Exhibit
10.2


 


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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. 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: December 10, 2021


 


$ [     ]


 


8% ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE
NOTE 


 


DUE DECEMBER 10, 2022


 


THIS 8% ORIGINAL
ISSUE DISCOUNT SENIOR SECURED NOTE is one of a series of duly authorized and validly issued 8% Original Issue Discount Senior Secured
Convertible Notes of Nightfood Holdings, Inc., a Nevada corporation (the “Company”), having an address at 520 White Plains
Road-Suite 500, Tarrytown, New York. 10591, designated as its 8% Original Issue Discount Senior Secured Convertible Note due December
7, 2022 (this “ Note ” and, collectively with the other Notes of such series, the “ Notes”). The
Notes shall be convertible into shares of common stock of the Company in accordance with the terms of the Notes.


 


FOR VALUE RECEIVED, the
Company promises to pay [     ], or its registered assigns (the “ Holder ”), or shall
have paid pursuant to the terms hereunder, the principal sum of $ [     ] on December 10 , 2022 (the
“ Maturity Date ”) or such earlier date as this Note 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 Note in accordance with
the provisions hereof. This Note is subject to the following additional provisions:


 



Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (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 below.


 


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


 


“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 or 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 or (g) 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.


 






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“Base
Conversion Price” shall have the meaning set forth in Section 5(b).


 


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


 


“Business
Day” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


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


 


 “Change
of Control” shall have the meaning set forth in the Purchase Agreement.


 


“Closing
Bid Price” means on any particular date (a) the last reported closing bid price per share of Common Stock on such date on the
Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there is no such price on such date, then
the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P. at 4:15 p.m. (New York
City time)), or (c) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported
in the “pink sheets” published by Pink Sheets LLC (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly
traded the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company .


 


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


 


“Conversion
Shares” means, collectively, the shares of common stock of the Company issuable upon conversion of this Note in accordance with
the terms hereof.


 


“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).


 


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


 


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


 


“Exempt Issuance” means the
issuance of (a) options to purchase shares of Common Stock, restricted shares, restricted stock units or performance shares, to employees,
officers or directors of the Company, pursuant to any stock option, incentive or performance plan, arrangement or agreement duly adopted
by the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose,
(b) shares of Common Stock issuable upon exercise, conversion or pursuant to the terms of the Securities, or convertible securities, options
or warrants issued and outstanding on the date of this Agreement (or that are underlying securities that are outstanding on the date of
this Agreement), provided that such securities (other than the Securities) have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) shares issued to unaffiliated
third parties for legal, financial, consulting or other services provided to the Company not to exceed 1,000,000 shares in the aggregate
during any 12-month period, (d) securities issued pursuant to acquisitions or strategic transaction, provided that any such issuance shall
only be to a person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of
the Company and in which the Company receive benefits in addition to the investment of funds, but shall not include a transaction in which
the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in
securities and (e) to bona fide commercial partners in connection with transactions not including transactions in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.


 






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


 


“Interest
Payment Date” shall have the meaning set forth in Section 2(a).


 


“Late Fees” shall have the meaning set forth in Section 2(c).


 


“Majority
Purchasers” shall mean holders of 50% of the then outstanding principal amount of the Notes, so long as such 50% includes
[     ] as lead investor while [     ] owns any of the Notes. “Monthly
Conversion Period” shall have the meaning set forth in Section 6(b) hereof.


 


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


 


“Monthly
Redemption Amount” means, as to a Monthly Redemption, one ninth of the then-outstanding original principal amount, plus accrued
but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Note.


 


“Monthly
Redemption Date” means the tenthof each month, commencing immediately upon September 10, 2022 and terminating upon the full
redemption of this Note.


 


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


 


“Note
Register” shall have the meaning set forth in Section 2(b).


 


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


 


“Optional
Redemption” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Amount” means at (i) 115% of the principal amount thereof plus any unpaid accrued interest to the date of repayment
if within the first 3 months of the Closing Date and (i) 120% of the principal amount thereof plus any unpaid accrued interest to the
date of repayment if after the first 3 months of the Closing Date, plus all other liquidated and other amounts due in respect of the Note.


 


“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).


 


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


 






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“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Notes (excluding any Notes issued pursuant to most favored nations
or similar provisions), (b) lease obligations and purchase money indebtedness of up to $100,000, in the aggregate, incurred in connection
with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets and (c) unsecured indebtedness
that is expressly subordinate to the Notes pursuant to a written subordination agreement with the Purchasers that is acceptable to each
Purchaser in its sole and absolute discretion.


 


“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 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; and (c) Liens incurred in connection with Permitted Indebtedness under clauses
(a) and (b) thereunder, provided in the case of clause (b) that such Liens are not secured by assets of the Company other than the assets
so acquired or leased.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of the Original Issue Date, between the Company, and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.


 


“Qualified Offering” means
a debt or equity financing for the account of the Company or any of its subsidiaries in which debt, shares of common stock, or securities,
directly or indirectly, convertible into or exchangeable or exercisable for shares of common stock are issued, which financing results
in cumulative aggregate proceeds to the Company of at least $8,000,000.


 


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


 


“Registration
Statement” means a registration statement that registers the resale of all Conversion Shares and the Warrant Shares, names the
Holder as a “selling stockholder” therein, and meets the requirements of the Registration Rights Agreement.


 


“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(d)(ii).


 


“Subsidiary”
shall have the meaning set forth in the Purchase Agreement.


 


“Trading
Day” means a day on which the applicable Trading Market of the Company’s common stock is open for business.


 






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“Trading
Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE MKT LLC, any
trading platform maintained by OTC Markets, Inc., including, but not limited to, the OTCQX, OTCQB and Pink Open Markets.


 


“Transaction
Documents” shall have the meaning set forth in the Purchase Agreement.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); (b) if the OTC Bulletin Board is not a Trading Market, the
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the
Common Stock is not then quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.


 


“Warrants Shares”
means shares of common stock of the Company issuable upon exercise of the Warrants in accordance with the terms hereof.


 


Section 2. Interest.


 


		a)	Payment of Interest in Cash. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of 8% per annum, payable, as the case may be, (i) monthly, on the tenth calendar day of each
month, beginning on February 10, 2022, (ii) on each Monthly Redemption Date (as to that principal amount then being redeemed), (iii) on
each Conversion Date (as to that principal amount then being converted), (iv) on each Optional Redemption Date (as to that principal amount
then being redeemed) and (v) on the Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment
Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day), in cash.



 


		b)	Interest Calculations. Interest shall be calculated
on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue
Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other
amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered
on the records of the Company regarding registration and transfers of this Note (the “Note Register”).



 


		c)	Late Fee. In addition to all other amounts required
to be paid to Holder hereunder, all overdue accrued and unpaid principal and interest to be paid hereunder shall entail a late fee at
an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”)
which shall accrue daily from the date such principal and interest is due hereunder through and including the date of actual payment
in full.



 






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Section
3.   Registration of Transfers and Exchanges.


 


a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes 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.


 


b)
Investment Representations. This Note 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 Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the
Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note 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 Note is no longer outstanding, this Note shall be convertible,
in whole or in part, into shares of common stock of the Company (the “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(c) 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 Note 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. To effect conversions hereunder, the
Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all
accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal
amount of this Note 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 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 Note, acknowledge and agree
that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal
amount of this Note may be less than the amount stated on the face hereof. 


 



b)
Conversion Price. This Note shall be convertible at the option of the Holder into shares of common stock of the Company at a fixed
conversion price initially equal to $0.25 ( as adjusted hereunder, the “Conversion Price”). If at any time after the
6-month anniversary of the Closing Date (i.e., June 10, 2022), the closing price on any Trading Day of the common stock on the Trading
Market is less than $0.20/share, the Conversion Price shall be reduced to $0.20.


 






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 c)
Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert
any portion of this Note, 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 person or entity acting as a group together with the Holder or any
of the Holder’s Affiliates) 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 shall include the
number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted principal amount of
this Note beneficially owned by the Holder or any of its Affiliates and (B) 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 Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 4(c), 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(c) applies,
the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates)
and of which principal amount of this Note 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 Note may be converted (in relation to other securities
owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the
Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph 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(c), in determining the number of outstanding shares of Common Stock, the Holder may rely on
the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Company’s most recent periodic
or annual report, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent 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 two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 4(c), 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 Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(c) shall continue
to apply. Any such increase or decrease 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(c) 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 Note.


 


 d)
Mechanics of Conversion.


 



i.
Conversion Shares Issuable Upon Conversion of Principal Amount. Subject to Section 4(d)(vii), 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 Note
to be converted by (y) the Conversion Price.


 






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 ii.
Delivery of Certificate Upon Conversion. Subject to Section 4.1 and Section 4.3 of the Purchase Agreement, not later than two Trading
Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to
the Holder (A) a certificate or certificates representing the Conversion Shares which, on or after the earlier of (i) the six month anniversary
of the Original Issue Date or (ii) the Effectiveness Date (as defined in the Registration Rights Agreement), 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 Note and (B) a bank check in the amount of accrued and unpaid interest. On or after
the earlier of (i) the six-month anniversary of the Original Issue Date or (ii) the Effectiveness Date, the Company shall use its commercially
reasonable efforts to deliver any certificate or certificates required to be delivered by the Company under this Section 4(d) electronically
through the Depository Trust Company or another established clearing corporation performing similar functions.


 


iii.
Failure to Deliver Certificates. If in the case of any Notice of Conversion such certificate or certificates are not delivered
to or as directed by the applicable Holder by the second Trading Day after the Conversion Date, the Holder shall be entitled to elect
by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion,
in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Company.


 


iv. Obligation Absolute; Partial Liquidated
Damages. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii)
by the third Trading Day after the Conversion Date, the Company shall pay to such Holder, in cash, as liquidated damages and not as a
penalty, of $1000 for each Trading Day after such third Trading Day until such certificates are delivered. In addition, if the Company
fails to deliver instructions to the Transfer Agent by the day required above, the Company shall be required to pay an additional amount
in cash, as liquidated damages and not as a penalty, of $1,000 for each date until such notice is given to the Transfer Agent as required.
The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note 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 a Holder of this Note 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 any one associated or affiliated with the Holder of has been engaged in any violation
of law, agreement or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all
or part of this Note 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 principal amount of this Note outstanding, which is subject to the injunction, which bond shall remain in effect until
the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent it obtains
judgment. In the absence of an injunction precluding the same, the Company shall issue Conversion Shares or, if applicable, cash, upon
a properly noticed conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default
pursuant to Section 8 herein for the Company’s failure to deliver Conversion Shares within the period specified herein and such
Holder shall have the right to pursue all remedies available to it 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 Holders from seeking to enforce damages pursuant
to any other Section hereof or under applicable law. In the absence of such injunction, the Company shall issue Conversion Shares or,
if applicable, cash, upon a properly noticed 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.


 






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v.
Compensation for Buy-In on Failure to Timely Deliver Certificates 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 certificate or certificates by the Share Delivery Date pursuant
to Section 4(d)(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 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 Note in a
principal amount equal to the principal amount of the attempted conversion 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(d)(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 Note 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 certificates representing shares of Common Stock upon
conversion of this Note as required pursuant to the terms hereof.


 


vi.
[INTENTIONALLY OMITTED].


 


vii.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which 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. The issuance of certificates for shares of the Common Stock on conversion of this Note 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 certificates,
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 certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company
shall not be required to issue or deliver such certificates 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.


 


Section 5. Certain Adjustments.


 


a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock 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 Notes), (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 holders 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 Equity Sales. If, at any time while this Note is outstanding, the Company sells or grants any option to purchase or
sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other
disposition), any common stock or common stock equivalents entitling any Person to acquire shares of common stock at an effective price
per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (if the holder of the common stock or common stock equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares
of common stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred
for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base
Conversion Price. Such adjustment shall be made whenever such common stock or common stock equivalents are issued. Notwithstanding the
foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If the Company enters into a Variable
Rate Transaction in violation of the Purchase Agreement, the Company shall be deemed to have issued common stock or common stock equivalents
at the lowest possible conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in
writing, no later than 1 Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b),
indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms
(such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a
Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance (other than an Exempt Issuance),
the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive
Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.


 



c)
Subsequent Rights Offerings. If the Company, at any time while the Note is outstanding, shall issue rights, options or warrants
to all holders of Common Stock (and not to Holders) entitling them to subscribe for or purchase shares of Common Stock at a price per
share that is lower than the then Conversion Price, then the Conversion Price shall be multiplied by a fraction of which the denominator
shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number of shares which the aggregate offering price of the total
number of shares so offered (assuming delivery to the Company in full of all consideration payable upon exercise of such rights, options
or warrants) would purchase at such price. Such adjustment shall be made whenever such rights or warrants are issued, and shall become
effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.


 



d)
Pro Rata Distributions. If the Company, at any time while this Note is outstanding, distributes to all holders of Common Stock
(and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe
for or purchase any security (other than the Common Stock, which shall be subject to Section 5(c)), then in each such case the Conversion
Price shall be adjusted by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the denominator shall be the then VWAP of the common stock determined
as of the record date mentioned above, and of which the numerator shall be such then VWAP of the common stock on such record date less
the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to
1 outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith. In either case the adjustments
shall be described in a statement delivered to the Holder describing the portion of assets or evidences of indebtedness so distributed
or such subscription rights applicable to 1 share of Common Stock. Such adjustment shall be made whenever any such distribution is made
and shall become effective immediately after the record date mentioned above.


 






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e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company effects any merger or consolidation of
the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction
or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or
(iv) the Company effects any reclassification of 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 (in any such case, a “Fundamental Transaction”),
then, upon any subsequent conversion of this Note, 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, the same kind and amount of securities,
cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of 1 share of Common Stock (the “Alternate Consideration”). 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 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 one share 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 Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new Note consistent
with the foregoing provisions and evidencing the Holder’s right to convert such Note into Alternate Consideration. The terms of
any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity
to comply with the provisions of this Section 5(e) and insuring that this Note (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental Transaction.


 



f)
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. No fractional
shares are to be issued upon the conversion of this Note, but rather the number of shares of Common Stock to be issued shall be rounded
to the nearest whole number. To the extent that rounding up to the nearest whole number would result in a violation of Section 4(c),
the Company shall pay the applicable converting Holder an amount in cash equal to the fractional share amount multiplied by the Closing
Bid Price for the Common Stock on the such date of conversion


 



  
g)
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 holders of stockholders of the Company or shall be required in
connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, of 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 Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note
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. The Holder is entitled
to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice.


 






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Section 6.  Redemption; Automatic Conversion.


 



a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the Original Issue
Date, the Company may deliver a written notice to the Holder (an “Optional Redemption Notice” and the date such notice
is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem this Note
for cash in an amount equal to the Optional Redemption Amount on the 20th Trading Day following the Optional Redemption Notice
Date (such date, the “Optional Redemption Date”, such 20 Trading Day period, the “Optional Redemption Period”
and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional
Redemption Date. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the
Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. The Company’s determination to pay
an Optional Redemption in cash shall be applied ratably to all of the holders of the then outstanding Notes based on their (or their predecessor’s)
initial purchases of Notes pursuant to the Purchase Agreement. In the event of any such attempt to repay the Notes, the Holder shall have
the right to convert the Notes prior to the date of any such prepayment in accordance with the conversion mechanics set forth herein.


 



b)
Monthly Redemption. On each Monthly Redemption Date, the Company shall redeem a portion of this Note equal to the Monthly Redemption
Amount (the “Monthly Redemption”) at 120% of the principal amount thereof plus accrued and unpaid interest and all
other amounts to the redemption date thereof. The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid in cash.
Holder may convert, pursuant to Section 4(a), any principal amount of this Note subject to a Monthly Redemption at any time prior to the
date that the Monthly Redemption Amount is due and paid in full.


 


Any principal amount of this Note converted during the applicable monthly
period in excess of the Monthly Redemption Amount shall be applied against the last principal amount of this Note scheduled to be redeemed
hereunder, in reverse time order from the Maturity Date. The Company covenants and agrees that it will honor all Notices of Conversion
tendered up until such amounts are paid in full. The Company’s determination to pay a Monthly Redemption shall be applied ratably
to all of the holders of the then outstanding Notes based on their (or their predecessor’s) initial purchases of Notes pursuant
to the Purchase Agreement.


 


 c) Redemption
Procedure. The payment of cash pursuant to an Optional Redemption or a Monthly Redemption shall be payable on the Optional Redemption
Date and Monthly Redemption Date, as applicable. If any portion of the payment pursuant to an Optional Redemption or Monthly Redemption
shall not be paid by the Company by the applicable due date, an Event of Default shall be deemed to have occurred under this Note. Notwithstanding
anything to the contrary in this Section 6, the Company’s determination to redeem in cash shall be applied ratably among the Holders
of Notes. The Holder may elect to convert the outstanding principal amount of the Note 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 prior to such payment.


 


d) [Intentionally Omitted]


 






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(e) Mandatory Prepayment. The Company shall
be required to offer to repay or prepay, as the case may be, in cash the aggregate principal amount of the Notes at (i) 115% of the principal
amount thereof plus any unpaid accrued interest to the date of repayment if within the first 3 months of the Closing Date and (ii) 120%
of the principal amount thereof plus any unpaid accrued interest to the prepayment date if after the first 3 months of the Closing Date,
in either case upon the sale of all or substantially all of the assets of the Company or its subsidiaries, a Change of Control, and upon
a Qualified Offering and at Maturity. In such an event, the Investor(s) shall have the right to convert the Notes prior to the date of
any such prepayment in accordance with any of the conversion mechanics as set forth in the Notes. Such payment shall be made on the date
of each of the events specified above and in each case the Company shall if practical have provided 20 days’ notice to Holders.
In such an event, the Holder shall have the right to convert the Notes prior to the date of any such prepayment in accordance with any
of the conversion mechanics as set forth herein.


 


 Section 7. Negative
Covenants. As long as any portion of this Note remains outstanding, unless the Majority Purchasers shall have otherwise given prior
written consent, the Company shall not, and shall not permit any of its Subsidiaries (whether or not a Subsidiary on the Original Issue
Date) 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 of the Company or its Subsidiaries other than as to (i) the Conversion Shares as permitted or required under
the Transaction Documents, and (ii) repurchases of Common Stock or Common Stock Equivalents of Company 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 Note;


 



e)
repay, repurchase or offer to repay, repurchase or otherwise acquire, or make any principal, interest or amortization payment on any Indebtedness,
other than the Notes;


 



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


 






    -13-


     


    

 



g)
subsequent to the date hereof 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 Note or (B) interest, liquidated damages and other amounts owing to a Holder
on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or
otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five
(5) Trading Days;


 



ii.
the Company, any of its Subsidiaries shall fail to observe or perform any other covenant or agreement contained in the Notes (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) which failure is not cured, if possible to cure, within the earlier to occur of (A) ten (10) Trading Days after
notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (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 (other than the Notes), 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);


 



iv.
any representation or warranty made in this Note, 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;


 



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 involves an obligation greater
than $100,000, whether such indebtedness now exists or shall hereafter be created;


 



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 shall be a party to any Change of Control or Fundamental Transaction or shall agree to sell or dispose of all or in excess
of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change of Control);


 






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ix.
the Company does not meet the current public information requirements under Rule 144 in respect of the Registrable Securities (as defined
under 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);


 



xi.
the Company shall fail for any reason to deliver certificates to a Holder prior to the tenth Trading Day after a Conversion Date pursuant
to Section 4(d);


 


xii. 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
Notes in accordance with the terms hereof; or


 



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 45 calendar days.


 


		b)	Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note plus 25% thereof,
plus accrued but unpaid interest, liquidated damages and other amounts owing in respect of this Note through the date of acceleration,
shall become, at the Holder’s election, immediately due and payable in cash (the “Mandatory Default Amount”),
subject to the Holder’s continued right to convert in accordance with Section 4. Commencing 5 days after the occurrence of any Event
of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal
to the lesser of 18% per annum or the maximum rate permitted under applicable law. At Holder’s option, it shall be entitled to be
paid all such amounts due including late fees, if any, in cash, or convert in accordance with Section 4. Upon the payment in full of the
Mandatory Default Amount, the Holder shall promptly surrender this Note 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 Note 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.



 


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, addressed to the Company at the address
set forth above, or such other electronic mail number or address as the Company may specify for such purpose 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 facsimile or electronic mail, or sent by a nationally recognized overnight courier service
addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile
number or address appears, at the principal place of business of the Holder. 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
facsimile or electronic mail at the facsimile number or email address, as applicable, specified on the signature page prior to 5:30 p.m.
(New York City time), (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile
or electronic mail at the facsimile number or email address, as applicable, specified on the signature page between 5:30 p.m. (New York
City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.



 






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		b)	Absolute Obligation. Except as expressly provided herein,
no provision of this Note 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 Note at the time, place, and rate, and in the coin or currency, herein
prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter
issued under the terms set forth herein.



 


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



 


		d)	Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Note 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 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 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 Note or the transactions contemplated
hereby. If the Holder shall commence an action or proceeding to enforce any provisions of this Note, then it shall be reimbursed by the
Company for its attorney’s fees and other costs and expenses incurred in the investigation, preparation and prosecution of such
action or proceeding.



 


		e)	Waiver; Amendment. Any waiver by the Company, or the
Holder of a breach of any provision of this Note 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 Note. The failure of the Company, or the Holder to insist upon strict adherence to any
term of this Note 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 Note. Any waiver by the Company, or the Holder must be in writing. No provision
of this Agreement may be waived or amended except in a written instrument signed, in the case of amendments, by the Company and the Majority
Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought.



 






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		f)	Severability. If any provision of this Note is invalid,
illegal or unenforceable, the balance of this Note 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 Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this indenture, 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.



 


		g)	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.



 


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



 


		j)	Assumption. Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such
Fundamental Transaction, all of the obligations of the Company under this Note and the other Transaction Documents pursuant to written
agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue
to the Holder a new Note of such successor entity evidenced by a written instrument substantially similar in form and substance to this
Note, including, without limitation, having a principal amount and interest rate equal to the principal amount and the interest rate of
this Note and having similar ranking to this Note, which shall be satisfactory to the Holder (any such approval not to be unreasonably
withheld or delayed). The provisions of this Section 9(i) shall apply similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations of this Note.





 


		j)	Senior Secured Obligation. The Notes will be senior
to all obligations of the Company. The obligations of the Company under this Note are secured by a first lien on all of the current and
future intellectual property assets of the Company and the Guarantors, in each case pursuant to the Security Agreement, dated as of the
date hereof between the Company and the Guarantors



 


(Signature Pages Follow)


 




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


 


	 	NIGHTFOOD HOLDINGS, INC.
	 	 
	 	By: 	                                                                          
	 	Name: 	Sean Folkson
	 	Title: 	Chief Executive Officer
	 	 	 
	 	Facsimile No. for delivery of Notices: 


 






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ANNEX A


 


NOTICE OF CONVERSION


 


The undersigned hereby elects
to convert principal under the 8% Senior Secured Convertible Note of Nightfood Holdings, Inc., a Nevada corporation (the “Company”),
due on December 10, 2022, into shares of common stock, of the Company (the “Common Stock”), according to the conditions
hereof, as of the date written below. If shares 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
determined in accordance with Section 13(d) of the Exchange Act, specified under Section 4(c) of this Note.


 


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 Notes to be Converted:	 
	 	 	 
	 	Payment of Interest in Common Stock __ yes  __ no	 



 


	 	 	 
	 	 	If yes, $_____________of Interest Accrued on Account of Conversion at Issue.



 


	 	 	 
	 	Number of shares of Common Stock to be issued:	 
	 	 	 
	 	Signature:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Address:	 
	 	 	 
	 	Delivery Instructions:	 



 







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Schedule 1


 


CONVERSION SCHEDULE


 


The 8% Original Issue Discount Senior Secured Convertible Note due
on December 10, 2022 in the original principal amount of $543,478.26 is issued by Nightfood Holdings, Inc., a Nevada corporation. This
Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.


 


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
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 



 


 


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