Document:

THIS
WARRANT AND THE SECURITIES UNDERLYING THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS
AND THE RULES AND REGULATIONS THEREUNDER.

 

GIGGLES
‘N HUGS, INC.

 

WARRANT

 

TO
PURCHASE COMMON STOCK OF THE COMPANY

 

	Warrant
No. 2251-	 	 	Issue Date: February 28, 2017

 

FOR
VALUE RECEIVED, GIGGLES ‘N HUGS, INC., a Nevada corporation (the “Company”), grants this warrant
(this “Warrant”) with the following rights to Firelight, LLC fso Jillian Michaels and G-Money, LLC,
fso of Giancarlo Chersich and its permitted assigns, heirs, executors, and administrators (individually and collectively, the
“Holders”), as of the date first written above (“Issue Date”).

 

Section
1. Grant.

 

The
Holders are hereby granted the right (collectively, the “Purchase Rights”), in accordance with the terms
and conditions of this Warrant, from the date hereof until the expiration of the “Exercise Period” (as defined below),
to purchase from the Company that number of fully paid and non-assessable shares of the Company’s common stock (the “Common
Stock”), set forth in Section 2 hereof, at the “Exercise Price” (as defined below), upon delivery of
this Warrant to the Company with the Notice of Exercise form attached as Exhibit 1 hereto, duly executed, and upon tender
of the Exercise Price for the shares of Common Stock to be purchased.

 

Section
2. Number of Shares of Common Stock Purchasable.

 

2.1
Subject to the other provisions of this Section 2, this Warrant entitles each of the Holders to purchase two million five hundred
thousand (2,500,000) shares of Common Stock; provided, however, the Holders may not exercise their individual purchase rights
for more than six hundred twenty-five thousand (625,000) shares as of May 31, 2017, one million two hundred fifty thousand (1,250,000)
shares in the aggregate (including any prior exercises) as of August 31, 2017, and one million eight hundred seventy-five thousand
(1,875,000) shares in the aggregate (including any prior exercises) as of November 31, 2017. This Warrant will terminate upon
the termination of the Brand Ambassador Agreement entered concurrently herewith only in the event of termination for cause by
the Company or termination without cause by the Holders. Each of the Holders may purchase such shares independent, and without
any action, of the other of the Holders.

 

    	1

     

    

 

2.2
In case prior to the expiration of the Purchase Rights by exercise or by the terms of this Warrant, the Company shall undertake
any reclassification, forward stock split, reverse stock split, stock dividend, or any similar proportionately-applied change
(collectively, a “Reclassification”) of outstanding shares of Common Stock (other than a change solely
in, of, or from par value), the Holders shall thereafter be entitled, upon exercise of this Warrant for the same total consideration
as presently required, to purchase the kind and amount of shares of stock and other securities and property receivable upon such
Reclassification by a holder of the number of shares of Common Stock which this Warrant entitles the Holders hereof to purchase
immediately prior to such Reclassification. Notice of any such Reclassification shall be given to the Holders pursuant to Section
11 hereof.

 

2.3
In case prior to the expiration of the Purchase Rights by exercise or by the terms of this Warrant, the Company shall determine
to consolidate or merge with, or convey all, or substantially all, of its property or assets to, any other corporation or corporations,
or dissolve, liquidate, or wind up, then, as a condition precedent to such consolidation, merger, conveyance, dissolution, liquidation,
or winding up, notice shall be given to the Holders pursuant to Section 11 hereof and lawful and adequate provision shall be made
whereby the Holders shall thereafter have the right to receive from the Company or the successor corporation, as the case may
be, upon the basis and upon the terms and conditions specified in this Warrant, in lieu of the shares of Common Stock of the Company
theretofore purchasable upon the exercise of the Purchase Rights, such shares of stock, securities, or assets as may be issued
or payable with respect to, or in exchange for, the number of shares of Common Stock of the Company theretofore purchasable upon
the exercise of the Purchase Rights had such consolidation, merger, conveyance, dissolution, liquidation, or winding up not taken
place; and in any such event the rights of the Holders to an adjustment of the number of shares of Common Stock purchasable upon
the exercise of the Purchase Rights as herein provided, shall continue and be preserved in respect of any stock or securities
which the Holders becomes entitled to purchase.

 

Section
3. Exercise Period; Registration Statement Notice. The Purchase Rights represented hereby shall be exercisable
in whole or in part from time to time after the date of issuance of this Warrant until 5:00 p.m. Pacific time on the fifth (5th)
anniversary of the Issue Date hereof (the “Exercise Period”).

 

Section
4. Exercise.

 

4.1
The Purchase Rights represented by this Warrant are exercisable upon the terms and conditions set forth herein at the option of
the Holders in whole at any time and in part at any time and from time to time during the Exercise Period upon the delivery of
the Notice of Exercise form attached hereto as Exhibit 1 to the Company with such notice duly executed and, except as otherwise
set forth herein, upon payment in cash, wire transfer or bank cashier’s check of the Exercise Price. The Purchase Rights
shall be deemed to have been exercised, and the Holders shall be deemed to have become a stockholder of record of the Company
for the purposes of receiving dividends and for all other purposes whatsoever with respect to the shares of Common Stock so purchased,
as of the date of delivery of such properly executed Notice of Exercise accompanied by proper tender of the Exercise Price at
the office of the Company. As promptly as practicable on or after such date, and in any event within five (5) business days thereafter,
the Company at its expense shall issue and deliver, or cause to be issued and delivered, to the person or persons entitled to
receive the same, a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense shall execute and deliver a new Warrant of like tenor exercisable for the number
of shares for which this Warrant may then be exercised.

 

    	2

     

    

 

4.2
Notwithstanding the foregoing, in lieu of making the payment contemplated in Section 4.1, the Holders may elect to receive shares
of Common Stock equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which event the Company shall issue to the Holders a
number of shares of Common Stock computed using the following formula:

 

	 	 	Y
        (A-B)

        X
= ——————

        A
	 	 	 	 

 

	Where:
     	X
     	=
     	the
    number of the shares of Common Stock to be issued to the Holders.
	 	 	 	 
	   	Y
     	=
     	the
    number of the shares of Common Stock purchasable under this Warrant.
	 	 	 	 
	   	A
     	=
     	the
    fair market value of a share of Common Stock on the date of determination.
	 	 	 	 
	   	B
     	=
     	the
    per share Exercise Price (as adjusted to the date of such calculation).

 

For
purposes of this Section, the fair market value of a share of Common Stock shall mean either of the following: (i) If the Common
Stock is publicly traded, the per share fair market value of a share of Common Stock shall be the average of the closing prices
of the Common Stock as quoted on the Over-the-Counter Bulletin Board, or the principal exchange on which the Common Stock is listed,
in each case for the fifteen (15) trading days ending five (5) trading days prior to the date of determination of fair market
value; or (ii) If the Common Stock is not so publicly traded, the per share fair market value of a share of Common Stock shall
be such fair market value as is determined in good faith by the Board of Directors of the Company after taking into consideration
factors it deems appropriate, including, without limitation, recent sale and offer prices of the capital stock of the Company
in private transactions negotiated at arm’s length.

 

Section
5. Exercise Price. The exercise price, subject to adjustment as provided in Section 2 and otherwise herein, shall
be equal to $0.1401 per share of Common Stock.

 

Section
6. Company’s Representations, Warranties and Covenants.

 

6.1
The Company represents and warrants to the Holders that the following will be true and correct through and including the Exercise
Period:

 

6.1.1
The Company has taken all action necessary and appropriate to properly authorize, reserve, and issue those shares of Common Stock
issuable to the Holders pursuant to this Warrant including an authorization of issuance and setting of Exercise Price.

 

    	3

     

    

 

6.1.2
The Common Stock deliverable on the exercise of the Purchase Rights represented hereby shall, when issued, be duly and validly
issued, fully paid, and non-assessable, free and clear of all liens and encumbrances.

 

6.1.3
The Company has all requisite corporate power and corporate authority to issue this Warrant and to carry out and perform its obligations
hereunder.

 

6.1.4
This Warrant is a valid and binding obligation of the Company, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency, the relief of debtors or other laws affecting the enforcement of creditors’
rights generally, general principles of equity.

 

6.1.5
The offer, issuance and sale of this Warrant is, and the issuance of Common Stock upon exercise of this Warrant and the issuance
of Common Stock upon conversion of the Common Stock will be exempt from the registration requirements of the Securities Act, and
are exempt from the qualification requirements of any applicable state securities laws (the “Exemptions”).

 

6.1.6
The issuance of this Warrant and the Common Stock issuable upon the exercise hereof pursuant to the provisions of this Warrant
will not violate any preemptive rights or rights of first refusal granted by the Company, and are or will be, as applicable, in
compliance with all applicable federal and state securities laws, and will be free of any liens or encumbrances.

 

6.1.7
The execution and delivery of this Warrant and the consummation of the other transactions contemplated herein, the carrying on
of the business as currently conducted by the Company and compliance with the terms and provisions of this Warrant will not conflict
with or result in a breach of the terms and conditions of, or constitute any default under, the Articles of Incorporation or Bylaws
of the Company, or of any provision of (a) any indebtedness of the Company, (b) any contract, covenant or instrument under which
the Company is bound, including, without limitation, any equipment lease, or (c) any judgment, order, ruling, injunction or decree
of any court or administrative agency affecting the Company.

 

6.2
The Company covenants and agrees with the Holders through the Exercise Period as follows:

 

6.2.1
The Company shall at all times reserve and hold available sufficient shares of Common Stock to satisfy the Purchase Rights.

 

6.2.2
All shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any stockholder and free
of all taxes, liens and charges with respect to the issue thereof.

 

    	4

     

    

 

6.2.3
The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon
which the Common Stock may be listed, and neither the Company nor anyone acting on its behalf will take any action hereafter that
would cause the loss of such exemptions.

 

6.2.4
Unless the Holders consent thereto in writing, the Company shall not amend its Articles of Incorporation prior to the exercise
of this Warrant if the Common Stock would be adversely affected by such amendment.

 

6.2.5
The Company shall secure and maintain the listing of the Common Stock issuable upon exercise of this Warrant and the shares of
Common Stock or other securities issuable upon conversion of such Common Stock upon each securities exchange or over-the-counter
market upon which securities of the same class or series issued by the Company are listed, if any. Upon exercise of this Warrant,
the Company will use its best efforts to cause stock certificates representing the shares of Common Stock purchased pursuant to
the exercise to be issued in the names of the Holders, their nominees or assignees, as appropriate at the time of such exercise.
Upon conversion of the shares of Common Stock into shares of Common Stock, the Company will issue the Common Stock in the names
of the Holders, its nominees or assignees, as appropriate.

 

Section
7. Transfer; Compliance With Securities Laws; Registration.

 

7.1
The Purchase Rights shall be registered on the books of the Company, which shall be kept by it at its principal office for that
purpose. This Warrant and the Common Stock issuable upon exercise of the Purchase Rights, may not be transferred or assigned in
whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee,
including, if requested by the Company, an opinion of counsel satisfactory to the Company to the effect that the transfer or assignment
is in compliance with applicable securities laws.

 

7.2
If the Company at any time proposes to register any of its securities under the 1933 Act, including under an S-l Registration
Statement or otherwise, it will give written notice to the Holders, or his assigns, of its intention so to do. Upon the written
request of the Holders, or assigns, given within thirty (30) days after receipt of any such notice, the Company will use its best
efforts to cause all shares underlying the conversion hereof to be registered under the 1933 Act (with the securities which the
Company at the time propose to register). All expenses incurred by the Company in complying with this Section, including without
limitation, all registration and filing fees, listing fees, printing expenses, fees, and disbursements of all independent accountants,
or counsel for the Company and the expense of any special audits incident to or required by any such registration and the expenses
of complying with the securities or blue sky laws of any jurisdiction shall be paid by the Company.

 

Section
8. Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock issuable upon the exercise
of this Warrant or any portion thereof (and issuance of a replacement Warrant certificate in the event of partial exercise) shall
be made without charge to the Holders hereof for any issue taxes or any other incidental expenses in respect of the issuance of
such certificates to and in the name of the registered Holders of this Warrant, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holders of this Warrant. Certificates will be issued
in a name other than that of the Holders upon the request of the Holders and payment by the Holders of any applicable transfer
taxes and compliance with all applicable securities laws and with all applicable provisions of this Warrant including but not
limited to Section 7 hereof.

 

    	5

     

    

 

Section
9. Exchange for Other Denominations. This Warrant is exchangeable for new certificates of like tenor and date representing
in the aggregate the right to purchase the number of shares purchasable hereunder in denominations designated by the Holders at
the time of surrender. In the event of the purchase, at any time prior to the expiration of the Exercise Period, of less than
all of the shares of Common Stock purchasable hereunder, the Company shall cancel this Warrant upon surrender thereof, and shall
promptly execute and deliver to the Holders hereof a new warrant of like tenor and date for the balance of the shares purchasable
hereunder.

 

Section
10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant, and, in case of loss, theft,
or destruction, of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable
and documented expenses incidental thereto, and upon surrender of this Warrant, if mutilated, the Company shall promptly make
and deliver a new warrant of like tenor and date, in lieu of this Warrant and cancel this Warrant.

 

Section
11. Notices Including Certificate of Company In Event of Adjustment.

 

11.1
Whenever the number of shares purchasable hereunder or the Exercise Price shall be adjusted pursuant to Sections 2, 5 or 11 hereof,
the Company shall issue a certificate signed by its Chief Executive Officer or such other appropriate officer, setting forth,
in reasonable detail, the event or Issuance requiring the adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the number of shares purchasable hereunder or the new Exercise Price after giving effect to such adjustment,
and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holders of this Warrant.

 

11.2
All notices, requests, consents and demands required by this Warrant shall be in writing and shall be personally delivered or
mailed, postage prepaid.

 

All
notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not,
then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery
with written verification of receipt.

 

Section
12. Miscellaneous. This Warrant shall not entitle the Holders to any of the rights of a stockholder of the Company.
This Warrant shall be binding upon the Company’s successors. This Warrant shall be governed, construed, and enforced in
accordance with the laws of the State of California. In case any provision of this Warrant shall be invalid, illegal, or unenforceable,
or partially invalid, illegal, or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby. This Warrant shall any term hereof may be changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of such change, waiver, discharge, or termination is sought. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

 

[Signature
appears on following page.]

 

    	6

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and delivered on its behalf as of the Issue Date set
forth above.

 

	 	COMPANY:
	 	 	 
	 	GIGGLES
    ‘N HUGS, INC.
	 	 	 
	 	By:	 
	 		Joey
    Parsi
	 	 	Chief
    Executive Officer

 

	 	HOLDERS:
	 	 	 
	 	Firelight,
    LLC
	 	 	 
	 	By:	 
	 	Name:
    	Jillian
    Michaels
	 	Title:	Authorized
    Signatory

 

	 	G-Money, LLC
	 	 	 
	 	By:	 
	 	Name:
    	Giancarlo
    Chersich
	 	Title:	Authorized
    Signatory

 

    	7

     

    

 

EXHIBIT
1

 

NOTICE
OF EXERCISE PURSUANT TO

ATTACHED WARRANT

 

	 	_________________,
    20__

 

To:
GIGGLES ‘N HUGS, INC.

 

(1)
The undersigned, being one of the Holders of record of the attached Warrant of GIGGLES ‘N HUGS, INC., hereby exercises the
option granted by the Purchase Rights evidenced by the attached Warrant and hereby tenders payment of the Exercise Price as determined
by the Warrant to purchase upon the terms set forth in such Warrant ________ shares of Common Stock, which constitutes all [or
a portion] of the shares of Common Stock issued pursuant to the Purchase Rights represented by this Warrant of GIGGLES ‘N
HUGS, INC. All capitalized terms used but not defined in this notice have the meanings assigned to such terms in the Warrant.

 

(2)
In exercising this Warrant, the undersigned hereby confirms and acknowledges that (a) the undersigned is an “accredited”
investor, (b) the shares of the Common Stock to be issued are being acquired solely for investment and solely for the account
of the undersigned, (c) the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities
laws, and (d) the certificate or certificates representing said shares of Common Stock shall bear a restrictive legend prohibiting
and restricting transfer of such shares except in compliance with applicable federal and state securities laws.

 

(3)
Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such
other name as is specified below.

 

(4)
Please issue a new Warrant for the unexercised portion of the attached Warrant, if any, in the name of the undersigned or in such
other name as is specified below:

 

	 	 

 

	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

(If
certificates for Common Stock or new Warrants are requested in a name other than the undersigned, be advised that the delivery
of the certificates and/or new Warrants will be delayed until the Company assures itself that such change is permitted under Section
7 of the Warrant that such change does not violate applicable federal and state securities laws.)

 

    	8This
5.0% Convertible Debenture (the “Debenture”) and the securities underlying this Debenture have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”) and may not be offered, sold or otherwise
transferred, assigned, pledged, or hypothecated in the absence of such registration or an exemption therefrom under such Securities
Act, any applicable state securities laws, and the rules and regulations thereunder.

 

GIGGLES
‘N HUGS, INC.

5.0%
Convertible Debenture

Due
August 31, 2016

 

	  $50,000
    	August
    24, 2015

 

GIGGLES
‘N HUGS, INC., a Nevada corporation (the “Company”, which term includes any successor corporation),
for value received, hereby promises to pay to J & N invest LLC. (the “Holder”), or registered
assigns, on _August 31, 2016 (the “Maturity Date”), the sum of $50,000 (the “Principal
Amount”), with accrued and unpaid interest thereon to the registered Holder hereof from the date hereof as provided
herein. Payment of the principal hereof and interest on this Debenture will be made by stock or immediately available funds, in
lawful tender of the United States, to an account designated in writing by the Holder. In the event of a default, and subject
to the cure provisions of Article Five, the principal hereof, together with accrued and unpaid interest, shall, at the option
of the Holder hereof, become immediately due and payable.

 

ARTICLE
ONE 

SUBORDINATION

 

1.1
Senior Indebtedness. As used in this Debenture, the term “Senior Indebtedness” shall mean any
indebtedness secured by assets of the Company, to the extent of and with respect to such assets; provided, however, that the term
shall not include indebtedness which by the terms of the instrument creating or evidencing it is subordinated to or on parity
with this Debenture.

 

1.2.
Subordination. The Company covenants and agrees and the Holder, by acceptance hereof, covenants, expressly for the benefit
of holders of Senior Indebtedness, that the payment of the principal and interest on this Debenture is expressly subordinated
in right of payment to the payment of all principal and interest under the Senior Indebtedness in case of any event of default,
bankruptcy, insolvency, receivership, or other similar proceeding, whether voluntary or otherwise, of or with respect to the Company.

 

    	 	1	 

    	 

    

 

ARTICLE
TWO

PAYMENT

 

2.1
Rate and Payment of Interest. Interest will accrue on the Principal Amount of this Debenture (or any portion thereof that
remains unpaid) from the date hereof until the entire Principal Amount is paid or converted into securities of the Company accordance
with Article Three herein, at the rate of 5.0% per annum (computed on the basis of a year of 360 days).

 

2.2
Payment. The Principal Amount and any interest accruing hereunder shall be due and payable on the Maturity Date. No payments
shall be due until the Maturity Date.

 

2.3
Prepayment. Prepayments of the Principal Amount, in whole or in part, and any interest thereon shall be permitted without
penalty to the Maker.

 

ARTICLE
THREE

CONVERSION

 

3.1
Definitions. For purposes of this Debenture the following terms shall have the meaning as set forth below:

 

“Common
Stock” shall mean the Company’s Common Stock, par value $0.001 per share.

 

“Sale
of the Company” shall mean (i) the sale of all or substantially all the assets of the Company, or (ii) the transfer,
assignment or sale of all of the outstanding capital stock of the Company to one or more persons who collectively own less than
twenty percent (20%) of the outstanding capital stock of the Company, by merger, stock sale, or otherwise.

 

“Transaction
Documents” shall mean this Debenture and any documents related to any of the foregoing or the consummation of the
transactions contemplated by this Debenture.

 

3.2
Holder’s Optional Conversion. At any time after the date hereof, Holder shall have the right, but not the obligation,
to convert any or all of the outstanding principal and accrued but unpaid interest under this Debenture into share of Common Stock
at $0.10 per share; provided that any incremental amount converted in accordance with this Section 3.2 shall be at least $10,000
or greater. (the “Conversion Rate”).

 

3.3
Notice of Conversion. Before the Holder shall be entitled to convert this Debenture in accordance with Section 3.2 of this
Debenture, in part or in full, into Units, it shall surrender this Debenture at the office of the Company and shall give written
notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same, and shall
state therein the name or names in which the certificate or certificates for shares of Common Stock to purchase shares of Common
Stock are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver to the Holder of this Debenture
a certificate or certificates for the number of shares of Common Stock underlying the Debenture shall be entitled as aforesaid.
If this Debenture shall be converted in part, the Company shall cancel this Debenture and issue a new debenture of identical terms
and conditions for the unconverted principal amount. Such conversion shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of this Debenture, and the person or persons entitled to receive the Units issuable
upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such
date.

 

    	 	2	 

    	 

    

 

3.4
Mandatory Conversion. On the earlier to occur of (the “Mandatory Conversion Date”) (A) in the
Company’s sole and absolute discretion, on or after the date on which the Company’s Common Stock has been publicly
traded on the OTCQB, or such other public stock exchange as the Company’s Common Stock may be listed from time to time:
(i) at an average daily volume of at least 40,000 shares for thirty (30) consecutive trading days, and (ii) at an average closing
trading price of at least $0.20 for that same period; or (B) the Maturity Date, this Debenture shall be converted pursuant to
the terms hereof. Provided that the Holder has received the certificates or other instruments representing the securities issued
upon conversion pursuant to this Section 3.4 within ten (10) business days following the Mandatory Conversion Date, this Debenture
shall be deemed cancelled and of no further force or effect as of the Mandatory Conversion Date.

 

3.5
Effect, Mechanics of Conversion. No fractional shares of capital stock shall be issued upon conversion of this Debenture.
If the conversion would result in the issuance of any fractional share, the number of shares of capital stock shall be rounded
up or down to the nearest whole number, and no cash shall be paid to Holder in lieu of the deficiency, if any. At its expense,
the Company shall, as soon as practicable after conversion, issue and deliver to the Holder a certificate or certificates for
the number of shares of Common Stock to which the Holder shall be entitled upon such conversion, together with any other securities
and property to which the Holder is entitled upon such conversion under the terms of this Debenture.

 

ARTICLE
FOUR 

CONVERSION RATE ADJUSTMENTS

 

4.1
Adjustments for Stock Splits and Subdivisions. In the event the Company should at any time or from time to time after the
date of issuance hereof fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares
of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment
of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional
shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion Rate of this Debenture shall be appropriately decreased
so that the number of shares of Common Stock issuable upon conversion of this Debenture shall be increased in proportion to such
increase of outstanding shares, unless such adjustment has already been made to the Conversion Rate.

 

    	 	3	 

    	 

    

 

4.2
Adjustments for Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the date hereof
is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination,
the Conversion Rate for this Debenture shall be appropriately increased so that the number of shares of Common Stock issuable
on conversion hereof shall be decreased in proportion to such decrease in outstanding shares, unless such adjustment has already
been made to the Conversion Rate.

 

4.3
Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the conversion of this Debenture such number of its shares
of Common Stock as shall from time to time be sufficient to effect the conversion of the Debenture; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire outstanding principal
amount and accrued interest of this Debenture, in addition to such other remedies as shall be available to the holder of this
Debenture, the Company will use its best efforts to take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized, but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

 

4.4
Favored nation status. If company should do another round of financing with better terms, then holder has the right to
receive the same terms.

 

ARTICLE
FIVE

EVENTS OF DEFAULT

 

The
occurrence of any of the following events of default shall, at the option of the Holder hereof, make all sums of Principal Amount
and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, all without demand,
presentment or notice, all of which hereby are expressly waived:

 

5.1
Breach of Covenant. The breach of any covenant or other term or condition of this Debenture and continuance thereof for
a period of thirty (30) days after written notice to the Company from the Holder.

 

5.2
Insolvency; Receiver or Trustee. The Company shall become insolvent or admit in writing its inability to pay its debts
as they mature; or make an assignment for the benefit of creditors; 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 otherwise shall be appointed.

 

    	 	4	 

    	 

    

 

5.3
Bankruptcy. Bankruptcy, insolvency, reorganization, or liquidation proceeding 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.

 

ARTICLE
SIX 

MISCELLANEOUS

 

6.1
Entire Debenture. This Debenture and the documents referred to herein constitute the entire agreement among the parties
and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except
as specifically set forth herein or therein. The terms and conditions of this Debenture shall inure to the benefit of and be binding
upon the respective heirs, personal representatives, successors and assigns of the parties, except to the extent assignability
is limited herein.

 

6.2
Waiver and Amendment. Any provision of this Debenture may be amended, waived, or modified upon the written consent of the
Company and the Holder.

 

6.3
Governing Law. This Debenture shall be governed by and construed under the laws of the State of California.

 

6.4
Titles and Subtitles. The titles and subtitles used in this Debenture are used for convenience only and are not to be considered
in construing or interpreting this Debenture.

 

6.5
Notices. Any notice required or permitted under this Debenture shall be given in writing and shall be deemed effectively
given upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid,
or by reputable overnight courier such as FedEx and addressed in the following manner:

 

	(a)	If
    to the Holder:
	 	___________________
	 	___________________
	 	___________________
	 	 
	(b)	If
    to the Company:
	 	 
	 	Giggles
    N Hugs, Inc.
	 	10250
    Santa Monica, #155
	 	Los
    Angeles, CA 90067
	 	Attention:
    Joey Parsi, CEO
	 	Telephone:
    310-553-4847
	 	 
	 	With
    a copy to (which shall not constitute notice):
	 	 
	 	Richardson
    & Patel LLP
	 	1100
    Glendon Avenue, Suite 850
	 	Los
    Angeles, CA 90024
	 	Attn:
    Peter Hogan, Esq.

 

6.6
Amendments and Waivers. Any term of this Debenture may be amended and the observance of any term of this Debenture may
be waived (either generally or in a particular instance and either retroactively or prospectively), pursuant to a written agreement
of the Company and Holder, and not otherwise.

 

[The
remainder of this page has been intentionally left blank.]

 

    	 	5	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Debenture to be signed in its name by the manual signature of its Chief Executive
Officer.

 

	 	GIGGLES N HUGS, INC., 
	 	a Nevada corporation
	 	 	 
	 	By:	 
	 	 	Joey
    Parsi, Chief Executive Officer

 

	Name
    of Holder: 	__________________________________
	 	 
	Address:
    	__________________________________
		 
	 	__________________________________

 

    	 	6

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