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: $700,000.00	Issue Date: September 22, 2022
	Actual Amount of Purchase Price: $644,000.00	 









 


PROMISSORY
NOTE


 


FOR
VALUE RECEIVED, NIGHTFOOD HOLDINGS, INC., a Nevada corporation (hereinafter called the “Borrower” or the “Company”)
(Trading Symbol: NGTF), 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 $700,000.00, which
amount is the $644,000.00 actual amount of the purchase price (the “Consideration”) hereof plus an original issue discount
in the amount of $56,000.00 (the “OID”) (subject to adjustment herein) (the “Principal Amount”) and to pay interest
on the unpaid Principal Amount hereof at the rate of eight percent (8%) (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 twelve (12) months from the Issue Date (the “Maturity Date”), and
is the date upon which the Principal Amount, the OID, as well as 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 business day.


 






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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 Second Warrant (as defined in the Purchase Agreement) (the “Second
Warrant”) to Holder as a commitment fee, provided, however, that the Second Warrant shall, without any further action by either
party thereto, 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.


 


The
following terms shall also apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS


 


1.1. Conversion
Right. The Holder shall have the right, at any time on or following the date that an Event of Default (as defined in this Note) occurs
under this 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”), by submitting to the Borrower or Borrower’s
transfer agent a Notice of Conversion (as defined in this Note) by e-mail dispatched on the Conversion Date prior to 11:59 p.m., New
York, New York time; 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 the terms of this Note; provided that the
Notice of Conversion is submitted by e-mail 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 upon an Event of Default as further described in this Note (the
“Conversion Price”) shall equal $0.10, 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, (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) 9,800,000 shares of Common Stock or (b) the product 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) four (4) (the
“Reserved Amount”); provided that for purposes of this Section 1.3, the Company and the Holder agree and acknowledge that
the aforementioned formula in Section 1.3(b) of this Note shall only be in effect on and after the date that is six (6) calendar months
after the Issue Date. 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.


 






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1.4. Method
of Conversion.


 


(a) [Intentionally
Omitted].


 


(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 an e-mail 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 two (2) 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.


 






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(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 pursuant to the terms hereof, 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.


 


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.”


 






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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.


 


(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.


 






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(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. Except for Exempt Issuances (as defined in this Note) and Reg A Issuances (as defined in this Note), 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 (as defined in the Purchase
Agreement)), 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. “Exempt Issuance”
means (a) the issuance, vesting and/or exercise of options, warrants, restricted stock, restricted stock units or other common stock
purchase rights issued (or to be issued) to employees, officers or directors of, or consultants or advisors to, the Company for compensatory
purposes pursuant to any stock purchase plan, stock option plan, equity incentive plan or other plan or arrangement approved by the Board
of Directors (or the Compensation Committee thereof) at any time and (b) issuances of securities pursuant to the exercise or conversion
of preferred stock, options, warrants or any evidence of indebtedness, shares of capital stock (other than Common Stock) or other securities
convertible into or exchangeable for Common Stock outstanding (or in the case of warrants underlying outstanding preferred stock, which
may be issued and outstanding) prior to the Issue Date, which are (i) disclosed in the SEC Documents (as defined in the Purchase Agreement)
prior to the Issue Date and (ii) have a per share of Common Stock conversion price, exercise price, exchange price, or other similar
price equal to or greater than $0.10 (subject to adjustment for any stock split, stock combination, or other similar transaction), so
long as any of the terms of such securities (including but not limited to the exercise or conversion price of such securities) are not
amended or modified in any way on or after the Issue Date. “Reg A Issuances” means an issuance of Common Stock (or units
consisting of Common Stock and warrants) pursuant to an offering by the Company under Regulation A so long as the offering price of each
share of Common Stock is equal to or greater than $0.10 (subject to adjustment for any stock split, stock combination, or other similar
transactions; and for the avoidance of doubt, assuming any such warrants have no value), provided, however, that if an Event of Default
(as defined in the Note) occurs at any time, then this Section 1.6(e) of this Note shall apply to each and every Reg A Issuance on or
after the Issue Date as well as the exercise price of any common stock purchase warrants issued as part of a unit in connection with
a Reg A Issuance.


 






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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) business 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) business 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 three
(3) 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 three (3) 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 $1,500,000 (the “Minimum Threshold”) in the aggregate (for the avoidance of doubt, each time that
the Company receives cash proceeds on or after the Issue Date (except with respect to this Note), such amount shall be aggregated together
for purposes of calculating the Minimum Threshold) from any source or series of related or unrelated sources from the issuance of equity
(excluding the conversion of outstanding warrants of the Company), debt or the issuance of securities pursuant to an Equity Line of Credit
(as defined in this Note)) of the Borrower, the Borrower shall, within three (3) business days 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. Failure of the Borrower to comply with this
provision shall constitute an Event of Default. “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 of this Note shall not apply to any revenue from the sale of goods in the ordinary course.


 


ARTICLE
II. RANKING AND CERTAIN COVENANTS


 


2.1. Ranking
and Security. This Note shall have priority over all unsecured indebtedness (other than trade payables) of the Borrower.


 


2.2. Other
Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly through
any Subsidiary or affiliate) incur or suffer to exist or guarantee any unsecured indebtedness (other than trade payables) that is senior
to or pari passu with (in priority of payment and performance) the Borrower’s obligations hereunder.


 


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 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.


 


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 repay any pari passu or subordinated indebtedness of Borrower.


 


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. Any
consent by the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.


 






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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 or make advances to 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. Section
3(a)(9) or 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, either Section 3(a)(9) of the Securities Act
(a “3(a)(9) Transaction”) or 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)(9) Transaction or 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). This Section
2.7 shall not apply to the Company’s existing convertible notes with the Existing Lenders.


 


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; (b) sell, divest, change the structure of any material assets
other than in the ordinary course of business; (c) enter into a Variable Rate Transaction; or (d) enter into any merchant cash advance
transactions. 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.


 


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 (provided, however, that such failure
to fully comply with Section 1.10 of this Note shall be subject to a five (5) calendar day cure period).


 






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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 on and after the earlier of (i) the date that an Event of Default occurs under
this Note and (ii) the date that is six (6) calendar months after the Issue Date, (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 material covenant, agreement, or other material term or condition contained
in the Purchase Agreement, this Note, Irrevocable Transfer Agent Instructions, Warrant (as defined in the Purchase Agreement), or in
any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith.


 


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, 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 more than $100,000, 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.


 


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 (subject to a five Trading Day right to cure) and/or the Borrower shall cease to be subject to the reporting requirements
of the 1934 Act.


 


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.


 






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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 unless the Borrower restates such financial
statements within fifteen (15) calendar days after the date that the Borrower discloses its need to restate such financial statements
in a filing with the Securities and Exchange Commission.


 


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, except with respect
to the transactions consummated pursuant to the securities purchase agreement entered into as of December 10, 2021, as amended, with
the Existing Lenders unless the event of default with respect to the aforementioned transactions is not cured within thirty (30) calendar
days.


 


3.15. Variable
Rate Transactions. The Borrower consummates a Variable Rate Transaction at any time on or after the Issue Date.


 


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 obtain
a standard “144 legal opinion letter” from an attorney 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.


 


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. Market
Capitalization. The Borrower fails to maintain a market capitalization of at least $4,000,000 on any Trading Day, which shall be
calculated by multiplying (i) the closing price of the Borrower’s common stock on the Trading Day immediately preceding the respective
date of calculation by (ii) the total shares of the Borrower’s common stock issued and outstanding on the Trading Day immediately
preceding the respective date of calculation.


 


3.20. 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 Second 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.


 






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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 transmitted by e-mail, 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 upon delivery by e-mail, with accurate confirmation generated by the transmitting 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).
The addresses for such communications shall be:


 


If
to the Borrower, to:


 


NIGHTFOOD
HOLDINGS, INC.


520
White Plains Road, Suite 500


Tarrytown,
New York 10591


Attention:
Sean Folkson


e-mail:
sean@nightfood.com


 


If
to the Holder:


 


MAST
HILL FUND, L.P.


48
Parker Road


Wellesley,
MA 02482


e-mail:
admin@masthillfund.com


 


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. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, 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.


 






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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 Nevada
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 state courts
located in the Commonwealth of Massachusetts or federal courts located in the Commonwealth of Massachusetts. 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.


 


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.


 






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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.


 


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. 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 electronic mail (i) within two (2) Trading Days 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 two (2) Trading Days 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 two (2) Trading Days, 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 two (2) Trading Days 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.


 


[signature
page follows]


 




    15


     


    


 


IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on September 22, 2022.


 





	NIGHTFOOD HOLDINGS, INC.	 
	 	 
	By:	/s/
  Sean Folkson   	 
	Name: 	Sean Folkson	 
	Title:	Chief Executive Officer	 



 













    16


     


    


 


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 NIGHTFOOD HOLDINGS,
INC., a Nevada corporation (the “Borrower”), according to the conditions of the promissory note of the Borrower dated
as of September 22, 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:	 


 







    17


     


    


 


EXHIBIT
B – CONFESSION OF JUDGMENT 


 


(see
attached)


 


 


 


 


 


 


 


 


 




    18


     


    


 


Affidavit
of Confession of Judgment


 


	COMMONWEALTH
    OF MASSACHUSETTS	 	 
	----------------------------------------------------------------X	 	 
	MAST
    HILL FUND, L.P.,	 	 
	 	 	Index
    No.
	Plaintiff,		 
	 	 	AFFIDAVIT
    OF CONFESSION OF
	-
    against -	 	JUDGMENT
	 	 	 
	NIGHTFOOD
    HOLDINGS, INC.,	 	 
	 	 	 
	Defendant.	 	 
	----------------------------------------------------------------X	 	 
	 	 	 
	 	 	 
	COMMONWEALTH
    OF MASSACHUSETTS	)	 
	 	)
                        ss.:	 


 


Sean Folkson, being duly
sworn, hereby deposes and says:


 


1. I am the Chief Executive
Officer of defendant NIGHTFOOD HOLDINGS, INC., a Nevada 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 520 White Plains Road, Suite
500, Tarrytown, New York 10591. On behalf of the Borrower, I hereby confess judgment in favor of MAST HILL FUND, L.P., a Delaware limited
partnership (“Mast Hill”), with its address at 48 Parker Road, Wellesley, MA 02482, in the amount of $700,000.00, 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 Commonwealth of Massachusetts to enter judgment against Borrower in the amount of in
the amount of $700,000.00, 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 Mast Hill called for by the promissory note between of the parties, dated September 22, 2022 (the “Note”),
due to the occurrence of an Event of Default (as defined in the Note) under the Note.


 






    19


     


    

 


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 Mast Hill under the following circumstances: Borrower entered
into the Note pursuant to which Borrower promised to pay to the order of Mast Hill the principal sum of $700,000.00 plus interest as provided
for therein. The amounts confessed by this affidavit represent a promissory note investment by Mast Hill 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 Mast Hill 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 Mast Hill 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]


 




    20


     


    


 





	 	NIGHTFOOD HOLDINGS, INC.
	 	 	 
	 	By:	
/s/ Sean Folkson     
	 	Name:  	Sean Folkson
	 	


Title: 


	Chief Executive Officer



 








STATE
OF FLORIDA )


  ss.:


COUNTY
OF PASCO )


 


ACKNOWLEDGMENT


 


On
September 23, 2022 before me personally came Sean Folkson – identified by US Passport                                             ,
to me


known,
who, by me duly sworn, did depose and say that deponent is an officer of NIGHTFOOD HOLDINGS, 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.


 


	/s/ Jack W.
Koch	 
	Notary
Public	 
	 	 
	SEAL:	 






 





[Signature
Page to Affidavit of Confession of Judgment]


 


 


 21