Gulfslope
Energy, Inc. 8-K


Exhibit
10.1


 


	 	Execution
    Copy



 


NEITHER
THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD 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.


GULFSLOPE
ENERGY, INC.


Convertible
Debenture


Principal
Amount: $1,220,548.00


Debenture
Issuance Date: October 22, 2019


Debenture
Number: GSPE-2


FOR
VALUE RECEIVED, GULFSLOPE ENERGY, INC., a Delaware corporation (the “Company”), hereby promises to pay
to the order of Delek GOM Investments, LLC, or its registered assigns (the “Holder”) the amount set
out above as the Principal Amount (as reduced pursuant to the terms hereof pursuant to conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration 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 from
the date set out above as the Debenture Issuance Date (the “Issuance Date”) until the same becomes due and
payable, whether upon an Interest Date (as defined below), the Maturity Date or acceleration, conversion or otherwise (in each
case in accordance with the terms hereof). This Convertible Debenture (including all debentures issued in exchange, transfer or
replacement hereof, this “Debenture”) was originally issued pursuant to the Post Drilling Agreement Regarding
Certain Issues of even date herewith (the “Agreement”) between the Company and the Holder. Certain capitalized
terms used herein are defined in Section 16 hereof.


(1)            
GENERAL TERMS.


(a)             
Maturity Date. The “Maturity Date” shall be October 22, 2020, as may be extended at the option of the
Holder. Subject to the immediately following sentence, the Company may repay the outstanding principal amount of this Debenture,
or any portion thereof, plus accrued and unpaid interest to the date of payment, at any time without penalty. With respect to
any such prepayment, the Company shall provide Holder with five (5) business days written notice prior to repayment, during which
such time Holder may elect to convert this Debenture in accordance with Section 3.


(b)            
Interest Rate and Payment of Interest. Interest shall accrue on the outstanding principal balance hereof at an annual rate
equal to 12.0% (“Interest Rate”), which Interest Rate shall be equal to 15% per year upon an Event of Default.
Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by
applicable law.


(2)            
EVENTS OF DEFAULT.


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




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(i)              
the Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts
when and as due under this Debenture or any other Transaction Document within five (5) Business Days after such payment is due;


(ii)            
The Company or any subsidiary of the Company shall commence, or there shall be commenced against
the Company or any subsidiary of the Company under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company or any subsidiary of the Company commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company or any subsidiary of the Company or there is commenced against the
Company or any subsidiary of the Company any such bankruptcy, insolvency or other proceeding which remains undismissed for a period
of 61 days; or the Company or any subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company or any subsidiary of the Company suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of sixty one (61) days; or the Company or any subsidiary of the Company makes
a general assignment for the benefit of creditors; or the Company or any subsidiary of the Company shall fail to pay, or shall
state in writing that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company or
any subsidiary of the Company shall convene a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts; or the Company or any subsidiary of the Company shall by any act or failure to act expressly indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company or any subsidiary
of the Company for the purpose of effecting any of the foregoing;


(iii)          
The Company or any subsidiary of the Company shall default in any of its obligations under any
other debenture or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument
under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement of the Company or any subsidiary of the Company in an amount exceeding $100,000,
whether such indebtedness now exists or shall hereafter be created and such default is not cured or waived within five (5) Business
Days;


(iv)           
The Common Stock shall cease to be quoted or listed for trading, as applicable, on a Primary Market
for a period of 10 consecutive Trading Days;


(v)            
The Company or any subsidiary of the Company shall be a party to any Change of Control Transaction
(as defined in Section 16) unless in connection with such Change of Control Transaction this Debenture is retired;


(vi)           
the Company’s (A) failure to cure a Conversion Failure by delivery of (I) the required number
of shares of Common Stock or (II) the Buy-In Price within five (5) Business Days after the applicable Conversion Failure
or (B) written notice to any holder of the Debentures, or notice by way of public announcement, at any time, of its intention
not to comply with a request for conversion of any Debentures into shares of Common Stock that is tendered in accordance with
the provisions of the Debentures, other than pursuant to Section 4(c);


(vii)         
The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as
defined herein) within five (5) Business Days after such payment is due;


(viii)       
The Company shall fail to observe or perform any other material covenant, agreement or warranty
contained in, or otherwise commit any material breach or default of any provision of this Debenture (except as may be covered
by Section 2(a)(i) through 2(a)(vii) hereof) or any Transaction Document (as defined in Section 16) which is not cured within
the time prescribed.




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


(b)            
During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred and is continuing, the
full unpaid Principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date
of acceleration shall become at the Holder’s election, immediately due and payable in cash; provided that if the
Event of Default is due to the Company’s failure to timely issue Conversion Shares or Warrant Shares then the amount due
upon acceleration shall be 150% of the full unpaid Principal amount of this Debenture, plus accrued but unpaid interest. Furthermore,
in addition to any other remedies, the Holder shall have the right (but not the obligation) to convert this Debenture at any time
after an Event of Default (provided that such Event of Default is continuing) at the Default Conversion Price. The Holder need
not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, (other than required notice
of conversion) and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder.
No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.


(3)            
CONVERSION OF DEBENTURE. This Debenture shall be convertible into shares of the Company’s Common Stock, on the terms
and conditions set forth in this Section 3.


(a)             
Conversion Right. Subject to the provisions of Section 3(c), 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 fully paid and
nonassessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The number of
shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section 3(a) shall be determined by
dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”). 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 and similar taxes that may be payable with respect to the issuance and delivery
of Common Stock upon conversion of any Conversion Amount.


(i)              
“Conversion Amount” means the portion of the Principal and accrued Interest
to be converted, redeemed or otherwise with respect to which this determination is being made.


(b)            
“Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination shall
be $0.05 per share (the “Conversion Price”). The Conversion Price shall be adjusted from time to time pursuant
to the other terms and conditions of this Debenture.


(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 (A) transmit by facsimile (or otherwise deliver), 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 and (B) if required by Section 3(c)(iii), surrender
this Debenture to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking
reasonably satisfactory to the Company with respect to this Debenture in the case of its loss, theft or destruction). On or before
the third Business Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the
Company shall (X) if legends are not required to be placed on certificates of Common Stock and provided that the Transfer Agent
is participating in the Depository Trust Company’s (“DTC”) Fast Automated




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Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s
or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver 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 which certificates shall not bear any restrictive legends unless required pursuant
to federal or state securities laws and the rules and regulations of the Commission or state securities authorities. If this Debenture
is physically surrendered for conversion and the outstanding Principal of this Debenture 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 Debenture and at its own expense, issue and deliver to the holder a new Debenture representing the
outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion
of this Debenture shall be treated for all purposes as the record holder or holders of such shares of Common Stock upon the transmission
of a Conversion Notice.


(ii)            
Company’s Failure to Timely Convert. If within three (3) Trading Days after the Company’s
receipt of the facsimile copy of a Conversion Notice the Company shall fail to issue and deliver a certificate to the Holder or
credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon
such holder’s conversion of any Conversion Amount (a “Conversion Failure”), and if on or after such Trading
Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the
Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three (3) Business Days after 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 (the “Buy-In Price”),
at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Common Stock, times (B) the Closing Bid Price on the Conversion Date.


(iii)          
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion
of any portion of this Debenture in accordance with the terms hereof, the Holder shall not be required to physically surrender
this Debenture to the Company unless (A) the full Conversion Amount represented by this Debenture is being converted 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 Debenture upon physical surrender of this Debenture. The Holder and the Company shall maintain records showing the Principal
and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder
and the Company, so as not to require physical surrender of this Debenture upon conversion.


(d)            
[Reserved].


(e)             
Other Provisions.


(i)              
The Company shall at all times reserve and keep available out of its authorized Common Stock the
full number of shares of Common Stock issuable upon conversion of all outstanding amounts under this Debenture; and within three
(3) Business Days following the receipt by the Company of a Holder’s notice that such minimum number of Underlying Shares
is not so reserved, the Company shall promptly reserve a sufficient number of shares of Common Stock to comply with such requirement.




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(ii)            
All calculations under this Section 3 shall be rounded to the nearest $0.0001 or whole share.


(iii)          
The Company covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Debenture and payment of interest
on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons
other than the Holder, not less than such number of shares of the Common Stock as shall be issuable (taking into account the adjustments
and restrictions set forth herein) upon the conversion of the outstanding principal amount of this Debenture and payment of interest
hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid, nonassessable and, if the Underlying Shares Registration Statement has been declared effective
under the Securities Act, registered for public sale in accordance with such Underlying Shares Registration Statement.


(iv)           
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event
of Default pursuant to Section 2 herein for the Company’s failure to deliver certificates representing shares of Common
Stock upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available
to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case
without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from
seeking to enforce damages pursuant to any other Section hereof or under applicable law.


(v)            
Conversion Costs. The Company agrees to reimburse the Holder for costs incurred for any
legal opinions paid for by the Holder in connection with sale of underlying shares of Common Stock (provided that the Company
has first had the opportunity to obtain such a legal opinion on behalf of the Holder). The Holder shall notify the Company of
any such reasonable costs and expenses it incurs that are referred to in this section from time to time and such reasonable amounts
owed hereunder, not to exceed $650 for any single legal opinion, and not to exceed $5,000 in the aggregate without the Company’s
prior written approval, shall be paid by the Company on the Maturity Date.


(4)            
Adjustments to Conversion Price.


(a)             
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company, at any time while this
Debenture is outstanding, shall (a) pay a stock dividend or otherwise make a distribution or distributions on shares of its Common
Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (d) issue by reclassification of shares of the Common Stock any shares of capital stock
of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or re-classification.


(b)            
[Reserved].


(c)             
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 Debenture,
at the Holder’s




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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 Debenture) 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 Debenture 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 reasonably satisfactory to
the Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall
be applied without regard to any limitations on the conversion of this Debenture.


(d)            
Whenever the Conversion Price is adjusted pursuant to Section 4 hereof, the Company shall promptly mail to the Holder a notice
setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


(e)             
In case of any (1) merger or consolidation of the Company or any subsidiary of the Company comprising a majority of the Company’s
assets with or into another Person, or (2) sale by the Company or any subsidiary of the Company of more than one-half of the assets
of the Company in one or a series of related transactions, a Holder shall have the right to (A) exercise any rights under Section
2(b), (B) convert the aggregate amount of this Debenture then outstanding into the shares of stock and other securities, cash
and property receivable by holders of Common Stock following such merger, consolidation or sale, and such Holder shall be entitled
upon such event or series of related events to receive such amount of securities, cash and property as the shares of Common Stock
into which such aggregate principal amount of this Debenture could have been converted immediately prior to such merger, consolidation
or sales would have been entitled, or (C) in the case of a merger or consolidation, require the surviving entity to issue to the
Holder a convertible Debenture with a principal amount equal to the aggregate principal amount of this Debenture then held by
such Holder, plus all accrued and unpaid interest and other amounts owing thereon, which such newly issued convertible Debenture
shall have terms identical (including with respect to conversion) to the terms of this Debenture, and shall be entitled to all
of the rights and privileges of the Holder of this Debenture set forth herein and the agreements pursuant to which this Debentures
were issued. In the case of clause (C), the conversion price applicable for the newly issued shares of convertible preferred stock
or convertible Debentures shall be based upon the amount of securities, cash and property that each share of Common Stock would
receive in such transaction and the Conversion Price in effect immediately prior to the effectiveness or closing date for such
transaction. The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder
the right to receive the securities, cash and property set forth in this Section upon any conversion following such event. This
provision shall similarly apply to successive such events.


(5)            
REISSUANCE OF THIS DEBENTURE.


(a)             
Transfer. If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Debenture (in accordance with Section 5(d)), registered
in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along
with any accrued and unpaid interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture
(in accordance with Section 5(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and any
assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following
conversion of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal
stated on the face of this Debenture.




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(b)            
Lost, Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any bonding and
indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and
cancellation of this Debenture, the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section
5(d)) representing the outstanding Principal.


(c)             
Debenture Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder
at the principal office of the Company, for a new Debenture or Debentures (in accordance with Section 5(d)) representing in the
aggregate the outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.


(d)            
Issuance of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture,
such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new
Debenture, the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 5(a) or Section
5(c), the Principal designated by the Holder which, when added to the principal represented by the other new Debentures issued
in connection with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to
such issuance of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is
the same as the Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall
represent accrued and unpaid Interest from the Issuance Date.


(6)            
NOTICES. Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must
be in writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail
addresses for such communications shall be:


	If to the Company, to:	 	GulfSlope Energy, Inc.

    1331 Lamar St., Suite 1665 

    Houston, Texas 77010 

    Telephone: (281) 918-4103 

    Attention: John Malanga 

    E-Mail: john.malanga@gulfslope.com
	 	 	 
	With Copy to:	 	Mayer Brown LLP
00 Louisiana St., 

    Suite 3400 Houston, Texas 77002

    Telephone: (713) 238-2684

    Attention: William T. Heller IV

    E-Mail: wheller@mayerbrown.com
	 	 	 
	If to the Holder:	 	Corporation Trust Center 

    1209 Orange Street 

    Wilmington, Delaware 19801
	 	 	 
	With Copy to:	 	Leora Pratt Levin

    VP & General Counsel

    Delek Group Ltd

    19, Abba Eban blvd. P.O.B 2054 

Herzliya 4612001, Israel


Tel: (+972 9) 8638492


Fax: (+972 9) 8854955


E-mail: leorapl@delek-group.com
	 	 	 








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or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation
of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.


(7)            
Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which
are absolute and unconditional, to pay the principal of, interest and other charges (if any) on, this Debenture at the time, place,
and rate, and in the coin or currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this
Debenture is outstanding, the Company shall not and shall cause their subsidiaries not to, without the consent of the Holder,
amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder.


(8)            
This Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation,
the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the
terms hereof.


(9)            
[Reserved].


(10)         
This Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect
to conflicts of laws thereof.


(11)         
If the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly,
to the extent reasonably incurred and documented, all fees, costs and expenses, including, without limitation, reasonable attorneys’
fees and expenses incurred by the Holder in any action in connection with this Debenture, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in connection with the rendering of legal advice as to the Holder’s
rights, remedies and obligations, (ii) collecting any sums which become due to the Holder, (iii) defending or prosecuting any
proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights
or remedies of the Holder.


(12)         
Any waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist
upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture. Any waiver must
be in writing.


(13)         
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable
laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted




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rate
of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this
indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted
to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.


(14)         
Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.


(15)         
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.


(16)         
CERTAIN DEFINITIONS. For purposes of this Debenture, the following terms shall have the following meanings:


(a)             
“Bloomberg” means Bloomberg Financial Markets.


(b)            
“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in
the United States or a day on which banking institutions are authorized or required by law or other government action to close.


(c)             
“Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty
percent (50%) of the voting securities of the Company (except that the acquisition of voting securities by the Holder or any other
current holder of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof),
(b) a replacement at one time or over time of more than one-half of the members of the board of directors of the Company (other
than as due to the death or disability of a member of the board of directors) which is not approved by a majority of those individuals
who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board
of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of
directors who are members on the date hereof), (c) the merger, consolidation or sale of fifty percent (50%) or more of the assets
of the Company or any subsidiary of the Company in one or a series of related transactions with or into another entity, or (d)
the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the
events set forth above in (a), (b) or (c). No transfer to a wholly-owned subsidiary shall be deemed a Change of Control Transaction
under this provision.


(d)            
“Closing Bid Price” means the price per share in the last reported trade of the Common Stock on a Primary Market
or on the exchange which the Common Stock is then listed as quoted by Bloomberg.


(e)             
“Commission” means the Securities and Exchange Commission.




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(f)             
“Common Stock” means the common stock, par value $0.001, of the Company and stock of any other class into which
such shares may hereafter be changed or reclassified.


(g)            
“Default Conversion Price” means 60% of the lowest VWAP prices (as reported by Bloomberg, LP) during the 20
consecutive Trading Days immediately preceding the applicable date of determination.


(h)            
“Exchange Act” means the Securities Exchange Act of 1934, as amended.


(i)              
“Fundamental Transaction” means any of the following: (1) the Company effects any merger or consolidation of
the Company with or into another Person and the Company is the non-surviving company (other than a merger or consolidation with
a wholly owned subsidiary of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all
or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property


(j)              
“Other Debentures” means the debentures issued to YA II PN, LTD and any other debentures, notes, or other instruments
issued in exchange, replacement, or modification of the foregoing.


(k)            
“Person” means a corporation, an association, a partnership, organization, a business, an individual, a government
or political subdivision thereof or a governmental agency.


(l)              
“Primary Market” means any of the New York Stock Exchange, the NYSE MKT, the Nasdaq Global Market, the Nasdaq
Global Select Market, or the OTC QB or OTC QX, and any successor to any of the foregoing markets or exchanges.


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


(n)            
“Trading Day” means a day on which the shares of Common Stock are quoted or traded on a Primary Market on which
the shares of Common Stock are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed
or quoted, then Trading Day shall mean a Business Day.


(o)            
“Transaction Document(s)” shall mean this Debenture and the Amended Mortgage and Amended Security Agreement
entered into in connection with the foregoing.


(p)            
“Underlying Shares” means the shares of Common Stock issuable upon conversion of this Debenture or as payment
of interest in accordance with the terms hereof.


(q)            
“VWAP” means, for any security as of any date, the daily dollar volume-weighted average price for such security
on the Primary Market as reported by Bloomberg through its “Historical Prices – Px Table with Average Daily Volume”
functions, or, if no dollar volume-weighted average price is reported for such security by Bloomberg.


[Signature
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IN
WITNESS WHEREOF, the Company has caused this Convertible Debenture to be duly executed by a duly authorized officer as of
the date set forth above.


	 	COMPANY:
	 	GULFSLOPE
    ENERGY, INC.
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 




 







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Exhibit
I



CONVERSION NOTICE


(To
be executed by the Holder in order to Convert the Debenture)


TO:


The
undersigned hereby irrevocably elects to convert $_____________________ of the principal amount of Debenture No. GSPE-2 into
Shares of Common Stock of GULFSLOPE ENERGY, INC., according to the conditions stated therein, as of the Conversion Date
written below.


	Conversion
    Date:	___________________________________
	 	 
	Conversion
    Amount to be converted:	$__________________________________
	 	 
	Conversion
    Price:	$__________________________________
	 	 
	Number
    of shares of Common Stock to be issued:	___________________________________
	 	 


 


Please
issue the shares of Common Stock in the following name and to the following address:

Issue to:


	Authorized
    Signature:	___________________________________
	 	 
	Name:	___________________________________
	 	 
	Title:	___________________________________
	 	 
	Broker DTC Participant
    Code:	 
	 	 
	Account Number:	 


 


 



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