Exhibit 4.1


 


EXHIBIT A


 


NEITHER THIS SECURITY NOR THE
SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


Original Issue Date: May 31, 2022


Original Conversion Price (subject to adjustment
herein): $2.00


 


$____________


 


 


ORIGINAL
ISSUE DISCOUNT SENIOR CONVERTIBLE DEBENTURE


DUE
NOVEMBER 30, 2022


 


THIS ORIGINAL ISSUE DISCOUNT
SENIOR CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Original Issue Discount Senior Convertible Debentures
of Creatd, Inc., a Nevada corporation (the “Company”), having its principal place of business at 419 Lafayette Street,
6th Floor, New York, New York 10003, designated as its Original Issue Discount Senior Convertible Debenture due ________, 2022 (this debenture,
the “Debenture” and, collectively with the other debentures of such series, the “Debentures”).


 


FOR VALUE RECEIVED, the Company
promises to pay to _________ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder,
the principal sum of $_______ on November 30, 2022 (the “Maturity Date”), which Maturity Date may be extended by the
Company pursuant to Section 2(b), or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder,
and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with
the provisions hereof, if applicable. This Debenture is subject to the following additional provisions:


 


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


 


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


 






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


 


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


 


“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” 
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
are open for use by customers on such day.


 


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


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 33% of the voting
securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together with the
Debentures), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company
and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 66%
of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its Subsidiaries,
taken as a whole) sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately
prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (d)
a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which is not approved
by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are
serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.


 






    2


     


    

 


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


 


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


 


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


 


“Conversion
Price Adjustment Event” means (i) the Company publicly announces, via a widely disseminated press release or a filing with the
Commission or any other customary manner, that the Company has terminated the Rights Offering or postponed the Rights Offering for an
unspecified period of time or (ii) prior to the Company’s public announcement of the final pricing of the Units, Series A Warrants
and Series B Warrants in the Rights Offering, the Company publicly announces, via a widely disseminated press release or a filing with
the Commission or any other customary manner, that the Company has issued, entered into any agreement to issue or announced the issuance
or proposed issuance of securities of the Company in a Subsequent Financing which Subsequent Financing has terms that are more favorable
to the investors in such Subsequent Financing than the terms to the investors pursuant to the Transaction Documents or (iii) the Company
consummates the Rights Offering with aggregate gross proceeds to the Company at the closing of less than $5,000,000.


 


“Conversion
Price Adjustment Event Date” means the date of a Conversion Price Adjustment Event.


 


“Conversion
Price Reset Date” means the date on which the Company publicly announces, via a widely disseminated press release or a filing
with the Commission or any other customary manner, the final pricing of a Unit (or any security in substitution for a Unit) to be issued
in the Rights Offering.


 


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


 


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


 


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


 


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


 


“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions scheduled
to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) (i) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable
pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for
the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents (and shares issuable in lieu
of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information
requirements as determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable
to the Transfer Agent and the Holder, and (c) there is no existing Event of Default and no existing event which, with the passage of time
or the giving of notice, would constitute an Event of Default.


 






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“Equity
Conditions Period” shall have the meaning set forth in Section 2(b).


 


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


 


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


 


“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all accrued
and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand
or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied
by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher
VWAP, or (ii) 110% of the outstanding principal amount of this Debenture, plus 100% of accrued and unpaid interest hereon, and (b) all
other amounts, costs, expenses and liquidated damages due in respect of this Debenture.


 


“Maturity
Date Extension” shall have the meaning set forth in Section 2(b).


 


“Maturity
Date Extension Notice” shall have the meaning set forth in Section 2(b).


 


“Maturity
Date Extension Notice Date” shall have the meaning set forth in Section 2(b).


 


“Maturity
Date Extension Period” shall have the meaning set forth in Section 2(b).


 


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


 


“Monthly
Redemption Amount” means, as to a Monthly Redemption, the sum of (i) an amount equal to 1/6 of the outstanding principal amount
of this Debenture held by the Holder, as determined on the day immediately prior to the commencement of the Maturity Date Extension Period
and (ii) accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Debenture as
of the date in question.


 


“Monthly
Redemption Date” means, following a Maturity Date Extension, the last day of each calendar month during the Maturity Date Extension
Period, and terminating upon the full redemption of this Debenture.


 


“New Maturity
Date” shall have the meaning set forth in Section 2(b).


 


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


 


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


 


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


 


“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) the Indebtedness existing on the Original Issue Date
and set forth on Schedule 3.1(bb) attached to the Purchase Agreement, (c) lease obligations and purchase money indebtedness of
up to $250,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to
newly acquired or leased assets, and (d) indebtedness that (i) is expressly subordinate to the Debentures pursuant to a written subordination
agreement with the Purchasers that is acceptable to each Purchaser in its sole and absolute discretion and (ii) matures at a date later
than the 91st day following the Maturity Date (as such date may be extended hereunder).


 






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“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and
by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established
in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated
Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for
the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted
Indebtedness under clauses (a) and (b) thereunder, and (d) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder,
provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of May 31, 2022 among the Company and the original Holders, as
amended, modified or supplemented from time to time in accordance with its terms.


 


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


 


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


 


“Rights
Offering” means the Company’s offering of subscription rights to purchase units of the Company (“Units”),
each Unit comprised of one share of Common Stock, a Series A common stock purchase warrant to purchase one share of Common Stock (a “Series
A Warrant”) and Series B common stock purchase warrant to purchase one share of Common Stock (a “Series B Warrant”)
(and/or any other security in substitution for a Unit and/or any other securities included in the Units in substitution for a Series A
Warrant and/or a Series B Warrant) of the Company, pursuant to the registration statement on Form S-1 (File No. 333-265251).


 


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


 


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


 


“Subsequent
Financing” means any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents for cash
consideration, Indebtedness or a combination of units thereof.


 


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


 






    5


     


    

 


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


 


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


 


 Section 2. No Regular Interest
Payments; Extension of Maturity Date.


 


a)
The parties acknowledge that this Debenture was issued at an original issue discount and there are no regularly scheduled interest payments
on this Debenture.


 


b)
Extension of Maturity Date. Subject to the provisions of this Section 2(b), at any time prior to the date that is ten (10) Trading
Days prior to the Maturity Date, the Company may deliver a written notice to the Holder (a “Maturity Date Extension Notice”
and the date on which such notice is deemed delivered hereunder, the “Maturity Date Extension Notice Date”) of its
irrevocable election to extend the term of this Debenture until the date that is six (6) months following the Maturity Date (such date,
the “New Maturity Date” and such extension of the term, the “Maturity Date Extension” and such additional
six (6) month period, the “Maturity Date Extension Period”). The Maturity Date Extension shall be effective on the
Maturity Extension Notice Date and, as of such date, the term “Maturity Date” herein shall mean the New Maturity Date. The
Company may only effect a Maturity Date Extension if, unless waived in writing by the Holder, all of the Equity Conditions are satisfied
on the ten (10) Trading Days prior to the Maturity Extension Notice Date through and including November 30, 2022 (such period, the “Equity
Conditions Period”). If any of the Equity Conditions shall cease to be satisfied at any time during the Equity Conditions Period,
then a Holder may elect to nullify the Maturity Date Extension Notice as to such Holder by notice to the Company within 3 Trading Days
after the first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents,
the Corporation is obligated to notify the Holders of the non-existence of an Equity Condition, such notice period shall be extended to
the third Trading Day after proper notice from the Corporation) in which case the Maturity Date Extension Notice shall be null and void,
ab initio. A Maturity Extension shall not alter or amend any provision in this Debenture, other than the extension of the term
of the Debenture as described herein.


 


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


 


Section 3. Registration
of Transfers and Exchanges.


 


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


 






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


 


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


 


Section 4. Conversion.


 


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


 


b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $2.00, subject to adjustment herein
(the “Conversion Price”). In addition, on the Conversion Price Reset Date, the Conversion Price shall be reduced, and
only reduced, to equal the Unit Purchase Price, but in no event less than $1.00 (subject to adjustment for reverse and forward stock splits,
recapitalizations and similar transactions after the Original Issue Date) (the “Reset Conversion Price” which shall
thereafter be the new Conversion Price, subject to further adjustment hereunder). The Company shall notify the Holder of the applicable
adjustment to the Conversion Price on the Conversion Price Reset Date (such notice, the “Conversion Price Reset Date Adjustment
Notice”). For purposes of clarity, whether or not the Company provides a Conversion Price Reset Date Adjustment Notice pursuant
to this Section 4(b), the Holder shall receive a number of Conversion Shares and retain a principal amount of this Debenture based upon
the Conversion Price as adjusted pursuant to this Section, regardless of whether the Holder accurately refers to such price or principal
amount of this Debenture converted in any Notice of Conversion. Any adjustment to the Conversion Price pursuant to this Section 4(b) shall
be effective on the Conversion Price Reset Date. For purposes herein, “Unit Purchase Price” means the final price for
a Unit as announced on the Conversion Price Reset Date.


 






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In addition, on a Conversion Price Adjustment
Event Date, the Conversion Price shall be reduced, and only reduced, to $1.00 (subject to adjustment for reverse and forward stock splits,
recapitalizations and similar transactions after the Original Issue Date), which shall be the Reset Conversion Price and thereafter the
new Conversion Price for purposes of this Section. The Company shall notify the Holder of the applicable adjustment to the Conversion
Price on the Conversion Price Adjustment Event Date (such notice, the “Conversion Price Adjustment Event Date Adjustment Notice”).
For purposes of clarity, whether or not the Company provides a Conversion Price Adjustment Event Date Adjustment Notice pursuant to this
Section 4(b), the Holder shall receive a number of Conversion Shares and retain a principal amount of this Debenture based upon the Conversion
Price as adjusted pursuant to this Section, regardless of whether the Holder accurately refers to such price or principal amount of this
Debenture converted in any Notice of Conversion. Any adjustment to the Conversion Price pursuant to this paragraph shall be effective
on the Conversion Price Adjustment Event Date.


 


		c)	Mechanics of Conversion.



 


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


 


ii.
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading
Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after the earlier of (i) the
six month anniversary of the Original Issue Date or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions
(other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon
the conversion of this Debenture (including, if the Company has given continuous notice pursuant to Section 2(b) for payment of interest
in shares of Common Stock at least 20 Trading Days prior to the date on which the Notice of Conversion is delivered to the Company, shares
of Common Stock representing the payment of accrued interest otherwise determined pursuant to Section 2(a) but assuming that the Interest
Notice Period is the 20 Trading Days period immediately prior to the date on which the Notice of Conversion is delivered to the Company
and excluding for such issuance the condition that the Company deliver Interest Conversion Shares as to such interest payment prior to
the commencement of the Interest Notice Period) and (B) a bank check in the amount of accrued and unpaid interest (if the Company has
elected or is required to pay accrued interest in cash). On or after the earlier of (i) the six month anniversary of the Original Issue
Date or (ii) the Effective Date, the Company shall deliver any Conversion Shares required to be delivered by the Company under this Section
4(c) electronically through the Depository Trust Company or another established clearing corporation performing similar functions. As
used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.


 






    8


     


    

 


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


 


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


 


v.
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date pursuant
to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery
Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available
to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions)
for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled
to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation
was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture
in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded)
or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its
delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted conversion of this Debenture with respect to which the actual sale price of the Conversion
Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion
Shares upon conversion of this Debenture as required pursuant to the terms hereof.


 






    9


     


    

 


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


 


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


 


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


 






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


 


Section 5. Certain Adjustments.


 


a)
Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest
on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification
of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately
before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.


 






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b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of this Debenture (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 


c)
Pro Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Debenture, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Debenture (without regard to any limitations on conversion hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is
taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in
the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to
such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).


 






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


 






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


 


f)  
Notice to the Holder.


 


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


 


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


 


Section 6. Redemption.


 


a)
Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount (the “Monthly
Redemption”). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash. The Holder may convert,
pursuant to Section 4(a), any principal amount of this Debenture subject to a Monthly Redemption at any time prior to the date that the
Monthly Redemption Amount, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder are due
and paid in full. The Company covenants and agrees that it will honor all Notices of Conversion tendered up until such amounts are paid
in full.


 






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b)
Redemption Procedure. The payment of cash pursuant to a Monthly Redemption shall be payable on the Monthly Redemption Date.
If any portion of the payment pursuant to a Monthly Redemption shall not be paid by the Company by the applicable due date, interest shall
accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law until such amount
is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Monthly Redemption Amount remains unpaid
after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate such Monthly
Redemption, ab initio. The Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4
prior to actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the Company.


 


c)
Mandatory Redemption at Election by Holder. Subject to the provisions of this Section 6, at any time while this Debenture
is outstanding, in the event of a Subsequent Financing, the Holder shall have the right to require the Company to use up to 30% (as such
percentage is determined by the Holder and set forth in the applicable notice) of the aggregate gross proceeds to the Company in cash
to repay the then outstanding principal amount, plus any interest or other amounts payable pursuant to this Debenture (any such proceeds,
the “Holder Mandatory Redemption Proceeds”, and any such redemption, a “Mandatory Redemption”).
Not less than three (3) Business Days prior to the closing of a Subsequent Financing, the Company shall deliver to each Holder of the
Debentures a written notice of such Subsequent Financing (“Subsequent Financing Notice”). At any time following the
Subsequent Financing Notice, each Holder shall notify the Company in writing that it either wishes to immediately exercise its right to
require a Mandatory Redemption at the closing of the Subsequent Financing or defer its right to exercise its right to require a Mandatory
Redemption at a later date selected by the Holder in its sole discretion (“Mandatory Redemption Exercise Notice”).
If no Mandatory Redemption Exercise Notice is delivered to the Company prior to the later of the three (3) Business Days following delivery
of the Subsequent Financing Notice and the date of closing of the Subsequent Financing, the Holder shall be deemed to not have elected
to receive the Mandatory Redemption at such closing. The Company shall effect the Mandatory Redemption and pay the Holder the Holder Mandatory
Redemption Proceeds reflected in the Mandatory Redemption Exercise Notice (such amount, the “Holder Elected Amount”)
on the closing of such Subsequent Financing or, if the Holder elects to defer the Mandatory Redemption to after the closing, within five
Business Days following delivery to the Company of a subsequent Mandatory Redemption Exercise Notice specifying such date after closing
(“Mandatory Redemption Date”). The Company’s payment of the Holder Mandatory Redemption Proceeds shall be paid
to each Holder participating pursuant to this Section 6 in accordance with the Holder’s Mandatory Redemption Exercise Notice. Notwithstanding
anything herein to the contrary, any proceeds from a Subsequent Financing in excess of the Holder Mandatory Redemption Proceeds payable
to all holders of Debentures shall be deposited into an account of the Company. The Company’s payment of the Mandatory Redemption
Proceeds shall be applied ratably to all of the holders of the then outstanding Debentures which exercise the right to require a Mandatory
Redemption on the basis of their (or their predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. Notwithstanding
the foregoing, this Section 6 shall not apply with respect to an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.


 






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d)
Mandatory Redemption Procedure. The payment of cash pursuant to a Mandatory Redemption shall be payable in full on or before
the Mandatory Redemption Date. If any portion of the payment pursuant to a Mandatory Redemption shall not be paid by the Company by the
applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted
by applicable law until such amount is paid in full. Notwithstanding anything to the contrary in this Section 6, the Holder Mandatory
Redemption Proceeds shall be applied ratably among the Holders of Debentures if more than one Holder shall deliver a Mandatory Redemption
Exercise Notice, in accordance with Holder Elected Amounts of the Holders of Debentures.


 


Section 7. Negative
Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at least 67% in principal amount of
the then outstanding Debentures shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the
Subsidiaries to, directly or indirectly:


 


a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom;


 


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


 


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


 


d)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock
or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or required under the Transaction
Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company, provided
that such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture;


 


e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Debentures if on a pro-rata basis,
other than regularly scheduled principal and interest payments as such terms are in effect as of the Original Issue Date, provided that
such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exists or occurs;


 






    16


     


    

 


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


 


g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of
the Company (even if less than a quorum otherwise required for board approval); or


 


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


 


  Section 8. Events of Default.


 


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


 


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


 


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


 


iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the
Company or any Subsidiary is obligated (and not covered by clause (vi) below), which default or event of default, with respect to clause
(B) herein, is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after notice of such failure sent by
the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become or should have become aware of such
default;


 






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iv.
any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or
thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made, which breach is not cured, if possible to cure, within the
earlier to occur of (A) 5 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10
Trading Days after the Company has become or should have become aware of such breach;


 


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


 


vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any
indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater
than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become due and payable;


 


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


 


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


 


ix.
the Initial Registration Statement (as defined in the Registration Rights Agreement) shall not have been declared effective by
the Commission on or prior to the 120th calendar day after the Closing Date or the Company does not meet the current public
information requirements under Rule 144 in respect of the Registrable Securities (as defined in the Registration Rights Agreement);


 


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


 






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


 


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


 


xiii.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded
or unstayed for a period of 60 calendar days; or


 


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


 


b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at
the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing 5 days after the occurrence
of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture shall accrue
at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon the payment in full
of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the Company. In connection with
such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder
receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon.


 






    19


     


    

 


  Section 9. Miscellaneous.


 


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


 


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


 


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


 






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d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts,
or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Debenture or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


e)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture on any
other occasion. Any waiver by the Company or the Holder must be in writing.


 


f)  
Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company
(to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit
the execution of every such as though no such law has been enacted.


 






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g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Debenture shall
be cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Debenture.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any
such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder
to confirm the Company’s compliance with the terms and conditions of this Debenture.


 


h)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.


 


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


 


Section 10. Disclosure. Upon
receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries,
the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on
a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice,
and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its Subsidiaries.


 


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





 


(Signature Page Follows)


 




    22


     


    

 


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


 


	 	Creatd, Inc.
	 	 
	 	By:	               
	 	 	Name:   
	 	 	Title:



 




    23


     


    

  


ANNEX
A


 


 NOTICE OF CONVERSION


 


 


The undersigned hereby elects
to convert principal under the Original Issue Discount Senior Convertible Debenture due November 30, 2022 of Creatd, Inc., a Nevada corporation
(the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the
conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such
transfer taxes, if any.


 


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


 


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


 


Conversion calculations:











 


	 	Date to Effect Conversion:
	 	 
	 	Principal Amount of Debenture to be Converted:
	 	 
	 	Number of shares of Common Stock to be issued:
	 	 
	 	Signature:
	 	 
	 	Name:
	 	 
	 	Address for Delivery of Common Stock Certificates:
	 	 
	 	Or



 


	 	DWAC Instructions:
	 	 
	 	Broker
    No: ________________
	 	 
	 	Account No: _______________









 






    24


     


    

 






Schedule 1


 


CONVERSION SCHEDULE


 


The Original Issue Discount Senior Convertible
Debentures due on November 30, 2022 in the aggregate principal amount of $____________ are issued by Creatd, Inc., a Nevada corporation.
This Conversion Schedule reflects conversions made under Section 4 of the above referenced Debenture.


 


Dated:





 



	
     

    Date of Conversion



    (or for first entry, 

Original Issue Date)
	 	
     

    Amount of

 Conversion
	 	
    Aggregate 

Principal 

Amount

 Remaining 

Subsequent
    to 

Conversion

    (or original

 Principal

 Amount)
	 	
     

    Company Attest

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 



 


 


25