Document:

Exhibit
4.2

 

THIS
NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION
UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED PURSUANT TO AN EXEMPTION UNDER SUCH ACT AND SECURITIES LAWS.

 

AMMO,
INC.

 

8%
UNSECURED CONVERTIBLE PROMISSORY NOTE

 

	Principal
    Amount:	$______
	 	 
	Original
    Issue Date:	November
    5, 2020
	 	 
	Interest:	8%
    per annum
	 	 
	Payment
    Obligations: 	Interest
    only payments for 24 months; any unpaid principal and interest due and payable on the Maturity Date.

 

THIS
8.0% UNSECURED CONVERTIBLE NOTE (this “Note “) is issued, dated, and effective as of the Original Issue Date
set forth above by Ammo, Inc., a Delaware corporation (the “Company”), having its principal place of business
at 7681 E. Gray Road, Scottsdale, Arizona 85260, to [___________] (together with its successors and permitted assigns, the “Holder”),
pursuant to exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”).
The Company promises to pay the aggregate unpaid Principal Amount under this Note set forth above (the “Principal Amount”)
and any unpaid Interest to the Holder on the two (2) year anniversary of this Note (the “Maturity Date”), and
to pay interest to the Holder on the aggregate then outstanding Principal Amount in accordance with the provisions of this Note.

 

1.
Payment of Principal and Interest. Payment of principal and any accrued but unpaid interest are to be made on or
before the Maturity Date at the address of Holder set forth on the signature page of this Note or at such other place as Holder
designates to the Company in writing.

 

(a)
Interest Rate. Interest shall accrue daily on the outstanding Principal Amount of this Note at a rate per annum equal to
eight percent (8.0%) (“Interest”).

 

(b)
Payment of Interest. The Company shall pay to the Holder any accrued interest on the aggregate unconverted and then outstanding
Principal Amount of this Note on a monthly basis, beginning on November __, 2020 an continuing for a period of 24 months ending
on the Maturity Date..

 

(c)
Interest Calculations. Interest shall be calculated on the basis of a three hundred sixty five (365)-day year, and shall
accrue daily commencing on the Original Issue Date until payment in full of the outstanding Principal Amount, together with all
accrued and unpaid interest and other amounts which may become due hereunder, has been made or until such Principal Amount and
interest have been duly converted. 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.

 

(d)
Prepayment. This Note may be prepaid by the Company at any time following the Original Issuance Date on seven (7) day’s
prior written notice to the Holder. If the Company exercises its right to prepay the Note, the Company shall make payment to the
Holder of an amount equal to the outstanding principal amount of the Note plus any Interest validly accrued and not paid by the
Company as of the date of prepayment.

 

2.
Maturity. This Note shall mature automatically and the entire outstanding principal amount, together with all interest
accrued under this Note, shall become due and payable on the two year anniversary of the Original Issue Date (“Maturity
Date”), unless this Note, before such date, is converted into shares of common stock of the Company pursuant to Section
3 hereof.

 

    	1

     

    

 

3.
Conversion of Note.

 

(a)
Conversion into Stock.

 

(i)
Voluntary Conversion. At the option of the Holder, at any time after the period beginning 30 days after the Issue Date
of this Note, the entire principal amount of this Note plus any accrued interest may be converted, in whole or in part, into fully
paid and nonassessable shares of restricted common stock of the Company (“Conversion Shares”) at the Conversion
Price (as defined herein). The number of such shares of common stock that Holder shall be entitled to receive, and shall receive,
upon such Conversion shall be determined by dividing the aggregate amount of principal and accrued interest by the Conversion
Price (as defined herein). Holder agrees to execute and deliver the form of Notice of Conversion attached hereto. Upon receipt
by the Company of any such Notice of Conversion, the election to convert shall be irrevocable and the date the Notice of Conversion
executed by the Holder shall be the “Conversion Date.”

 

(ii)
Automatic Conversion. On the 180th day following the Maturity Date the entire unpaid Principal Amount under
this Note shall be automatically converted into Conversion Shares at the Conversion Price (as defined herein).

 

(b)
Conversion Price. The “Conversion Price” shall be $2.00 per share

 

(c)
Mechanics of Conversion. No fractional shares of the Common Stock shall be issued upon Conversion of this Note. Upon the
Note Maturity Date or Conversion hereof, Holder shall surrender the Note at the office of the Company or of any transfer agent
for such Common Stock and shall give the Notice of Conversion to the Company. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the Note.

 

(d)
Stock Certificates. Upon Conversion into common stock, the Company shall issue and deliver to Holder, or to Holder’s
nominee or nominees, a certificate or certificates representing the number of shares of restricted common stock to which Holder
shall be entitled as a result of Conversion as provided herein.

 

(e)
No Shareholder Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other person:
(a) the right to vote or to consent or to receive notice as a shareholder with respect to meetings of shareholders of the Company
or for any other matters on which shareholders are entitled to vote or receive notice, or (b) any other rights as a shareholder
of the Company, and (c) no dividends shall be payable or accrued with respect to the Common Stock into which this Note is convertible,
in all cases until, and only to the extent that, this Note shall have been converted into the Common Stock as provided in this
Note.

 

(f)
Adjustments for Reorganizations, Mergers, Reclassifications or Similar Events. If the Common Stock shall be changed into
the same or a different number of shares of any other class or classes of stock or other securities or property, whether by capital
reorganization, merger, reclassification or otherwise, then the Note shall thereafter be convertible into the number of shares
of stock or other securities or property to which a holder of the number of shares of common stock of the Company deliverable
upon Conversion of the Note shall have been entitled upon such reorganization, merger, reclassification or other event.

 

4.
Unsecured Obligation. This Note represents an unsecured obligation of the
Company. Notwithstanding the foregoing, this Note will rank pari passu with all other unsecured obligations of the Company with
respect to right of payment and priority.

 

5.
Restrictions on Company’s Shares.

 

(a)
Holder hereby acknowledges and agrees that any shares of the Company’s common stock received under this Note will not
have been registered with the Securities Exchange Commission (“SEC”), and are being acquired by reason of
a specific exemption under the Securities Act as well as under certain state securities laws for transactions by an issuer
not involving any public offering. Further, any disposition of the shares of the Company’s common stock may, under
certain circumstances, be inconsistent with this exemption and may make the holder who disposes of such stock an
“underwriter” within the meaning of the Securities Act. It is understood that the definition of
“underwriter” focuses upon the concept of “distribution” and that any subsequent disposition of the
subject common stock can only be effected in transactions that are not considered distributions

 

    	2

     

    

 

(b)
Holder hereby acknowledges and agrees that the shares of the Company’s common stock must be held and may not be sold,
transferred, or otherwise disposed of for value unless they are subsequently registered under the Securities Act of 1933, as
amended (the “Act”), or an exemption from such registration is available. The Company is under no
obligation to register its common stock under the Act. Further, if Rule 144 is available only routine sales of the
Company’s common stock in limited amounts can be made in reliance upon Rule 144 in accordance with the terms and
conditions of that rule.

 

(c)
The certificate(s) representing the shares of the Company’s common stock will bear a legend in substantially the
following form so restricting the sale of such securities:

 

The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”), and are “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act.
The securities have been acquired for investment and may not be sold or transferred without complying with Rule 144 in the absence
of an effective registration or other compliance under the Securities Act.

 

6.
Events of Default, Acceleration and Remedies.

 

(a)
Events of Default. The occurrence of any of the following shall constitute an Event of Default under this Note:

 

i.
Company fails to pay all or any portion of any amount due hereunder when the same becomes due and payable, whether at a stated
payment date or by acceleration, and such failure continues for ten days following Company’s receipt of Holder’s written
notice of such failure; or

 

ii.
any representation or warranty made herein is false in any material respect on the date as of which it is made or as of which
the same is to be effective; or

 

iii.
Company fails to comply with any term, covenant or agreement contained herein subject to any applicable grace period or cure period;
or

 

iv.
Company becomes insolvent or fails generally to pay debts as they become due; or

 

v.
the taking of action by Company to become the subject of proceedings under the United States Bankruptcy Code; or the execution
by Company of a petition to become a debtor under the United States Bankruptcy Code; or the entry of an order for relief under
the United States Bankruptcy Code against Company; or Company making an assignment for the benefit of creditors; or Company consenting
to the appointment of a custodian, receiver, trustee or other officer with similar powers for it, or for any substantial part
of its property; or adjudicating of Company as insolvent; or

 

vi.
if any Governmental Authority of competent jurisdiction shall enter an order appointing, without consent of Company, as applicable,
a custodian, receiver, trustee or other officer with similar powers with respect to Company, or with respect to any substantial
part of Company’s property, or if an order for relief relating to Company shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of Company, or if any petition for any such relief shall be filed against Company and
such petition shall not be dismissed or stayed within 60 days; or

 

vii.
Any breach, violation, or default shall occur under any of the other Related Documents and shall continue beyond any applicable
notice and cure period set forth therein.

 

    	3

     

    

 

(b)
Acceleration. Upon the occurrence of:

 

i.
any Bankruptcy Default, the unpaid principal balance of the Loan and all accrued and unpaid interest thereon at that time outstanding
automatically shall mature and become due, and

 

ii.
any other Event of Default, Holder, at any time, at its option, and without notice or demand, may declare the outstanding principal
amount of the Loan and all accrued and unpaid interest thereon, due and payable, whereupon such amounts immediately shall mature
and become due and payable, all without presentment, protest or notice, all of which hereby are waived.

 

(c)
Remedies. Upon the occurrence of any Event of Default, Holder, at its option, may enforce or cause to be enforced any of
the rights or remedies accorded to Holder at equity or law, by virtue of this Note, by statute or otherwise.

 

7.
Losses, Theft or Destruction of Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft or destruction of this Note and of indemnity or security reasonably satisfactory to the Company, the Company
shall make and deliver a new Note that shall carry the same rights to interest (unpaid and to accrue) carried by this Note, stating
that such Note is issued in replacement of this Note, making reference to the original Issue Date of this Note (and any successor
hereto) and dated as of such cancellation, in lieu of this Note.

 

8.
Miscellaneous.

 

(a)
Waivers. Borrower expressly hereby waives presentment for payment, protest and demand and notice of protest, demand, dishonor,
nonpayment, intent to accelerate and acceleration of this Note, and expressly agrees that this Note, or any payment hereunder,
may be extended from time to time before, at or after maturity, without in any way affecting the liability of Borrower.

 

(b)
Modifications. This Note may only be amended by an instrument in writing signed by the party against whom enforcement of
the change or amendment is sought.

 

(c)
Assignment. Subject to restrictions on resale imposed by state and federal securities laws, Holder may assign this Note
or any of the rights, interests or obligations hereunder, by operation of law or otherwise, in whole or in part, to any person
or entity so long as such assignee agrees to be bound by the terms and conditions of the Note. Effective upon any such assignment,
the person or entity to whom such rights, interests and obligations are assigned shall have and exercise all of Holder’s
rights, interests and obligations hereunder as if such person or entity were the original holder of this Note.

 

(d)
Severability. Every provision of this Note is intended to be severable. If any term or provision hereof is declared
by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not
affect the balance of the terms and provisions hereof, which shall remain binding and enforceable to the Company and the Holder.

 

(e)
No Fractional Units or Scrip. No fractional shares or scrip representing fractional units shall be issued upon the Conversion
of this Note. In lieu of any fractional shares to which Holder otherwise would be entitled, the Company shall make a cash payment
equal to the Conversion Price then in effect multiplied by such fraction.

 

(f)
Issue Date. The provisions of this Note shall be construed and shall be given effect in all respects as if this Note had
been issued and delivered by the Company on the earlier of the date hereof or the Issue Date of any Note for which this Note is
issued in replacement. This Note shall be binding on any successor or assign of the Company.

 

(g)
Compliance With Usury Laws. The Company and Holder intend to comply with all applicable usury laws. In fulfilling this
intention, all agreements between the Company and Holder are expressly limited so that the amount of interest paid or agreed to
be paid to the Holder for the use, forbearance, or detention of money under this Note shall not exceed the maximum amount permissible
under applicable law.

 

    	4

     

    

 

If
for any reason the law shall prohibit a payment of any amount required under this Note, then the obligation shall be reduced to
the maximum allowable by such law. If for any reason Holder receives as interest an amount that would exceed the highest lawful
rate, then the amount that would constitute excessive interest shall be applied to the reduction of the principal of this Note
and not to the payment of interest. If any conflict arises between this provision and any provision of any other agreement between
the Company and Holder, then this provision shall control.

 

(h)
Legal Representation. Holder agrees and represents that such party has been represented by such party’s own legal
counsel with regard to all aspects of this Note, or if such party is acting without legal counsel, that such party has had adequate
opportunity and has been encouraged to seek the advice of such party’s own legal counsel prior to the execution of this
Agreement.

 

(i)
Restrictions. Holder acknowledges that all shares of common stock acquired upon the Conversion of this Note shall be subject
to restrictions on resale imposed by applicable state and federal securities laws.

 

(j)
Governing Law; Jurisdiction. This Note shall be governed by and construed in accordance with the laws of Delaware. The
courts of Arizona shall have exclusive jurisdiction to settle any dispute or claim that arises out of, or in connection with this
Note. Accordingly, any action whatsoever brought upon or relating to this Note shall be instituted and prosecuted in the courts
of Arizona.

 

(j)
Jury Waiver. BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) BETWEEN BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE, ANY OTHER RELATED
DOCUMENT OR ANY RELATIONSHIP BETWEEN LENDER AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED HEREIN.

 

(k)
Submission to Jurisdiction; Service of Process. ALL JUDICIAL PROCEEDINGS IN ANY MANNER RELATING TO OR ARISING OUT OF THIS
NOTE OR ANY OBLIGATIONS HEREUNDER MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF WISCONSIN LOCATED IN MARICOPA COUNTY OR THE FEDERAL
COURT FOR THE DISTRICT OF ARIZONA (PHOENIX). BY EXECUTING AND DELIVERING THIS NOTE, BORROWER IRREVOCABLY:

 

(a)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

 

(b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

(c)
AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS SET FORTH IN THE INTRODUCTORY PARAGRAPH OF THIS NOTE;

 

(d)
AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND

 

(e)
AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	5

     

    

 

IN
WITNESS WHEREOF, Ammo, Inc. has caused this Convertible Promissory Note to be executed by its officer thereunto duly authorized.

 

	 	The
    “Company”
	 	 	 
	 	AMMO,
    INC.
	 	a
    Delaware corporation
	 	 	 
	 	 	 
	 	By:	Fred
    Wagenhals
	 	Its:	Chief
    Executive Officer
	 	 	 
	Accepted
    and Agreed to:	 	 
	 	 	 
	 	 	“Holder”
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	Signature
	 	 	 
	 	 	Address:
	 	 	 
	 	 	 
	 	 	 

 

    	6

     

    

 

NOTICE
OF CONVERSION

 

Ammo,
Inc.

Attn:
Fred Wagenhals

7681
E. Gray Road,

Scottsdale,
Arizona 85260

 

This
Notice is provided to inform you that the Ammo, Inc., a Delaware corporation (the “Company”) irrevocably elects to
convert the 8% Unsecured Convertible Promissory Note (the “Note”), as provided in Section 3 of the Note, effective
as of the date written below.

 

The
Conversion Price of the Note shall be determined in accordance with Section 3(b). The number of shares to which the undersigned
will be entitled shall be determined by dividing (i) the principal and accrued interest on this Note set forth below by (ii) the
Conversion Price.

 

Effective
as of the Conversion Date, the Note is cancelled and terminated as to the amount of the principal and interest set forth below.
The undersigned will receive a stock certificate of Ammo, Inc. representing the number of shares of stock into which the Company’s
common stock is converted.

 

	Date:________________	 
	 	Signature
	 	 
	 	 
	Print
    Name

 

	Principal
    amount:___________________	Address:
	 	
	Accrued
        interest:____________________

        
	
	_________________________________	 
	Total
    Conversion Shares to be issued: ______________	

 

    	7Exhibit
4.3

 

THE
SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND SUCH STATE SECURITIES LAWS, OR AN EXEMPTION FROM REGISTRATION THEREUNDER.

 

AMENDED
PROMISSORY NOTE B

 

	$1,687,664.00	Manitowoc,
    Wisconsin
	 	November
    4, 2020

 

FOR
VALUE RECEIVED, the undersigned, ENLIGHT GROUP II, a Delaware limited liability company whose principal address is 7681 East Gray
Road, Scottsdale, Arizona (“EGII”), and AMMO, INC., a Delaware corporation whose principal address is 7681
East Gray Road, Scottsdale, Arizona (“AMMO”) (EGII and AMMO are individually and together referred to herein
as “Borrower”, as the context shall permit or allow), hereby promises to pay to the order of JAGEMANN STAMPING
COMPANY, a Wisconsin corporation, whose principal address is 5757 West Custer Street, Manitowoc, Wisconsin 54221-0217 (“Lender”),
the principal sum of One Million Six Hundred Eighty Seven Thousand Six Hundred Sixty Four and 00/100 Dollars ($1,687,664.00),
plus interest thereon as set forth below on or prior to the Maturity Date (as defined in Section 1) to the account of Lender,
in accordance with the terms set forth below. Borrower and Lender (collectively, the “Parties”) have entered into
this Amended Promissory Note B (the “Amended Note B”) in consideration of Borrower’s payment in full of the
Promissory Note A and in order to modify the payment terms of Note B as set forth below.

 

1.
Definitions. As used in this Promissory Note B (“Note”), the following terms shall have the following meanings:

 

“Bankruptcy
Default” means any Event of Default described in Sections 6.1(d), 6.1(e) or 6.1(f).

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which banks in Manitowoc, Wisconsin are required to
close.

 

“Collateral”
means that equipment of Borrower described in Exhibit A attached hereto.

 

“Closing
Date” shall mean the date upon which Note A is paid in full and the collateral provided thereto as security released
by Lender.

 

    	 

    	2

    

 

“Default”
means any act, event, condition or omission which, with the giving of notice or lapse of time, would constitute an Event of Default
if uncured or unremedied.

 

“Dollars”
means the lawful currency of the United States.

 

“Event
of Default” means the occurrence of any of the events described in Section 6.1 of this Note.

 

“Governmental
Authority” means any foreign, federal, state, municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof or any court or arbitrator.

 

“Loan”
means the extension of credit made by Lender to Borrower evidenced by this Amended Note B.

 

“Maturity
Date” means June 26, 2023, or such earlier date on which the obligations under this Note become due and payable pursuant
to the terms hereof.

 

“Payment
Date” means the 10th day of each month of each fiscal year of Borrower; provided that if the 10th day of
a month is not a Business Day, the payment due on such date shall be due on the immediately preceding Business Day.

 

“Person”
means any natural person, corporation, limited liability company, joint venture, limited liability partnership, partnership, association,
trust or other entity or any Governmental Authority.

 

“Note
A” means that certain promissory note entered into by and between the Parties dated June 26, 2020 in the original amount
of $5,803,800.

 

“Note
B” means that certain promissory note entered into by and between the Parties dated June 26, 2020 in the original amount
of $2,635,797.00.

 

“Related
Documents” means this Note, the Settlement Agreement, the Use Agreement and the General Business Security Agreements,
all as amended, restated, replaced, supplemented or otherwise modified from time to time, including Exhibit “A” attached
hereto and incorporated by reference.

 

“Settlement
Agreement” means the Settlement Agreement dated as of June 26, 2020 among Lender, EGII and AMMO.

 

“Use
Agreement” means the Use Agreement dated as of the date hereof between Lender and EGII.

 

    	 

    	3

    

 

2.
Interest Rate; Default Rate; Late Fee.

 

2.1
Interest Rate. The interest rate to be applied to the unpaid principal balance of the Loan will be a per annum rate equal
to the 9.0%. Interest on this Note is computed on an Actual 360 basis; that is, by applying the ratio of the interest rate over
a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance
is outstanding. All interest payable under this Note is computed using this method.

 

2.2
Default Rate. Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default, the
unpaid principal balance of the Loan and any accrued and unpaid interest shall bear interest at an annual rate (the “Default
Rate”) equal to the rate otherwise in effect under Section 2.1 plus 3.0 percentage points, payable upon demand. On and after
the Maturity Date, the unpaid principal balance of the Loan and all accrued interest thereon shall bear interest at the Default
Rate, payable upon demand.

 

2.3
Late Fee. If a payment is not made on or before the 15th day after its due date, Borrower will be charged 5.00%
of the unpaid portion of the regularly scheduled payment.

 

2.4
Maximum Rate of Interest. Nothing herein contained shall be deemed to require Borrower to pay or be liable for the payment
of interest upon the Loan in excess of the maximum legal rate of interest (if there be any maximum) allowable under the laws of
the State of Wisconsin. If for any reason interest in excess of the amount as limited in the foregoing sentence shall have been
paid hereunder, whether by reason of acceleration of this Note, payment of any penalty or premium, or otherwise, then and in that
event, any such excess interest shall constitute and be treated as a payment of principal hereunder and shall operate to reduce
the principal balance of the Loan by the amount of such excess, or if in excess of the then outstanding principal balance of the
Loan, such excess shall be refunded.

 

3.
Payments.

 

3.1
Principal and Interest. The unpaid principal balance of the Loan outstanding from time to time, together with accrued interest
thereon, shall be repayable in 31 equal monthly installments of principal and interest in the amount of $61,305.43.1
Such payments shall be due on each Payment Date, commencing on the tenth (10th) day of the month following the Closing
Date starting on December 10, 2020, provided, that any remaining outstanding principal balance of the Loan, together with all
unpaid accrued interest thereon, shall be repaid in full on the Maturity Date.

 

3.2
Application of Payments. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued
unpaid interest; then to principal then to any unpaid collection costs; and then to any late charges. Borrower will pay Lender
at Lender’s address shown above or at such other place as Lender may designate in writing.

 

 

1
Payment amounts will be calculated based on a 3-year amortization.

 

    	 

    	4

    

 

3.3
Early Payment. Borrower may pay all or a portion of the amount owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve the Borrower of its obligation to continue to make payments on this Note. Rather, early
payments will reduce the principal balance due and may result in Borrower making fewer payments. Borrower agrees not to send Lender
payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without communications concerning disputed amounts, including any check or other payment instrument that
indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: JAGEMANN STAMPING COMPANY, 5757 West
Custer Street, Manitowoc, Wisconsin 54221-0217.

 

3.4
INTENTIONALLY OMITTED.

 

4.
Prepayment. Borrower may prepay the Loan together with any accrued and unpaid interest thereon at any time in whole or
in part without premium or penalty.

 

5.
Representations and Warranties. To induce Lender to make the Loan, Borrower represents and warrants to Lender that:

 

5.1
Organization; Subsidiaries; Corporate Power. Borrower is a corporation or limited liability company, as applicable, duly
organized and validly existing under the laws of the State of Delaware.

 

5.2
Authorization and Binding Effect. The execution and delivery by Borrower of the Related Documents, and the performance
by Borrower of its obligations thereunder: (a) are within its power as a limited liability company and/or corporation, as applicable,
(b) have been duly authorized by proper action on the part of the governing body of Borrower, (c) are not in violation of any
Requirement of Law, the organizational or charter documents of Borrower or the terms of any agreement, restriction or undertaking
to which Borrower is a party or by which Borrower is bound, and (d) do not require the approval or consent of the holders of the
equity interests of Borrower, any Governmental Authority or any other Person, other than those obtained and in full force and
effect. The Related Documents, when executed and delivered, will constitute the valid and binding obligations of Borrower enforceable
in accordance with their terms, except as limited by bankruptcy, insolvency or similar laws of general application affecting the
enforcement of creditors’ rights and except to the extent that general principles of equity might affect the specific enforcement
of such Related Documents.

 

5.3
Accuracy of Information. All information, certificates or statements given to Lender pursuant to this Note shall be true
and complete when given.

 

    	 

    	5

    

 

6.
Events of Default, Acceleration and Remedies.

 

6.1
Events of Default. The occurrence of any of the following shall constitute an Event of Default under this Note:

 

(a)
Borrower fails to pay all or any portion of any amount due hereunder when the same becomes due and payable, whether at a stated
payment date or by acceleration, and such failure continues for ten days following Borrower’s receipt of Lender’s
written notice of such failure; or

 

(b)
any representation or warranty made herein is false in any material respect on the date as of which it is made or as of which
the same is to be effective; or

 

(c)
Borrower fails to comply with any term, covenant or agreement contained herein subject to any applicable grace period or cure
period; or

 

(d)
Borrower becomes insolvent or fails generally to pay debts as they become due; or

 

(e)
the taking of action by Borrower to become the subject of proceedings under the United States Bankruptcy Code; or the execution
by Borrower of a petition to become a debtor under the United States Bankruptcy Code; or the entry of an order for relief under
the United States Bankruptcy Code against Borrower; or Borrower making an assignment for the benefit of creditors; or Borrower
consenting to the appointment of a custodian, receiver, trustee or other officer with similar powers for it, or for any substantial
part of its property; or adjudicating of Borrower as insolvent; or

 

(f)
if any Governmental Authority of competent jurisdiction shall enter an order appointing, without consent of Borrower, as applicable,
a custodian, receiver, trustee or other officer with similar powers with respect to Borrower, or with respect to any substantial
part of Borrower’s property, or if an order for relief relating to Borrower shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of Borrower, or if any petition for any such relief shall be filed against Borrower
and such petition shall not be dismissed or stayed within 60 days; or

 

(g)
Any breach, violation, or default shall occur under any of the other Related Documents and shall continue beyond any applicable
notice and cure period set forth therein.

 

6.2
Acceleration. Upon the occurrence of:

 

(a)
any Bankruptcy Default, the unpaid principal balance of the Loan and all accrued and unpaid interest thereon at that time outstanding
automatically shall mature and become due, and

 

    	 

    	6

    

 

(b)
any other Event of Default, Lender, at any time, at its option, and without notice or demand, may declare the outstanding principal
amount of the Loan and all accrued and unpaid interest thereon, due and payable, whereupon such amounts immediately shall mature
and become due and payable, all without presentment, protest or notice, all of which hereby are waived.

 

6.3
Remedies. Upon the occurrence of any Event of Default, Lender, at its option, may enforce or cause to be enforced any of
the rights or remedies accorded to Lender at equity or law, by virtue of this Note, the other Related Documents, by statute or
otherwise.

 

7.
Miscellaneous.

 

7.1
Waivers. Borrower expressly hereby waives presentment for payment, protest and demand and notice of protest, demand, dishonor,
nonpayment, intent to accelerate and acceleration of this Note, and expressly agrees that this Note, or any payment hereunder,
may be extended from time to time before, at or after maturity, without in any way affecting the liability of Borrower.

 

7.2
Modifications. This Note may only be amended by an instrument in writing signed by the party against whom enforcement of
the change or amendment is sought.

 

7.3
Successors and Assigns. This Note shall be binding upon Borrower and upon Borrower’s successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns; provided that Borrower’s rights under this Note are
not assignable without the prior written consent of Lender.

 

7.4
Severability. In the event that any provision of this Note is deemed to be invalid by reason of the operation of any law
or by reason of the interpretation placed thereon by any Governmental Authority, the validity, legality and enforceability of
the remaining terms and provisions of this Note shall not in any way be affected or impaired thereby, all of which shall remain
in full force and effect, and the affected term or provision shall be modified to the minimum extent permitted by law so as to
achieve most fully the intention of this Note.

 

7.5
Time of the Essence. Time for the performance of the obligations under this Note is of the essence.

 

7.6
Expenses. Borrower agrees to pay on demand (i) all out-of-pocket expenses incurred by Lender in connection with the administration,
amendment or enforcement of this Note and the other Related Documents including the reasonable fees and expenses of Lender’s
counsel, (ii) any taxes (including any interest and penalties relating thereto) payable by Lender on or with respect to the transactions
contemplated by this Note (Borrower hereby agreeing to indemnify Lender with respect thereto) and (iii) all out-of-pocket expenses,
including the reasonable fees and expenses of Lender’s counsel, incurred by Lender in connection with any litigation, proceeding
or dispute in any way related to Lender’s relationship with Borrower, whether arising hereunder or otherwise. The obligations
of Borrower under this paragraph will survive payment of this Note.

 

    	 

    	7

    

 

7.7
Governing Law. This Note shall be construed in accordance with and governed by the laws and decisions of the State of Wisconsin.

 

7.8
Setoff. As security for payment of this Note, Borrower grants to Lender a security interest in and lien on any credit balance
or other money now or hereafter owed Borrower by Lender. In addition, Borrower agrees that Lender may, at any time after the occurrence
of an Event of Default, without prior notice, set off against any such credit balance or other money all or any part of this Note,
irrespective of whether Lender shall have made demand under this Note and although such obligations may be contingent or unmatured.

 

7.9
Notices. All notices provided for herein shall be in writing and shall be (a) personally delivered or (b) sent by express
or first class mail; and, if to Lender, addressed to it at 5757 West Custer Street, Manitowoc, Wisconsin 54221-0217, attention:
Ralph Hardt and, if to Borrower, addressed to it at 7681 East Gray Road, Scottsdale, Arizona 85260, attention: Fred Wagenhals
and John Flynn, or to such other address with respect to any party as such party shall notify the others in writing; such notices
shall be deemed given when delivered, mailed or so transmitted.

 

7.10
Joint and Several. If Borrower is comprised of more than one Person, the obligations of such Persons under this Note and
the other Related Documents shall be joint and several.

 

7.11
No Novation.This Amended Note B amends, restates and supersedes in its entirety, and is given as a replacement for,
and not in satisfaction of or as a novation with respect to that certain Promissory Note in the principal amount of $10,400,000,
executed by Borrower in favor of Lender and dated March 14, 2019 (as amended), and Note A, the latter of which has been paid in
full as of this even date and Note B.

 

7.12
Security.Borrower hereby grants Lender, to secure the payment and performance required hereunder, a first priority
perfected security interest in the Collateral. Lender agrees to promptly take such actions as necessary to modify any all existing
liens or UCC-1 filings, including those resulting from the execution of Note A and Note B, in order to limit its first priority
security interest to the Collateral. The Parties hereby reaffirm the validity and enforceability of that certain Subordination
Agreement entered into by and between Lender, Borrower and Factors Southwest, LLC dated June 18, 2020.

 

    	 

    	8

    

 

7.13
Jury Waiver. BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) BETWEEN BORROWER AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE, ANY OTHER RELATED
DOCUMENT OR ANY RELATIONSHIP BETWEEN LENDER AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
DESCRIBED HEREIN.

 

7.14
Submission to Jurisdiction; Service of Process. ALL JUDICIAL PROCEEDINGS IN ANY MANNER RELATING TO OR ARISING OUT OF THIS
NOTE OR ANY OBLIGATIONS HEREUNDER MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF WISCONSIN LOCATED IN MANITOWOC COUNTY OR THE FEDERAL
COURT FOR THE EASTERN DISTRICT OF WISCONSIN. BY EXECUTING AND DELIVERING THIS NOTE, BORROWER IRREVOCABLY:

 

(a)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

 

(b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

(c)
AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS SET FORTH IN THE INTRODUCTORY PARAGRAPH OF THIS NOTE;

 

(d)
AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND

 

(e)
AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION.

 

    	 

    	9

    

 

IN
WITNESS WHEREOF, this Note has been executed and delivered by Borrower as of the date first set forth above.

 

	 	BORROWER:
	 	ENLIGHT
    GROUP II, LLC
	 	 
	 	BY	/s/
    Fred Wagenhals
	 	Name:
    	Fred
    Wagenhals
	 	Title:
    	AMMO,
    Inc. CEO- Managing Member
	 	 	 
	 	AMMO,
    INC.
	 	 	 
	 	BY	/s/
    Fred Wagenhals
	 	Name:
    	Fred
    Wagenhals
	 	Title:
    	CEO
	 	 	 
	 	LENDER:
	 	 	 
	 	JAGEMANN
    STAMPING COMPANY
	 	 	 
	 	BY
    	/s/
    Tom Jagemann
	 	Name:
    	Tom
    Jagemann
	 	Title:
    	CEO

 

    	 

    	10

    

 

Supplemental
Information for

 

FIRST
AMENDMENT TO GENERAL BUSINESS SECURITY AGREEMENT

 

AMENDED
PROMISSORY NOTE B

 

The
following is a list of Exhibits to the above referenced Agreement, not attached herewith. Any omitted information will
be furnished to the Securities and Exchange Commission upon request.

 

1.
Exhibit A

 

    	 

    	 

    

 

FIRST
AMENDMENT TO GENERAL BUSINESS SECURITY AGREEMENT

 

THIS
FIRST AMENDMENT TO GENERAL BUSINESS SECURITY AGREEMENT, dated as of November [__], 2020 (this “Amendment”),
is by and between ENLIGHT GROUP II, LLC, a Delaware limited liability company whose principal address is 7681 East Gray Road,
Scottsdale, Arizona (“EG”), and JAGEMANN STAMPING COMPANY, a Wisconsin corporation whose principal address
is 5757 West Custer Street, Manitowoc, Wisconsin 54221-0217 (“JSC”), and amends and supplements that certain
General Business Security Agreement dated June 26, 2020 (as may be amended, restated, supplemented or otherwise modified from
time to time, the “Security Agreement”), by EG in favor of JSC.

 

RECITAL

 

The
parties desire to amend and supplement the Security Agreement as provided below.

 

AGREEMENTS

 

In
consideration of the recital, the promises and agreements set forth in the Security Agreement, as amended hereby, and that certain
Amended and Restated Promissory Note B dated the date hereof made by EG and Ammo, Inc., a Delaware corporation, in favor of JSC
(the “Note”), and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

 

1.
Definitions and References. Capitalized terms not otherwise defined herein have the meanings assigned to them in the Security
Agreement. All references to the Security Agreement contained in any other contract or agreement, shall, upon fulfillment of the
conditions specified in section 3 below, mean the Security Agreement as amended by this Amendment.

 

2.
Amendments to the Security Agreement. The Security Agreement is hereby amended as follows:

 

(a)
Clause (i) in the first paragraph of the Security Agreement is hereby amended and restated as follows: “(i) the property
set forth on Schedule 1 attached hereto,”.

 

(b)
A new Schedule 1 is hereby added to the Security Agreement, to read as set forth as Schedule 1 attached hereto.

 

3.
Effectiveness of the Amendment. This Amendment shall be effective upon execution and delivery hereof by the parties hereto.

 

4.
No Waiver. EG agrees that nothing contained herein shall be construed by EG as a waiver by JSC of EG’s compliance
with each representation, warranty and covenant contained in the Security Agreement and that no waiver of any provision of the
Security Agreement by JSC has occurred. EG further agrees that nothing contained herein shall impair the right of JSC to require
strict performance by EG of the Security Agreement.

 

    	 

     

    

 

5.
Representations and Warranties. EG represents and warrants to JSC that:

 

(a)
The execution and delivery of this Amendment and the Note is within its limited liability company power and limited liability
company authority, has been duly authorized by all proper limited liability company action on the part of EG, is not in violation
of any existing law, rule or regulation of any governmental agency or authority, any order or decision of any court, the organizational
documents of EG or the terms of any agreement, restriction or undertaking to which EG is a party or by which EG is bound, and
does not require the approval or consent of the holders of equity interests of EG, any governmental body, agency or authority
or any other person or entity other than those consents and approvals in full force and effect.

 

(b)
Each of this Amendment and the Note has been duly executed and delivered by EG and constitutes the legal, valid and binding obligation
of EG, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.

 

(c)
The representations and warranties contained in the Security Agreement and the Note are correct and complete as of the date of
this Amendment, and no condition or event exists or act has occurred that, with or without the giving of notice or the passage
of time, would constitute a default under the Security Agreement.

 

6.
Miscellaneous.

 

(a)
Expenses and Fees. EG agrees to pay on demand (i) all out-of-pocket expenses incurred by JSC in connection with the administration,
amendment or enforcement of the Note and the other Related Documents, including the reasonable fees and expenses of JSC’s
counsel, (ii) any taxes (including any interest and penalties relating thereto) payable by JSC on or with respect to the transactions
contemplated by the Note (EG hereby agreeing to indemnify JSC with respect thereto) and (iii) all out-of-pocket expenses, including
the reasonable fees and expenses of JSC’s counsel, incurred by JSC in connection with any litigation, proceeding or dispute
in any way related to JSC’s relationship with EG, whether arising hereunder or otherwise.

 

(b)
Headings. The headings in this Amendment are intended solely for convenience of reference and shall be given no effect
in the construction or interpretation of this Amendment.

 

(c)
Counterparts. This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute one and the same instrument. Delivery of an executed counterpart hereto by facsimile
or by electronic transmission of a portable document file (PDF or similar file) shall be as effective as delivery of a manually
executed counterpart signature page hereto.

 

(d)
Governing Law. This Amendment shall be construed in accordance with and governed by the laws and decisions of the State
of Wisconsin.

 

    	2

    	 

    

 

(e)
Submission to Jurisdiction; Service of Process. ALL JUDICIAL PROCEEDINGS IN ANY MANNER RELATING TO OR ARISING OUT OF THIS
AMENDMENT OR ANY OBLIGATIONS HEREUNDER MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF WISCONSIN LOCATED IN MANITOWOC COUNTY OR
THE FEDERAL COURT FOR THE EASTERN DISTRICT OF WISCONSIN. BY EXECUTING AND DELIVERING THIS AMENDMENT, EG IRREVOCABLY:

 

(i)
ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

 

(ii)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

(iii)
AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO EG AT ITS ADDRESS SET FORTH IN THE INTRODUCTORY PARAGRAPH OF THIS AMENDMENT;

 

(iv)
AGREES THAT SERVICE AS PROVIDED IN CLAUSE (iii) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER EG IN ANY SUCH PROCEEDING
IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND

 

(v)
AGREES THAT JSC RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST EG IN
THE COURTS OF ANY OTHER JURISDICTION.

 

(f)
Jury Waiver. EG AND JSC HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN EG AND JSC ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AMENDMENT, ANY OTHER RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN JSC AND EG. THIS PROVISION IS A MATERIAL INDUCEMENT
TO JSC TO ENTER INTO THIS AMENDMENT.

 

(g)
Construction. This Amendment has been drafted with the assistance of counsel for each party hereto and shall not be construed
in favor of, or against, any party hereto.

 

7.
Affirmation. Each party hereto affirms and acknowledges that the Security Agreement, as amended by this Amendment, remains
in full force and effect in accordance with its terms, as may be amended hereby.

 

[signature
page follows]

 

    	3

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this First Amendment to General Business Security Agreement as of the date
first written above.

 

	 	ENLIGHT
    GROUP II, LLC
	 	 	 
	 	By:
    	/s/
    Fred Wagenhals
	 	Name:
    	Fred
    Wagenhals
	 	Title:
    	CEO
	 	 	 
	 	JAGEMANN
    STAMPING COMPANY, LLC
	 	 	 
	 	By:
    	/s/
    Tom Jagemann
	 	Name:
    	Tom
    Jagemann
	 	Title:
    	CEO

 

Signature
Page to First Amendment

 

    	 

     

    

 

Supplemental
Information for

 

FIRST
AMENDMENT TO GENERAL BUSINESS SECURITY AGREEMENT

 

Dated
November 4, 2020

 

The
following is a list of Schedules to the above referenced Agreement, not attached herewith. Any omitted information will be furnished
to the Securities and Exchange Commission upon request.

 

1.
Schedule I Collateral Description

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