Document:

Exhibit 10.4

 

FIRST AMENDMENT
To AMENDED AND RESTATED INTERcreditor agreement

 

THIS FIRST AMENDMENT
TO AMENDED AND RESTATED INTERCREDITOR AGREEMENT (this “Amendment”) is entered into this 1st
day of July, 2016, among BANK OF AMERICA, N.A., in its capacity as administrative agent and collateral agent (together with
its successors and assigns in such capacity, the “BofA Facility Agent”), and WILMINGTON TRUST, NATIONAL
ASSOCIATION, in its capacity as administrative agent and collateral agent (together with its successors and assigns in such
capacities, the “GSO Agent”).

 

Recitals

 

A.           Pursuant to that
certain Second Amended and Restated First Lien Credit Agreement, dated as of April 8, 2015, by and among Sequential Brands Group,
Inc., a Delaware corporation (the “Borrower”), the Guarantors party thereto, the BofA Facility Agent
and the BofA Facility Lenders (as amended prior to the date hereof and in effect, the “Existing BofA Facility Credit
Agreement”), the BofA Facility Lenders have agreed to make certain loans and provide other financial accommodations
to or for the benefit of the Borrower.

 

B.           Pursuant to that
certain Second Amended and Restated Credit Agreement dated as of December 4, 2015, by and among the Borrower, the Guarantors party
thereto, the GSO Lenders and the GSO Agent (as amended prior to the date hereof and in effect, the “Existing GSO Credit
Agreement”), the GSO Lenders have made certain loans to the Borrower.

 

C.           The BofA Facility
Agent and the GSO Agent have entered into that certain Amended and Restated Intercreditor Agreement dated as of December 4, 2015
(as amended and in effect, the “Intercreditor Agreement”), which provides, among other things, the respective
rights and remedies of the BofA Facility Agent and the GSO Agent with respect to the Collateral (as defined therein) and certain
other matters.

 

D.           Contemporaneously
herewith, the Borrower, the Guarantors, the BofA Facility Lenders and the BofA Facility Agent are entering into that certain Third
Amended and Restated First Lien Credit Agreement to amend and restate the terms of the Existing BofA Facility Credit Agreement
(the “Restated BofA Facility Credit Agreement”).

 

E.           Contemporaneously
herewith, the Borrower, the Guarantors, the GSO Lenders and the GSO Agent are entering into that certain Third Amended and Restated
Credit Agreement to amend and restate the terms of the Existing GSO Credit Agreement (the “Restated GSO Credit Agreement”).           

 

F.           The BofA Facility
Agent and the GSO Agent have agreed to amend certain provisions of the Intercreditor Agreement, but only to the extent, in accordance
with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.

 

     1

     

    

 

Agreement

 

Now,
Therefore, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the
parties hereto agree as follows:

 

1.           Definitions.
Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Intercreditor Agreement.

 

2.           Amendments
to Intercreditor Agreement.

 

(a)           General.
Any and all references in the Intercreditor Agreement, other than in Section 8.4 of the Intercreditor Agreement, to the phrase
“as in effect on the date hereof” and the phrase “as of the date hereof” shall be deleted and replaced
with the phrase “as in effect on the First Amendment Effective Date” and the phrase “as of the First Amendment
Effective Date”, respectively.

 

(b)           Section
1.2 of the Intercreditor Agreement is hereby amended by deleting the reference to “Section 6.18(b)” in clause (iii)
of the definition of “Inadvertent Overadvances” and by substituting “Section 6.18(a)” in its stead.

 

(c)           Section
1.2 of the Intercreditor Agreement is hereby amended by deleting the definition of “Maximum BofA Facility Amount”
in its entirety and by substituting the following in its stead:

 

“Maximum
BofA Facility Amount” shall mean, on any date of determination thereof, a principal amount equal to (a) $287,500,000
plus (b) an additional amount of additional indebtedness incurred under the BofA Credit Agreement that would not result in the
Consolidated First Lien/First Out Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower for
which financial statements are required to have been delivered under the GSO Credit Agreement by the Borrower to exceed 2.50:1.00,
after giving pro forma effect to the incurrence of such additional amount under the BofA Credit Agreement, plus (c) BofA Facility
Obligations under Bank Product Agreements and Cash Management Services Agreement, plus (d) any additional principal amount extended
pursuant to a DIP Financing permitted pursuant to Section 6.1(a) hereof, minus (e) the amount of any permanent repayment of the
BofA Facility Obligations made after the First Amendment Effective Date or any commitment reduction of the BofA Facility Obligations
after the First Amendment Effective Date.

 

(d)           Section
1.2 of the Intercreditor Agreement is hereby amended by deleting the definition of “Maximum GSO Facility Amount”
in its entirety and by substituting the following in its stead:

 

“Maximum
GSO Facility Amount” shall mean (a) the principal amount of $450,000,000 plus (b) the aggregate principal amount
of Indebtedness that may be incurred under Section 2.14 of the GSO Credit Agreement as in effect on the First Amendment Effective
Date.

 

     2

     

    

 

(e)          Section
1.2 of the Intercreditor Agreement is hereby amended by adding the following new defined terms in appropriate alphabetical
order therein:

 

“First
Amendment Effective Date” shall mean July 1, 2016.

 

“MSLO
Key Man Policy” shall have the meaning assigned to that term in the BofA Credit Agreement.

 

(f)          Section
4.1 of the Intercreditor Agreement is hereby deleted in its entirety and the following is substituted in its stead:

 

“4.1       Application
of Proceeds of BofA Facility Priority Collateral.

 

(a)          The BofA Facility
Agent and the GSO Agent hereby agree that all BofA Facility Priority Collateral and all Proceeds thereof received by either of
them (other than the MSLO Key Man Policy and the Proceeds thereof) (i) in connection with any Exercise of Secured Creditor Remedies
with respect to the BofA Facility Priority Collateral, (ii) in connection with the exercise of any right or remedy (including set
off) relating to the BofA Facility Priority Collateral, or (iii) following the commencement of any Insolvency Proceeding, in each
case, shall be applied,

 

first,
to the payment of reasonable costs and expenses of the BofA Facility Agent,

 

second,
to the payment of the BofA Facility Obligations (other than the Excess BofA Facility Obligations) in accordance with the BofA Facility
Loan Documents until the Discharge of BofA Facility Obligations (other than the Excess BofA Facility Obligations) shall have occurred;

 

third,
to the payment of the GSO Obligations (other than the Excess GSO Obligations) in accordance with the GSO Loan Documents until the
Discharge of GSO Obligations (other than the Excess GSO Obligations) shall have occurred,

 

fourth,
to the payment of the Excess BofA Facility Obligations in accordance with the BofA Facility Loan Documents until the Discharge
of BofA Facility Obligations shall have occurred,

 

fifth,
to the payment of the Excess GSO Obligations in accordance with the GSO Loan Documents until the Discharge of GSO Obligations shall
have occurred, and

 

sixth,
the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.

 

(b)          The BofA Facility
Agent and the GSO Agent hereby agree that the MSLO Key Man Policy and the Proceeds thereof received by either of them (i) in connection
with any Exercise of Secured Creditor Remedies with respect to the MSLO Key Man Policy and the Proceeds thereof, (ii) in connection
with the exercise of any right or remedy (including set off) relating to the the MSLO Key Man Policy and the Proceeds thereof,
or (iii) following the commencement of any Insolvency Proceeding, in each case, shall be applied,

 

     3

     

    

 

first,
to the payment of reasonable costs and expenses of the BofA Facility Agent,

 

second,
to the payment of the BofA Facility Obligations consisting of the Tranche A Term Loan (other than the Excess BofA Facility Obligations)
in an amount equal to the lesser of (x) the aggregate amount of the Tranche A Term Loan outstanding and (y) (i) at any time that
any portion of the BofA Facility Obligations consisting of the Tranche A-1 Loan is outstanding, $20,000,000, and (ii) at all other
times, $35,000,000;

 

third,
at any time that any portion of the BofA Facility Obligations consisting of the Tranche A-1 Loan is outstanding, to the payment
of the BofA Facility Obligations consisting of the Tranche A-1 Term Loan (other than the Excess BofA Facility Obligations) in an
amount equal to the lesser of (x) the aggregate amount of the Tranche A-1 Term Loan outstanding and (y) (i) $20,000,000;

 

fourth,
to the payment of the GSO Obligations (other than the Excess GSO Obligations) in accordance with the GSO Loan Documents up to an
amount not to exceed (i) at any time that any portion of the BofA Facility Obligations consisting of the Tranche A-1 Loan is outstanding,
$10,000,000, and (ii) at all other times, $15,000,000;

 

fifth,
to the payment of the other BofA Facility Obligations (other than the Excess BofA Facility Obligations) in accordance with the
BofA Facility Loan Documents until the Discharge of BofA Facility Obligations (other than the Excess BofA Facility Obligations)
shall have occurred;

 

sixth,
to the payment of the other GSO Obligations (other than the Excess GSO Obligations) in accordance with the GSO Loan Documents until
the Discharge of GSO Obligations (other than the Excess GSO Obligations) shall have occurred,

 

seventh,
to the payment of the Excess BofA Facility Obligations in accordance with the BofA Facility Loan Documents until the Discharge
of BofA Facility Obligations shall have occurred,

 

eighth,
to the payment of the Excess GSO Obligations in accordance with the GSO Loan Documents until the Discharge of GSO Obligations shall
have occurred, and

 

ninth,
the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.”

 

(g)          Section
5.2 of the Intercreditor Agreement is hereby amended by:

 

		(1)	adding the following language at the end of clause (a)(4) of such
section:

 

“, including,
without limitation, pursuant to the provisos of Sections 2.06(a) and (b) of the BofA Credit Agreement as in effect on the First
Amendment Effective Date;”

 

		(2)	deleting the number “2.16” in its entirety in the second
line of clause (a)(6) of such section; 

 

     4

     

    

 

		(3)	deleting “; or” at the end of clause (a)(6) and by substituting
“;” in its stead;

 

		(4)	deleting clause (a)(7) in its entirety and by substituting the following
in its stead:

 

“(7)           amend,
supplement or otherwise modify Section 4.02(d) of the BofA Credit Agreement as in effect on the First Amendment Effective Date
or waive the requirements thereunder; or

 

(8)            make
any other amendment or modification in contravention of this Agreement.”; and

 

		(5)	deleting the number “2.05” in the first line of clause
(b)(2) of such section and by substituting “2.07” in its stead.

 

3.           Consent
to Restated BofA Facility Credit Agreement. The GSO Agent, on behalf of itself and
the other GSO Secured Parties, hereby consents to the terms and conditions of the Restated BofA Facility Credit Agreement, and
acknowledges and agrees that, on and after the First Amendment Effective Date, all references in the Intercreditor Agreement to
the “BofA Credit Agreement” shall mean and refer to the Restated BofA Facility Credit Agreement.

 

4.           Consent
to Restated GSO Credit Agreement. The BofA Facility Agent, on behalf of itself and
the other BofA Facility Secured Parties, hereby consents to the terms and conditions of the Restated GSO Credit Agreement, and
acknowledges and agrees that, on and after the First Amendment Effective Date, all references in the Intercreditor Agreement to
the “GSO Credit Agreement” shall mean and refer to the Restated GSO Credit Agreement.

 

5.           Representations
and Warranties. Each of the parties hereto hereby represents and warrants to the other
party as follows:

 

5.1           Each
party hereto has the power and authority to execute and deliver this Amendment and perform its obligations under the Intercreditor
Agreement (as amended by this Amendment);

 

5.2           The
execution and delivery by each party hereto of this Amendment and the performance by such parties of its obligations under the
Intercreditor Agreement (as amended by this Amendment) has been duly authorized; and

 

5.3           This
Amendment has been duly executed and delivered by each party hereto and is the binding obligation of the BofA Facility Agent and
the GSO Agent, enforceable against each such party in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles
relating to or affecting creditors’ rights.

 

     5

     

    

 

6.           Miscellaneous.

 

6.1           This
Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one instrument. Delivery of an executed counterpart
of a signature page of this Amendment by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart
of this Amendment.

 

6.2           This
Amendment expresses the entire understanding of the parties hereto with respect to the transactions contemplated hereby. No prior
negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.

 

6.3           Any
determination that any provision of this Amendment or any application hereof is invalid, illegal, or unenforceable in any respect
and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the
validity, legality, or enforceability of any other provision of this Amendment.

 

6.4           Except
as expressly amended hereby, all terms and provisions of the Intercreditor Agreement remain in full force and effect.

 

6.5           THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE CHOICE
OF LAW AND VENUE PROVISIONS SET FORTH IN THE INTERCREDITOR AGREEMENT, AND SHALL BE SUBJECT TO THE JURY TRIAL WAIVER AND NOTICE
PROVISIONS OF THE INTERCREDITOR AGREEMENT.

 

6.6           This
Amendment shall become effective on and as of the date when the parties hereto execute and deliver to one another signature pages
to this Amendment.

 

[Signature page follows]

 

     6

     

    

 

In
Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date
first written above.

 

	 	BANK OF AMERICA, N.A.,
	 	as BofA Facility Agent
	 	 	 
	 	By:	/s/ Andrew Cerussi
	 	Name:	Andrew Cerussi
	 	Title:	Director
	 	 	 
	 	WILMINGTON TRUST, NATIONAL ASSOCIATION,
	 	as GSO Agent
	 	 	 
	 	By:	/s/ Meghan H. Mc Cauley
	 	Name:	Meghan H. Mc Cauley
	 	Title:	Assistant Vice President

 

    	 	 	 

     

    

 

ACKNOWLEDGMENT

 

The Borrower and each
Guarantor hereby acknowledges that it has received a copy of this Amendment and consents thereto, agrees to recognize all rights
granted thereby to the BofA Facility Agent, the BofA Facility Secured Parties, the GSO Agent, and the GSO Secured Parties and will
not do any act or perform any obligation which is not in accordance with the agreements set forth in this Amendment. The Borrower
and each Guarantor further acknowledges and agrees that it is not an intended beneficiary or third party beneficiary under this
Amendment and (i) as between the BofA Facility Secured Parties, the Borrower and the Guarantors, the BofA Facility Loan Documents
remain in full force and effect as written and are in no way modified hereby, and (ii) as between the GSO Secured Parties, the
Borrower and the Guarantors, the GSO Loan Documents remain in full force and effect as written and are in no way modified hereby.

 

	 	SEQUENTIAL BRANDS GROUP, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	SQBG, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	SEQUENTIAL LICENSING, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	WILLIAM RAST LICENSING, LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer

 

    	 	 	 

     

    

 

	 	HEELING SPORTS LIMITED
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	Name: Gary Klein
	 	 	Title: Chief Financial Officer
	 	 	 
	 	B©AND MATTER, LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	SBG
    Revo Holdings, LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	sbg
    universe brands, llc
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	Galaxy
    Brands LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	The
    Basketball Marketing Company, Inc.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer

 

    	 	 	 

     

    

 

	 	American Sporting Goods Corporation
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	Gary
    Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	LNT Brands LLC
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	sbg fm, LLC
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	joe’s holdings
    LLC
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MARTHA STEWART LIVING OMNIMEDIA, INC.
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 

    	 	 	 

     

    

 

	 	MSO IP HOLDINGS, INC.
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	martha
    stewart, inc.
	 	 	 
	 	By:	/s/
    Gary Klein 
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	body
    & soul omnimedia, inc.
	 	 	 
	 	By:	/s/
    Gary Klein 
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MSLO PRODUCTIONS, INC.
	 	 	 
	 	By:	 /s/
    Gary Klein
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MSLO PRODUCTIONS – HOME, INC.
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MSLO PRODUCTIONS – EDF, INC.
	 	 	 
	 	By:	/s/
    Gary Klein
	 	 	 
	 	Name:	 Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 

 

    	 	 	 

     

    

 

	 	FLOUR PRODUCTIONS, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	EMERIL PRIMETIME MUSIC, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	EMERIL PRIMETIME PRODUCTIONS, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	GOOD THING PRODUCTIONS, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MSLO SHARED IP SUB LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	MSLO EMERIL ACQUISITION SUB LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 

    	 	 	 

     

    

 

	 	SBG-GAIAM HOLDINGS, LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	GAIAM BRAND HOLDCO, LLC
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial Officer
	 	 	 
	 	GAIAM AMERICAS, INC.
	 	 	 
	 	By:	/s/ Gary Klein
	 	 	 
	 	Name:	Gary Klein
	 	 	 
	 	Title:	Chief Financial OfficerEXHIBIT 4.1

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

CONVERTIBLE
PROMISSORY NOTE

CHATAND,
INC.

 

THIS
CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued Convertible Promissory Note of chatAND, Inc., a Nevada corporation,
having its principal place of business at 244 5th Avenue, Suite C68, New York, New York 10001 (the “Company”)
designated as its Convertible Promissory Note ( the “Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to David Stefansky with a principal address of 146 Beach 9th Street, Apt 5A, Far Rockaway,
New York, NY 11691, or its assigns (“Holder”), pursuant to the terms hereunder, the principal sum of $15,000
on or before July 5, 2017 (the “Maturity Date”). The Company further promises to pay interest on the outstanding
principal from the date hereof until payment in full at the rate of ten percent (10%) per annum and such interest shall be due
at the Maturity Date. This Note is subject to the following additional provisions:

 

Section
1.Repayment and Additional Grants. The Company may repay this Note to Holder, in whole or in part, at any time. In
addition, Holder may convert this Note, including any interest due and payable, in whole or in part, pursuant to Section 2 below.
As an additional inducement to Holder to enter into the Note, the Company to issue to the Holder the Warrant to Purchase Shares
of Common Stock substantially in the form attached hereto as Exhibit A.

 

Section
2.Conversion. 

 

(a)Conversion
Right. At any time during which either principal or interest remain outstanding under the Note, Holder shall have the right
to convert the entire balance of the Note (including any unpaid interest) then outstanding into shares of common stock, at a conversion
price of $0.01 per share (the “Conversion Price”); provided, however, if the Company raises any equity
financing below the Conversion Price during the term of the Note, the Conversion Price shall be adjusted as set forth in Section
3 below.

 

    	 	1	 

     

    

 

(b)Mechanics
of Conversion.

 

(i)Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of shares of Common Stock issuable upon a conversion (the
“Conversion Shares”) hereunder shall be determined by the quotient obtained by dividing (x) the outstanding
principal amount and any accrued but unpaid interest under this Note to be converted by (y) the then applicable conversion price.
All such Conversion Shares shall be “restricted securities” as such term is defined by the Securities Act.

 

(ii)Delivery
of Certificate Upon Conversion. Not later than five (5) Trading Days after the Conversion date, the Company shall deliver,
or cause to be delivered, to Holder, a certificate or certificates representing the Conversion Shares without restrictive legend,
if applicable. “Trading Day” means any day during which the Company’s then current principal trading market
shall be open for trading.

 

(iii)Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note no less than one
hundred percent (100%) of the number of shares required for such conversion. The Company covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and non-assessable.

 

(iv)Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which Holder would otherwise be entitled to purchase upon such conversion, the Company shall round
up to the next whole share.

 

(v)Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note, if at any time Holder shall or would be issued
shares of Common Stock, but such issuance would cause Holder (together with its affiliates) to beneficially own a number of shares
exceeding 9.99% of the number of shares of Common Stock outstanding on such date (the “Maximum Percentage”), then
the Company will not issue to Holder the shares that would cause Holder to exceed the Maximum Percentage.

 

(c)Representations
of Holder. Holder is, and will be at the time of any conversion under this Note, an “accredited investor,” as
such term is defined in Rule 501 of Regulation D promulgated under the Securities Act, is experienced in investments and business
matters, has made investments of a speculative nature and, with its representatives, has such knowledge and experience in financial,
tax and other business matters as to enable such Holder to utilize the information available with respect to the Company to evaluate
the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a
speculative investment. Holder has the authority and is duly and legally qualified to purchase and own shares of the Company.
Holder is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

 

    	 	2	 

     

    

 

Section
3.Certain Adjustments and Covenants.

 

(a)Adjustment
of Conversion Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if and whenever during the
term of this Note the Company issues or sells Common Stock, options for common stock, or convertible securities for a consideration
per share (the “New Conversion Price”) less than a price equal to the Conversion Price in effect immediately
prior to such issue, conversion, or sale or deemed issuance or sale (such Conversion Price then in effect is referred to herein
as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after
such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Conversion Price. For
the avoidance of doubt, if the New Conversion Price is greater than the Applicable Price, there shall be no adjustment to the
Conversion Price. For the purposes of this Section 3(a), “Excluded Securities” means any shares of Common
Stock, options, restricted stock units or convertible securities issued or issuable (i) in connection with any approved stock
plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint
ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basis, the purpose of which is
not to raise additional capital. Notwithstanding the foregoing, any Common Stock issued or issuable to raise capital for the Company
or its subsidiaries, directly or indirectly, in connection with any transaction contemplated by clause (ii) above, including,
without limitation, securities issued in one or more related transactions or that result in similar economic consequences, shall
not be deemed to be Excluded Securities. Provided, however, any and all rights of Holder under this Section 3(a) shall
immediately expire if and when the Company if and when the Company’s common stock becomes listed or quoted on a “national
securities exchange” within the meaning of Section 6 of the Securities Exchange Act of 1934, as amended.

 

(b)Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (A) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock; (B) subdivides outstanding
shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares
of Common Stock into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the Common Stock,
any shares of capital stock of the Company, then the Conversion price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.

 

    	 	3	 

     

    

 

(c)Fundamental
Transaction. If, at any time while this Note is outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another entity of any kind, (B) the Company effects any sale of all or substantially all of its assets in one transaction
or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another entity, person,
or group of either) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, Holder
shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior
to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been
entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, Holder of one (1) share of Common Stock (the “Alternate Consideration”). For purposes of any such
conversion, the determination of the Conversion price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. The Company shall use commercially reasonable efforts to ensure
the holding period under Rule 144(d) of the Securities Act is maintained on behalf of Holder under the Note in the event of a
Fundamental Transaction.

 

(d)Notice
to Holder. Whenever the conversion price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to each Holder a notice setting forth the Conversion price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

 

Section
4.Events of Default.

 

(a)“Event
of Default” means, wherever used herein, any of the following events:

 

(i)any
default in the payment of (A) the principal amount of any Note or (B) liquidated damages and other amounts owing to a Holder on
any Note, as and when the same shall become due and payable (whether on a conversion date or the Maturity Date or by acceleration
or otherwise) which default, is not cured within ten (10) Trading Days;

 

(ii)the
Company shall fail to observe or perform any other covenant or agreement contained in the Note which failure is not cured, if
possible to cure, within ten (10) Trading Days after notice of such failure sent by Holder or by any other Holder; or

 

(iii)bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and such petition or proceedings shall not have been dismissed
within ninety (90) days of the filing thereof.

 

    	 	4	 

     

    

 

(b)Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus other amounts owing
in respect thereof through the date of acceleration, shall become, at the election of Holder’s of the majority in principal
amount of the Notes then outstanding, immediately due and payable in cash or as otherwise specified herein. From the date of the
Event of Default then the default interest shall be payable at fifteen percent (15%) per annum.

 

Section
5.Miscellaneous.

 

(a)Notices.
Any and all notices or other communications or deliveries to be provided by the Company, or by Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized
overnight courier service, addressed to the respective Company or Holder, at the address set forth above. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number specified on the signature page, (ii) the second
Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iii) upon actual receipt
by the party to whom such notice is required to be given.

 

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

 

(c)Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflict of laws thereof. If either party shall commence an action or proceeding to enforce any provisions of this Note, then
the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other
costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

(d)Waiver.
Any waiver by the Company or Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of this Note. Any waiver by the Company or Holder
must be in writing.

 

(e)Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances

 

    	 	5	 

     

    

 

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

 

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

 

(h)Assumption.
Any successor to the Company or any surviving entity in a Fundamental Transaction shall assume, prior to such Fundamental Transaction,
all of the obligations of the Company under this Note pursuant to written agreements in form and substance satisfactory to Holder
(such approval not to be unreasonably withheld or delayed).

 

(i)Assignability.
This Note shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Holder and Holder’s
successors and assigns. This Note shall not be assigned by either the Company or Holder without the prior written consent of the
other party.

 

[SIGNATURE
PAGE FOLLOWS]

 

    	 	6	 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be executed by a duly authorized officer as of the 5th day of
July, 2016.

 

	CHATAND,
    INC.	 
	 	 	 
	By:	/s/
    Victoria D. Rudman	 
	Name:
    	Victoria
    D. Rudman	 
	Title:
    	Interim
    Chief Executive Officer and	 
	 	Chief
    Financial Officer	 
	 	 	 
	AGREED
    TO AND ACKNOWLEDGE BY:	 
	 	 	 
	DAVID
    STEFANSKY	 
	 	 	 
	By:	/s/
    David Stefansky	 
	Name:
    	David
    Stefansky	 

 

    	 	7	 

     

    

 

EXHIBIT
A

 

FORM
OF WARRANT TO PURCHASE SHARES OF COMMON STOCK

 

    	 	8

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