GULFSLOPE ENERGY, INC. 8-K


 


Exhibit 10.2


 


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
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 COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT. 


 


Principal Amount: $55,000.00 Issue Date: October
7, 2022 Purchase Price: $55,000.00 


 


CONVERTIBLE PROMISSORY NOTE 


 


FOR VALUE RECEIVED, GULFSLOPE ENERGY,
INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of 1800 DIAGONAL
LENDING LLC, a Virginia limited liability company, or registered assigns (the “Holder”) the sum of $55,000.00 together
with any interest as set forth herein, on October 7, 2023 (the “Maturity Date”), and to pay interest on the unpaid principal
balance 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. This Note may not be prepaid
in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid
when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default
Interest”). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Interest shall commence
accruing on the Issue Date but shall not be payable until the Note becomes payable (whether at Maturity Date or upon acceleration or by
prepayment). All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share (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. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Purchase Agreement”).


 


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.


 


The following terms shall apply to this Note:


 


ARTICLE I. CONVERSION RIGHTS 


 


1.1 Conversion Right. The Holder shall have the
right from time to time, and at any time during the period the Note is outstanding, each in respect of the remaining outstanding amount
of this Note to convert all or any part of the outstanding and unpaid amount of this Note 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 (the “Conversion Price”) determined as
provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion
of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially
owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership
of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation
on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1)
of such proviso. The beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number
of shares of Common Stock 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 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 before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”); however,
if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion Date shall be the next business day. 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 rates provided in this Note 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) plus (4) at the Holder’s option, any amounts owed to the
Holder pursuant to Sections 1.4 hereof.


 






     


     


    

 


1.2 Conversion Price. The Conversion Price means,
as of the date of conversion, the Variable Conversion Price (as defined herein and subject to equitable adjustments for stock splits,
stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of
the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion
Price" shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). “Market Price”
means the lowest Trading Price (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete
Trading Day prior to the Conversion Date. “Trading Price” means, for any security as of any date, the closing bid price on
the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable
reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal trading
market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security
is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing
bid prices of any market makers for such security that are listed in the “pink sheets”. If the Trading Price cannot be calculated
for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by
the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock
is tradable for any period on the OTC, or on the principal securities exchange or other securities market on which the Common Stock is
then being traded.


 


1.3 Authorized Shares. The Borrower covenants
that during the period the conversion right exists, 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 Common Stock upon the full conversion of this Note issued
pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved four times the number of shares
that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section 1.1 is not in effect)(based
on the respective Conversion Price of the Note (as defined in Section 1.2) in effect from time to time, initially 73,578,595)(the
“Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written consent of the Holder) from time
to time in accordance with the Borrower’s obligations hereunder. The Borrower represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to
its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current
Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note,
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 to execute and issue the necessary certificates for shares of Common Stock 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 under Section 3.2 of the Note.


 


1.4 Method of Conversion.


 


(a) Mechanics of Conversion. As set forth in Section
1.1 hereof, from time to time, and at any time during the period that the Note is outstanding, this Note may be converted by the Holder
in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile,
e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B)
subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).


 






     


     


    

 


(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 of this Note 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.


 


(c) Delivery of Common Stock Upon Conversion.
Upon receipt by the Borrower 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 Common Stock issuable upon such conversion within three
(3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal
amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt by the Borrower of
a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding
principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations hereunder, 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 Common Stock 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.


 


(d) Delivery of Common Stock by Electronic Transfer.
In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating
in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the
Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker
with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.


 


(e) Failure to Deliver Common Stock Prior to Deadline.
Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties
agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline due to action and/or
inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower
fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that the Fail to Deliver Fee shall not be
due if the failure is a result of a third party (i.e., transfer agent; and not the result of any failure to pay such transfer agent) despite
the best efforts of the Borrower to effect delivery of such Common Stock. Such cash amount shall be paid to Holder by the fifth day of
the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first
day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest
shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock
in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages
resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly,
the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.


 


1.5 Concerning the Shares. The shares of Common
Stock 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 Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be
sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule)
(“Rule 144”); or (iii) 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).


 






     


     


    

 


Any restrictive legend on certificates representing
shares of Common Stock issuable upon conversion of this Note shall be removed and the Borrower shall issue to the Holder a new certificate
therefore free of any transfer legend if the Borrower or its transfer agent shall have received an opinion of counsel from Holder’s
counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale
or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that
the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered
for sale by the Holder under an effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption
from registration. In the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect
to the transfer of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an
Event of Default pursuant to Section 3.2 of the 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, the effectuation
by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed
of, 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 be deemed to be an Event of Default (as defined in Article III) 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 Article III). “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 the 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 affect any transaction described in this Section 1.6(b)
unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but in any event at least five (5) 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 Note. 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.


 






     


     


    

 


1.7 Prepayment. Notwithstanding anything to the
contrary contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment
Periods”) or as otherwise agreed to between the Borrower and the Holder, the Borrower shall have the right, exercisable on not more
than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest),
in full, in accordance with this Section 1.7. 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 not more than three (3) Trading Days from the date of the Optional Prepayment
Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional
Prepayment Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower
(which shall direction to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date). If the
Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal to the percentage
(“Prepayment Percentage”) as set forth in the table immediately following this paragraph opposite the applicable Prepayment
Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid
principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses
(w) and (x) plus (z) any amounts owed to the Holder pursuant to Section 1.4 hereof (the “Optional Prepayment Amount”).


 


	Prepayment Period Prepayment Percentage 	 
	1. The period beginning on the Issue Date and ending on the date which is sixty (60) days following the Issue Date.  	120%
	2. The period beginning on the date which is sixty-one (61) days from the Issue Date and ending one hundred eighty (180) days following the Issue Date.	125%


 


After the expiration of the Prepayment Periods
set forth above, the Borrower may submit an Optional Prepayment Notice to the Holder. Upon receipt by the Holder of the Optional Prepayment
Notice post Prepayment Periods, the prepayment shall be subject to the Holder’s and the Borrower’s agreement with respect
to the applicable Prepayment Percentage.


 


Notwithstanding anything contained herein to the
contrary, the Holder’s conversion rights herein shall not be affected in any way until the Note is fully paid (funds received by
the Holder) pursuant to an Optional Prepayment Notice.


 


ARTICLE II. CERTAIN COVENANTS


 


2.1 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 to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition.


 


ARTICLE III. EVENTS OF DEFAULT


 


If any of the following events of default (each,
an “Event of Default”) shall occur:


 


3.1 Failure to Pay Principal and Interest. The
Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such
breach continues for a period of five (5) days after written notice from the Holder.


 


3.2 Conversion and the Shares. The Borrower fails
to issue shares of Common Stock 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, fails to transfer or cause its
transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note, 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 shares of Common Stock to be issued 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 shares
of Common Stock 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 three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower
to remain current in its 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 paid by the Borrower
to the Holder within forty-eight (48) hours of a demand from the Holder.


 






     


     


    

 


3.3 Breach of Covenants. The Borrower breaches
any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited
to the Purchase Agreement and such breach continues for a period of twenty (20) days after written notice thereof to the Borrower from
the Holder.


 


3.4 Breach of Representations and Warranties.
Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto
or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect
when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.


 


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 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.


 


3.7 Delisting of Common Stock. The Borrower shall
fail to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained
by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange.


 


3.8 Failure to Comply with the Exchange Act. The
Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the
reporting requirements of the Exchange Act (the filing of a Form 15 with the SEC is an immediate Event of Default).


 


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 Financial Statement Restatement. The restatement
of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date or period
until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial statement,
have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.


 


3.12 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.


 


3.13 Cross-Default. Notwithstanding anything to
the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or
other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods,
shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall
be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements
by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and
instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including,
without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion
documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing
and future debt of Borrower to the Holder.


 






     


     


    

 


Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when
due at the Maturity Date), the 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 Default Amount (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION
OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE 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: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED
BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect
to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section
1.7 or upon acceleration), 3.3, 3.4, 3.7, 3.8, 3.10, 3.11, 3.12, 3.13, and/or 3.14 exercisable through the delivery of written notice
to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining
sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section
3,1 hereof), the 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 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default
Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3
and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs,
including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity.


 


If the Borrower fails to pay the Default Amount
within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time,
so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the
Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower
equal to the Default Amount divided by the Conversion Price then in effect.


 


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 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, facsimile or email, 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 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:


 


GULFSLOPE ENERGY, INC.

1000 Main Street, Suite 2300

Houston, Texas 77002

Attn: John Seitz, Chief Executive Officer Email: jnseitz@gulfslope.com


 


If to the Holder:


 


1800 DIAGONAL LENDING LLC

1800 Diagonal Road, Suite 623 Alexandria VA 22314

Attn: Curt Kramer, President

Email: ckramer@sixthstreetlending.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 (and the other Notes issued pursuant to the Purchase Agreement) 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. Each
transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange Commission).
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; and may be assigned by the Holder without the consent of the Borrower.


 


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. This Note shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the Circuit Court
of Fairfax County, Virginia or in the Alexandria Division of the United States District Court for the Eastern District of Virginia. The
parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not
assert any objection or defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder
waive trial by jury. The Holder shall be entitled to recover from the Borrower its reasonable attorney's fees and costs incurred in connection
with or related to any Event of Default by the Company, as defined in Article III hereof. In the event that any provision of this Note
or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, 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 hereof or any agreement delivered in connection herewith. 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, any agreement or any other
document delivered in connection with this Note 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.


 


4.7 Purchase Agreement. By its acceptance of this
Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.


 


4.8 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.


 






     


     


    

 


IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by its duly authorized officer this on October 7, 2022


 





	 	GULFSLOPE ENERGY, INC. 	 
	 	 	 	 
	 	By:	 	 
	 	 	John Seitz	 
	 	 	Chief Executive Officer	 



 






     


     


    

 


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 GULFSLOPE ENERGY, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible note of
the Borrower dated as of October 7, 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 At Custodian (“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


Amount of Principal Balance due remaining 


 


	 	1800 DIAGONAL LENDING LLC	 	 	 
	 	 	 	 	 	 
	 	By:	 	 	 	 
	 	 	 	 	 	 
	 	 	Name: Curt Kramer	Date	 
	 	 	Title: President