outstanding
as of such date of determination and (y) the VWAP of the Common Stock on such date of determination.


 


(pp)
“Maturity Date” shall mean May ___, 20231; provided, however, the Maturity Date may be extended at the
option of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event
shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii)
through the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental
Transaction is publicly announced or a Change of Control Notice is delivered prior to the Maturity Date, provided further that if a Holder
elects to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to Section
3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the conversion of
this Note.


 


(qq)
“Optional Redemption Percentage” means, with respect to any given Company Optional Redemption Date or Holder Optional
Redemption, as applicable, the sum of (i) 100% plus (ii) the product of (A) six percent (6%) by (B) the quotient of (x) the number of
elapsed calendar days during the period commencing on, and including, the Issuance Date through and including such Company Optional Redemption
Date or Holder Optional Redemption, as applicable, divided by (y) 720 calendar days.


 


(rr)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.


 


(ss)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(tt)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set
forth on Schedule 3.1(bb) to the Purchase Agreement, as in effect as of the Subscription Date, (iii) Permitted Pari Passu and
Subordinated Indebtedness and (iv) Indebtedness secured by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the
definition of Permitted Liens.


 





 






	1	Insert
    second anniversary of the Issuance Date.


 




    	48



     


    

 


(uu)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv)
Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment
or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $250,000, (v) Liens incurred
in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above,
provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and (vii) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(x).


 


(vv)
“Permitted Pari Passu and Subordinated Indebtedness” means Indebtedness incurred by the Company that is made expressly
pari passu or subordinate in right of payment to the obligation to the Holder evidenced by this Note, as reflected in a written agreement
acceptable to the Required Holders at their sole and absolute discretion, and which Indebtedness does not provide at any time for (1)
the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until
at least ninety-one (91) Trading Days after the Maturity Date and (2) total interest, original issue discount, redemption premium or
similar provisions, and fees at a rate in excess of 12% per annum and which Indebtedness does not conflict with or prohibits in any way
the Company’s obligations and performance under the Transaction Documents.


 


(ww)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.


 


(xx)
[RESERVED]


 


(yy)
“Principal Market” means the Nasdaq Capital Market.


 


(zz)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption
Notices, Holder Optional Redemption Notices and the Change of Control Redemption Notices, and each of the foregoing, individually, a
“Redemption Notice.”


 


(aaa)
“Redemption Premium” means 115%.


 


(bbb)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices,
the Company Optional Redemption Prices and the Holder Optional Redemption Prices, and each of the foregoing, individually, a “Redemption
Price.”


 




    	49



     


    

 


(ccc)
“Revenue” means, with respect to any given cash flow, receivable or other general intangible, the revenue directly
attributable thereto of the Company or any of its Subsidiaries, as determined in accordance with GAAP.


 


(ddd)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.


 


(eee)
“Purchase Agreement” means that certain Purchase Agreement, dated as of the Subscription Date, by and among the Company
and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from time to time.


 


(fff)
“Subscription Date” means May 28, 2021.


 


(ggg)
“Subsidiaries” shall have the meaning as set forth in the Purchase Agreement.


 


(hhh)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.


 


(iii)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.


 


(jjj)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.


 


(kkk)
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar trading volume
(as reported on Bloomberg) of the Common Stock on the Principal Market on each Trading Day on three (3) or more Trading Days during the
ten (10) Trading Days ending on the Trading Day immediately preceding such date of determination (such 10 Trading Day period, the “Volume
Failure Measuring Period”), is less than $6,000,000. All such determinations to be appropriately adjusted for any stock splits,
stock dividends, stock combinations, recapitalizations or other similar transactions during such Volume Failure Measuring Period.


 




    	50



     


    

 


(lll)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 23. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.


 


(mmm)
“Warrants” has the meaning ascribed to such term in the Purchase Agreement, and shall include all warrants issued
in exchange therefor or replacement thereof.


 


32.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice
(or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice
(or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information
contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing
contained in this Section 32 shall limit any obligations of the Company, or any rights of the Holder, under Section 4.6 of the Purchase
Agreement.


 


33.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.


 


[signature
page follows]


 




    	51



     


    

 


IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.


 


	 	ESPORTS
    ENTERTAINMENT GROUP, INC.
	 	
	 	By:
    	                     
	 	Name:	 
	 	Title:	 


 


Senior Convertible Note
- Signature Page


 




    	 



     


    

 


EXHIBIT
I


 


ESPORTS
ENTERTAINMENT GROUP, INC.

CONVERSION NOTICE


 


Reference
is made to the Senior Convertible Note (the “Note”) issued to the undersigned by Esports Entertainment Group, Inc.,
a Nevada corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to
convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par value per
share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall
have the meaning as set forth in the Note.


 


	 	Date
of Conversion:	 



 


	 	Aggregate
Principal to be converted:	 
	 	 	 
	 	Aggregate
accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such Aggregate
Interest to be converted:	 



 


	 	AGGREGATE CONVERSION AMOUNT

      TO
BE CONVERTED:
	 




 


Please
confirm the following information:


 


	 	Conversion
    Price:	 
	 	 	 
	 	Number
    of shares of Common Stock to be issued:	 






 




    	 



     


    

 


If
this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following
Alternate Conversion Price:____________


 


Please
issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:


 


	 	Check
    here if requesting delivery as a certificate to the following name and to the following address:
	 	 	
	 	Issue
    to:	 
	 	 	 
	 	 	 
	 	 	 
	 	Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

                                                                                 

	 	DTC
    Participant:	 
	 	 	 
	 	DTC
    Number:	 
	 	 	 
	 	Account
    Number:	 


 


	Date:
    _____________ __,	 
	 	 
	 	 
	Name
    of Registered Holder	 


 


	By:	 	 
	Name:
    	 	 
	Title:	 	 
	 	 	 
	Tax
    ID:	 	 
	 	 	 
	Facsimile:	 	 



 


	E-mail
    Address: 	 	 


 




    	 



     


    

 


Exhibit
II


 


ACKNOWLEDGMENT


 


The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are
not] eligible to be resold by the Holder without restriction under applicable securities laws and (c) hereby directs _________________
to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________,
20__ from the Company and acknowledged and agreed to by ________________________.


 


	 	ESPORTS ENTERTAINMENT GROUP, INC.
	 	 
	 	By:
    	                   
	 	Name:	 
	 	Title: