Exhibit
4.6


 


EXECUTION
COPY


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS 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 WITH A REGISTERED BROKER-DEALER OR OTHER LOAN
WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER
LOAN SECURED BY SUCH SECURITIES.


 


Original
Issue Date: August 8, 2022


Original
Principal Amount: $


Purchase
Price: $


Fixed
Conversion Price (subject to adjustment herein): $0.5450


 


SENIOR
SECURED CONVERTIBLE NOTE


DUE
February 7, 2024


 


THIS
SENIOR SECURED CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Senior Secured Convertible Notes of Ensysce
Biosciences, Inc., a Delaware corporation (the “Company”), having its principal place of business at 7946 Ivanhoe
Avenue, Suite 201, La Jolla, California, 92037 , designated as its Senior Secured Convertible Note due February 7, 2024 (this note, the
“Note” and, collectively with the other notes of such series, the “Notes”).


 


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 February 7, 2024 (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:


 


“Accelerated
Redemption Date” means a date that is the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) after an additional Monthly Redemption Notice in respect of an Accelerated Redemption,
which notice is provided in accordance with Section 6(c)(iii) herein.


 




    	 



    	 



    

 


“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 sixty (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 sixty (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, (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.


 


“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(d).


 


“Business
Day” means any day other than Saturday, Sunday or other day on which the Federal Bank of New York is closed.


 


“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 50%
of the voting securities of the Company (other than by means of conversion or exercise of the Notes and the Securities issued together
with the Notes), (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.


 




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“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
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 Note in accordance with the terms
hereof.


 


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


 


“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.


 


“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) the Company shall have paid all liquidated
damages and other amounts owing to the Holder in respect of this Note, (c)(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, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction
Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common
Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction
Documents, (f) 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, (g) the issuance of the shares in question (or, in the case of an Optional Redemption or Monthly Redemption,
the shares issuable upon conversion in full of the Optional Redemption Amount or Monthly Redemption Amount) to the Holder would not violate
the limitations set forth in Section 4(d) and Section 4(e) herein, (h) there has been no public announcement of a pending or proposed
Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable Holder is not in possession
of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates,
that constitutes, or may constitute, material non-public information, (j) for each of the twenty (20) Trading Days prior to the applicable
date in question, the closing price of the Common Stock on the principal Trading Market is at least equal to the Floor Price plus an
eight percent (8%) premium (as defined below), (k) the average daily dollar volume of for the Common Stock on the principal Trading Market
for the twenty (20) Trading Days prior to the applicable date in question exceeds $200,000, and (l) the Company has timely filed (exclusive
of any grace period) all of its SEC Reports during the time period in question.


 




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


 


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


 


“Floor
Price” means $0.1003 (or such lower amount as permitted, from time to time, by the Principal Market), subject to adjustment
for share splits, share dividends, share combinations, recapitalizations or other similar events.


 


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


 


“Interest
Conversion Rate” means 92% of the average of the three lowest VWAPs during the ten (10) consecutive Trading Days ending on
the Trading Day that is immediately prior to the applicable Interest Payment Date.


 


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


 


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


 


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


 


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


 


“Issuable
Maximum” shall have the meaning set forth in Section 4(e).


 


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


 




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“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note, plus all accrued and
unpaid interest hereon, divided by the lesser of (i) the Conversion Price, or (ii) 85% of the average of the three lowest VWAPs during
the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable 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 highest closing price for the Common Stock on the Trading Market during the period beginning
on the date of first occurrence of the Event of Default and ending on the date the Mandatory Default Amount is paid in full, or (ii)
130% of the sum of the outstanding principal amount of this Note, plus accrued and unpaid interest hereon, and (b) all other amounts,
costs, expenses and liquidated damages due in respect of this Note.


 


“Monthly
Conversion Period” shall have the meaning set forth in Section 6(b) hereof.


 


“Monthly
Conversion Price” 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 fifteenth (1/15th) of the Original Principal Amount, plus accrued
but unpaid interest, liquidated damages and any other amounts then owing to the Holder in respect of this Note. The Monthly Redemption
Amount shall be equal to ninety-two percent (92%) of the average of the three lowest VWAPs in the ten Trading Days prior to the Monthly
Redemption Date, or, at the Company’s option, in cash with a premium of eight percent of the Monthly Redemption Amount.


 


“Monthly
Redemption Date” means (i) with respect to the first (1st) Monthly Redemption, November 1, 2022, and (ii) with respect
to all Monthly Redemptions subsequent to the first Monthly Redemption, the first (1st) of each month commencing on December
1, 2022, and terminating upon the full redemption of this Note.


 


“Monthly
Redemption Notice” shall have the meaning set forth in Section 6(b) hereof.


 


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


 


“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: as to the period commencing on the Original Issue Date and ending at the Maturity Date, 108% of the
outstanding principal amount of the Note to be redeemed, plus accrued but unpaid interest thereon, plus all liquidated damages and other
amounts due in respect of the Note, if any.


 


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


 




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“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 the Notes, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence such Notes.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of June 30, 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.


 


“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).


 


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


 


“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 will, in accordance with the terms hereof,
be 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; the New York Stock Exchange; OTC Markets; the OTC Bulletin Board or the OTC Markets Group Inc. (or any successors
to any of the foregoing).


 


“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 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 OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (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 Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the Company.


 




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Section
2. Interest.


 


a)
Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Note at the rate of six percent (6%) per annum, payable on November 1, 2022, and commencing on December 1, 2022,
the first (1st) Trading Day of each month, on each Monthly Redemption Date (as to that principal amount then being redeemed),
on each Conversion Date (as to that principal amount then being converted), on each Optional Redemption Date (as to that principal amount
then being redeemed) and 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 or, at the Company’s
option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the Interest Conversion Rate (the
dollar amount to be paid in shares, the “Interest Share Amount”) or a combination thereof; provided, however,
that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have been met (unless waived by Holders owning
a majority in Original Principal Amount of the Notes in writing) during the ten (10) Trading Days immediately prior to the applicable
Interest Payment Date (the “Interest Notice Period”) and through and including the date such shares of Common Stock
are actually issued to the Holder, (ii) the Company shall have given the Holder notice in accordance with the notice requirements set
forth below and (iii) as to such Interest Payment Date, prior to such Interest Notice Period (but not more than five (5) Trading Days
prior to the commencement of such Interest Notice Period), the Company shall have delivered to the Holder’s account with The Depository
Trust Company a number of shares of Common Stock to be applied against such Interest Share Amount equal to the quotient of (x) the applicable
Interest Share Amount divided by (y) the lesser of the (i) then Conversion Price and (ii) the Interest Conversion Rate assuming for such
purposes that the Interest Payment Date is the Trading Day immediately prior to the commencement of the Interest Notice Period (the “Interest
Conversion Shares”). Notwithstanding anything to the contrary contained in this Section 2(a): (i) if the Company elects to
pay any interest in Interest Conversion Shares and the Floor Price is greater than the lesser of the (a) then Conversion Price and (b)
then Interest Conversion Rate, then (ii) the amount of Interest Conversion Shares to be issued to the Holder will be at the Holder’s
option; and (ii) in addition to the payment of an Interest Share Amount in Interest Conversion Shares (which issuance shall be at the
Floor Price) (in the event that the Holder permits such issuance albeit subparagraph (j) of the definition of Equity Conditions not being
satisfied), the Company shall pay to the Holder cash as a true-up (the “Cash Interest True-Up Amount”). The Cash Interest
True-Up Amount shall be determined by the product of (i) the difference between (y) the Floor Price less (z) 92% of the average of the
three lowest VWAPs during the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable
Monthly Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting
the Common Stock during such ten (10) Trading Day period), multiplied by (ii) the Interest Share Amount that is being paid in Interest
Conversion Shares. The Company and Holder agree to adjust the foregoing formula, in good-faith, in the event that the formula does not
represent the intent of the Cash Interest True-Up Amount. The intent of the Cash Interest True-Up Amount is to compensate the Holder
for its loss in value due to the condition that an Interest Share Amount cannot be converted into shares of Common Stock at Interest
Conversion Rate less than the Floor Price. Any such adjustment must be approved by the Holder.


 




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b)
Company’s Election to Pay Interest in Cash or Kind. Subject to the terms and conditions herein, the decision whether to
pay interest hereunder in cash, shares of Common Stock or a combination thereof shall be at the sole discretion of the Company. Prior
to the commencement of any Interest Notice Period, the Company shall deliver to the Holder a written notice of its election to pay interest
hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof and the Interest Share
Amount as to the applicable Interest Payment Date, provided that the Company may indicate in such notice that the election contained
in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice. During any Interest Notice Period,
the Company’s election (whether specific to an Interest Payment Date or continuous) shall be irrevocable as to such Interest Payment
Date. Subject to the aforementioned conditions, failure to timely deliver such written notice to the Holder shall be deemed an election
by the Company to pay the interest on such Interest Payment Date in cash. At any time the Company delivers a notice to the Holder of
its election to pay the interest in shares of Common Stock, the Company shall timely file a prospectus supplement pursuant to Rule 424
disclosing such election, if required by the Securities Act and the rules and regulations promulgated thereunder. The aggregate number
of shares of Common Stock otherwise issuable to the Holder on an Interest Payment Date shall be reduced by the number of Interest Conversion
Shares previously issued to the Holder in connection with such Interest Payment Date.


 


c)
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. Payment of interest in shares
of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur pursuant
to Section 4(c)(ii) herein and, solely for purposes of the payment of interest in shares, the Interest Payment Date shall be deemed the
Conversion Date. Interest shall cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers
the Conversion Shares within the time period required by Section 4(c)(ii) herein. 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”).
Except as otherwise provided herein, if at any time the Company pays interest partially in cash and partially in shares of Common Stock
to the holders of the Notes, then such payment of cash shall be distributed ratably among the holders of the then-outstanding Notes based
on their (or their predecessor’s) initial purchases of Notes pursuant to the Purchase Agreement.


 




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d)
Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of ten percent (10%) per annum or the maximum rate permitted by applicable law (the “Late Fees”) which shall
accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. Notwithstanding anything
to the contrary contained herein, if, on any Interest Payment Date the Company has elected to pay accrued interest in the form of Common
Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails to satisfy the conditions for payment
in Common Stock set forth in Section 2(a) herein (and such conditions are not waived by the Holder), then the Company, in lieu of delivering
either shares of Common Stock pursuant to this Section 2 shall deliver, within three (3) Trading Days of each applicable Interest Payment
Date, an amount in cash equal to the interest due plus the Late Fees. If any Interest Conversion Shares are issued to the Holder in connection
with an Interest Payment Date and are not applied against an Interest Share Amount, then the Holder shall promptly return such excess
shares to the Company.


 


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


 


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.


 




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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 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) and Section 4(e) 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. 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 Note to the Company unless the entire principal amount of this Note, plus all accrued
and unpaid interest thereon, has been so converted in which case the Holder shall surrender this Note 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 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 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 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.


 


Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to $0.5450, subject to adjustment herein (the
“Conversion Price”).


 


b)
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 Note to be converted by (y) the
Conversion Price.


 




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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 (6) month anniversary of the Original Issue Date; provided that on the Share Delivery Date the Company has satisfied the current
public information requirements under Rule 144 and the Conversion Shares may be resold without any volume or manner-of-sale restrictions
under Rule 144 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 Note
(including, if the Company has given continuous notice pursuant to Section 2(b) for payment of interest in shares of Common Stock at
least ten (10) 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 ten
(10) 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; provided that
on the Share Delivery Date the Company has satisfied the current public information requirements under Rule 144 and the Conversion Shares
may be resold without any volume or manner-of-sale restrictions under Rule 144 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.


 


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 Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares
issued to such Holder pursuant to the rescinded Notice of Conversion.


 




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iv.
Obligation Absolute; Partial Liquidated Damages. 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 the 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 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 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 outstanding principal
amount of this Note, 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, $5
per Trading Day 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 Note 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 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 Conversion Shares upon conversion of this Note as required pursuant to the terms hereof.


 




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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 Note and payment of interest
on this Note, 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 Notes), 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 Note 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 Note.
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 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 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 Note 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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c)
Holder’s 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 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 Note with respect to which such determination is being made, but shall exclude the number of shares of Common
Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder
or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or 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 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 Note 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 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 or Attribution Parties)
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(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 stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission,
as the case may be, (ii) a more recent public announcement by the Company, or (iii) 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 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 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 Note
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 Note.


 




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d)
Issuance Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval, then
the Company may not issue, upon conversion of this Note, a number of shares of Common Stock which, when aggregated with any shares of
Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (i) in connection with the conversion of any
Notes issued pursuant to the Purchase Agreement, (ii) in connection with the exercise of any Warrants issued pursuant to the Purchase
Agreement and (iii) in connection with any warrants issued to any registered broker-dealer as a fee in connection with the issuance of
the Securities pursuant to the Purchase Agreement, would exceed 7,106,055 shares of Common Stock (subject to adjustment for forward and
reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder
shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the original principal amount of
the Holder’s Note by (y) the aggregate original principal amount of all Notes issued on the Original Issue Date to all Holders.
In addition, each Holder may allocate its pro-rata portion of the Issuable Maximum among Notes and Warrants held by it in its sole discretion.
Such portion shall be adjusted upward ratably in the event a Holder no longer holds any Notes or Warrants and the amount of shares issued
to the Holder pursuant to the Holder’s Notes and Warrants was less than the Holder’s pro-rata share of the Issuable Maximum.
For avoidance of doubt, unless and until any required Shareholder Approval is obtained and effective, warrants issued to any registered
broker-dealer as a fee in connection with the Securities issued pursuant to the Purchase Agreement as described in clause (iii) above
shall provide that such warrants shall not be allocated any portion of the Issuable Maximum and shall be unexercisable unless and until
such Shareholder Approval is obtained and effective.


 




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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 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 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 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.


 


b)
Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, 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 simultaneously with
the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Conversion Price shall be reduced to equal the Base
Conversion Price, provided that the Base Conversion Price shall not be less than the Floor Price (as defined herein and for the avoidance
of doubt subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the date of
the Purchase Agreement). 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, despite the prohibition set forth in 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 the Trading 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, 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.


 




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c)
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 Note (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).


 


d)
Pro Rata Distributions. During such time as this Note 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 Note, 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 Note (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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e)
Fundamental Transaction. If, at any time while this Note 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
fifty percent (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 or scheme of arrangement) with another Person whereby such other Person acquires
more than fifty percent (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 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 (without regard to any limitation in Section 4(d) and Section 4(e)
on the conversion of this Note), 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 Note is convertible immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section 4(e) on the conversion of this Note).
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 Note 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 Note and the other Transaction Documents (as defined in the Purchase
Agreement) in accordance with the provisions of this Section 5(e) 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 Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Note 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 Note (without regard to any limitations on the conversion of this Note) 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 Note 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 Note 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 Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as
the Company herein. Notwithstanding the preceding, if it is a condition of the buyer, which condition the Holders of a majority in interest
of the Original Principal Amount of the Notes have agreed to, that the Notes and/or Warrants not be assumed and must be converted in
such Fundamental Transaction into the equity and/or cash paid in such Fundamental Transaction, then this Note and/or Warrants may be
cancelled upon payment in full therefor.


 




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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.


 


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 deliver to each Holder within one (1) Trading Day 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 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. 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 Note 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.


 




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Section
6. Redemption.


 


a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the Closing Date,
the Company may deliver a 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 some or all of the
then outstanding principal amount of this Note for cash in an amount equal to the applicable Optional Redemption Amount on the tenth
(10th) Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”,
such ten (10) 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 may only effect an Optional Redemption
if 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 during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through
and including the date payment of the Optional Redemption Amount is actually made in full. If this condition shall cease to be satisfied
at any time during the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the
Company within three (3) Trading Days after the first day on which such condition has not been met (provided that if, by a provision
of the Transaction Documents, the Company is obligated to notify the Holder of the existence of such event, such notice period shall
be extended to the third (3rd) Trading Day after proper notice from the Company) in which case the Optional Redemption Notice
shall be null and void, ab initio. 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.


 


b)
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; provided,
however, as to any Monthly Redemption and upon twenty (20) Trading Days’ prior written irrevocable notice (the “Monthly
Redemption Notice”), in lieu of a cash redemption payment the Company may elect to pay all or part of a Monthly Redemption
Amount in Conversion Shares based on a conversion price equal to the lesser of (i) the then Conversion Price and (ii) 92% of the average
of the three lowest VWAPs during the ten (10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable
Monthly Redemption Date (subject to adjustment for any stock dividend, stock split, stock combination or other similar event affecting
the Common Stock during such ten (10) Trading Day period) (the price calculated during the ten (10) Trading Day period immediately prior
to the Monthly Redemption Date, the “Monthly Conversion Price” and such ten (10) Trading Day period, the “Monthly
Conversion Period”); provided, further, that the Company may not pay the Monthly Redemption Amount in Conversion
Shares unless (y) the Monthly Conversion Price is at least equal to the Floor Price, and (z) from the date the Holder receives the duly
delivered Monthly Redemption Notice through and until the date such Monthly Redemption is paid in full, the Equity Conditions have been
satisfied, unless waived in writing by the Holder. The 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, plus accrued but unpaid interest, liquidated
damages and any other amounts then owing to the Holder are due and paid in full. Unless otherwise indicated by the Holder in the applicable
Notice of Conversion, any principal amount of this Note converted during the applicable Monthly Conversion Period until the date the
Monthly Redemption Amount is paid in full shall be first applied to the principal amount subject to the Monthly Redemption Amount payable
in cash and then to the Monthly Redemption Amount payable in Conversion Shares. Any principal amount of this Note converted during the
applicable Monthly Conversion 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 in cash, shares of Common Stock or a combination thereof 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. At any time the Company
delivers a notice to the Holder of its election to pay the Monthly Redemption Amount in shares of Common Stock, the Company shall file
a prospectus supplement pursuant to Rule 424 disclosing such election, if required by the Securities Act and the rules and regulations
promulgated thereunder. Notwithstanding anything to the contrary contained in this Section 6(b): (i) if the Company elects to pay any
Monthly Redemption Amount in Conversion Shares, then the amount of Conversion Shares to be issued to the Holder will be at the Holder’s
option; and (ii) if the Monthly Conversion Price is less than the Floor Price, then in addition
to the payment of a Monthly Redemption Amount in Conversion Shares (which issuance shall be at the Floor Price) (in the event that the
Holder permits such issuance albeit subparagraph (j) of the definition of Equity Conditions not being satisfied), the Company shall pay
to the Holder cash as a true-up (the “Cash True-Up Amount”). The Cash True-Up Amount shall be determined by
the product of (i) the difference between (y) the Floor Price less (z) 92% of the average of the three lowest VWAPs during the ten (10)
consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Monthly Redemption Date (subject to adjustment
for any stock dividend, stock split, stock combination or other similar event affecting the Common Stock during such ten (10) Trading
Day period), multiplied by (ii) the Monthly Redemption Amount that is being paid in Conversion Shares. The Company and Holder agrees
to adjust the foregoing formula, in good-faith, in the event that the formula does not represent the intent of the Cash True-Up Amount.
The intent of the Cash True-Up Amount is to compensate the Holder for its loss in value due to the condition that a Monthly Redemption
Amount cannot be converted into shares of Common Stock at Monthly Conversion Price less than the Floor Price. Any such adjustment must
be approved by the Holder.


 






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c)
Redemption Procedure.


 


i.
The payment of cash or issuance of Common Stock, as applicable, pursuant to an Optional Redemption or a Monthly Redemption shall be payable
on the Optional Redemption Date or 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, interest shall accrue thereon at an interest rate
equal to the lesser of 15 % 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 Optional Redemption Amount or 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 Optional Redemption
or Monthly Redemption, ab initio, and, with respect to the Company’s failure to honor the Optional Redemption, the Company
shall have no further right to exercise such Optional Redemption. Notwithstanding anything to the contrary in this Section 6, the Company’s
determination to redeem in cash or its elections under Section 6(b) 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.


 


ii.
Notwithstanding anything herein contained to the contrary, the Holder, at its option, may defer any Monthly Redemption (each a “Deferred
Redemption”) up to a maximum of four times. In such event, the Holder may elect to receive a Deferred Redemption at any time
in shares of Common Stock at the lesser of (i) the Conversion Price, (ii) 92% of the average of the three lowest VWAPs in the ten (10)
days prior to the Holder’s notice to the Company of its election to receive payment for the Deferred Redemption. Any payment of
a Deferred Redemption that is not converted into shares of Common Stock, shall be paid in cash to the Holder on the next applicable Monthly
Redemption Date.


 




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iii.
Notwithstanding anything herein contained to the contrary, the Holder, at its option, may accelerate up to four (4) Monthly Redemptions
during any calendar month (an “Accelerated Redemption”), through no more than two additional Monthly Redemption Notices,
by indicating such acceleration on a Monthly Redemption Notice (or an additional Monthly Redemption Notice). In such event, the Holder
may elect to receive an Accelerated Redemption (on a LIFO basis) at any time in shares of Common Stock at the Monthly Conversion Price.
Any payment of an Accelerated Redemption shall be paid in Shares of Common Stock on the Monthly Redemption Date or Accelerated Redemption
Date that relates to the Monthly Redemption Notice (or an additional Monthly Redemption Notice, as the case may be) indicating an Accelerated
Redemption. For the avoidance of doubt, the Holder is entitled to an Accelerated Redemption, at its option, with respect to each Monthly
Redemption. For the avoidance of doubt, the Holder shall have in any month the right to provide the Company an aggregate of three Monthly
Redemption Notices during any calendar month.


 


d)
Mandatory Redemption at Election of Holder. Subject to the provisions of this Section 6, if, at any time while this Note is outstanding,
the Company shall carry out one or more Subsequent Financings in excess of $5,000,000 in gross proceeds, the Holder shall have the right
to require the Company to first use up to 20% of the gross proceeds of such Subsequent Financing (such dollar amount, the “Mandatory
Redemption Proceeds”) to redeem all or a portion of this Note for an amount in cash equal to the Mandatory Redemption Amount
equal to 1.08 multiplied by the sum of Principal Amount subject to the Mandatory Redemption, plus accrued but unpaid interest, plus liquidated
damages, if any, and any other amounts, if any, then owing to the Holder in respect of this Note (a “Mandatory Redemption”).
The Company shall deliver notice to the Holder of the Subsequent Financing at least five (5) Trading Days prior to the closing of the
Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of
such financing (such additional notice, a “Mandatory Redemption Notice” and the date such Mandatory Redemption Notice
is deemed delivered hereunder, the “Mandatory Redemption Notice Date”). If the Holder exercises its right herein to
require a Mandatory Redemption by delivering written notice to the Company within five (5) Trading Days of the Mandatory Redemption Notice
Date (“Mandatory Redemption Exercise Notice”), the Company shall effect the Mandatory Redemption and pay the Mandatory
Redemption Amount to the Holder on or prior to the fifth (5th) Trading Day following the consummation of the Subsequent Financing (“Mandatory
Redemption Date”). The Company’s payment of the Mandatory Redemption Proceeds shall be applied ratably to all of the
holders of the then outstanding Notes which exercise the right to require a Mandatory Redemption on the basis of their (or their predecessor’s)
initial purchases of Notes 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.


 


Section
7. Negative Covenants. As long as any portion of this Note remains outstanding, unless Holder and the holders of at least 50.1%
in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall
not permit any of the Subsidiaries to, directly or indirectly (except to the extent permitted by the terms of the Purchase Agreement):


 




    	22



    	 



    

 


a)
except with the prior written consent of the Agent (as defined in the Security Agreement), enter into, create, incur, assume, guarantee
or suffer to exist any indebtedness for borrowed money of any kind exceeding $250,000 in the aggregate, 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)
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, except Permitted Liens;


 


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, pursuant
to any equity incentive approved by the disinterest member of the Board of Directors, provided that such repurchases shall not exceed
an aggregate of $50,000 for all officers and directors during the term of this Note;


 


e)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness other than the Notes if on a pro-rata basis;


 


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


 


g)
subject to Section 4.20 of the Purchaser Agreement, enter into any transaction with any Affiliate of the Company or Related Party; 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 three
(3) Trading Days;


 




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ii.
the Company 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) or
in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) 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 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) with a cure period of ten (10) Trading Days of the date of the
occurrence;


 


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, which if curable, has not been cured within ten (10) Trading Days of
date of the occurrence;


 


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 50% of its assets in one transaction or a series of related transactions (whether
or not such sale would constitute a Change of Control Transaction);


 




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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 60th calendar day after the Closing Date if the Company has not used, and does not continue to use, its
best efforts during such period to have such Registration Statement declared effective and the Registration Statement is not declared
effective with 75 days, 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 twenty (20) consecutive Trading Days or thirty (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 ten (10) consecutive Trading Days during any twelve (12) month period pursuant to this Section 8(a)(x);


 


xi.
the Company shall fail for any reason to deliver Conversion Shares to a Holder prior to the third (3rd) 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 Notes in accordance with the terms hereof;


 


xii.
any Person shall materially breach any agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase Agreement;


 


xiii.
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” for a period of five Trading Days;


 


xiv.
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 $250,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 45 calendar days;


 




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xv.
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;


 


xv.
the Company shall fail to maintain the Required Minimum;


 


xvi.
the Company does not obtain the Stockholder Consent on the Closing Date;


 


xvii.
the Information Statement is not filed with the Commission within ten (10) calendar days of the Closing Date;


 


xviii.
the mailing of the Information Statement is not completed by the 40th calendar day after the Closing Date;


 


xix.
the Company shall fail to timely make any filings required under the Exchange Act;


 


xx.
the Company fails to satisfy the current public information requirements under Rule 144;


 


xxi.
the Company fails to cause the security filings described in Section 4.21 of the Purchase Agreement to be made within 29 calendar days
of the Original Issue Date; or


 


xxii.
the Company fails to cause the security filings described in Section 4.22 and Section 4.23 of the Purchase Agreement to be made within
a reasonable period of time.


 


b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, 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, at the Holders election in cash at the Mandatory Default Amount or in shares of
Common Stock at the Mandatory Default Amount at a conversion price equal to 85% of the average of the three lowest VWAPs during the ten
(10) consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable date the Mandatory Default Amount
is demanded or otherwise due. Commencing five (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 10% 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 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.


 




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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 facsimile, 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 facsimile number, 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 facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or 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 facsimile at the facsimile number or 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 facsimile at the facsimile number or 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 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.


 




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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 Nevada, 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 Clark County, Nevada (the “Nevada
Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Nevada 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 Nevada Courts, or such Nevada 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 any party shall commence an action or proceeding to enforce any provisions of this Note, 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 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 on any other occasion.
Any waiver by the Company or the Holder must be in writing.


 


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 Note, 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 Note shall be cumulative
and in addition to all other remedies available under this Note 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 Note. 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 Note.


 


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 Note and shall not be deemed
to limit or affect any of the provisions hereof.


 


j)
Secured Obligation. The obligations of the Company under this Note are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement, dated the date hereof between the Company, the Subsidiaries of the Company and the Secured Parties
(as defined therein). The Company acknowledges and agrees that should a proceeding under any bankruptcy or insolvency law be commenced
by or against the Company or a Subsidiary, or if any of the Collateral (as defined in the Security Agreement) should become the subject
of any bankruptcy or insolvency proceeding, then the Holder should be entitled to, among other relief to which the Holder may be entitled
under the Transaction Documents and/or applicable law, an order from the court granting immediate relief from the automatic stay pursuant
to 11 U.S.C. Section 362 to permit the Holder to exercise all of its rights and remedies pursuant to the Transaction Documents and/or
applicable law. THE COMPANY EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE COMPANY
EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR
RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY
OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE TRANSACTION DOCUMENTS AND/OR APPLICABLE LAW. The Company hereby consents
to any motion for relief from stay that may be filed by the Holder in any bankruptcy or insolvency proceeding initiated by or against
the Company and, further, agrees not to file any opposition to any motion for relief from stay filed by the Holder. The Company represents,
acknowledges and agrees that this provision is a specific and material aspect of the Transaction Documents, and that the Holder would
not agree to the terms of this Note and the other Transaction Documents if this waiver were not a part of this Note. The Company further
represents, acknowledges and agrees that is waiver is knowingly, intelligently and voluntarily made, that neither the Holder nor any
person acting on behalf of the Holder has made any representations to induce this waiver, that the Company has been represented (or has
had the opportunity to by represented) in the signing of this Note and the Transaction Documents and in the making of this waiver by
independent legal counsel selected by the Company and that the Company has discussed this waiver with counsel.


 




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k)
Reserved.


 


l)
Equitable Adjustment. Trading volume amounts, price/volume amounts, the amount of Warrants, the amount of shares of Common Stock
identified in the Purchase Agreement, Conversion Price, Exercise Price, shares of Common Stock underlying the Notes and the Warrants,
and similar figures in the Transaction Documents shall be equitably adjusted (but without duplication) to offset the effect of stock
splits, similar events and as otherwise described in the Purchase Agreement, Notes and Warrants.


 


m)
Issuance of Conversion Shares Below Floor Price. For the avoidance of doubt, subject to Section 6(b), the Company shall not issue
any shares of Common Stock to the Holder in connection with this Note if the applicable conversion price is less than the Floor Price.


 


Section
10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, 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)


 




    	30



    	 



    

 


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.


 


ENSYSCE
BIOSCIENCES, INC.


 


	By:	 	 
	Name:	 	 
	Title	 	 


 





	Facsimile
  No. for delivery of Notices: 	 	 



 




    	31



    	 



    

 


ANNEX
A


 


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Senior Secured Convertible Note due February 7, 2024 of Ensysce Biosciences,
Inc., a Delaware 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 Note, 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 Note 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
    for Delivery of Common Stock Certificates:
	 	Or
	 	DWAC
    Instructions:
	 	 






	 	Broker
    No.:  	






	 	Account
    No.: 	


 




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