Exhibit
10.31


 


SIGNING
DEBENTURE


 


NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION
REQUIREMENTS THEREOF OR EXEMPTION THEREFROM.


 


CIPHERLOC
CORPORATION


 


CONVERTIBLE
DEBENTURE DUE DECEMBER 13, 2020


 


	Issuance
    Date: December 14, 2017	Principal
    Amount: $300,000.00


 


FOR
VALUE RECEIVED, CIPHERLOC CORPORATION, a corporation organized and existing under the laws of the State of Texas (the “Company”),
hereby promises to pay to PEAK ONE OPPORTUNITY FUND, L.P., having its address at 333 South Hibiscus Drive, Miami Beach,
FL 33139, or its assigns (the “Holder” and together with the other holders of Debentures issued pursuant to the Securities
Purchase Agreement (as defined below), the “Holders”), the initial principal sum of Three Hundred Thousand and 00/100
Dollars ($300,000.00) (subject to adjustment as provided herein, the “Principal Amount”) on December 13, 2020
(the “Maturity Date”). The Company has the option to redeem this Debenture prior to the Maturity Date pursuant to
Section 2(b). All unpaid principal due and payable on the Maturity Date shall be paid in the form of Common Stock of the Company,
par value $0.01 per share (“Common Stock”) pursuant to Section 3. The Holder has the option to cause any outstanding
principal and accrued interest, if any, on this Debenture to be converted into Common Stock at any time prior to the Redemption
Date (as defined below) or the Maturity Date pursuant to Section 2(a).


 


This
Debenture is one of the Debentures referred to in the Securities Purchase Agreement (the “Securities Purchase Agreement”)
dated as of December 14, 2017, between the Company and the Holder. Capitalized terms used but not defined herein shall have the
meanings set forth in the Securities Purchase Agreement. This Debenture is subject to the provisions of the Securities Purchase
Agreement and further is subject to the following additional provisions:


 


1.
This Debenture has been issued subject to investment representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act and other applicable state and foreign securities laws. The Holder may transfer
or assign this Debenture (or any part thereof) without the prior consent of the Company, and the Company shall cooperate with
any such transfer. In the event of any proposed transfer of this Debenture, the Company may require, prior to issuance of a new
Debenture in the name of such other Person, that it receive reasonable transfer documentation including legal opinions that the
issuance of the Debenture in such other name does not and will not cause a violation of the Securities Act or any applicable state
or foreign securities laws or is exempt from the registration requirements of the Securities Act. Prior to due presentment for
transfer of this Debenture to which the Company has consented, the Company and any agent of the Company may treat the Person in
whose name this Debenture is duly registered on the Company’s books and records of outstanding debt securities and obligations
(“Debenture Register”) as the owner hereof for the purpose of receiving payment as herein provided and for all other
purposes, whether or not this Debenture be overdue, and neither the Company nor any such agent shall be affected by notice to
the contrary.


 


2.
Conversion at Holder’s Option; Redemption at Company’s Option.


 


a.
The Holder is entitled to, at any time or from time to time, convert the Conversion Amount (as defined below) into Conversion
Shares, at a conversion price for each share of Common Stock (the “Conversion Price”) equal to either: (i) if no Event
of Default (as defined herein) has occurred and the date of conversion is prior to the date that is one hundred eighty (180) days
after the Issuance Date, $1.00, or (ii) if an Event of Default has occurred or the date of conversion is on or after the date
that is one hundred eighty (180) days after the Issuance Date, the lesser of (a) $1.00 or (b) Seventy percent (70%) of the lowest
traded price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date
of the date of conversion of the Debentures (provided, further, that if either the Company is not DWAC Operational at the time
of conversion or the Common Stock is traded on the OTC Pink (“OTCP”) at the time of conversion, then Seventy percent
(70%) shall automatically adjust to Sixty Five percent (65%) of the lowest traded price (as reported by Bloomberg LP) of the Common
Stock for the twenty (20) Trading Days immediately preceding the date of conversion of the Debentures), subject in each case to
equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. The Company shall
issue irrevocable instructions to its Transfer Agent regarding conversions such that the transfer agent shall be authorized and
instructed to issue Conversion Shares upon its receipt of a Notice of Conversion without further approval or authorization from
the Company. For purposes of this Debenture, the “Conversion Amount” shall mean the sum of (A) all or any portion
of the outstanding Principal Amount of this Debenture, as designated by the Holder upon exercise of its right of conversion plus
(B) any interest, pursuant to Section 10 or otherwise, that has accrued on the portion of the Principal Amount that has been designated
for payment pursuant to (A).


 




    	 



    	 



    

 


Conversion
shall be effectuated by delivering by facsimile, email or other delivery method to the Transfer Agent of the completed form of
conversion notice attached hereto as Annex A (the “Notice of Conversion”), executed by the Holder of the Debenture
evidencing such Holder’s intention to convert this Debenture or a specified portion hereof. No fractional shares of Common
Stock or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded
to the nearest whole share. The Holder may, at its election, deliver a Notice of Conversion to either the Company or the Transfer
Agent. The date on which notice of conversion is given (the “Conversion Date”) shall be deemed to be the date on which
the Company or the Transfer Agent, as the case may be, receives by fax, email or other means of delivery used by the Holder the
Notice of Conversion (such receipt being evidenced by electronic confirmation of delivery by facsimile or email or confirmation
of delivery by such other delivery method used by the Holder). Delivery of a Notice of Conversion to the Transfer Agent may be
given by the Holder by facsimile, or by delivery to the Transfer Agent at the address set forth in the Transfer Agent Instruction
Letter (or such other contact facsimile number, email or street address as may be designated by the Transfer Agent to the Holder).
Delivery of a Notice of Conversion to the Company shall be given by the Holder pursuant to the notice provisions set forth in
Section 10 of the Agreement. The Conversion Shares must be delivered to the Holder within two (2) business days from the date
of delivery of the Notice of Conversion to the Transfer Agent or Company, as the case may be. Conversion shares shall be delivered
by DWAC so long as the Company is then DWAC Operational, unless the Holder expressly requests delivery in certificated form or
the Conversion Shares are in the form of Restricted Stock and are required to bear a restrictive legended. Conversion Shares shall
be deemed delivered (i) if delivered by DWAC, upon deposit into the Holder’s brokerage account, or (ii) if delivered in
certificated form, upon the Holder’s actual receipt of the Conversion Shares in certificated form at the address specified
by the Holder in the Notice of Conversion, as confirmed by written receipt. All expenses incurred by Holder, for the issuance
and clearing of the Common Stock into which this Debenture is convertible into, shall immediately and automatically be added to
the balance of the Debenture at such time as the expenses are incurred by Holder.


 


Notwithstanding
the foregoing, unless the Holder delivers to the Company written notice at least sixty-one (61) days prior to the effective date
of such notice that the provisions of this paragraph (the “Limitation on Ownership”) shall not apply to such Holder,
in no event shall a holder of Debentures have the right to convert Debentures into, nor shall the Company issue to such Holder,
shares of Common Stock to the extent that such conversion would result in the Holder and its affiliates together beneficially
owning more than 4.99% of the then issued and outstanding shares of Common Stock. For purposes hereof, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13D-G under the Exchange Act.


 


b.
So long as no Event of Default (as defined in Section 10) shall have occurred and be continuing (whether such Event of Default
has been declared by the Holder) (unless the Holder consents to such redemption notwithstanding such Event of Default, as described
in clause (v), below), the Company may at its option call for redemption all or part of the Debentures, with the exception of
any portion thereof which is the subject of a previously-delivered Notice of Conversion, prior to the Maturity Date, as follows:


 




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(i)
The Debentures called for redemption shall be redeemable by the Company, upon not more than two (2) days written notice, for an
amount (the “Redemption Price”) equal to: (i) if the Redemption Date (as defined below) is ninety (90) days or less
from the date of issuance of this Debenture, One Hundred percent (100%) of the sum of the Principal Amount so redeemed plus accrued
interest, if any; (ii) if the Redemption Date is greater than or equal to one ninety-one (91) days from the date of issuance of
this Debenture and less than or equal to one hundred twenty (120) days from the date of issuance of this Debenture, One Hundred
Ten percent (110%) of the sum of the Principal Amount so redeemed plus accrued interest, if any; (iii) if the Redemption Date
is greater than or equal to one hundred twenty one (121) days from the date of issuance of this Debenture and less than or equal
to one hundred fifty (150) days from the date of issuance of this Debenture, One Hundred Twenty Five percent (125%) of the sum
of the Principal Amount so redeemed plus accrued interest, if any; (iv) if the Redemption Date is greater than or equal to one
hundred fifty one (151) days from the date of issuance of this Debenture and less than or equal to one hundred eighty (180) days
from the date of issuance of this Debenture, One Hundred Thirty percent (130%) of the sum of the Principal Amount so redeemed
plus accrued interest, if any; and (v) if either (1) the Debentures are in default but the Holder consents to the redemption notwithstanding
such default or (2) the Redemption Date is greater than or equal to one hundred eighty one (181) days from the date of issuance
of this Debenture, One Hundred Forty percent (140%) of the sum of the Principal Amount so redeemed plus accrued interest, if any.
The date upon which the Debentures are redeemed and paid shall be referred to as the “Redemption Date” (and, in the
case of multiple redemptions of less than the entire outstanding Principal Amount, each such date shall be a Redemption Date with
respect to the corresponding redemption).


 


(ii)
If fewer than all outstanding Debentures are to be redeemed and are held by different investors, then all Debentures shall be
partially redeemed on a pro rata basis.


 


(iii)
[Reserved]


 


(iv)
On the Redemption Date, the Company shall cause the Holders whose Debentures have been presented for redemption to be issued payment
of the Redemption Price. In the case of a partial redemption, the Company shall also issue new Debentures to the Holders for the
Principal Amount remaining outstanding after the Redemption Date promptly after the Holders’ presentation of the Debentures
called for redemption.


 


(v)
To effect a redemption the Company shall provide a written notice to the Holder(s) not more than two (2) days prior to the Redemption
Date (the “Redemption Notice”), setting forth the following:


 


	 	1.	the
    Redemption Date;
	 	 	 
	 	2.	the
    Redemption Price;
	 	 	 
	 	3.	the
    aggregate Principal Amount of the Debentures being called for redemption; 
	 	 	 
	 	4.	a
    statement instructing the Holders to surrender their Debentures for redemption and payment of the Redemption Price, including
    the name and address of the Company or, if applicable, the paying agent of the Company, where Debentures are to be surrendered
    for redemption;
	 	 	 
	 	5.	a
    statement advising the Holders that the Debentures (or, in the case of a partial redemption, that portion of the Principal
    Amount being called for redemption) as of the Redemption Date will cease to be convertible into Common Stock as of the Redemption
    Date; and
	 	 	 
	 	6.	in
    the case of a partial redemption, a statement advising the Holders that after the Redemption Date a substitute Debenture will
    be issued by the Company after deduction the portion thereof called for redemption, at no cost to the Holder, if the Holder
    so requests.


 


Notwithstanding
the foregoing, in the event the Company issues a Redemption Notice but fails to fund the redemption on the Redemption Date, then
such Redemption Notice shall be null and void, and (i) the Holder(s) shall be entitled to convert the Debentures previously the
subject of the Redemption Notice, and (ii) the Company may not redeem such Debentures for at least thirty (30) days following
the intended Redemption Date that was voided, and the Company shall be required to pay to the Holder(s) the Redemption Price simultaneously
with the issuance of a Redemption Notice in connection with any subsequent redemption pursued by the Company.


 




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3.
Unless demand has otherwise been made by the Holder in writing for payment in cash as provided hereunder, and so long as no Event
of Default shall exist (whether or not notice thereof has been delivered by the Holder to the Company), any Debentures not previously
tendered to the Company for conversion as of the Maturity Date shall be deemed to have been surrendered for conversion, without
further action of any kind by the Company or any of its agents, employees or representatives, as of the Maturity Date at the Conversion
Price applicable on the Maturity Date (“Mandatory Conversion”).


 


4.
No provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional to convert
this Debenture into Common Stock, at the time, place, and rate herein prescribed. This Debenture is a direct obligation of the
Company.


 


5.
If the Company (a) merges or consolidates with another corporation or business entity and the Company is not the surviving entity
or (b) sells or transfers all or substantially all of its assets to another Person and the holders of the Common Stock are entitled
to receive stock, securities or property in respect of or in exchange for Common Stock, then as a condition of such merger, consolidation,
sale or transfer, the Company and any such successor, purchaser or transferee will agree that this Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the kind and amount of stock, securities or property
receivable upon such merger, consolidation, sale or transfer by a holder of the number of shares of Common Stock into which this
Debenture might have been converted immediately before such merger, consolidation, sale or transfer, subject to adjustments which
shall be as nearly equivalent as may be practicable. In the event of any (i) proposed merger or consolidation where the Company
is not the surviving entity or (ii) sale or transfer of all or substantially all of the assets of the Company (in either such
case, a “Sale”), the Holder shall have the right to convert by delivering a Notice of Conversion to the Company within
fifteen (15) days of receipt of notice of such Sale from the Company.


 


6.
If, at any time while any portion of this Debenture remains outstanding, the Company effectuates a stock split or reverse stock
split of its Common Stock or issues a dividend on its Common Stock consisting of shares of Common Stock or otherwise recapitalizes
its Common Stock, the Conversion Price shall be equitably adjusted to reflect such action. By way of illustration, and not in
limitation, of the foregoing (i) if the Company effectuates a 2:1 split of its Common Stock, thereafter, with respect to any conversion
for which the Company issues the shares after the record date of such split, the Conversion Price shall be deemed to be one-half
of what it had been calculated to be immediately prior to such split; (ii) if the Company effectuates a 1:10 reverse split of
its Common Stock, thereafter, with respect to any conversion for which the Company issues the shares after the record date of
such reverse split, the Conversion Price shall be deemed to be the amount of such Conversion Price calculated immediately prior
to the record date multiplied by 10; and (iii) if the Company declares a stock dividend of one share of Common Stock for every
10 shares outstanding, thereafter, with respect to any conversion for which the Company issues the shares after the record date
of such dividend, the Conversion Price shall be deemed to be the amount of such Conversion Price calculated immediately prior
to such record date multiplied by a fraction, of which the numerator is the number of shares for which a dividend share will be
issued and the denominator is such number of shares plus the dividend share(s) issuable or issued thereon.


 


7.
All payments contemplated hereby to be made “in cash” shall be made by wire transfer of immediately available funds
in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private
debts. All payments of cash and each delivery of shares of Common Stock issuable to the Holder as contemplated hereby shall be
made to the Holder to an account designated by the Holder to the Company and if the Holder has not designated any such accounts
at the address last appearing on the Debenture Register of the Company as designated in writing by the Holder from time to time;
except that the Holder may designate, by notice to the Company, a different delivery address for any one or more specific payments
or deliveries.


 


8.
The Holder of the Debenture, by acceptance hereof, agrees that this Debenture is being acquired for investment and that such Holder
will not offer, sell or otherwise dispose of this Debenture or the Shares of Common Stock issuable upon conversion thereof except
in compliance with the terms of the Securities Purchase Agreement and under circumstances which will not result in a violation
of the Securities Act or any applicable state Blue Sky or foreign laws or similar laws relating to the sale of securities.


 




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9.
This Debenture shall be governed by and construed in accordance with the laws of the State of Nevada. Each of the parties consents
to the exclusive jurisdiction and venue of the state and/or federal courts located in Miami-Dade
County, Florida in connection with any dispute arising under this Agreement, and each waives any objection based on forum non
conveniens. This provision is intended to be a “mandatory” forum selection clause and governed by and interpreted
consistent with Florida law (Nevada law governing all other, substantive matters). To the extent determined by such court, the
Company shall reimburse the Holder for any reasonable legal fees and disbursements incurred by the Holder in enforcement of or
protection of any of its rights under this Debenture or the Securities Purchase Agreement.


 


10.
The following shall constitute an “Event of Default”:


 


a.
The Company fails in the payment of principal or interest (to the extent that interest is imposed under this Section 10) on this
Debenture as required to be paid in cash hereunder, and payment shall not have been made for a period of five (5) business days
following the payment due date (as to which no further cure period shall apply); or


 


b.
Any of the representations or warranties made by the Company herein, in the Securities Purchase Agreement or in any certificate
or financial or other written statements heretofore or hereafter furnished by the Company to the Holder in connection with the
issuance of this Debenture, shall be false or misleading (including without limitation by way of the misstatement of a material
fact or the omission of a material fact) in any material respect at the time made (as to which no cure period shall apply); or


 


c.
The Company fails to remain listed on OTCP, OTCQB, or OTCQX, or a more senior stock exchange any time from the date hereof to
the Maturity Date for a period in excess of five (5) Trading Days (as to which no further cure period shall apply); or


 


d.
The Company (i) fails to timely file required SEC reports when due (including extensions), becomes, is deemed to be or asserts
that it is a “shell company” at any time for purposes of the 1933 Act, and Rule 144 promulgated thereunder or otherwise
takes any action, or refrains from taking any action, the result of which makes Rule 144 under the 1933 unavailable to the Holder
for the sale of their Securities, (ii) fails to issue shares of Common Stock to the Holder or to cause its Transfer Agent to issue
shares of Common Stock upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this
Debenture, (iii) fails to transfer or to cause its Transfer Agent to transfer any certificate for shares of Common Stock issued
to the Holder upon conversion of this Debenture as and when required by this Debenture and such transfer is otherwise lawful,
(iv) fails to remove any restrictive legend or to cause its Transfer Agent to transfer any certificate or any shares of Common
Stock issued to the Holder upon conversion of this Debenture as and when required by the relevant Transaction Document(s) and
such legend removal is otherwise lawful, or (v) the Company fails to perform or observe any of its obligations under the Section
5 of the Agreement or under the Transfer Agent Instruction Letter (no cure period shall apply in the case of clauses (i) through
(v) above, inclusive); or


 


e.
The Company fails to perform or observe, in any material respect (i) any other covenant, term, provision, condition, agreement
or obligation set forth in the Debenture, (subject to a cure period of three (3) days other than in the case of a failure under
Section 5 hereof, as to which no cure period shall apply), or (ii) any other covenant, term, provision, condition, agreement or
obligation of the Company set forth in the Securities Purchase Agreement and such failure shall continue uncured for a period
of either (1) three (3) days after the occurrence of the Company’s failure under Section 4(d), (e) (except as described
in Section 10(c) hereof, as to which Section 10(c) hereof shall control), (f), (g) or (h) of the Securities Purchase Agreement,
or (2) ten (10) days after the occurrence of the Company’s failure under any other provision of the Securities Purchase
Agreement not otherwise specifically addressed in the Events of Default set forth in this Section 10; or


 


f.
The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the
benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business (as to which no cure period shall apply);
or


 




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g.
A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such appointment (as to which no cure period shall apply);
or


 


h.
Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody
or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within
sixty (60) days thereafter (as to which no cure period shall apply); or


 


i.
Any money judgment, writ or warrant of attachment, or similar process (including an arbitral determination), in excess of Fifty
Thousand Dollars ($50,000) in the aggregate shall be entered or filed against the Company or any of its properties or other assets
(as to which no cure period shall apply); or


 


j.
The occurrence of a breach or an event of default under the terms of any indebtedness or financial instrument of the Company or
any subsidiary (including but not limited to any Subsidiary) of the Company in an aggregate amount in excess of Fifty Thousand
Dollars ($50,000) or more which is not waived by the creditors under such indebtedness (as to which no cure period shall apply);
or


 


k.
Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or
any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall
not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent
to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any
such proceeding (as to which no further cure period shall apply); or


 


l.
The issuance of an order, ruling, finding or similar adverse determination the SEC, the Secretary of State of the State of Nevada
or Texas, the National Association of Securities Dealers, Inc. or any other securities regulatory body (whether in the United
States, Canada or elsewhere) having proper jurisdiction that the Company and/or any of its past or present directors or officers
have committed a material violation of applicable securities laws or regulations (as to which no cure period shall apply); or


 


m.
The Company shall have its Common Stock suspended or delisted from a national securities exchange or an electronic quotation service
such as the OTCP, OTCQB, or OTCQX for a period in excess of five (5) Trading Days (as to which no further cure period shall apply);
or


 


n.
Any of the following shall occur and be continuing: a breach or default by any party under (a) any agreement identified by the
Company in its SEC filings as a material agreement or (b) any note or other form of indebtedness in favor of the Company representing
indebtedness of at least Three Hundred Thousand Dollars ($300,000.00), irrespective of whether such breach or default was waived
(as to which no cure period shall apply); or


 


o.
Notice of a Material Adverse Effect is provided by the Company or the determination in good faith by the Holder that a Material
Adverse Effect has occurred (as to which no cure period shall apply); or


 


p.
The Company attempts to modify, amend, withdraw, rescind, disavow or repudiate any part of the Irrevocable Instructions (as to
which no cure period shall apply).


 


q.
Any attempt by the Company or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal,
conveyance, or disclosure by the Company or its officers, directors, and/or affiliates of, material non-public information concerning
the Company, to the Holder or its successors and assigns, which is not immediately cured by Company’s filing of a Form 8-K
pursuant to Regulation FD on that same date.


 




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r.
At any time while this Debenture is outstanding, the lowest traded price on the OTCP, OTCQB, or OTCQX, or other applicable principal
trading market for the Common Stock, is equal to or less than $0.0001.


 


Then,
or at any time thereafter, the Company shall immediately give written notice of the occurrence of such Event of Default to the
Holders of all Debentures then outstanding, and in each and every such case, unless such Event of Default shall have been waived
in writing by a majority in interest of the Holders of the Debentures (which waiver shall not be deemed to be a waiver of any
subsequent default), then at the option of a majority in interest of the Holders and in the discretion of a majority in interest
of the Holders, take any or all of the following actions: (i) pursue remedies against the Company in accordance with any of the
Holder’s rights, (ii) increase the interest rate applicable to the Debentures to the lesser of eighteen percent (18%) per
annum and the maximum interest rate allowable under applicable law, (iii) in the case of an Event of Default under Section 10(e)(ii)(1)
based on the Company’s failure to be DWAC Operational, increase the Principal Amount to an amount equal to one hundred ten
percent (110%) of the then-outstanding Principal Amount, (iv) in the case of an Event of Default under Section 10(d)(i), increase
the Principal Amount to an amount equal to one hundred twenty percent (120%) of the then-outstanding Principal Amount and an additional
ten percent (10%) discount shall be factored into the Conversion Price until this Debenture is no longer outstanding, (v) in the
case of an Event of Default under Section 10(d)(i) through (v), increase the Principal Amount of the relevant Holder’s Debenture
by One Thousand Dollars and 00/100 ($1,000.00) for each day the related failure continues, (vi) in the case of an Event of Default
under Section 10(d)(ii) through (v) arising from an untimely delivery to the Holder of Conversion Shares or shares of Common Stock
in de-legended form, if the traded price of the Common Stock on the Trading Day immediately prior to the actual date of delivery
of Conversion Shares or de-legended shares, as the case may be, is less than the traded price on the Trading Day immediately prior
to the date when Conversion Shares or de-legended shares were required to be delivered, increase the Principal Amount of the relevant
Holder’s Debenture by an amount per share equal to such difference, and (vii) following the expiration of the applicable
grace period (if any), at the option and discretion of the Holder, accelerate the full indebtedness under this Debenture, in an
amount equal to one hundred forty percent (140%) of the outstanding Principal Amount and accrued and unpaid interest (the “Acceleration
Amount”), whereupon the Acceleration Amount shall be immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything contained herein, in the Securities Purchase Agreement
or in any other note or instruments to the contrary notwithstanding. In the case of an Event of Default under Section 10(d)(ii),
the Holder may either (i) declare the Acceleration Amount to exclude the Conversion Amount that is the subject of the Event of
Default, in which case the Acceleration Amount shall be based on the remaining Principal Amount and accrued interest (if any),
in which case the Company shall continue to be obligated to issue the Conversion Shares, or (ii) declare the Acceleration Amount
to include the Conversion Amount that is the subject of the Event of Default, in which case the Acceleration Amount shall be based
on the full Principal Amount, including the Conversion Amount, and accrued interest (if any), whereupon the Notice of Conversion
shall be deemed withdrawn. At its option, the Holder may elect to convert the Debenture pursuant to Section 2 notwithstanding
the prior declaration of a default and acceleration, in the sole discretion of such Holder. A majority in interest of the Holders
may immediately enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies
afforded by applicable law. Notwithstanding the foregoing, in the case of a default under Section 10(d)(ii) through (iv), the
Holder of the Debenture sought to be converted, transferred or de-legended, as the case may be, acting singly, shall have the
sole and absolute discretion to increase the applicable interest rate on the Debentures held by such Holder and/or to accelerate
the Debenture(s) held by such Holder. The Company expressly acknowledges and agrees that the Holder’s exercise of any or
all of the remedies provided herein or under applicable law, including without limitation the increase(s) in the Principal Amount
and the Acceleration Amount as may be declared in the case of a default, is reasonable and appropriate due to the inability to
define the financial hardship that the Company’s default would impose on the Holders. To the extent that the Holder’s
exercise of any of its remedies in the case of an Event of Default shall be construed to exceed the maximum interest rate allowable
under applicable law, then such remedies shall be reduced to equal the maximum interest rate allowable under applicable law


 


11.
Nothing contained in this Debenture shall be construed as conferring upon the Holder the right to vote or to receive dividends
or to consent or receive notice as a shareholder in respect of any meeting of shareholders or any rights whatsoever as a shareholder
of the Company, unless and to the extent converted in accordance with the terms hereof.


 




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12.
So long as this Debenture is outstanding, upon any issuance by the Company or any of its subsidiaries of any security with any
term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly
provided to the Holder in this Debenture, then the Company shall notify the Holder of such additional or more favorable term and
such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The types of terms contained
in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing
conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts, stock sale price,
private placement price per share, and warrant coverage.


 


13.
This Debenture may be amended only by the written consent of the parties hereto. Notwithstanding the foregoing, the Principal
Amount of this Debenture shall automatically be reduced by any and all Conversion Amounts (to the extent that the same relate
to principal hereof). In the absence of manifest error, the outstanding Principal Amount of the Debenture on the Holder’s
book and records shall be the correct amount.


 


14.
In the event of any inconsistency between the provisions of this Debenture and the provisions of any other Transaction Document,
the provisions of this Debenture shall prevail. Without limiting the generality of the foregoing, in the event the Transfer Agent
is not required to transfer any Common Stock, issue Conversion Shares or de-legended shares of Restricted Stock pursuant to the
Transfer Agent Instruction Letter, this shall not operate as an excuse, extension or waiver of the Company’s obligation
to issue and deliver Conversion Shares or de-legended Restricted Stock.


 


15.
The Company specifically acknowledges and agrees that in the event of a breach or threatened breach by the Company of any provision
hereof or of any other Transaction Document, the Holder will be irreparably damaged, and that damages at law would be an inadequate
remedy if this Debenture or such other Transaction Document were not specifically enforced. Therefore, in the event of a breach
or threatened breach by the Company, the Holder shall be entitled, in addition to all other rights and remedies, to an injunction
restraining such breach, without being required to show any actual damage or to post any bond or other security, and/or to a decree
for a specific performance of the provisions of this Debenture and the other Transaction Documents.


 


16.
No waivers or consents in regard to any provision of this Debenture may be given other than by an instrument in writing signed
by the Holder.


 


17.
Each time, while this Debenture is outstanding, the Company enters into a Section 3(a)(9) transaction (including but not limited
to the issuance of new promissory notes or debentures, or of a replacement promissory note or debenture), or Section 3(a)(10)
transaction, in which any 3rd party has the right to convert monies owed to that 3rd party (or receive shares pursuant to a settlement
or otherwise) at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable
adjustments in this Debenture), then the Conversion Price shall be automatically adjusted to such greater discount percentage
(prior to all applicable adjustments in this Debenture) until this Debenture is no longer outstanding. Each time, while this Debenture
is outstanding, the Company enters into a Section 3(a)(9) transaction (including but not limited to the issuance of new promissory
notes or debentures, or of a replacement promissory note or debenture), or Section 3(a)(10) transaction, in which any 3rd party
has a look back period greater than the look back period in effect under this Debenture at that time, then the Holder’s
look back period shall automatically be adjusted to such greater number of days until this Debenture is no longer outstanding.
The Company shall give written notice to the Holder, with the adjusted Conversion Price and/or adjusted look back period (each
adjustment that is applicable due to the triggering event), within one (1) business day of an event that requires any adjustment
described in this section. So long as this Note is outstanding, the Company shall not enter into any transaction or arrangement
structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities
Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In
the event that the Company does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this note is outstanding, a liquidated damages charge of 20% of the outstanding principal balance of this Note,
but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder
at its election in the form of cash payment or addition to the balance of this Note.


 


18.
So long as this Debenture is outstanding, upon any issuance by the Company or any of its subsidiaries of any security with any
term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly
provided to the Holder in this Debenture, then the Company shall notify the Holder of such additional or more favorable term and
such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The types of terms contained
in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing
conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts, stock sale price,
private placement price per share, and warrant coverage.


 


[Signature
Page Follows]


 




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IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by an officer thereunto duly authorized as of the
date of issuance set forth above.


 


	 	Cipherloc
    Corporation 
	 	By:	/s/
    Michael De La Garza
	 	Name:	Michael
    De La Garza
	 	Title:	Chief
    Executive Officer


 


[Signature
Page to Convertible Debenture]


 




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ANNEX
A


 


CIPHERLOC
CORPORATION


 


NOTICE
OF CONVERSION


 


(To
Be Executed by the Registered Holder in Order to Convert the Debenture)


 


The
undersigned hereby irrevocably elects to convert $ ________________ of the Principal Amount of the above Debenture into Shares
of Common Stock of Cipherloc Corporation, a Texas corporation (the “Company”), according to the conditions hereof,
as of the date written below. After giving effect to the conversion requested hereby, the outstanding Principal Amount of such
debenture is $____________________, absent manifest error.


 


Pursuant
to the Debenture, certificates representing Common Stock upon conversion must be delivered (including delivery by DWAC or DRS)
to the undersigned within two (2) business days from the date of delivery of the Notice of Conversion to the Transfer Agent.


 


	Conversion
    Date
	 
	 
	Applicable
    Conversion Price
	 
	 
	Signature
	 
	 
	Print
    Name
	 
	 
	Address
	 
	 	 
	 	 


 




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