Exhibit 10.4


 





NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE 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 AND
THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.


 


	Original
    Issue Date: June 8, 2020	 
	Original
    Conversion Price (subject to adjustment herein): $3.30
	 	 
		$
    [  ]


 


SENIOR
SECURED CONVERTIBLE NOTE


DUE
JUNE 8, 2022


 


THIS
SENIOR SECURED CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Senior Secured Convertible Notes of Allied
Esports Entertainment Inc., a Delaware corporation (the “Company”), having its principal place of business
at 17877 Von Karman Avenue, Suite 300, Irvine, California, 92614, designated as its Senior Secured Convertible Note due June 8,
2022 (this note, the “Note” and, collectively with the other notes of such series, the “Notes”).


 


FOR
VALUE RECEIVED, the Company promises to pay to [       ] or its registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $[       ] on June
8, 2022 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided
hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in
accordance with the provisions hereof. This Note is subject to the following additional provisions:


 


Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms
not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have
the following meanings:


 


“Alternate
Consideration” shall have the meaning set forth in Section 5(e).


 



    1


     


    

 





“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Company or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it
or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment,
(e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts
as they become due, (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its
consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.


 


“Base
Conversion Price” shall have the meaning set forth in Section 5(b).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 


“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 are generally are open for use by customers on such day.


 


“Buy-In”
shall have the meaning set forth in Section 4(c)(v).


 


“Change
of Control Transaction” means the occurrence after the date hereof of any 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 33% of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the
Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company (and all of its Subsidiaries, taken as a whole) sells or transfers all or substantially all of its assets to another
Person and the stockholders of the Company immediately prior to such transaction own less than 66% of the aggregate voting power
of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more
than one-half of the members 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 Original Issue Date (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), or (e) 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 in clauses (a) through (d) above. For purposes hereof, any sale of Common
Stock by Primo Vital (a “Primo Vital Sale”) shall not constitute a “Change of Control Transaction”;
provided, however, that the Primo Vital Sale (in one transaction or a series of related transactions) does not constitute
a Fundamental Transaction.


 






    2


     


    

 


“Conversion”
shall have the meaning ascribed to such term in Section 4.


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.


 


“Note
Register” shall have the meaning set forth in Section 2(c).


 


“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).


 


“Effectiveness
Period” shall have the meaning set forth in the Registration Rights Agreement.


 


“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have
paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c)(i) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common
Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue
uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents
(and shares issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale
restrictions or current public information requirements as determined by the counsel to the Company as set forth in a written
opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder, (d) the Common Stock is trading
on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such
Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted
for the foreseeable future), (e) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common
Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) there is no existing Event
of Default and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default,
(g) the issuance of the shares in question (or, in the case of an Optional Redemption or Monthly Redemption, the shares issuable
upon conversion in full of the Optional Redemption Amount or Monthly Redemption Amount) to the Holder would not violate the limitations
set forth in Section 4(d) and Section 4(e) herein, (h) there has been no public announcement of a pending or proposed Fundamental
Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder is not in possession of
any information provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates,
that constitutes, or may constitute, material non-public information, (j) for each of the twenty (20) Trading Days prior to the
applicable date in question, the closing price of the Common Stock on the principal Trading Market is at least equal to the Floor
Price (as defined below), and (k) the average daily dollar volume of for the Common Stock on the principal Trading Market for
the twenty (20) Trading Days prior to the applicable date in question exceeds $85,000.


 






    3


     


    

 


“Event
of Default” shall have the meaning set forth in Section 8(a).


 


“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).


 


“Interest
Conversion Rate” means the lesser of (a) the Conversion Price or (b) 87% of the lowest VWAP during the ten (10) consecutive
Trading Days ending on the Trading Day that is immediately prior to the applicable Interest Payment Date.


 


“Interest
Conversion Shares” shall have the meaning set forth in Section 2(a).


 


“Interest
Notice Period” shall have the meaning set forth in Section 2(a).


 


“Interest
Payment Date” shall have the meaning set forth in Section 2(a).


 


“Interest
Share Amount” shall have the meaning set forth in Section 2(a).


 


“Issuable
Maximum” shall have the meaning set forth in Section 4(e).


 


“Late
Fees” shall have the meaning set forth in Section 2(d).


 


“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note, plus all accrued
and unpaid interest hereon, divided by the lesser of (i) the Conversion Price, or (ii) 75% of the lowest VWAPs during the twenty
(20) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable date the Mandatory Default
Amount is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in
full, whichever has a lower Conversion Price, multiplied by the highest closing price for the Common Stock on the Trading Market
during the period beginning on the date of first occurrence of the Event of Default and ending on the date the Mandatory Default
Amount is paid in full, or (ii) 130% of the sum of the outstanding principal amount of this Note, plus accrued and unpaid interest
hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.


 






    4


     


    

 


“Monthly
Conversion Period” shall have the meaning set forth in Section 6(b) hereof.


 


“Monthly
Conversion Price” shall have the meaning set forth in Section 6(b) hereof.


 


“Monthly
Redemption” means the redemption of this Note pursuant to Section 6(b) hereof.


 


“Monthly
Redemption Amount” means, as to a Monthly Redemption, 110% of the sum of $290,909.10, plus accrued but unpaid interest,
liquidated damages and any other amounts then owing to the Holder in respect of this Note.


 


“Monthly
Redemption Date” means (i) with respect to the first (1st) Monthly Redemption, August 7, 2020, and (ii) with
respect to all Monthly Redemptions subsequent to the first Monthly Redemption, the first (1st) of each month commencing
on September 1, 2020, and terminating upon the full redemption of this Note.


 


“Monthly
Redemption Notice” shall have the meaning set forth in Section 6(b) hereof.


 


“New
York Courts” shall have the meaning set forth in Section 9(d).


 


“Notice
of Conversion” shall have the meaning set forth in Section 4(a).


 


“Optional
Redemption” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Amount” means: (i) as to the period commencing on the Original Issue Date and ending sixty (60) calendar
days thereafter, 100% of the sum of (a) the outstanding principal amount of the Note to be redeemed, (b) accrued but unpaid interest
thereon and (c) all liquidated damages and other amounts due in respect of the Note; (ii) as to the period commencing on the 61st
calendar day after the Original Issue Date and ending 180 calendar days after the Original issue Date, 105% of the sum of
(a) the outstanding principal amount of the Note to be redeemed, (b) accrued but unpaid interest thereon (including, without limitation,
the guaranteed interest described in Section 2(a)) and (c) all liquidated damages and other amounts due in respect of the Note,
or (iii) as to the period commencing on the 181st calendar day after the Original Issue Date and ending on the calendar
day prior to the Maturity Date, 110% of the sum of (a) the outstanding principal amount of the Note to be redeemed, (b) accrued
but unpaid interest thereon (including, without limitation, the guaranteed interest described in Section 2(a)) and (c) all liquidated
damages and other amounts due in respect of the Note.


 






    5


     


    

 


“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).


 


“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 8, 2020 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the
Company and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.


 


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


 


“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Successor
Entity” shall have the meaning set forth in Section 5(e).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American; the Nasdaq Capital Market, the Nasdaq Global Market; the Nasdaq Global Select Market;
the New York Stock Exchange; OTCQB or OTCQX (or any successors to any of the foregoing).





 






    6


     


    

 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a
Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or
OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the
Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market
value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority
in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.


 


Section
2. Interest.


 


a)
Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then
outstanding principal amount of this Note at the rate of eight percent (8%) per annum (with twenty-four (24) months of interest
being guaranteed), payable on August 7, 2020, and commencing on September 1, 2020, the first (1st) Trading Day of each
month, on each Monthly Redemption Date (as to that principal amount then being redeemed), on each Conversion Date (as to that
principal amount then being converted), on each Optional Redemption Date (as to that principal amount then being redeemed) and
on the Maturity Date (each such date, an “Interest Payment Date”)) (if any Interest Payment Date is not a Business
Day, then the applicable payment shall be due on the next succeeding Business Day), in cash or, at the Company’s option,
in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the Interest Conversion Rate (the
dollar amount to be paid in shares, the “Interest Share Amount”) or a combination thereof; provided,
however, that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have been met (unless
waived by the Holder in writing) during the twenty (20) Trading Days immediately prior to the applicable Interest Payment Date
(the “Interest Notice Period”) and through and including the date such shares of Common Stock are actually
issued to the Holder, (ii) the Company shall have given the Holder notice in accordance with the notice requirements set forth
below and (iii) as to such Interest Payment Date, prior to such Interest Notice Period (but not more than five (5) Trading Days
prior to the commencement of such Interest Notice Period), the Company shall have delivered to the Holder’s account with
The Depository Trust Company a number of shares of Common Stock to be applied against such Interest Share Amount equal to the
quotient of (x) the applicable Interest Share Amount divided by (y) the lesser of the (i) then Conversion Price and (ii) the Interest
Conversion Rate assuming for such purposes that the Interest Payment Date is the Trading Day immediately prior to the commencement
of the Interest Notice Period (the “Interest Conversion Shares”). Notwithstanding anything to the contrary
contained in this Section 2(a): (i) if the Company elects to pay any interest in Interest Conversion Shares and the Floor Price
is greater than the lesser of the (a) then Conversion Price and (b) then Interest Conversion Rate, then (ii) the amount of Interest
Conversion Shares to be issued to the Holder will be at the Holder’s option; and (ii) in addition to the payment of an Interest
Share Amount in Interest Conversion Shares (which issuance shall be at the Floor Price) (in the event that the Holder permits
such issuance albeit subparagraph (j) of the definition of Equity Conditions not being satisfied), the Company shall pay to the
Holder cash as a true-up (the “Cash Interest True-Up Amount”). The Cash Interest True-Up Amount shall be determined
by the product of (i) the difference between (y) the Floor Price less (z) 87% of the lowest VWAP during the ten (10) consecutive
Trading Days ending on the Trading Day that is immediately prior to the applicable Monthly Redemption Date (subject to adjustment
for any stock dividend, stock split, stock combination or other similar event affecting the Common Stock during such ten (10)
Trading Day period), multiplied by (ii) the Interest Share Amount that is being paid in Interest Conversion Shares. The Company
and Holder agree to adjust the foregoing formula, in good-faith, in the event that the formula does not represent the intent of
the Cash Interest True-Up Amount. The intent of the Cash Interest True-Up Amount is to compensate the Holder for its loss in value
due to the condition that an Interest Share Amount cannot be converted into shares of Common Stock at Interest Conversion Rate
less than the Floor Price. Any such adjustment must be approved by the Holder.





 






    7


     


    

 


b)
Company’s Election to Pay Interest in Cash or Kind. Subject to the terms and conditions herein, the decision whether
to pay interest hereunder in cash, shares of Common Stock or a combination thereof shall be at the sole discretion of the Company.
Prior to the commencement of any Interest Notice Period, the Company shall deliver to the Holder a written notice of its election
to pay interest hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof
and the Interest Share Amount as to the applicable Interest Payment Date, provided that the Company may indicate in such notice
that the election contained in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice.
During any Interest Notice Period, the Company’s election (whether specific to an Interest Payment Date or continuous) shall
be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written
notice to the Holder shall be deemed an election by the Company to pay the interest on such Interest Payment Date in cash. At
any time the Company delivers a notice to the Holder of its election to pay the interest in shares of Common Stock, the Company
shall timely file a prospectus supplement pursuant to Rule 424 disclosing such election, if required by the Securities Act and
the rules and regulations promulgated thereunder. The aggregate number of shares of Common Stock otherwise issuable to the Holder
on an Interest Payment Date shall be reduced by the number of Interest Conversion Shares previously issued to the Holder in connection
with such Interest Payment Date.


 


c)
Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day
periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Payment
of interest in shares of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall
otherwise occur pursuant to Section 4(c)(ii) herein and, solely for purposes of the payment of interest in shares, the Interest
Payment Date shall be deemed the Conversion Date. Interest shall cease to accrue with respect to any principal amount converted,
provided that, the Company actually delivers the Conversion Shares within the time period required by Section 4(c)(ii) herein.
Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration
and transfers of this Note (the “Note Register”). Except as otherwise provided herein, if at any time the Company
pays interest partially in cash and partially in shares of Common Stock to the holders of the Notes, then such payment of cash
shall be distributed ratably among the holders of the then-outstanding Notes based on their (or their predecessor’s) initial
purchases of Notes pursuant to the Purchase Agreement.


 






    8


     


    

 


d)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal
to the lesser of fifteen percent (15%) per annum or the maximum rate permitted by applicable law (the “Late Fees”)
which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.
Notwithstanding anything to the contrary contained herein, if, on any Interest Payment Date the Company has elected to pay accrued
interest in the form of Common Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails
to satisfy the conditions for payment in Common Stock set forth in Section 2(a) herein (and such conditions are not waived by
the Holder), then the Company, in lieu of delivering either shares of Common Stock pursuant to this Section 2 shall deliver, within
three (3) Trading Days of each applicable Interest Payment Date, an amount in cash equal to the interest due plus the Late Fees.
If any Interest Conversion Shares are issued to the Holder in connection with an Interest Payment Date and are not applied against
an Interest Share Amount, then the Holder shall promptly return such excess shares to the Company.


 


e)
Prepayment. Except as otherwise set forth in this Note, the Company may not prepay any portion of the principal amount
of this Note without the prior written consent of the Holder.


 


Section
3. Registration of Transfers and Exchanges.


 


a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.


 


b)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.


 


c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.


 






    9


     


    

 


Section
4. Conversion.


 


a)
Voluntary Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall
be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time
(subject to the conversion limitations set forth in Section 4(d) and Section 4(e) hereof). The Holder shall effect conversions
by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion
shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion,
the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of
Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note
to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted
in which case the Holder shall surrender this Note as promptly as is reasonably practicable after such conversion without delaying
the Company’s obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company
shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an
objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any
dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The
Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the
amount stated on the face hereof.


 


b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $3.30, subject to adjustment
herein (the “Conversion Price”).


 


c)
Mechanics of Conversion.


 


i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price.


 






    10


     


    

 


ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after
the earlier of (i) the six (6) month anniversary of the Original Issue Date; provided that on the Share Delivery Date the Company
has satisfied the current public information requirements under Rule 144 and the Conversion Shares may be resold without any volume
or manner-of-sale restrictions under Rule 144 or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired
upon the conversion of this Note (including, if the Company has given continuous notice pursuant to Section 2(b) for payment of
interest in shares of Common Stock at least 20 Trading Days prior to the date on which the Notice of Conversion is delivered to
the Company, shares of Common Stock representing the payment of accrued interest otherwise determined pursuant to Section 2(a)
but assuming that the Interest Notice Period is the twenty (20) Trading Days period immediately prior to the date on which the
Notice of Conversion is delivered to the Company and excluding for such issuance the condition that the Company deliver Interest
Conversion Shares as to such interest payment prior to the commencement of the Interest Notice Period) and (B) a bank check in
the amount of accrued and unpaid interest (if the Company has elected or is required to pay accrued interest in cash). On or after
the earlier of (i) the six month anniversary of the Original Issue Date; provided that on the Share Delivery Date the Company
has satisfied the current public information requirements under Rule 144 and the Conversion Shares may be resold without any volume
or manner-of-sale restrictions under Rule 144 or (ii) the Effective Date, the Company shall deliver any Conversion Shares required
to be delivered by the Company under this Section 4(c) electronically through the Depository Trust Company or another established
clearing corporation performing similar functions. As used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common
Stock as in effect on the date of delivery of the Notice of Conversion.


 


iii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the
Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to
the Company the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.


 


iv.
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the
event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or
enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for
the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of
which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue
Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver
to the Holder such Conversion Shares pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder,
in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day
(increasing to $20 per Trading Day on the fifth (5th) Trading Day after such liquidated damages begin to accrue) for
each Trading Day after such Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section
8 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall
have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. 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.


 






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v.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the
Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the
principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements
under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a 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 Conversion Shares upon conversion of this Note as required pursuant to the terms hereof.


 


vi.
Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note and payment
of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights
of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common
Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the
adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment
of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities
Act, shall be registered for public resale in accordance with such Registration Statement (subject to such Holder’s compliance
with its obligations under the Registration Rights Agreement).


 


vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.


 






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viii.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge
to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of
this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person
or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Conversion Shares.


 


d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not
have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)) would
beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include
the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal
amount of this Note beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned
by the Holder or any of its Affiliates or Attribution Parties.  Except as set forth in the preceding sentence, for purposes
of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination
of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates and Attribution
Parties) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission
of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation
to other securities owned by the Holder together with any Affiliates or Attribution Parties) and which principal amount of this
Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction,
the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion
has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this
Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report
filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written
notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing 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
or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon notice
to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the
Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial
Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any increase in the Beneficial Ownership Limitation
will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.


 






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e)
Issuance Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval,
then the Company may not issue, upon conversion of this Note, a number of shares of Common Stock which, when aggregated with any
shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (i) in connection with the
conversion of any Notes issued pursuant to the Purchase Agreement, (ii) in connection with the exercise of any Warrants issued
pursuant to the Purchase Agreement and (iii) in connection with any warrants issued to any registered broker-dealer as a fee in
connection with the issuance of the Securities pursuant to the Purchase Agreement, would exceed 5,666,480 shares of Common Stock
(subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable
Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing
(x) the original principal amount of the Holder’s Note by (y) the aggregate original principal amount of all Notes issued
on the Original Issue Date to all Holders. In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum
among Notes and Warrants held by it in its sole discretion. Such portion shall be adjusted upward ratably in the event a Holder
no longer holds any Notes or Warrants and the amount of shares issued to the Holder pursuant to the Holder’s Notes and Warrants
was less than the Holder’s pro-rata share of the Issuable Maximum. For avoidance of doubt, unless and until any required
Shareholder Approval is obtained and effective, warrants issued to any registered broker-dealer as a fee in connection with the
Securities issued pursuant to the Purchase Agreement as described in clause (iii) above shall provide that such warrants shall
not be allocated any portion of the Issuable Maximum and shall be unexercisable unless and until such Shareholder Approval is
obtained and effective.


 


Section
5. Certain Adjustments.


 


a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion
of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues, in the event of a 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 any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately 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)
Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces
any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price,
the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if
the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion
Price on such date of the Dilutive Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of
each Dilutive Issuance the Conversion Price shall be reduced to equal the Base Conversion Price, provided that the Base Conversion
Price shall not be less than $0.734 (subject to adjustment for reverse and forward stock splits, recapitalizations and similar
transactions following the date of the Purchase Agreement) (the “Floor Price”). Notwithstanding the foregoing,
no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If the Company enters into a Variable Rate
Transaction, despite the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised. The
Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes
of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence
of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price
on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price
in the Notice of Conversion.


 






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c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares 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
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of 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 exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


d)
Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to 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)
(a “Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations
on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which
a record is taken for such Distribution, 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 participation in such Distribution (provided, however, that, to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership
of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held
in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Beneficial Ownership Limitation).


 






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e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company
(and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property
and has been accepted by the holders of fifty percent (50%) or more of the outstanding Common Stock, (iv) the Company, directly
or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization 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, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than fifty percent (50%) of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this
Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section
4(e) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section
4(e) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect
of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note
following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the
Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company
under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of
this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the
Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note,
deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of
this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a
conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such 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.


 






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f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued
and outstanding.


 


g)
Notice to the Holder.


 


i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall deliver to each Holder within one (1) Trading Day a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.


 


ii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company (and
all of its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company,
or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each
case, the Company shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at
least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such
notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.


 


Section
6. Redemption.


 


a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the Closing
Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice
is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem
some or all of the then outstanding principal amount of this Note for cash in an amount equal to the applicable Optional Redemption
Amount on the tenth (10th) Trading Day following the Optional Redemption Notice Date (such date, the “Optional
Redemption Date”, such ten (10) Trading Day period, the “Optional Redemption Period” and such redemption,
the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.
The Company may only effect an Optional Redemption if each of the Equity Conditions (excluding subparagraphs (j) and (k) of the
definition of Equity Conditions) shall have been met (unless waived in writing by the Holder) on each Trading Day during the period
commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment
of the Optional Redemption Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any
time during the Optional Redemption Period (excluding subparagraphs (j) and (k) of the definition of Equity Conditions), then
the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within three (3) Trading Days after the
first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents,
the Company is obligated to notify the Holder of the non-existence of an Equity Condition, such notice period shall be extended
to the third (3rd) Trading Day after proper notice from the Company) in which case the Optional Redemption Notice shall
be null and void, ab initio. The Company covenants and agrees that it will honor all Notices of Conversion tendered from
the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The
Company’s determination to pay an Optional Redemption in cash shall be applied ratably to all of the holders of the then
outstanding Notes based on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement.


 






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b)
Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount (the “Monthly
Redemption”). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash; provided,
however, as to any Monthly Redemption and upon thirty (30) Trading Days’ prior written irrevocable notice (the “Monthly
Redemption Notice”), in lieu of a cash redemption payment the Company may elect to pay all or part of a Monthly Redemption
Amount in Conversion Shares based on a conversion price equal to the lesser of (i) the then Conversion Price and (ii) 87% of the
lowest VWAP during the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable
Monthly Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting
the Common Stock during such ten (10) Trading Day period) (the price calculated during the ten (10) Trading Day period immediately
prior to the Monthly Redemption Date, the “Monthly Conversion Price” and such ten (10) Trading Day period,
the “Monthly Conversion Period”); provided, further, that the Company may not pay the Monthly
Redemption Amount in Conversion Shares unless (y) the Monthly Conversion Price is at least equal to the Floor Price, and (z) from
the date the Holder receives the duly delivered Monthly Redemption Notice through and until the date such Monthly Redemption is
paid in full, the Equity Conditions have been satisfied, unless waived in writing by the Holder. The Holder may convert, pursuant
to Section 4(a), any principal amount of this Note subject to a Monthly Redemption at any time prior to the date that the Monthly
Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due
and paid in full. Unless otherwise indicated by the Holder in the applicable Notice of Conversion, any principal amount of this
Note converted during the applicable Monthly Conversion Period until the date the Monthly Redemption Amount is paid in full shall
be first applied to the principal amount subject to the Monthly Redemption Amount payable in cash and then to the Monthly Redemption
Amount payable in Conversion Shares. Any principal amount of this Note converted during the applicable Monthly Conversion Period
in excess of the Monthly Redemption Amount shall be applied against the last principal amount of this Note scheduled to be redeemed
hereunder, in reverse time order from the Maturity Date. The Company covenants and agrees that it will honor all Notices of Conversion
tendered up until such amounts are paid in full. The Company’s determination to pay a Monthly Redemption in cash, shares
of Common Stock or a combination thereof shall be applied ratably to all of the holders of the then outstanding Notes based on
their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement. At any time the Company delivers
a notice to the Holder of its election to pay the Monthly Redemption Amount in shares of Common Stock, the Company shall file
a prospectus supplement pursuant to Rule 424 disclosing such election, if required by the Securities Act and the rules and regulations
promulgated thereunder. Notwithstanding anything to the contrary contained in this Section 6(b): (i) if the Company elects to
pay any Monthly Redemption Amount in Conversion Shares, then the amount of Conversion Shares to be issued to the Holder will be
at the Holder’s option; and (ii) if the Monthly Conversion Price is less than the
Floor Price, then in addition to the payment of a Monthly Redemption Amount in Conversion Shares (which issuance shall be at the
Floor Price) (in the event that the Holder permits such issuance albeit subparagraph  (j) of the definition of Equity Conditions
not being satisfied), the Company shall pay to the Holder cash as a true-up (the “Cash True-Up Amount”). The
Cash True-Up Amount shall be determined by the product of (i) the difference between (y) the Floor Price less (z) 87% of the lowest
VWAP during the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Monthly
Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting
the Common Stock during such ten (10) Trading Day period), multiplied by (ii) the Monthly Redemption Amount that is being paid
in Conversion Shares. The Company and Holder agrees to adjust the foregoing formula, in good-faith, in the event that the formula
does not represent the intent of the Cash True-Up Amount. The intent of the Cash True-Up Amount is to compensate the Holder for
its loss in value due to the condition that a Monthly Redemption Amount cannot be converted into shares of Common Stock at Monthly
Conversion Price less than the Floor Price. Any such adjustment must be approved by the Holder.


 






    18


     


    

 


c)
Redemption Procedure.


 


i.
The payment of cash or issuance of Common Stock, as applicable, pursuant to an Optional Redemption or a Monthly Redemption shall
be payable on the Optional Redemption Date or Monthly Redemption Date, as applicable. If any portion of the payment pursuant to
an Optional Redemption or Monthly Redemption shall not be paid by the Company by the applicable due date, interest shall accrue
thereon at an interest rate equal to the lesser of 15 % per annum or the maximum rate permitted by applicable law until such amount
is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption Amount or
Monthly Redemption Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given at any
time thereafter, to invalidate such Optional Redemption or Monthly Redemption, ab initio, and, with respect to the
Company’s failure to honor the Optional Redemption, the Company shall have no further right to exercise such Optional Redemption.
Notwithstanding anything to the contrary in this Section 6, the Company’s determination to redeem in cash or its elections
under Section 6(b) shall be applied ratably among the Holders of Notes. The Holder may elect to convert the outstanding principal
amount of the Note pursuant to Section 4 prior to actual payment in cash for any redemption under this Section 6 by the delivery
of a Notice of Conversion to the Company.


 


ii.
Notwithstanding anything herein contained to the contrary, the Holder, at its option, may defer any Monthly Redemption (each a
“Deferred Redemption”). In such event, the Holder may elect to receive a Deferred Redemption at any time in
shares of Common Stock at the lesser of (i) the Conversion Price, (ii) 87% of the lowest VWAP in the ten (10) days prior to the
Holder’s notice to the Company of its election to receive payment for the Deferred Redemption. Any payment of a Deferred
Redemption that is not converted into shares of Common Stock, shall be paid in cash to the Holder on the next applicable Monthly
Redemption Date.


 


iii.
Notwithstanding anything herein contained to the contrary, the Holder, at its option, may accelerate up to four (4) Monthly Redemptions
(an “Accelerated Redemption”) at once by indicating such acceleration on a Monthly Redemption Notice. In such
event, the Holder may elect to receive an Accelerated Redemption at any time in shares of Common Stock at the Monthly Conversion
Price. Any payment of an Accelerated Redemption shall be paid in Shares of Common Stock on Monthly Redemption Date that relates
to the Monthly Redemption Notice indicating an Accelerated Redemption. For the avoidance of doubt, the Holder is entitled to an
Accelerated Redemption, at its option, with respect to each Monthly Redemption.


 


d)
Cash Redemption Upon Subsequent Financing at Election of Holder. Upon any Subsequent Financing, the Holder may elect for
a cash redemption of this Note as set forth in Section 4.19 of the Purchase Agreement.


 


Section
7. Negative Covenants. As long as any portion of this Note remains outstanding, unless Investor and the holders of
at least 50.1% in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company
shall not, and shall not permit any of the Subsidiaries to, directly or indirectly (except to the extent permitted by the terms
of the Purchase Agreement):


 


a)
other than in connection with the Carveout Financing, except with the prior written consent of the Agent (as defined in the Security
Agreement), enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including,
but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;


 






    19


     


    

 


b)
other than in connection with the Carveout Financing, enter into, create, incur, assume or suffer to exist any Liens of any kind,
on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom;


 


c)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;


 


d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under
the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors
of the Company, provided that such repurchases shall not exceed an aggregate of $50,000 for all officers and directors during
the term of this Note;


 


e)
other than in connection with the payment of accrued but unpaid interest with respect to the Bridge Notes (as defined in the Disclosure
Schedules to the Purchase Agreement), repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness other
than the Notes if on a pro-rata basis;


 


f)
pay cash dividends or distributions on any equity securities of the Company;


 


g)
subject to Section 4.20 of the Purchaser Agreement, enter into any transaction with any Affiliate of the Company or Related Party;
or


 


h)
enter into any agreement with respect to any of the foregoing.


 


Section
8. Events of Default.


 


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


 


i.
any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages and other amounts owing
to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date
or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above,
is not cured within three (3) Trading Days;


 






    20


     


    

 


ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the
Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(xi) below) or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A)
five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading
Days after the Company has become or should have become aware of such failure;


 


iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by clause (vi) below), including without limitation, the Bridge Documents
(as defined in the Disclosure Schedules to the Purchase Agreement) and any documents or instruments related to such Bridge Documents;


 


iv.
any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;


 


v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;


 


vi.
the Company or any Subsidiary shall default on any of its obligations under 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 that (a) involves
an obligation greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;


 


vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days;


 


viii.
the Company (and all of its Subsidiaries, taken as a whole) shall be a party to any Change of Control Transaction or Fundamental
Transaction or shall agree to sell or dispose of all or in excess of 33% of its assets in one transaction or a series of related
transactions (whether or not such sale would constitute a Change of Control Transaction);


 






    21


     


    

 


ix.
the Initial Registration Statement (as defined in the Registration Rights Agreement) shall not have been declared effective by
the Commission on or prior to the 60th calendar day after the Closing Date or the Company does not meet the current
public information requirements under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights
Agreement);


 


x.
if, during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness of the Registration
Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as defined in the Registration
Rights Agreement) under the Registration Statement for a period of more than twenty (20) consecutive Trading Days or thirty (30)
non-consecutive Trading Days during any 12 month period; provided, however, that if the Company is negotiating a
merger, consolidation, acquisition or sale of all or substantially all of its assets or a similar transaction and, in the written
opinion of counsel to the Company, the Registration Statement would be required to be amended to include information concerning
such pending transaction(s) or the parties thereto which information is not available or may not be publicly disclosed at the
time, the Company shall be permitted an additional ten (10) consecutive Trading Days during any twelve (12) month period pursuant
to this Section 8(a)(x);


 


xi.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the third (3rd) Trading Day
after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way
of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with
the terms hereof;


 


xii.
any Person shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;


 


xiii.
the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established clearing
corporation is no longer available or is subject to a “chill”;


 


xiv.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $250,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 45 calendar days;


 


xv.
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity Conditions
are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has occurred;


 


xvi.
the Company shall fail to maintain the Required Minimum;


 






    22


     


    

 


xvii.
the Company does not obtain the Stockholder Consent on the Closing Date;


 


xviii.
the Information Statement is not filed with the Commission within ten (10) calendar days of the Closing Date;


 


xix.
the mailing of the Information Statement is not completed by the 40th calendar day after the Closing Date;


 


xx.
the Company shall fail to timely make any filings required under the Exchange Act;


 


xxi.
the Company fails to satisfy the current public information requirements under Rule 144;


 


xxii.
the Company fails to cause the security filings described in Section 4.21 of the Purchase Agreement to be made within 29 calendar
days of the Original Issue Date; or


 


xxiii.
the Company fails to cause the security filings described in Section 4.22 and Section 4.23 of the Purchase Agreement to be made
within a reasonable period of time.


 


b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable, at the Holders election in cash at the Mandatory Default Amount or
in shares of Common Stock at the Mandatory Default Amount at a conversion price equal to 75% of the lowest VWAPs during the twenty
(20) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable date the Mandatory Default
Amount is demanded or otherwise due. Commencing five (5) days after the occurrence of any Event of Default that results in the
eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the lesser of 15%
per annum or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder
shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the
Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the
Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time
prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder
receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.


 






    23


     


    

 


Section
9. Miscellaneous.


 


a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or sent
by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other
facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in
accordance with this Section 9(a).  Any and all notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized
overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on
the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the Purchase Agreement.  Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature
pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set
forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (iv) upon actual receipt by the party to whom such notice is required to be given.


 


b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.



 


c)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.


 






    24


     


    

 


d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), 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 such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of
this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 





e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note 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 Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note 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
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.


 


f)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. 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 Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, 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 impede 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.


 






    25


     


    

 


g)
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.  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 an injunction restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required. 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.


 


h)
Next Business Day. 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.


 


i)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.


 


j)
Secured Obligation. The obligations of the Company under this Note are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement, dated the date hereof between the Company, the Subsidiaries of the Company and the Secured
Parties (as defined therein).


 


k)
Issuance of Conversion Shares Below Floor Price. For the avoidance of doubt, subject to Section 6(b), the Company shall
not issue any shares of Common Stock to the Holder in connection with this Note if the applicable conversion price is less than
the Floor Price.


 


Section
10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly
disclose such material, nonpublic 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 its Subsidiaries, the Company so shall indicate
to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries.


 


*********************


 


(Signature
Page Follows)


 




    26


     


    


 


IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.


 


		Allied
    Esports Entertainment Inc.
	 	 	 	 
		By: 	       
	 		Name:	                
	 		Title:	
		Facsimile No. for delivery of Notices: _________


 




    27


     


    


 


ANNEX
A


 


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Senior Secured Convertible Note due June 8, 2022 of Allied Esports Entertainment
Inc., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in
the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and
is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will
be charged to the holder for any conversion, except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.


 








	Conversion
    calculations:	 
	 	Date to Effect Conversion:
	 	 
	 	Principal Amount
    of Note to be Converted:
	 	 
	 	Payment of Interest
    in Common Stock __ yes  __ no
	 	       If
    yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 
	 	Number of shares
    of Common Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	Address for Delivery
    of Common Stock Certificates:
	 	 
	 	Or
	 	 
	 	DWAC Instructions:


 


	 	Broker
    No:	____________________
	 	Account No:	____________________


 













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