Document:

Document

Exhibit 4.3

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES ACT OF 1934
        The following description sets forth certain material terms and provisions of the securities of Advance Auto Parts, Inc. that are registered under Section 12 of the Securities Exchange Act of 1934, as amended. In this description, the words “Company,” “we,” “us,” “our” and “AAP” refer only to Advance Auto Parts, Inc. and not to any of its subsidiaries.
DESCRIPTION OF COMMON STOCK
The following description of the general terms and provisions of the shares of our Common Stock, par value $0.0001 per share (“Common Stock”), is only a summary and is qualified in its entirety by reference to our Restated Certificate of Incorporation (our “Charter”), our Amended and Restated Bylaws (our “Bylaws”) and applicable provisions of the Delaware General Corporation Law (the “DGCL”).
Authorized Capital Stock
Our authorized capital stock consists of 200,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”).
Common Stock
Holders of Common Stock are entitled to one vote per share on all matters to be voted on by the stockholders of AAP. An election of directors by our stockholders shall be determined by a majority of the votes cast by the stockholders entitled to vote on the election, provided that if the number of nominees exceeds the number of directors to be elected, directors shall be elected by a plurality of the shares represented and entitled to vote. Stockholders are entitled to any dividends that may be declared by our board of directors. Holders of Common Stock do not have cumulative voting rights. Upon our dissolution, liquidation or winding up, holders of Common Stock are entitled to share ratably in our net assets after payment or provision for all liabilities and preferential liquidation rights of Preferred Stock then outstanding. Holders of Common Stock have no preemptive rights to purchase shares of Common Stock. The issued and outstanding shares of Common Stock are not subject to any redemption or sinking fund provisions and are not convertible into any other shares of our capital stock. The rights, preferences and privileges of holders of Common Stock are subject to those of the holders of any shares of Preferred Stock that we may issue in the future.
Transfer Agent and Registrar
Computershare is the transfer agent and registrar for our Common Stock.
Stock Exchange Listing
Our Common Stock is traded on the New York Stock Exchange under the symbol “AAP.”
Certain Provisions of Our Charter and Bylaws
Authorized but Unissued Stock. Our Charter authorizes the issuance of a significant number of shares of Common Stock and Preferred Stock. The existence of authorized but unissued shares of capital stock could render more difficult or discourage an attempt to obtain control of us by means of a tender offer, takeover attempt or otherwise. Additionally, Preferred Stock could be issued by our Board of Directors to increase the number of outstanding shares or otherwise make a takeover or change in control more difficult and expensive.

Advance Notice of Proposals and Nominations and Proxy Access. Our Bylaws provide that stockholders must provide timely written notice to bring business before an annual meeting of stockholders or to nominate candidates for election as directors at an annual meeting of stockholders. Generally, the advance notice provisions require that stockholder proposals be provided to us between 120 and 150 days before the anniversary of our last annual meeting and director nominations be provided to us between 120 and 150 days before the anniversary of the mailing of our proxy statement for our last annual meeting in order to be properly brought before a stockholder meeting. Our Bylaws also specify the form and content of a stockholder’s notice. Our bylaws generally provide a stockholder or group of stockholders holding three percent or more of the outstanding Common Stock for three years to nominate candidates for up to 20% of the Board of Directors.
Special Meetings and Written Consent. A special meeting of the stockholders may only be called by our Board of Directors, the Chairman of our Board of Directors, the Chief Executive Officer or stockholders following receipt by the Secretary of the Corporation of a written request for a special meeting from record holders owning at least ten percent in the aggregate of the outstanding Common Stock. Stockholders are not permitted under AAP’s Restated Certificate of Incorporation or Bylaws to act by written consent in lieu of a meeting.
Potential Anti-Takeover Effects of Delaware Law 
Our Company is governed by the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in “business combination” transactions with any “interested stockholder” for a period of three years following the time that the stockholder became an interested stockholder, unless:
•prior to the time the stockholder became an interested stockholder, the corporation’s board of directors approved either the applicable business combination or the transaction which resulted in the stockholder becoming an interested stockholder; 

•upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the voting stock owned by the interested stockholder) shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which the employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•at or subsequent to the time that the stockholder became an interested stockholder, the business combination is approved by the corporation’s board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder.

A “business combination” is defined to include, among other things and in general and subject to exceptions, a merger of the corporation with the interested stockholder; a sale of 10% or more of the market value of the corporation’s consolidated assets to the interested stockholder; certain transactions that result in the issuance of the corporation’s stock to the interested stockholder; a transaction that has the effect of increasing the proportionate share of the corporation’s stock owned by the interested stockholder; and any receipt by the interested stockholder of loans, guarantees or other financial benefits provided by the corporation. An “interested stockholder” is defined to include, in general and subject to exceptions, a person that (1) owns 15% or more of the outstanding voting stock of the corporation or (2) is an “affiliate” or “associate” (as defined in Section 203) of the corporation and was the owner of 15% or more of the corporation’s outstanding voting stock at any time within the prior three-year period.
2

DESCRIPTION OF DEBT SECURITIES
The following description of AAP’s 4.50% senior notes due 2022 (the “2022 Notes”), 4.50% senior notes due 2023 (the “2023 Notes”) and 3.90% senior notes due 2030 (the “2030 Notes,” and together with the 2022 Notes and the 2023 Notes, the “Notes”) is a summary and does not purport to be complete. 
The description of the 2022 Notes and the 2023 Notes is qualified in its entirety by reference to an indenture, dated as of April 29, 2010 (as amended or supplement, the “2022/2023 Notes Indenture”), among AAP, as issuer, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee. In addition, the description of the 2030 Notes is qualified in its entirety by reference to an indenture, dated as of April 16, 2020 (the “2030 Notes Indenture,” and together with the 2022/2030 Notes Indenture, the “Indentures”), among AAP, as issuer, the subsidiary guarantors named therein and Wells Fargo Bank, National Association, as trustee. 
AAP has an automatic shelf registration statement on Form S-3 (File No.: 333-192526), which was filed with the SEC on November 25, 2013, covering the issuance of the 2022 Notes and the 2023 Notes. In addition, AAP has a registration statement on Form S-4 (File No.: 333-239145), which was filed with the Securities and Exchange Commission (the “SEC”) on June 12, 2020 and deemed effective by the SEC on June 24, 2020, covering the issuance of the 2030 Notes.
The Notes
The 2022 Notes and the 2023 Notes were issued under the 2022/2023 Notes Indenture and the 2030 Notes were issued under the 2030 Indenture, which each provide that debt securities may be issued under the applicable Indenture from time to time in one or more series. Neither Indenture limits the amount of debt securities that AAP may issue under such Indenture. AAP may, without the consent of the holders of any series of Notes, issue additional notes (“Additional Notes”) of a series having the same terms as the Notes of such series, except for the public offering price and the issue date and, if applicable, the initial interest accrual date and the initial interest payment date. Any Additional Notes of a series, together with the Notes of such series, will constitute a single series of Notes and will vote together as one class on all matters with respect to such series of Notes; provided, however, that any Additional Notes that are not fungible with existing Notes of such series for U.S. federal income tax purposes will have a separate CUSIP, ISIN and other identifying number from the existing Notes of such series. 
The 2022 Notes. AAP issued $300.0 million aggregate principal amount of senior unsecured notes on January 11, 2012. The 2022 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on January 15 and July 15 of each year to the holders of record at the close of business on the immediately preceding January 1 and July 1. As of July 11, 2020, $299.6 million aggregate principal amount of the 2022 Notes remain outstanding.
The 2023 Notes. AAP issued $450.0 million aggregate principal amount of senior unsecured notes on November 27, 2013. The 2023 Notes bear interest at a rate of 4.50% per year payable semi-annually in arrears on June 1 and December 1 of each year to the holders of record at the close of business on the immediately preceding May 15 and November 15. As of July 11, 2020, $448.1 million aggregate principal amount of the 2023 Notes remain outstanding.
3

The 2030 Notes. AAP issued $500.0 million aggregate principal amount of senior unsecured notes on April 16, 2020 in a private placement. During the twelve weeks ended July 11, 2020, $499.9 million of such notes were exchanged for the equivalent amount of registered 2030 Notes. The 2030 Notes bear interest at a rate of 3.90% per year payable semi-annually in arrears on April 15 and October 15 of each year to the holders of record at the close of business on the immediately preceding April 1 and October 1. As of July 11, 2020, $492.7 million aggregate principal amount of the 2030 Notes remain outstanding.
Subsidiary Guarantees
The Notes are guaranteed by certain of our domestic subsidiaries. Our obligations under the Notes will be fully and unconditionally guaranteed, jointly and severally, on an unsubordinated unsecured basis by each of our subsidiaries that incurs or guarantees the applicable Credit Facilities or any other of our or any of our subsidiaries’ Credit Facility Debt or any Capital Markets Debt. Each subsidiary guarantee will rank equally in right of payment with all existing and future liabilities of the applicable subsidiary guarantor that are not subordinated. Each subsidiary guarantee will effectively rank junior to any secured indebtedness of its respective subsidiary guarantor to the extent of the value of the assets securing such indebtedness. Under the terms of the guarantees, holders of the Notes will not be required to exercise their remedies against us before they proceed directly against the subsidiary guarantors.
For purposes of the guarantee provisions of the Indentures, the following terms are defined as follows: 
“Capital Markets Debt” means any debt for borrowed money that (i) is in the form of, or represented by, bonds, notes, debentures or other securities (other than promissory notes or similar evidences of debt under a credit agreement) and (ii) has an aggregate principal amount outstanding of (A) at least $25.0 million, at any time that any Existing Notes remain outstanding or (B) at least $75.0 million at any time that no Existing Notes remain outstanding. 
“Credit Facility” means, (i) with respect to the 2022 Notes and the 2023 Notes, means (A) the Credit Agreement dated May 27, 2011, among AAP, Advance Stores Company, Incorporated, the lenders referred to therein and JPMorgan Chase Bank, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and (B)  the credit agreement contemplated by the commitment letter entered into in connection with the Acquisition, to be among AAP, Advance Stores Company, Incorporated, the lenders referred to therein and J.P. Morgan Chase Bank, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, or any other credit agreement entered into by AAP from time to time and, (ii) with respect to the 2030 Notes, means the credit agreement, dated as of January 31, 2017, among us, Advance Stores Company, Incorporated, the lenders referred to therein and Bank of America, N.A., as administrative agent, as amended, extended, renewed, restated, replaced, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time.
 “Credit Facility Debt” means any debt for borrowed money that (i) is incurred pursuant to a credit agreement, including pursuant to the applicable Credit Facilities or other agreement providing for revolving credit loans, term loans or other debt entered into between us or any of our subsidiaries and any lender or group of lenders and (ii) has an aggregate principal amount outstanding or committed of (A) at least $25.0 million, at any time that any Existing Notes remain outstanding or (B) at least $75.0 million at any time that no Existing Notes remain outstanding. 

4

  “subsidiary guarantor” means each of our subsidiaries that is or becomes a guarantor under the applicable Indenture.
Under the applicable Indenture, the respective holders of the Notes will be deemed to have consented to the release of the guarantee of the Notes provided by a subsidiary guarantor, without any action required on the part of the trustee or any holder of the Notes, upon such subsidiary guarantor ceasing to guarantee or be an obligor with respect to the applicable Credit Facilities or any other Credit Facility Debt and Capital Markets Debt of us or any subsidiary. Accordingly, if the lenders under the applicable Credit Facilities release a subsidiary guarantor from its guarantee of, or obligations as a borrower under, the applicable Credit Facilities, or if the applicable Credit Facilities are terminated in full, the obligations of our subsidiaries to guarantee the Notes will immediately terminate, unless our subsidiaries incur or guarantee obligations under any other Credit Facility Debt or Capital Markets Debt. We will give prompt written notice to the trustee of the automatic release of any subsidiary guarantor. If any of our subsidiaries incur or guarantee obligations under any Credit Facility Debt or Capital Markets Debt while the Notes are outstanding, then such subsidiaries will be required to guarantee the Notes. 
In addition, a subsidiary guarantor will be released and relieved from all its obligations under its subsidiary guarantee in the following circumstances, each of which is permitted by the Indenture: 
•upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total voting power of the capital stock or other interests of such subsidiary guarantor (other than to us or any of our affiliates); or 

•upon the sale or disposition of all or substantially all the property of such subsidiary guarantor (other than to any of our affiliates other than another subsidiary guarantor); 

provided, however, that, in each case, after giving effect to such transaction, such subsidiary is no longer liable for any guarantee or other obligations in respect of any of our or our subsidiaries’ Credit Facility Debt or Capital Markets Debt. 
The subsidiary guarantee of a subsidiary guarantor also will be released if we exercise our legal defeasance or our covenant defeasance option as described under “-Defeasance” or if our obligations under the Indentures are discharged as described under “-Discharge of the Indenture.” At our written instruction, the trustee will execute and deliver any documents, instructions or instruments evidencing any such release.
Ranking
The Notes are:
•our unsubordinated unsecured obligations, 
•effectively subordinated to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness, 
•structurally subordinated to any indebtedness of any of our subsidiaries that do not guarantee the Notes, 
•equal in ranking (“pari passu“) with all our existing and future unsubordinated indebtedness, and 
•senior in right of payment to all our existing and future subordinated indebtedness.
With respect to each subsidiary guarantor, the subsidiary guarantee will be: 
•an unsubordinated unsecured obligation of such subsidiary guarantor, 
•effectively subordinated to any secured indebtedness of such subsidiary guarantor to the extent of the value of the assets securing such indebtedness, 
5

•structurally subordinated to any indebtedness of any subsidiaries of such subsidiary guarantor that do not guarantee the Notes, 
•pari passu with such subsidiary guarantor’s existing and future unsubordinated indebtedness, and 
•senior in right of payment to such subsidiary guarantor’s existing and future subordinated indebtedness.

Payment on the Notes
The trustee, through its corporate trust office in New York City, will act as our paying agent (the “paying agent”) and security registrar in respect of the notes. The current location of such corporate trust office is 150 East 42nd Street, 40th Floor, New York, New York 10017. So long as the notes are issued in the form of global certificates, payments of principal, interest and premium, if any, will be made by us through the paying agent to DTC.
The Company will pay principal and interest on any note in definitive registered form (without a coupon) by check mailed to the address of the person entitled thereto as it appears in the note register (or upon written notice from such person given at least 15 days before the payment date, by wire transfer in immediately available funds if such person is entitled to interest on an aggregate principal amount of notes in excess of $2.0 million).
Optional Redemption 
Prior to the Par Call Date, the Notes will be redeemable in whole or in part at any time and from time to time, at our option, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would have been made if such Notes matured on the Par Call Date (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then-current Treasury Rate, plus 40 basis points (with respect to the 2022 Notes), 30 basis points (with respect to the 2023 Notes) and 50 basis points plus accrued interest thereon to but excluding the redemption date (with respect to the 2030 Notes).
On or after the Par Call Date, the Notes will be redeemable in whole or in part at any time and from time to time, at our option, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus, with respect to the 2030 Notes, accrued interest thereon to but excluding the redemption date.
“Comparable Treasury Issue” means the U.S. Treasury security selected by us as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes. 
“Comparable Treasury Price” means, with respect to any redemption date, (i) the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (ii) if we obtain fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations. 
“Par Call Date” means, (i) with respect to the 2022 Notes, October 15, 2021 (three months prior to the maturity date of the 2022 Notes, (ii) with respect to the 2023 Notes, September 1, 2023 (three months 
6

prior to the maturity date of the 2023 Notes) and, (iii) with respect to the 2030 Notes, January 15, 2030 (three months prior to the maturity date of the 2030 Notes).
“Reference Treasury Dealers” means, (i) with respect to the 2022 Notes and the 2023 Notes, each of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated and their respective successors, and any other primary Treasury dealer we select and, (ii) with respect to the 2030 Notes, each of BofA Securities, Inc. and J.P. Morgan Securities LLC and their respective successors, and any other primary Treasury dealer we select. If any of the foregoing ceases to be a primary U.S. government securities dealer in New York City, we must substitute another primary Treasury dealer. 
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 
“Treasury Rate” means, with respect to any redemption date: (a) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined below), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month), or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third business day preceding the date fixed for redemption.
Selection and Notice 
We will mail a notice of redemption to each holder of Notes to be redeemed by first-class mail or delivered electronically (in the case of book-entry) at least 30 and not more than 60 days prior to the date fixed for redemption. Any notice to holders of Notes of such a redemption shall include the appropriate calculation of the redemption price, but does not need to include the redemption price itself. The actual redemption price, calculated as described above, must be set forth in an officer’s or officers’ certificate (as described in the applicable Indenture) delivered to the trustee no later than one business day prior to the redemption date. Unless we default on payment of the redemption price, as of the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption. If fewer than all of the Notes are to be redeemed, the trustee will select, at least 30 days and not more than 60 days prior to the redemption date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously redeemed (i) if the Notes are listed on any securities exchange, in accordance with the requirements of such exchange, or (ii) if the Notes are not so listed, by such method as the trustee deems fair and appropriate in accordance with DTC procedures. Notes of $2,000 principal amount or less will not be redeemed in part. 
Certain Covenants
Limitation on Liens
The Indentures provide that we will not, and will not permit any of our subsidiaries to, create, incur, issue, assume or guarantee any debt secured by a Lien (other than Permitted Liens) upon any property or
7

assets (other than deposit accounts, inventory, accounts receivable or the proceeds thereof), without making effective provision to secure all of the Notes, equally and ratably with any and all other debt secured thereby, so long as any of such other debt shall be so secured.
Limitation on Sale and Leaseback Transactions
The Indentures provide that we will not, and will not permit any subsidiary to, enter into any arrangement with any person providing for the leasing by us or any subsidiary of any property or assets that has been or is to be sold or transferred by us or such subsidiary to such person, with the intention of taking back a lease of such property or assets (a “Sale and Leaseback Transaction”) unless either: 
        (1) within 12 months after the receipt of the proceeds of the sale or transfer, we or any subsidiary apply an amount equal to the greater of the net proceeds of the sale or transfer or the fair value of such property or assets (as determined in good faith by our board of directors as of any date within 90 days prior to the date of such sale or transfer) to the prepayment or retirement (other than any mandatory prepayment or retirement) of Senior Funded Debt; or 
        (2) we or such subsidiary would be entitled, at the effective date of the sale or transfer, to incur debt secured by a Lien on such property or assets in an amount at least equal to the Attributable Debt in respect of the Sale and Leaseback Transaction, without equally and ratably securing the Notes pursuant to the covenant described under “-Limitation on Liens.” 
The foregoing restriction in the paragraph above will not apply to any Sale and Leaseback Transaction (i) for a term of not more than three years including renewals; (ii) between us and a subsidiary or between subsidiaries; provided that the lessor is us or a wholly-owned subsidiary, or (iii) entered into within 270 days after the later of the acquisition or completion of construction of the subject property or assets.
Merger, Consolidation or Sale of Assets 
The Indentures provide that we shall not merge, consolidate or amalgamate with or into any other person (other than a merger of a wholly-owned subsidiary into AAP) or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of our property in any one transaction or series of related transactions unless: 
        (1) AAP shall be the surviving person or the surviving person (if other than AAP) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia;
        (2) the surviving person (if other than AAP) expressly assumes, by supplemental indenture in form satisfactory to the trustee, executed and delivered to the trustee by such surviving person, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of the Indentures and, if applicable, the registration rights agreement to be performed by us; 
        (3) immediately before and immediately after giving effect to such transaction or series of related transactions, no default or event of default shall have occurred and be continuing; and
8

(4) we shall deliver, or cause to be delivered, to the trustee, an officer’s certificate and an opinion of counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this covenant and that all conditions precedent in the applicable Indenture relating to such transaction have been complied with. 
For the purposes of this covenant, the sale, transfer, assignment, lease, conveyance or other disposition of all the property of one or more of our subsidiaries, which property, if held by us instead of such subsidiaries, would constitute all or substantially all of our property on a consolidated basis, shall be deemed to be the transfer of all or substantially all of our property. 
The Indentures provides that, unless the subsidiary guarantee of the applicable subsidiary guarantor is permitted to be released in connection with such transaction as described above under “-Subsidiary Guarantees,” such subsidiary guarantor shall not merge, consolidate or amalgamate with or into any other person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its property in any one transaction or series of related transactions unless: 
        (1) such subsidiary guarantor shall be the surviving person or the surviving person (if other than such subsidiary guarantor) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made shall be a corporation, limited partnership or limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia; 
        (2) the surviving person (if other than such subsidiary guarantor) expressly assumes, by supplemental indenture in form satisfactory to the trustee, executed and delivered to the trustee by such surviving person, such subsidiary guarantor’s guarantee of the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of the applicable Indenture and, if applicable, the registration rights agreement to be performed by such subsidiary guarantor; 
        (3) immediately before and immediately after giving effect to such transaction or series of related transactions, no default or event of default shall have occurred and be continuing; and 
        (4) we shall deliver, or cause to be delivered, to the trustee, an officer’s certificate and an opinion of counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this covenant and that all conditions precedent in the applicable Indenture relating to such transaction have been complied with.
Certain Definitions 
The following terms used in “-Certain Covenants” are defined as follows. Reference is made to the Indentures for the full definition of all such terms as well as any other capitalized terms used herein for which no definition is provided. 
“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value discounted at the rate of interest implicit in the terms of the lease (as determined in good faith by us) of the obligations of the lessee under such lease for net rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at our option, be extended). 
9

“Consolidated Net Tangible Assets” means the aggregate amount of our assets (less applicable reserves and other properly deductible items) and our consolidated subsidiaries’ assets after deducting therefrom (a) all current liabilities (excluding the sum of any debt for money borrowed having a maturity of less than twelve months from the date of our most recent consolidated balance sheet but which by its terms is renewable or extendable beyond twelve months from such date at the option of the borrower and, without duplication, any current installments thereof payable within such twelve month period) and (b) all goodwill, trade names, patents, unamortized debt discount and expense and other like intangibles, all as set forth on our most recent consolidated balance sheet and computed in accordance with GAAP. 
“Funded Debt” means debt which matures more than one year from the date of creation, or which is extendable or renewable at the sole option of the obligor so that it may become payable more than one year from such date or which is classified, in accordance with United States generally accepted accounting principles, as long-term debt on the consolidated balance sheet for the most-recently ended fiscal quarter (or if incurred  subsequent to the date of such balance sheet, would have been so classified) of the person for which the determination is being made. Funded Debt does not include (1) obligations created pursuant to leases, (2) any debt or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such debt shall be extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from such time, or (3) any debt for which money in the amount necessary for the payment or redemption of such debt is deposited in trust either at or before the maturity date thereof. 
“Lien” means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, security interest, lien, encumbrance or other security arrangement of any kind or nature on or with respect to such property or assets. 
“Permitted Liens” means: 
        (1) Liens (other than Liens created or imposed under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), for taxes, assessments or governmental charges or levies not yet subject to penalties for non-timely payment or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property or assets subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof); 
        (2) statutory Liens of landlords and Liens of mechanics, materialmen, warehousemen, carriers and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business; provided that any such Liens which are material secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established; 
        (3) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by us and our subsidiaries in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, laws or regulations, or to secure the performance of tenders, statutory obligations, bids, leases, trade or government contracts, surety, indemnification, appeal, performance and return-of-money bonds, letters of credit, bankers acceptances and other similar obligations (exclusive of obligations for the payment of borrowed money), or as security for customs or import duties and related amounts; 
10

        (4) Liens in connection with attachments or judgments (including judgment or appeal bonds), provided that the judgments secured shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay; 
        (5) Liens securing indebtedness (including capital leases) incurred to finance the purchase price or cost of construction of property or assets (or additions, repairs, alterations or improvements thereto), provided that such Liens and the indebtedness secured thereby are incurred within twelve months of the later of acquisition or completion of construction (or addition, repair, alteration or improvement) and full operation thereof; 
        (6) Liens securing industrial revenue bonds, pollution control bonds or similar types of tax-exempt bonds; 
        (7) Liens arising from deposits with, or the giving of any form of security to, any governmental agency required as a condition to the transaction of business or exercise of any privilege, franchise or license; 
        (8) encumbrances, covenants, conditions, restrictions, easements, reservations and rights of way or zoning, building code or other restrictions, (including defects or irregularities in title and similar encumbrances) as to the use of real property, or Liens incidental to conduct of the business or to the ownership of our or our subsidiaries’ properties not securing debt that do not in the aggregate materially impair the use of said properties in the operation of our business, including our subsidiaries, taken as a whole; 
        (9) leases, licenses, subleases or sublicenses granted to others not interfering in any material respect with our business, including our subsidiaries, taken as a whole; 
        (10) Liens on property or assets at the time such property or assets is acquired by us or any of our subsidiaries; 
        (11) Liens on property or assets of any person at the time such person becomes one of our subsidiaries; 
        (12) Liens on receivables from customers sold to third parties pursuant to credit arrangements in the ordinary course of business; 
        (13) Liens existing on the date of the applicable Indenture or any extensions, amendments, renewals, refinancings, replacements or other modifications thereto; 
        (14) Liens on any property or assets created, assumed or otherwise brought into existence in contemplation of the sale or other disposition of the underlying property or assets, whether directly or indirectly, by way of share disposition or otherwise; 
        (15) Liens securing debt of one of our subsidiaries owed to us or to another one of our subsidiaries; 
11

        (16) Liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision thereof, to secure partial, progress, advance or other payments; 
        (17) Liens to secure debt of joint ventures in which we or any of our subsidiaries has an interest, to the extent such Liens are on property or assets of, or equity interests in, such joint ventures; 
        (18) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution; 
        (19) Liens arising from financing statement filings regarding operating leases; 
        (20) Liens in favor of customs and revenue authorities to secure custom duties in connection with the importation of goods; 
        (21) Liens securing the financing of insurance premiums payable on insurance policies; provided, that, such Liens shall only encumber unearned premiums with respect to such insurance, interests in any state guarantee fund relating to such insurance and subject and subordinate to the rights and interests of any loss payee, loss payments which shall reduce such unearned premiums; 
        (22) Liens securing cash management obligations (that do not constitute indebtedness) in the ordinary course of business; 
        (23) Liens on any property or assets of our foreign subsidiaries securing debt of such subsidiaries (but not of our or any of our domestic subsidiaries’ debt); 
        (24) Liens securing indebtedness in an aggregate principal amount at any time outstanding not exceeding $250.0 million in respect of any arrangement under which we or any subsidiary transfers, once or on a revolving basis, without recourse (except for indemnities and representations customary for securitization transactions and except for the retention of risk in an amount and form required by applicable laws and regulations or as is customary for a similar type of transaction) involving one or more “true sale” transactions, accounts receivable or interests therein and related assets customarily transferred in connection with securitization transactions (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers; and 
        (25) other Liens on our property or assets and the property or assets of our subsidiaries securing debt in an aggregate principal amount (together with the aggregate amount of all Attributable Debt in respect of Sale and Leaseback Transactions entered into in reliance on this clause) not to exceed, as of any date of incurrence of such debt pursuant to this clause and after giving effect to such incurrence and the application of the proceeds therefrom, the greater of (1) $375.0 million and (2) 15% of our Consolidated Net Tangible Assets. 
“Senior Funded Debt” means all Funded Debt of ours or our subsidiaries (except Funded Debt, the payment of which is subordinated to the payment of the Notes). 
12

Events of Default 
Each of the following constitutes an event of default with respect to the Notes: 
(1)a default in payment of the principal amount or redemption price with respect to any Note when such amount becomes due and payable; 

(2)our failure to pay interest on any Note within 30 days of when such amount becomes due and payable;

(3)our failure to comply with any of our covenants or agreements in the applicable Indenture or the Notes (other than a failure that is subject to the foregoing clause (1) or (2)) and our failure to cure (or obtain a waiver of) such default and such failure continues for 60 days after written notice is given to us as provided below; 

(4)a default under any debt for money borrowed by us or any subsidiary that results in acceleration of the maturity of such debt, or failure to pay any such debt within any applicable grace period after final stated maturity, in an aggregate amount greater than $25.0 million at any time that any Existing Notes remain outstanding, or $75.0 million at any time that no Existing Notes remain outstanding, or its foreign currency equivalent at the time without such debt having been discharged or acceleration having been rescinded or annulled within 10 days after receipt by us of notice of the default by the trustee or holders of not less than 25% in aggregate principal amount of the Notes then outstanding (the “cross acceleration provision”); 

(5)certain events of bankruptcy, insolvency or reorganization affecting us, any subsidiary guarantor or any subsidiary that would be a significant subsidiary of AAP within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (a “Significant Subsidiary”) (the “bankruptcy provisions”); and 

(6)except as permitted by the Indenture, any subsidiary guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any subsidiary guarantor, or any person acting on its behalf, shall deny or disaffirm its obligation under the subsidiary guarantee.

A default under clause (3) is not an event of default until the trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding notify us of the default and we do not cure such default within the time specified after receipt of such notice. Such notice must specify the default, demand that it be remedied and state that such notice is a “Notice of Default.”
We will deliver to the trustee, within 30 days after the occurrence thereof, written notice in the form of an officer’s or officers’ certificate (as described in the applicable Indenture) of any event that with the giving of notice or the lapse of time or both would become an event of default, its status and what action we are taking or propose to take with respect thereto. 
If an event of default (other than an event of default resulting from certain events involving bankruptcy, insolvency or reorganization with respect to us or any subsidiary guarantor) shall have occurred and be continuing, the trustee or the registered holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare, by notice to us in writing (and to the trustee, if given by holders of such Notes) specifying the event of default, to be immediately due and payable the principal amount of all the Notes then outstanding, plus accrued but unpaid interest to the date of acceleration. In case an event of default resulting from certain events of bankruptcy, insolvency or reorganization with respect to us or any subsidiary guarantor shall occur, such amount with respect to all the Notes shall be due and payable 
13

immediately without any declaration or other act on the part of the trustee or the holders of the Notes. After any such acceleration, but before a judgment or decree based on acceleration is obtained by the trustee, the registered holders of a majority in aggregate principal amount of the Notes then outstanding may, under certain circumstances, rescind and annul such acceleration and waive such event of default if all events of default, other than the nonpayment of accelerated principal, premium or interest, have been cured or waived as provided in the Indenture.
Subject to the provisions of the applicable Indenture relating to the duties of the trustee, in case an event of default shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under the applicable Indenture at the request or direction of any of the holders of the Notes, unless such holders shall have offered to the trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. Subject to such provisions for the indemnification of the trustee, the holders of a majority in aggregate principal amount of the Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the Notes. 
No holder of Notes will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any remedy thereunder, unless: 
(1)such holder has previously given to the trustee written notice of a continuing event of default, 
(2)the registered holders of at least 25% in aggregate principal amount of the Notes then outstanding have made a written request and offered indemnity or security to the trustee reasonably satisfactory to it to institute such proceeding as trustee, and 
(3)the trustee shall not have received from the registered holders of a majority in aggregate principal amount of the Notes then outstanding a written direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. 

However, such limitations do not apply to a suit instituted by a holder of any Note for enforcement of payment of the principal of, and premium, if any, or interest on, such Note on or after the respective due dates expressed in such Note. 
The Indentures provides that, if a default with respect to the applicable Notes occurs and is continuing and is known to the trustee, the trustee must mail to each holder of such Notes notice of the default within 90 days after it occurs. The trustee may withhold the notice if and so long as it in good faith determines that withholding notice is in the interest of the holders of such Notes. 
The Indentures require us, in each case, to furnish to the trustee, within 120 days after the end of each fiscal year, a written statement of an officer regarding compliance with such Indenture. Within 30 days after the occurrence of any default or event of default, we are required to deliver to the trustee written notice in the form of an officers certificate a statement specifying its status and what actions we are taking or propose to take with respect thereto.
Legal Defeasance and Covenant Defeasance 
We may terminate at any time all our obligations with respect to the Notes, which we refer to as “legal defeasance,” except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. We may also terminate at any 
14

time our obligations with respect to the Notes under other covenants described in the Indentures, and the operation of the cross acceleration provision and the bankruptcy provisions with respect to Significant Subsidiaries and subsidiary guarantors, which we refer to as “covenant defeasance.” We may exercise the legal defeasance option notwithstanding our prior exercise of the covenant defeasance option.

Modification and Waiver
Modifications and amendments of the Indentures as it relates to the applicable Notes may be made by us, the subsidiary guarantors and the trustee with the consent of the holders of at least a majority in aggregate principal amount of the outstanding Notes affected by such modification or amendment. 
No such modification or amendment may, without the consent of the holder of each outstanding Note affected thereby: 
•reduce the percentage of principal amount of Notes the holders of which must consent to an amendment, modification, supplement or waiver; 

•reduce the rate of or extend the time of payment for interest on any Note; 

•reduce the principal amount or extend the stated maturity of any Note;

•reduce the redemption price of any Note or add redemption provisions to any Note;

•make any Note payable in money other than that stated in the applicable Indenture or the Note; 

•other than in accordance with the provisions of Indentures, eliminate any existing subsidiary guarantee of the Notes; 

•impair the right to receive, and to institute suit for the enforcement of, any payment with respect to the Notes; or 

•make any change to the amendment and waiver provisions of the Notes. 
Without the consent of any holder, we, the subsidiary guarantors and the trustee may amend the Indentures to, among other things, cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor of our or any subsidiary guarantor’s obligations under the Indentures as permitted thereunder, to provide for the issuance of additional notes in accordance with the limitations set forth in the Indenture, to add guarantees with respect to the Notes or to make any other change that does not adversely affect the rights of any holder in any material respect. 
The holders of at least a majority in principal amount of the outstanding Notes affected may waive compliance by us with certain restrictive provisions of the Indenture. The holders of at least a majority in principal amount of the outstanding Notes may waive any past default under the Indentures, except a default in the payment of principal or interest and certain covenants and provisions of such Indenture which cannot be amended without the consent of the holder of each outstanding Note.
Discharge 
When (i) we deliver to the trustee all outstanding Notes (other than Notes replaced because of mutilation, loss, destruction or wrongful taking) for cancellation or (ii) all outstanding Notes have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption as described above, and we irrevocably deposit with the trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes, including interest thereon, and if in either case we pay all other sums related to the Notes payable under the Indentures by us, then the Indentures will, subject to certain surviving provisions, 
15

cease to be of further effect. The trustee shall acknowledge satisfaction and discharge of the Indentures with respect to the Notes on our demand accompanied by an officer’s or officers’ certificate (as described in the applicable Indenture) and an opinion of counsel.
Governing Law
The Indentures, the Notes and the subsidiary guarantees will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
Regarding the Trustee
The Indentures provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the Indentures. During the existence of an event of default, the will exercise such rights and powers vested in it under the Indentures and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person’s own affairs.

16Exhibit
10.30

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount: US$224,000.00	Issue
    Date: July 29, 2020
	Purchase
        Price: US$200,000.00

        Original
        Conversion Price (subject to adjustment herein): $2.05
	 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, EDISON NATION, INC., a Nevada corporation (hereinafter called the “Borrower”), hereby promises
to pay to the order of Jefferson Street Capital LLC, a New Jersey limited liability company, or its registered assigns (the “Holder”),
the sum of US$224,000.00, together with any interest as set forth herein, on January 29, 2021 (the “Maturity Date”),
and to pay a one-time interest charge on the initial principal balance hereof in the amount of two percent (2%) (the “Interest
Rate”), which such amount shall be immediately assessed as of the funding date hereof (the “Issue Date”) and
become due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Convertible Promissory Note
(the “Note”) may be prepaid in whole or in part as explicitly set forth herein. Any amount of principal or interest
on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date
thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note
is fully paid and shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder
(to the extent not converted into common stock, $0.001 par value per share (the “Common Stock”) in accordance with
the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as
the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date
on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than
a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed.

 

    	 

    	 

    

 

On
April 7, 2020, the Borrower entered into that certain Securities Purchase Agreement (as amended and/or restated from time to time,
the “Purchase Agreement”), by and between the Borrower and the Holder with an aggregate funding amount under the Agreement
in an amount up to US$500,000.00, in connection with the first tranche issuance of that certain Convertible Promissory Note of
the Borrower in favor of the Investor, in the principal amount of US$168,000.00 (the “April Note”), convertible into
shares of common stock, $0.001 par value per share, of the Borrower (the “Common Stock”), upon the terms and subject
to the limitations and conditions set forth in such April Note. This Note is the second tranche under the terms and conditions
of the Purchase Agreement in the principal amount of US$224,000.00, convertible into shares of common stock, $0.001 par value
per share, of the Borrower upon the terms and subject to the limitations and conditions set forth herein. Each capitalized term
used herein, and not otherwise defined, shall have the meaning ascribed thereto in the Purchase Agreement, pursuant to which this
Note was originally issued.

 

This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The
undersigned hereby affirms all of the obligations of the Borrower to the Holder under all of the Transaction Documents and agrees
and affirms as follows: (i) that as of the date hereof, the undersigned have performed, satisfied and complied in all material
respects with all the covenants, agreements and conditions under each of the Transaction Documents to be performed, satisfied
or complied with by the undersigned; (ii) that the undersigned shall continue to perform each and every covenant, agreement and
condition set forth in each of the Transaction Documents and this Note, and continue to be bound by each and all of the terms
and provisions thereof and hereof; (iii) that as of the date hereof, no default or Event of Default has occurred or is continuing
under the Purchase Agreement, any Note or any other Transaction Documents, and no event has occurred that, with the passage of
time, the giving of notice, or both, would constitute a default or an Event of Default under the Purchase Agreement, the Notes
or any other Transaction Documents; and (iv) that as of the date hereof, no event, fact, or other set of circumstances has occurred
which could reasonably be expected to have, cause, or result in a Material Adverse Effect.

 

The
undersigned hereby acknowledges, represents, warrants and confirms to Holder that: (i) each of the Transaction Documents executed
by the Borrower are valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective
terms; and (ii) no oral representations, statements, or inducements have been made by Holder, or any agent or representative of
Holder, with respect to this Note, any other Note, the Purchase Agreement, and all other Transaction Documents.

 

    	2

    	 

    

 

The
following terms shall apply to this Note:

 

Article
I. CONVERSION RIGHTS

 

1.1 Conversion
Right. The Holder shall have the right at any time after 180 calendar days from the Issue Date to convert all or any part
of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to this Note into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other
securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as
defined below) determined as provided herein (a “Conversion”); provided, however, that in no event shall
the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the
sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised
or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the
limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this
Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1)
of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder
upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion
limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in
such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) (the numerator) by the applicable Conversion Price then in effect on the
date specified in the notice of conversion (the denominator), in the form attached hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted
by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00
p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all interest
in cash plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof.

 

    	3

    	 

    

 

 1.2 Conversion Price.

 

(a) Calculation
of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”)
shall equal $2.05. Upon an Event of Default, the Conversion Price shall equal the Alternate Conversion Price (as defined herein)
(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The “Alternate Conversion Price” shall equal the lesser of (i) 80% multiplied by
the average of the three lowest daily volume weighted average prices (“VWAP”) during the previous twenty (20) Trading
Days (as defined below) before the Issue Date of this Note (representing a discount rate of 20%) or (ii) 80% multiplied by the
Market Price (as defined herein) (representing a discount rate of 20%). “Market Price” means the average of the three
lowest daily VWAPs for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior
to the Conversion Date. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per
share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest
value possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion
Price may be adjusted downward if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower,
the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the
Borrower’s Common Stock have not been delivered within three (3) business days to the Borrower, the Notice of Conversion
may be rescinded. At any time after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable
by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s
Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for all future conversions under all
Notes. If in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only
eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under all Notes while the “chill”
is in effect. If in the case of both of the above, an additional cumulative 25% discount shall apply. Additionally, if the Borrower
ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one
hundred eighty-one (181) days from the Issue Date, an additional 15% discount will be attributed to the Conversion Price. If the
Market Price cannot be calculated for such security on such date in the manner provided above, the Market Price shall be the lesser
of (i) the lowest trading price of the Common Stock, or (ii) the fair market value as mutually determined by the Borrower and
the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required
in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock
is tradable for any period on the Nasdaq or on the principal securities exchange or other securities market on which the Common
Stock is then being traded. The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with
any such issuance. Holder shall be entitled to add to the principal amount of the Note $750.00 for each conversion to cover Holder’s
deposit fees associated with each Notice of Conversion.

 

(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which
the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially
all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer
to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred
to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall,
effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below),
be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement
Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination
Date, the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion
Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which
a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause
(i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination
or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative

 

    	4

    	 

    

 

(c) Pro
Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in
connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock not in
dispute and resolve such dispute in accordance with Section 4.13.

 

(d) Issuance
Cap. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, Holder and Borrower
agree that the total cumulative number of shares of Common Stock issued to Holder hereunder together with all other Transaction
Documents may not exceed the requirements of Nasdaq Listing Rule 5635(d) (“Nasdaq 19.99% Cap”), except that
such limitation will not apply following Nasdaq Approval. If Borrower is unable to obtain Nasdaq Approval to issue Common Stock
to the Holder in excess of the Nasdaq 19.99% Cap, any remaining outstanding balance of this Note must be repaid in cash at the
request of the Holder.

 

1.3 Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have
authorized and reserved at least two and one half (2.5) times the number of shares that is actually issuable upon full conversion
of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). The
Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 3(d)
of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid
and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which
would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price,
the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common
Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this
Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than
the initial Reserved Amount, regardless of any prior conversions. The Holder undertakes as a condition to this Note, that upon
the either the payment of this Note plus all accrued interest and/or the conversion of this Note in full, the Holder, within three
(3) business days, shall give written notice to TOL to release all shares subject to the Reserved Amount.

 

    	5

    	 

    

 

If,
at any time the Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of the
Holder, the principal amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s
and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

 

 1.4 Method of Conversion.

 

(a) Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time
to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable
means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time) and (B) subject to Section
1.4(b), surrendering this Note at the principal office of the Borrower.

 

(b) Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid
principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower,
so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such
records of the Holder shall, prima facie, 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 represented by this Note may be
less than the amount stated on the face hereof.

 

(c) Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities
or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are
to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such
tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other
reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates
(or electronic shares via DWAC transfer, at the option of Holder) for the Common Stock issuable upon such conversion within three
(3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

    	6

    	 

    

 

(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of
accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate
except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion.
If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder
to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person
or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of
any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the
Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be
the Conversion Date so long as the Notice of Conversion is received by the Borrower before 5:00 p.m., New York, New York time,
on such date.

 

(f) Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable
upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section
1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its
Deposit Withdrawal At Custodian (“DWAC”) system.

 

(g) DTC
Eligibility & Conversion Price Threshold. If the Borrower fails to maintain its status as “DTC Eligible” for
any reason, or, if the Conversion Price is less than $0.75, at any time while this Note is outstanding, the principal amount of
the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s
expectation that any principal amount increase will tack back to the Issue Date). In addition, the Alternate Conversion Price
shall be redefined to mean fifty percent (50%) multiplied by the Market Price, subject to adjustment as provided in this Note.

 

    	7

    	 

    

 

(h) Failure
to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion
of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which
failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the
Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder
or credit the Holder’s balance account with Nasdaq for the number of shares of Common Stock to which the Holder is entitled upon
such Holder’s conversion of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages will tack back to
the Issue Date). Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which
it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance
with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the
terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from
a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly,
the parties acknowledge that the liquidated damages provision contained in this Section 1.4(h) are justified.

 

(i) Rescindment
of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion
Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the Borrower’s
Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of the Note of Conversion,
(iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s Common Stock issued
unrestricted and/or deposited to sell for any reason related to the Borrower’s standing, (iv) the Holder is unable to deposit
the shares of the Borrower’s Common Stock requested in the Notice of Conversion for any reason related to the Borrower’s
standing, (v) at any time after a missed Deadline, at the Holder’s sole discretion, or (vi) if Nasdaq changes the Borrower’s
designation to ‘Limited Information’ (Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’
(Skull & Crossbones), or ‘Grey Market’ (Exclamation Mark Sign) or other trading restriction on the day of or any
day after the Conversion Date, the Holder maintains the option and sole discretion to rescind the Notice of Conversion (“Rescindment”)
with a “Notice of Rescindment.”

 

1.5 Concerning
the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor
rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal
provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered
under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular
date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that
has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

    	8

    	 

    

 

The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is
effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by
the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the
Borrower does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant
to Section 3.2 of the Note.

 

 1.6 Effect of Certain Events.

 

(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be
deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder
upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III)
or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability
company, partnership, association, trust or other entity or organization.

 

    	9

    	 

    

 

(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of
all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon
the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that
the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least
fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no
such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any
dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital
stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled,
upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.

 

(d) Purchase
Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of
any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) 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 Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

    	10

    	 

    

 

(e) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note.

 

1.7 Trading
Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the
Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note
and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the
Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded
(the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined
in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share
Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of
any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or
any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in
lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.2 of the Note.

 

1.8 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount
or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder
of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares
of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure
by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion
of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common
Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted
portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note
has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the
Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default
Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default
and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3)
for the Borrower’s failure to convert this Note.

 

    	11

    	 

    

 

1.9 Prepayment.
Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay the amounts outstanding hereunder pursuant
to the following terms and conditions:

 

(a) At
any time during the period beginning on the Issue Date and ending on the date which is one hundred eighty (180) days following
the Issue Date, the Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to
the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder
of an amount in cash equal to 115%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(b) After
the expiration of one hundred eighty-one (181) days following the date of the Note, the Borrower shall have no right of prepayment
except by written consent of the Holder.

 

Any
notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its
registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment
which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment
(the “Optional Prepayment Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the
order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional
Prepayment Date. If the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due
to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit
its right to prepay the Note pursuant to this Section 1.9.

 

1.10 Mandatory
Prepayment Option. Notwithstanding the prepayment provisions set forth herein, no later than one hundred sixty five (165)
calendar days from the Issue Date, at the sole and absolute discretion of the Holder, the Holder may demand in writing by e-mail
(a “Prepayment Demand”), prepayment by the Borrower to the Holder in cash in an amount equal to 115%, multiplied by
the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note plus (y) Default Interest, if any (the “Mandatory Prepayment Amount”). Upon delivery of the Prepayment
Demand, the Borrower shall have one hundred eighty (180) calendar days from the Issue Date to deliver the Mandatory Prepayment
Amount to the Holder (the “Prepayment Delivery Date”). In the event the Borrower fails to deliver the Mandatory Prepayment
Amount to the Holder on or before the Prepayment Delivery Date, it shall be an Event of Default under Section 3.4 herein.

 

    	12

    	 

    

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1 Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s
written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property
or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional
shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect
of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority
of the Borrower’s disinterested directors.

 

2.2 Restriction
on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other
securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower
or any warrants, rights or options to purchase or acquire any such shares.

 

2.3 Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.
Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.4 Advances
and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without
limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a)
in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b)
made in the ordinary course of business or (c) not in excess of $100,000.

 

2.5 Preservation
of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries
that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character
of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

 

2.6 Non-circumvention.
The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate or Articles of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue
or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required
to protect the rights of the Holder.

 

    	13

    	 

    

 

ARTICLE
III. EVENTS OF DEFAULT

 

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

 

3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether
by the Maturity Date, upon acceleration or otherwise.

 

3.2 Conversion
and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer
agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or
directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for
three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain
current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is
delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the
Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be
paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3 Failure
to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined in the Purchase
Agreement) to the Holder within three (3) business days of the date such amount is due.

 

3.4 Breach
of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any
collateral documents including but not limited to the Purchase Agreement.

 

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

 

    	14

    	 

    

 

3.6 Receiver
or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors or commence
proceedings for its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business, or such a receiver or trustee shall otherwise be appointed for the Borrower or for a substantial
part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment.

 

3.7 Judgments.
Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or
any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of sixty
(60) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.8 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it
an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower admits in writing
its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief,
all under international, federal or state laws as applicable.

 

3.9 Delisting
of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on the Nasdaq National Market, the Nasdaq
Small Cap Market, the New York Stock Exchange, or the NYSE MKT.

 

3.10 Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act (including
but not limited to becoming delinquent in its filings; and/or the Borrower shall cease to be subject to the reporting requirements
of the Exchange Act.

 

3.11 Liquidation.
Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.12 Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts
as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.13 Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future) or any disposition or conveyance of any material
asset of the Borrower.

 

    	15

    	 

    

 

3.14 Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or
period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of
such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.15 Reverse
Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to
the Holder.

 

3.16
 Replacement of Transfer Agent. In the event that the Borrower proposes to replace
its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable
Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to
the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to
Borrower and the Borrower.

3.17 Cessation
of Trading. Any cessation of trading of the Common Stock on the Nasdaq National Market, the Nasdaq Small Cap Market, the New
York Stock Exchange, or the NYSE MKT, and such cessation of trading shall continue for a period of five consecutive (5) Trading
Days.

 

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

 

3.19 Bid
Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with zero
market makers on the “Bid” per Level 2) and/or a market.

 

3.20 Nasdaq
Markets Designation. Nasdaq changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat
Emptor’ (Skull and Crossbones), or ‘Grey Market’ (Exclamation Mark Sign).

 

3.21 Inside
Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any
actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.

 

    	16

    	 

    

 

3.22 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder is unable to (i)
obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s
conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and
(ii) thereupon deposit such shares into the Holder’s brokerage account.

 

3.23 3(a)(10)
Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured
in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(l0) of the Securities Act.

 

Upon
the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 3.15, 3.16. 3.17, 3.18, 3.19, 3.20, 3.21, 3.22 and 3.23, exercisable through the delivery of written notice to the Borrower
by such Holders (the “Default Notice”), the Alternate Conversion Price shall be effective, the Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
130% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus
the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii)
at the option of the Holder, the “parity value” of the Default Sum to be prepaid, where parity value means (a) the
highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with
Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for
purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect
of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest
Trading Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending
one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall
immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together
with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise
all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.10 and/or 3.19 occurs or
is continuing after the six (6) month anniversary of this Note, then the principal amount of the Note shall increase by Fifteen
Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal
amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest Trading Price during the
delinquency period as a base price for the conversion with the Alternate Conversion Price shall be redefined to mean fifty percent
(50%) multiplied by the Market Price (at the option of the Holder), subject to adjustment as provided in this Note. For example,
if the lowest Trading Price during the delinquency period is $0.01 per share and the conversion discount is 50%, then the Holder
may elect to convert future conversions at $0.005 per share.

 

    	17

    	 

    

 

The
Holder shall have the right at any time, to require the Borrower to immediately issue, in lieu of the Default Amount, the number
of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect, subject
to the terms of this Note. This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default
without the need for any party to give any notice or take any other action.

 

If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging
an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys’ fees
and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

ARTICLE
IV. MISCELLANEOUS

 

4.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

 

4.2 Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by email or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:

 

If
to the Borrower, to:

 

Edison
Nation, Inc.

1
West Broad Street

Suite
1004

Bethlehem,
PA 18018

 

    	18

    	 

    

 

If
to the Holder:

 

Jefferson
Street Capital LLC

720
Monroe Street, C401B

Hoboken,
NJ 07030

 

4.3 Amendments.
This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The
term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other
Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended
or supplemented.

 

4.4 Assignability.
This Note shall be binding upon the Borrower and its successors and assigns and shall inure to be the benefit of the Holder and
its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to any
“accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any
of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower. Notwithstanding
anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account
or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than
the amount stated on the face hereof.

 

4.5 Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable costs of
collection, including reasonable attorneys’ fees.

 

4.6 Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note
shall be brought only in the state courts of New York, in the federal courts located in the District of the State of New York,
or in such other jurisdiction and venue as the Holder may determine in its sole discretion.. The parties to this Note hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING
OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered
in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document 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 Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

 

    	19

    	 

    

 

4.7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount
(or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock
acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower
and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

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

 

4.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders
who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire
(including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities
or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection
with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation,
dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to
the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier),
of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and
a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known
at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially
simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9 including, but not limited
to, name changes, recapitalizations, etc. as soon as possible under law.

 

    	20

    	 

    

 

4.10 Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest
permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will not seek to claim
or take advantage of any usury law that would prohibit or forgive the Borrower from paying all or a portion of the principal or
interest on this Note.

 

4.11 Remedies.
The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for
a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law
or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing
any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic
loss and without any bond or other security being required. No provision of this Note shall alter or impair the obligation of
the Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and
rate, and in the form, herein prescribed.

 

4.12 Severability.
In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.

 

4.13 Dispute
Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount
or Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or
the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or
the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within two (2) Business Days
after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise
to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the
Borrower are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination
or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within
two (2) Business Days, submit via facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the
or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by
the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default
Amount, Default Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower.
The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and
notify the Borrower and the Holder of the results no later than two (2) Business Days from the time it receives such disputed
determinations or calculations. Such investment bank’s or accountant’s determination or calculation shall be binding
upon all parties absent demonstrable error.

 

    	21

    	 

    

 

4.14 Terms
of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of
any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The
types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited
to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts,
stock sale price, private placement price per share, and warrant coverage.

 

4.15 Registered
Broker Dealer Review Fee. The Borrower shall pay Moody Capital Solutions Inc., a registered broker dealer (CRD#: 15989 and
SEC#: 8-32928), a fee in the amount of $3,000.00 in connection with the diligence review of the Borrower and the transaction contemplated
under the Agreement, the Note and related transaction documents (the “Registered Broker Dealer Review Fee”). The Registered
Broker Dealer Review Fee shall be paid from the proceeds funded by the Buyer at closing as set forth in the related Disbursement
Authorization.

 

4.16 Issuance
of Common Stock Shares to Buyer. As additional consideration for the Holder loaning the Purchase Price to the Borrower, the
Borrower shall issue in connection with this second tranche, 14,266 shares of common stock to the Holder upon execution hereof.

 

[signature
page follows]

 

    	22

    	 

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer as of the date first above
written.

 

	 	EDISON
    NATION, INC.
	 	 	 
	 	By:	 
	 	Name:	Christopher
    B. Ferguson
	 	Title:	Chief
    Executive Officer

 

    	23

    	 

    

 

EXHIBIT
A

NOTICE
OF CONVERSION 

 

The
undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) together with $________________
of accrued and unpaid interest thereto, totaling $_____________ into that number of shares
of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of
Edison Nation, Inc., a Nevada corporation (the “Borrower”), according to the conditions of the convertible note of
the Borrower dated as of July 29, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder
for any conversion, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	[  ]
    	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the
    undersigned or its nominee with DTC through its Deposit Withdrawal At Custodian system (“DWAC Transfer”).
	 	 	 
	 	 	Name of DTC Prime
    Broker:
	 	 	Account Number:
	 	 	 
	 	[  ]
    	The
    undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
    set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately
    below or, if additional space is necessary, on an attachment hereto:

 

	Date of Conversion:	 	 	 
	Applicable Conversion Price:	 	$	 	 
	Number of Shares of Common Stock to be Issued	 	 	 	 
	Pursuant to Conversion of the Notes:	 	 		 
	Amount of Principal Balance Due remaining	 	 	 	 
	Under the Note after this conversion:	 	 	 	 
	Accrued and unpaid interest remaining:	 	 	 	 

 

	JEFFERSON
    STREET CAPITAL LLC	 
	 	 	 
	By:	 	 
	Name:	Brian Goldberg 	 
	Title:	Managing
    Member

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}]]