Exhibit
10.2


 


THIS
INSTRUMENT CONTAINS AN AFFIDAVIT OF CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS BORROWER MAY HAVE
AND ALLOWS THE HOLDER TO OBTAIN A JUDGMENT AGAINST BORROWER WITHOUT ANY FURTHER NOTICE.


 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A
OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


	Principal
    Amount: $315,000.00	Issue
    Date: September 28, 2022
	Actual
    Amount of Purchase Price: $283,500.00	 


 


PROMISSORY
NOTE


 


FOR
VALUE RECEIVED, CLEARDAY, INC., a Delaware corporation (hereinafter called the “Borrower” or the “Company”)
(Trading Symbol: CLRD), hereby promises to pay to the order of MAST HILL FUND, L.P., a Delaware limited partnership, or registered
assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of $315,000.00 (the
“Principal Amount”) (subject to adjustment herein), which amount is the $283,500.00 actual amount of the purchase price hereof
plus an original issue discount in the amount of $31,500.00 (the “OID”), and to pay interest on the unpaid Principal Amount
hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”)
until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, as further provided herein.
The maturity date shall be October 13, 2023 (the “Maturity Date”), and is the date upon which the Principal Amount (which
includes the OID) and any accrued and unpaid interest and other fees, shall be due and payable.


 


This
Note may not be prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.


 


Any
Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent
(16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”).
Interest and Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.


 


All
payments due hereunder (to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall
be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of
this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day.


 


Each
capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used
in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks
in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading
Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase
Agreement), provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.


 




    	1



     


    

 


This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.


 


In
connection with the issuance of this Note, the Borrower issued the Warrant (as defined in the Purchase Agreement) (the “Warrant”)
to Holder as a commitment fee, provided, however, that the Warrant must be cancelled and extinguished in its entirety if the Note is
fully repaid and satisfied on or prior to the Maturity Date, subject further to the terms and conditions of this Note.


 


In
connection with the issuance of this Note, the Borrower issued the Second Shares (as defined in the Purchase Agreement) (the “Second
Shares”) to Holder as a commitment fee, provided, however, that all of the Second Shares must be cancelled and extinguished in
its entirety if the Note is fully repaid and satisfied on or prior to October 28, 2022, 141,750 of the Second Shares must be cancelled
and extinguished in its entirety if the Note is fully repaid and satisfied on or prior to November 28, 2022, 126,000 of the Second Shares
must be cancelled and extinguished in its entirety if the Note is fully repaid and satisfied on or prior to December 28, 2022, 110,250
of the Second Shares must be cancelled and extinguished in its entirety if the Note is fully repaid and satisfied on or prior to January
28, 2023, 94,500 of the Second Shares must be cancelled and extinguished in its entirety if the Note is fully repaid and satisfied on
or prior to February 28, 2023, 78,750 of the Second Shares must be cancelled and extinguished in its entirety if the Note is fully repaid
and satisfied on or prior to March 28, 2023, 63,000 of the Second Shares must be cancelled and extinguished in its entirety if the Note
is fully repaid and satisfied on or prior to April 28, 2023, 47,250 of the Second Shares must be cancelled and extinguished in its entirety
if the Note is fully repaid and satisfied on or prior to May 28, 2023, 31,500 of the Second Shares must be cancelled and extinguished
in its entirety if the Note is fully repaid and satisfied on or prior to June 28, 2023, and 15,750 of the Second Shares must be cancelled
and extinguished in its entirety if the Note is fully repaid and satisfied on or prior to July 28, 2023. All of the aforementioned share
amounts in this paragraph are to be appropriately adjusted for any stock dividend, stock split, stock combination, rights offerings,
reclassification or similar transaction that proportionately decreases or increases the Common Stock.


 


The
following terms shall also apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS


 


1.1
Conversion Right. The Holder shall have the right, on any calendar day, at any time on or following the date that an Event of
Default (as defined in the Note) occurs under the Note, to convert all or any portion of the then outstanding and unpaid Principal Amount
and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists
on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified, at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided,
however, that notwithstanding anything to the contrary contained herein, the a Holder shall not have the right to convert any portion
of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth
on the applicable Notice of Conversion, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any
other Persons (as defined below) 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 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 would be issuable upon (i) conversion of the remaining, nonconverted portion 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 nonconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein 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 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules
required to be filed in accordance therewith. 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
1.1, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B)
a more recent public announcement by the Company or (C) a more recent written notice by the Company or the 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 two Trading
Days 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 or Attribution Parties 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
at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental
entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note.
The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by
the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other
means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m.,
New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus
(2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2).


 




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1.2
Conversion Price.


 


(a)
Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default
Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal
$0.50, subject to adjustment as provided in this Note. If at any time the Conversion Price as determined hereunder for any conversion
would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal
such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where
“Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause
the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued
had the Conversion Price not been adjusted by the Holder to the par value price. Holder shall be entitled to deduct $1,750.00 from the
conversion amount in each Notice of Conversion to cover Holder’s fees associated with each Notice of Conversion. All such Conversion
Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination, rights offerings, reclassification
or similar transaction that proportionately decreases or increases the Common Stock. 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 (as defined in this Note), (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 the immediately preceding sentence shall become
effective immediately after the record date for the determination of shareholders 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. “Common
Stock Equivalents” means any securities of the Company or the Company’s subsidiaries which would entitle the holder thereof
to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.


 


1.3
Authorized and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the
issuance of a number of Conversion Shares equal to the greater of: (a) 787,500 shares of Common Stock or (b) the sum of (i) the number
of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) at the time
of such calculation (taking into consideration any adjustments to the Conversion Price as provided in this Note) multiplied by
(ii) 1.25 (the “Reserved Amount”). The Borrower represents that upon issuance, the Conversion Shares will be duly and validly
issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates
for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees
that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing
stock certificates or cause the Company to electronically issue shares of Common Stock to execute and issue the necessary certificates
for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the
terms and conditions of this Note.


 


If,
at any time, the Borrower does not maintain the Reserved Amount, it will be considered an Event of Default (as defined in this Note)
under this Note.


 




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1.4
Method of Conversion.


 


(a)
Mechanics of Conversion. This Note may be converted by the Holder in whole or in part, on any calendar day, at any time on or
following the date that an Event of Default occurs under the Note, by submitting to the Borrower or Borrower’s transfer agent a
Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59
p.m., New York, New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have
been delivered and received on the next Trading Day.


 


(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire
unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted
and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to
require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Holder
shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion
of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note
to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining
unpaid Principal Amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this
Note represented by this Note may be less than the amount stated on the face hereof.


 


(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held
for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has been paid.


 


(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower or Borrower’s transfer agent from the Holder of a
facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order
of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section
1.4(f) hereof) within one (1) Trading Day after such receipt (the “Deadline”) (and, solely in the case of conversion of the
entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company
shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion
Shares or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or to credit
the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled upon
the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available to
the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount
equal to 2.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and
to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last
possible date which the Company could have issued such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii)
the Holder, upon written notice to the Company, may void all or any portion of such Notice of Conversion; provided that the voiding of
all or any portion of a Notice of Conversion shall not affect the Company’s obligations to make any payments which have accrued
prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver
a certificate to the Holder and register such Conversion Shares on the Company’s share register or credit the Holder’s balance
account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit
such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise.
Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note
as required pursuant to the terms hereof.


 




    	4



     


    

 


(e)
Obligation of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or
Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion,
the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this Note shall
be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect
to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities,
cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein,
the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic delivery of
the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any
action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the
holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of
any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower
to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date
so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York
time, on such date.


 


(f)
Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion
Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically
transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of Holder’s Prime Broker
with DTC through its Deposit Withdrawal Agent Commission system.


 




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1.5
Concerning the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have
been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement)) to
the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii)
such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption, or (iv) such shares
are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise
provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the Conversion Shares
have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption
without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for
the Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant to an effective
registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as
appropriate:


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A,
REGULATION S UNDER SAID ACT, OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The
legend set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares
without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery
by crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws: (a)
such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated
by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares
may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected.
The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees
to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance
with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided
by the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A,
Regulation S, or other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation
S, or other applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.


 


1.6
Effect of Certain Events.


 


(a)
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other
Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default pursuant
to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount
equal to the Default Amount (as defined in this Note) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall
mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.


 




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(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion
of all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of
another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially
all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this
Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which
the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower
shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least
thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special
meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of
shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to
convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations
of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.


 


(c)
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend
or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note
after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder
of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.


 


(d)
Purchase Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible
securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record
holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before
the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date
as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 


(e)
Dilutive Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or
grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants any right
to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant or any option
to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise entitle any person
or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Note, and any convertible
notes or warrants outstanding as of or following the Issue Date), in each or any case 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”) (it being agreed that if the holder of the Common Stock or other securities 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 the Conversion Price shall be reduced, at the option of the Holder, to a price equal
to the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or other securities are issued. By way of example,
and for the avoidance of doubt, if the Company issues a convertible promissory note (including but not limited to a Variable Rate Transaction),
and the holder of such convertible promissory note has the right to convert it into Common Stock at an effective price per share that
is lower than the then Conversion Price (including but not limited to a conversion price with a discount that varies with the trading
prices of or quotations for the Common Stock), then the Holder has the right to reduce the Conversion Price to such Base Conversion Price
(including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common
Stock) in perpetuity regardless of whether the holder of such convertible promissory note ever effectuated a conversion at the Base Conversion
Price. In the event of an issuance of securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e)
shall be calculated as if all such securities were issued at the initial closing. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or
include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or
other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement
whereby the Company may issue securities at a future determined price (except with respect to an Equity Line of Credit (as defined in
this Note)).


 




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(f)
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in Section 1.6 of this Note, the Borrower shall, at its expense and within one (1) calendar day after the occurrence of each
respective adjustment or readjustment of the Conversion Price, compute such adjustment or readjustment and prepare and furnish to the
Holder a certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including
but not limited to relevant transaction documents) that evidences the adjustment or readjustment. In addition, the Borrower shall, within
one (1) calendar day after each written request from the Holder, furnish to such Holder a like certificate setting forth (i) the Conversion
Price in effect at such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon conversion of the Note, (iii) the detailed facts upon which such adjustment
or readjustment is based, and (iv) copies of the documentation (including but not limited to relevant transaction documents) that evidences
the adjustment or readjustment. For the avoidance of doubt, each adjustment or readjustment of the Conversion Price as a result of the
events described in Section 1.6 of this Note shall occur without any action by the Holder and regardless of whether the Borrower complied
with the notification provisions in Section 1.6 of this Note.


 


1.7
[Intentionally Omitted].


 


1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other
than the Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion
of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights
as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such
shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure
by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all
shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any
portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so
notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this
Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered,
adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its
rights and remedies for the Borrower’s failure to convert this Note.


 


1.9
Prepayment. At any time prior to the date that an Event of Default occurs under this Note, the Borrower shall have the right,
exercisable on seven (7) Trading Days prior written notice to the Holder of the Note, to prepay the outstanding Principal Amount and
interest then due under this Note in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising
its right to prepay the Note, and (2) the date of prepayment which shall be seven (7) Trading Days from the date of the Optional Prepayment
Notice (the “Optional Prepayment Date”). On the Optional Prepayment Date, the Borrower shall make payment of the amounts
designated below to or upon the order of the Holder as specified by the Holder in writing to the Borrower. If the Borrower exercises
its right to prepay the Note in accordance with this Section 1.9, the Borrower shall make payment to the Holder of an amount in cash
equal to the sum of: (w) 100% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the
Principal Amount to the Optional Prepayment Date plus (y) $750.00 to reimburse Holder for administrative fees.


 




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If
the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as
provided in this Section 1.9, then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section
1.9.


 


1.10
Repayment from Proceeds. If, at any time prior to the full repayment or full conversion of all amounts owed under this Note, the
Company receives cash proceeds of more than $2,000,000.00 (the “Minimum Threshold”) in the aggregate (for the avoidance of
doubt, each time that the Company receives cash proceeds from the sale of assets or issuance of securities of the Borrower on or after
the Issue Date (including pursuant to an Equity Line of Credit (as defined in this Note)), but excluding the proceeds from this Note),
such amount shall be aggregated together for purposes of calculating the Minimum Threshold) from the sale of assets or issuance of securities
of the Borrower (including pursuant to an Equity Line of Credit), the Borrower shall, within one (1) business day of Borrower’s
receipt of such proceeds, inform the Holder of or publicly disclose such receipt, following which the Holder shall have the right in
its sole discretion to require the Borrower to immediately apply up to 50% of such proceeds after the Minimum Threshold to repay all
or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. “Equity
Line of Credit” shall mean any transaction involving a written agreement between the Company and an investor or underwriter whereby
the Company has the right to “put” its Common Stock to the investor or underwriter over an agreed period of time and at an
agreed price or price formula (such Common Stock must be registered pursuant to a registration statement of the Company for the investor’s
or underwriter’s resale). Notwithstanding the foregoing, this Section 1.10 shall not apply to any Real Property Transaction (as
defined in this Note), the sale of assets to customers of the Company in the ordinary course of business, the sale of interests in real
estate, or any Small Business Administration Economic Injury Disaster Loan provided to the Borrower by the United States government.
If, at any time prior to the full repayment or full conversion of all amounts owed under this Note, the Borrower or the Borrower’s
subsidiaries receive Hurricane Revenues (as defined in this Note), the Borrower shall, within one (1) business day of Borrower’s
receipt of such proceeds, inform the Holder of or publicly disclose such receipt, following which the Holder shall have the right in
its sole discretion to require the Borrower to immediately apply up to 100% of such Hurricane Revenues to repay all or any portion of
the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. “Hurricane Revenues”
shall mean the net cash revenues received by the Borrower and all of the subsidiaries of the Borrower that arise from additional residents
accommodated by the Borrower’s and the Borrower’s subsidiaries’ facilities because of the State of Florida evacuation
protocols due to Hurricane Ian. Failure of the Borrower to comply with this provision shall constitute an Event of Default.


 


ARTICLE
II. RANKING AND CERTAIN COVENANTS


 


2.1
Ranking and Security. This Note shall have priority over all unsecured indebtedness of the Borrower.


 


2.2
[Intentionally Omitted]


 


2.3
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without
the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash,
property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional
shares of Common Stock or the shares of such securities or (b) directly or indirectly or through any subsidiary make any other payment
or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved
by a majority of the Borrower’s disinterested directors.


 


2.4
Restriction on Stock Repurchases and Debt Repayments. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property
or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower
or any warrants, rights or options to purchase or acquire any such shares, or prepay any pari passu or subordinated indebtedness of Borrower.


 




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2.5
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business, it
being acknowledged that any sale of real estate assets held as non-material assets is in the ordinary course of business. Any consent
by the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition. Notwithstanding
the foregoing, this Section 2.5 shall not apply to the Company’s sale of its land parcel located in Leander, Texas that it purchased
for a consideration of approximately $1,842,588,


 


2.6
Advances and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any person,
firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the
Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed Holder
in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary course of business
or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder’s written consent, repay any affiliate (as defined in Rule 144) of
the Borrower in connection with any indebtedness or accrued amounts owed to any such party.


 


2.7
3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a “3(a)(10)
Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(10) Transaction
while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than
$25,000, will be assessed and will become immediately due and payable to the Holder at its election in the form of a cash payment or
added to the balance of this Note (under Holder’s and Borrower’s expectation that this amount will tack back to the Issue
Date).


 


2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, (a) change the nature of its business; or (b) sell, divest, change the structure of any
material assets other than in the ordinary course of business; . In addition, so long as the Borrower shall have any obligation
under this Note, the Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that
have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.


 


2.9
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate or Articles
of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to
protect the rights of the Holder.


 


2.10
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note.


 




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ARTICLE
III. EVENTS OF DEFAULT


 


It
shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”)
shall occur:


 


3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note, and in each case
such failure remains uncured for five (5) business days.


 


3.2
Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, (iii) fails to reserve the Reserved Amount at all times, (iv) the Borrower directs its transfer agent not to transfer or
delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note,
or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares
issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2)
Trading Days after the Holder shall have delivered a Notice of Conversion, and/or (v) fails to remain current in its obligations to its
transfer agent (including but not limited to payment obligations to its transfer agent). It shall be an Event of Default of this Note,
if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the
option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced
funds shall be added to the principal balance of the Note.


 


3.3
Breach of Agreements and Covenants. The Borrower breaches any covenant, agreement, or other term or condition contained in the
Purchase Agreement, this Note, Irrevocable Transfer Agent Instructions, Registration Rights Agreement (as defined in the Purchase Agreement)
(the “Registration Rights Agreement”), Warrant, or in any agreement, statement or certificate given in writing pursuant hereto
or in connection herewith or therewith and such breach remains uncured for five (5) business days.


 


3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this
Note, Irrevocable Transfer Agent Instructions, Registration Rights Agreement, Warrant, or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made.


 


3.5
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall otherwise be appointed.


 


3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the
Borrower or any of its property or other assets for which any such person has a liability of more than $250,000, and shall remain unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably
withheld, other than the following: (i) the litigation brought by MC-Simpsonville, SC-UT, LLC (the landlord of the Simpsonville facility)
against Trident Healthcare Properties I, L.P., a subsidiary of Borrower, regarding the non-payment of rent by MCA Simpsonville Operating
Company LLC, a subsidiary of the Borrower, or (ii) the non-payment by a subsidiary of the Borrower of employment related taxes such as
required withholdings for Texas State unemployment taxes and federal income tax and employee and employer contributions for FICA (Social
Security and Medicare) taxes, and federal unemployment tax for the period from December 31, 2018 to December 31, 2020, each as described
in the SEC Documents (as defined in the Purchase Agreement).


 


3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary
of the Borrower.


 


3.8
Failure to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements
of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act and such breach remains uncured
for five (5) business days.


 




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3.9
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.


 


3.10
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its
debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.


 


3.11
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property
or other assets which are necessary to conduct its business (whether now or in the future).


 


3.12
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or
period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding.


 


3.13
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor transfer agent to Borrower and the Borrower.


 


3.14
Cross-Default. The declaration of an event of default by any lender or other extender of credit to the Company under any notes,
loans, agreements or other instruments of the Company evidencing any indebtedness of the Company (including those filed as exhibits to
or described in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.


 


3.15
[intentionally omitted].


 


3.16
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or
any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.


 


3.17
Unavailability of Rule 144. If, at any time on or after the date that is six (6) calendar months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion
of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or (ii) thereupon
deposit such shares into the Holder’s brokerage account.


 


3.18
Delisting, Suspension, or Quotation of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s
Common Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on a
Principal Market.


 


3.19
Registration Statement Failures. The Borrower fails to (i) file a registration statement (the “Registration Statement”)
covering the Holder’s resale at prevailing market prices (and not fixed prices) of all of the Conversion Shares (as defined in
the Purchase Agreement) (the “Conversion Shares”), Commitment Shares (as defined in the Purchase Agreement) (the “Commitment
Shares”), and Exercise Shares (as defined in the Purchase Agreement) (the “Exercise Shares”) within one hundred twenty
(120) calendar days following the Issue Date, (ii) cause the Registration Statement to become effective within one hundred eighty (180)
calendar days following the date that the Registration Statement is initially filed, (iii) cause the Registration Statement to remain
effective until the Holder no longer owns the Note, Warrant, Conversion Shares, Commitment Shares, or Exercise Shares, (iv) comply with
the provisions of the Registration Rights Agreement in all respects, or (v) immediately amend the Registration Statement or file a new
Registration Statement (and cause such Registration Statement to become effective as provided in the Registration Rights Agreement) if
there are no longer sufficient shares registered under the initial Registration Statement for the Holder’s resale at prevailing
market prices (and not fixed prices) of all of the Conversion Shares, Exercise Shares, and Commitment Shares.


 




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3.20
Failure to Pay an Amortization Payment. The Borrower fails to pay an Amortization Payment (as defined in this Note) when due as
provided in Section 4.17 of this Note and does not cure such failure to pay within ten (10) calendar days after the deadline of the respective
Amortization Payment as provided in Section 4.17 of this Note.


 


3.21
Rights and Remedies Upon an Event of Default. Upon the occurrence of any Event of Default specified in this Article III, the Holder
shall no longer be required to cancel and extinguish the Warrant under any circumstances, this Note shall become immediately due and
payable, and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Principal
Amount then outstanding plus accrued interest (including any Default Interest) through the date of full repayment multiplied by 125%
(collectively the “Default Amount”), as well as all costs, including, without limitation, legal fees and expenses, of collection,
all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower. Holder may, in its sole discretion,
determine to accept payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion formula set
forth in Section 1.2 shall apply as well as all other provisions of this Note. The Holder shall be entitled to exercise all other rights
and remedies available at law or in equity.


 


Upon
the occurrence of any Event of Default, and in addition to any other right or remedy of the Holder hereunder, under the related transaction
documents, or otherwise at law or in equity, the Borrower hereby irrevocably authorizes and empowers Holder or its legal counsel, each
as the Borrower’s attorney-in-fact, to appear ex parte and with notice to the Borrower to confess judgment against the Borrower
for the unpaid amount of this Note. The judgment shall set forth the amount then due hereunder, plus attorney’s fees and cost of
suit, and to release all errors, and waive all rights of appeal. The Borrower waives the right to contest Holder’s rights under
this section, including without limitation the right to any stay of execution and the benefit of all exemption laws now or hereafter
in effect. No single exercise of the foregoing right and power to confess judgment will be deemed to exhaust such power, whether or not
any such exercise shall be held by any court to be invalid, voidable, or void, and such power shall continue undiminished and may be
exercised from time to time as the Holder may elect until all amounts owing on this Note have been paid in full. The Borrower shall provide
a signed and notarized copy of the of the affidavit of confession of judgment attached hereto as Exhibit “B” on or before
the Closing Date.


 


ARTICLE
IV. MISCELLANEOUS


 


4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Holder existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.


 


4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:


 


If
to the Borrower, to:


 


CLEARDAY,
INC.


8800
Village Drive, Suite 106


San
Antonio, TX 78217


Attention:
James Walesa


e-mail:
info@myclearday.com


 


If
to the Holder:


 


MAST
HILL FUND, L.P.


48
Parker Road


Wellesley,
MA 02482


e-mail:
admin@masthillfund.com


 




    	13



     


    

 


4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the
Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. The Borrower shall not assign this Note or any rights or obligations hereunder without
the prior written consent of the Holder. The Holder may assign its rights hereunder to any “accredited investor” (as defined
in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined
under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof.


 


4.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.


 


4.6
Governing Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State
of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only in the
Court of Chancery of the State of Delaware or, to the extent such court does not have subject matter jurisdiction, the United States
District Court for the District of Delaware or, to the extent that neither of the foregoing courts has jurisdiction, the Superior Court
of the State of Delaware. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably waives personal
service of process and consents to process being served in any suit, action or proceeding in connection with this Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby 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 law. The prevailing party in any action or dispute brought in connection
with this the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover
from the other party its reasonable attorney’s fees and costs.


 


4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal
Amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt
of a cash payment without the opportunity to convert this Note into shares of Common Stock.


 




    	14



     


    

 


4.8
Purchase Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement, and the documents
entered into in connection herewith and therewith.


 


4.9
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification
of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the
event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive
payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger,
consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other
right, or for the purpose of determining shareholders who are entitled to vote in connection with any change in control or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior
to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier),
of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief
statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The
Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section 4.9.


 


4.10
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder,
by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at
law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach
of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.


 


4.11
Construction; Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed
against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 


4.12
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right
or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided
that the total liability of the Company under this Note for payments which under the applicable law are in the nature of interest shall
not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which under the applicable
law in the nature of interest that the Company may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if
the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any
official governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the Maximum
Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Holder with respect to indebtedness
evidenced by this the Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be
refunded to the Company, the manner of handling such excess to be at the Holder’s election.


 




    	15



     


    

 


4.13
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of
law (including any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision of this Note.


 


4.14
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security, or amendment to a security that was originally issued before the Issue Date, with any term that the Holder reasonably
believes is more favorable to the holder of such security or with a term in favor of the holder of such security that the Holder reasonably
believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify the Holder of such additional or more
favorable term within one (1) business day of the issuance and/or amendment (as applicable) of the respective security, and (ii) such
term, at Holder’s option, shall become a part of the transaction documents with the Holder (regardless of whether the Borrower
complied with the notification provision of this Section 4.14). 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 prepayment rate, interest rates, and original issue
discounts. Notwithstanding the foregoing, this Section 4.14 shall not apply to a Real Property Transaction (as defined in this Note),
Factoring Transaction (as defined in this Note), or Buyout Transaction (as defined in this Note). “Buyout Transaction” shall
mean any transaction if the Note is fully repaid and extinguished within two (2) business days after the Company’s closing of such
transaction.


 


4.15
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic
calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit
the disputed determinations or arithmetic calculations via facsimile (i) within one (1) Trading Day after receipt of the applicable notice
giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination
or calculation within one (1) Trading Day of such disputed determination or arithmetic calculation (as the case may be) being submitted
to the Borrower or the Holder, then the Borrower shall, within one (1) Trading Day, submit (a) the disputed determination of the Conversion
Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by
the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower.
The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify
the Borrower and the Holder of the results no later than one (1) Trading Day from the time it receives such disputed determinations or
calculations. Such investment bank’s or accountant’s determination or calculation shall be binding upon all parties absent
demonstrable error.


 


4.16
Right of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or financing
from any person or party, that the Borrower intends to act upon, then the Borrower must first offer such opportunity to the Holder to
provide such capital or financing to the Borrower on the same terms as each respective person’s or party’s terms. Should
the Holder be unwilling or unable to provide such capital or financing to the Borrower within five (5) Trading Days from Holder’s
receipt of written notice of the offer (the “Offer Notice”) from the Borrower, then the Borrower may obtain such capital
or financing from that respective person or party upon the exact same terms and conditions offered by the Borrower to the Holder, which
transaction must be completed within 30 days after the date of the Offer Notice. If the Borrower does not receive the capital or financing
from the respective person or party within 90 days after the date of the respective Offer Notice, then the Borrower must again offer
the capital or financing opportunity to the Holder as described above, and the process detailed above shall be repeated. The Offer Notice
must be sent via electronic mail to admin@masthillfund.com. Notwithstanding the foregoing, this Section 4.16 shall not apply to (i) a
bona fide offer of capital or financing from a nationally recognized broker dealer that is retained by Borrower and acceptable to the
Holder, which acceptance will not be unreasonably delayed, withheld or conditioned (“Investment Banker”), or any person or
party that is introduced to the Company by the Investment Banker in its capacity as a placement agent, (ii) a bona fide offer of capital
or financing from a person or party if such capital or financing is used by the Company for the acquisition or refinance of real property
so long as (a) any security interest granted to such person or party is solely limited to the real property being acquired or refinanced
and (b) such person or party shall have no rights at any time in such transaction or any related transaction to acquire Common Stock
or Common Stock Equivalents of the Company (each a “Real Property Transaction”), as well as (iii) a bona fide offer of capital
or financing from a person or party if such person or party is solely purchasing the Company’s accounts receivable(s) or sharing
of the Company’s revenues, in each case so long as such person or party shall have no rights at any time to acquire Common Stock
or Common Stock Equivalents of the Company (each a “Factoring Transaction”).


 




    	16



     


    

 


4.17
Amortization Payments. In addition to all other payment obligations under this Note, Borrower shall also make the following amortization
payments (each an “Amortization Payment”) in cash to the Holder towards the repayment of this Note, as provided in the following
table:


 


	 	Payment
    Date:	 	Payment Amount:	 
	 	 	 	 	 
	 	December
28, 2022	 	$31,500.00
plus accrued interest through December 28, 2022 (or, if, extended pursuant to Section 4.17(a) below, through January 27, 2023)	 
	 	 	 	 	 
	 	January
    27, 2023	 	$31,500.00
plus accrued interest through January 27, 2023 (or, if extended pursuant to Section 4.17(b) below, through February 28, 2023)	 
	 	 	 	 	 
	 	February
    28, 2023	 	$31,500.00
plus accrued interest through February 28, 2023 (or, if extended pursuant to Section 4.17(c) below, through March 28, 2023)	 
	 	 	 	 	 
	 	March
    28, 2023	 	$31,500.00
    plus accrued interest through March 28, 2023	 
	 	 	 	 	 
	 	April
    28, 2023	 	$31,500.00
    plus accrued interest through April 28, 2023	 
	 	 	 	 	 
	 	May
    26, 2023	 	$31,500.00
    plus accrued interest through May 26, 2023	 
	 	 	 	 	 
	 	June
    28, 2023	 	$31,500.00
    plus accrued interest through June 28, 2023	 
	 	 	 	 	 
	 	July
    28, 2023	 	$31,500.00
    plus accrued interest through July 28, 2023	 
	 	 	 	 	 
	 	August
    28, 2023	 	$31,500.00
    plus accrued interest through August 28, 2023	 
	 	 	 	 	 
	 	September
    28, 2023	 	$31,500.00
    plus accrued interest through September 28, 2023	 


 


(a)
With respect to the first Amortization Payment originally due on December 28, 2022 (the “First Amortization Payment”), the
Company may notify the Holder on or before December 28, 2022, that the Company is electing to extend the due date of the First Amortization
Payment to January 27, 2023 (the “First Amortization Payment Extension”) as further provided herein. If the Company exercises
the First Amortization Payment Extension, then the First Amortization Payment shall be due on January 27, 2023, and the Company shall
pay $3,150.00 plus 10% of the accrued interest through December 28, 2022 (the “First Amortization Payment Extension Fee”)
to the Holder on or before December 28, 2022. For the avoidance of doubt, the First Amortization Payment Extension shall not affect the
due date of any other Amortization Payment and the First Amortization Payment Extension Fee shall not reduce the amounts owed under the
Note. The Company shall not be permitted to exercise the First Amortization Payment Extension if an Event of Default occurs under the
Note.


 


(b)
With respect to the second Amortization Payment originally due on January 27, 2023 (the “Second Amortization Payment”), the
Company may notify the Holder on or before January 27, 2023, that the Company is electing to extend the due date of the Second Amortization
Payment to February 28, 2023 (the “Second Amortization Payment Extension”) as further provided herein. If the Company exercises
the Second Amortization Payment Extension, then the Second Amortization Payment shall be due on February 28, 2023, and the Company shall
pay $3,150.00 plus 10% of the accrued interest through January 27, 2023 (the “Second Amortization Payment Extension Fee”)
to the Holder on or before January 27, 2023. For the avoidance of doubt, the Second Amortization Payment Extension shall not affect the
due date of any other Amortization Payment and the Second Amortization Payment Extension Fee shall not reduce the amounts owed under
the Note. The Company shall not be permitted to exercise the Second Amortization Payment Extension if an Event of Default occurs under
the Note.


 


(c)
With respect to the third Amortization Payment originally due on February 28, 2023 (the “Third Amortization Payment”), the
Company may notify the Holder on or before February 28, 2023, that the Company is electing to extend the due date of the Third Amortization
Payment to March 28, 2023 (the “Third Amortization Payment Extension”) as further provided herein. If the Company exercises
the Third Amortization Payment Extension, then the Third Amortization Payment shall be due on March 28, 2023, and the Company shall pay
$3,150.00 plus 10% of the accrued interest through February 28, 2023 (the “Third Amortization Payment Extension Fee”) to
the Holder on or before February 28, 2023. For the avoidance of doubt, the Third Amortization Payment Extension shall not affect the
due date of any other Amortization Payment and the Third Amortization Payment Extension Fee shall not reduce the amounts owed under the
Note. The Company shall not be permitted to exercise the Third Amortization Payment Extension if an Event of Default occurs under the
Note.


 


[signature
page follows]


 




    	17



     


    

 


IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on September 28, 2022.


 


CLEARDAY,
INC.


 


	By:	 	 
	Name:
    	James
    Walesa	 
	Title:
    	Chief
    Executive Officer	 


 




    	18



     


    

 


EXHIBIT
A — NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to be
issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of CLEARDAY, INC., a Delaware corporation
(the “Borrower”), according to the conditions of the promissory note of the Borrower dated as of September 28, 2022 (the
“Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes,
if any.


 


Box
Checked as to applicable instructions:


 


	 	☐	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
    or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name
    of DTC Prime Broker:
	 	 	Account
    Number:


 


	 	☐	The
                                                         undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth
                                                         below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if
                                                         additional space is necessary, on an attachment hereto:



 


	 	Date
    of Conversion:	 	 	 
	 	Applicable
    Conversion Price:	$	 	 
	 	Number
    of Shares of Common Stock to be

    Issued
    Pursuant to Conversion of the Note:
	 	 	 

     

	 	Amount
    of Principal Balance Due remaining Under the Note after this conversion:	 	 	 

     



 


	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	Date:	 	 


 




    	 



     


    

 


EXHIBIT
B – CONFESSION OF JUDGMENT


 


(see
attached)


 




    	 



     


    

 


Affidavit
of Confession of Judgment


 


STATE
OF DELAWARE


————————————————————————
X


Mast
Hill Fund, L.P.,


 
	 	Index No.


 
	 	Plaintiff,	 


 


	

                                                                      
	AFFIDAVIT
    OF CONFESSION OF
	-
    against -	JUDGMENT


 


	CLEARDAY,
    INC.,	 	 
	 	Defendant.	 
	——————————————————————————————
    X	 
	STATE
    OF DELAWARE                                   )		 
	 	           )
         ss.: 	 


 


James
Walesa, being duly sworn, hereby deposes and says:


 


1.
I am the Chief Executive Officer of defendant CLEARDAY, INC., a Delaware corporation (“Borrower”). As such, I am fully familiar
with all the facts and circumstances recited herein on personal knowledge. Borrower has its principal place of business at 8800 Village
Drive, Suite 106, San Antonio, TX 78217. On behalf of the Borrower, I hereby confess judgment in favor of MAST HILL FUND, L.P. (“Holder”),
residing at 48 Parker Road, Wellesley, MA 02482, in the amount of $315,000.00, less any payments made on or after the date of this affidavit
of confession of judgment, plus Default Interest (as defined in the Note (as defined herein)) on said amount and all other applicable
penalties under the Note. In no event shall interest payable hereunder exceed the maximum permissible under applicable law.


 


2.
I hereby authorize the federal courts and/or state courts located in the State of Delaware to enter judgment against Borrower in the
amount of in the amount of $315,000.00, less any payments made on or after the date of this affidavit of confession of judgment, plus
Default Interest on said amount and all other applicable penalties under the Note, plus the costs and attorneys’ fees that are
set forth below, less any payments made on or after the date of this affidavit of confession of judgment, upon Borrower’s failure
for any reason to timely make any payment to Holder called for by the promissory note between of the parties, dated September 28, 2022
(the “Note”), due to the occurrence of an Event of Default (as defined in the Note) under the Note.


 




    	 



     


    

 


3.
In order to secure these obligations, Borrower agreed to simultaneously deliver with the execution of the Note this Affidavit of Confession
of Judgment.


 


4.
The sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Holder under the following circumstances:
Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Holder the principal sum of $315,000.00 plus
interest as provided for therein. The amounts confessed by this affidavit represent a promissory note investment by Holder in Borrower
and arise out of Borrower’s breach of its obligations under the Note.


 


5.
Borrower agrees to pay any and all costs and expenses incurred by Holder in enforcing the terms of this affidavit of confession of judgment,
including reasonable attorneys’ fees and expenses at the rate of $475.00 per hour that Holder incurs or is billed for in connection
with enforcing the terms of the affidavit of confession of judgment, entering any Judgment, collecting upon said Judgment, and defending
or prosecuting any appeals.


 


[signature
page to follow]


 




    	 



     


    

 


	 	CLEARDAY, INC.
	 	 	 
	 	By:	 
	 	Name:
    	James
    Walesa
	 	Title:
    	Chief
    Executive Officer


 


	STATE
    OF ______________    )
	ss.:
	COUNTY
    OF ______________   )


 


ACKNOWLEDGMENT


 


On
__________, 2022 before me personally came ________________________________________, to me known, who, by me duly sworn, did depose and
say that deponent is an officer of CLEARDAY, INC., the corporation described in, and which executed the foregoing affidavit of confession
of judgment, that deponent knows the seal of the corporation, that the seal affixed to the affidavit of confession of judgment is the
corporation’s seal, that it was affixed by order of the board of directors of the corporation and that deponent signed deponent’s
name by like order.


 


_____________________________


Notary
Public


 


SEAL:


 


[Signature
Page to Affidavit of Confession of Judgment]