Document:

Exhibit 4.1

 

EXECUTION COPY

 

	
 
    

 

 

 

 

THIRD SUPPLEMENTAL INDENTURE

 

between

 

WESTPAC BANKING CORPORATION

 

and

 

THE BANK OF NEW YORK MELLON

 

as Trustee

 

Dated as of January 31, 2020

 

 

THIRD SUPPLEMENTAL INDENTURE

 

THIRD SUPPLEMENTAL INDENTURE, dated as of January 31, 2020 (the “Third Supplemental Indenture”), between WESTPAC BANKING CORPORATION (ABN 33 007 457 141), a company incorporated in the Commonwealth of Australia under the Corporations Act 2001 of Australia and registered in New South Wales (the “Company”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, as trustee (the “Trustee”).

 

RECITALS:

 

WHEREAS, the Company and the Trustee are parties to a Third Amended and Restated Subordinated Indenture, dated as of November 9, 2018 (the “Base Indenture” and, as supplemented by this Third Supplemental Indenture, the “Indenture”), relating to the issuance from time to time by the Company of Securities in one or more series as therein provided;

 

WHEREAS, Section 11.1(5) of the Base Indenture provides that the Company may enter into a supplemental indenture to establish the forms or terms of Securities of any series as permitted by Sections 2.1 and 3.1 therein;

 

WHEREAS, in connection with the issuance of the Notes (as defined herein), the Company has duly authorized the execution and delivery of this Third Supplemental Indenture to establish the forms and terms of the Notes as hereinafter described; and

 

WHEREAS, all conditions and requirements of the Base Indenture necessary to make this Third Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto.

 

NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.01                General Definitions.  For purposes of this Third Supplemental Indenture:

 

(a)                               Capitalized terms used herein without definition shall have the meanings specified in the Base Indenture;

 

(b)                              All references to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of the Base Indenture; and

 

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(c)                               The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Third Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE II
 THE NOTES

 

Section 2.01                Title of Securities.  There shall be a series of Securities of the Company designated the “2.894% Subordinated Notes due 2030” (the “Notes”).

 

Section 2.02                Limitation of Aggregate Outstanding Principal Amount.  The aggregate Outstanding Principal Amount of the Notes shall initially be limited to US$1,500,000,000.  The Company may from time to time, without the consent of the Holders of the Notes, create and issue additional notes having the same terms and conditions as the Notes in all respects or in all respects except for the Issue Date, the issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon (“Additional Notes”).  Additional Notes issued in this manner will be consolidated with, and will form a single series with, the Notes, unless such Additional Notes will not be treated as fungible with the Notes for U.S. federal income tax purposes.  The Notes and any such Additional Notes would rank equally and ratably.

 

Section 2.03                Principal Payment Date.  The Outstanding Principal Amount of the Notes (together with any accrued and unpaid interest) shall be payable in a single installment on February 4, 2030 which date shall be the Stated Maturity of the Notes.

 

Section 2.04                Interest and Interest Rates.

 

(a)                               From and including January 31, 2020 (the “Issue Date”), to but excluding the interest payment date on February 4, 2025 (the “Reset Date”), the Notes will bear interest on the Outstanding Principal Amount at a rate of 2.894% per year, and on and after the Reset Date until the Outstanding Principal Amount of the Notes shall have been paid or duly provided for, the Notes will bear interest on the Outstanding Principal Amount at a fixed rate per year equal to the 5-Year U.S. Treasury Rate plus the Spread (rounded to three decimal places with 0.0005 rounded upwards) (each as defined below).  Interest on the Notes shall be payable semi-annually in arrears on February 4 and August 4 of each year, beginning on August 4, 2020.  Interest will accrue on a Note from and including the Issue Date.  Interest on a Note will be paid to the Person in whose name that Note was registered at the close of business on the January 20 and July 20, as the case may be, whether or not a Business Day, prior to the applicable Interest Payment Date, except that in the case of the Interest Payment Date that is also the Stated Maturity of the Notes, the interest due on such date will be paid to the Person to whom principal is payable upon surrender of such Note at a Place of Payment.

 

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Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual days elapsed in a partial month in such period.  Subject to Section 6.1(b) of the Indenture, any payment of principal or interest required to be made on an Interest Payment Date that is not a Business Day shall be made on the next succeeding Business Day, and no interest will accrue on that payment for the period from and after such Interest Payment Date to the date of payment on the next succeeding Business Day.  For purposes of the Notes, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

(b)                              “5-Year U.S. Treasury Rate” is calculated by the calculation agent as an interest rate expressed as a percentage determined to be the per annum rate equal to the yield to maturity for U.S. Treasury securities with a maturity of five years as published in the most recent H.15.

 

(c)                               “H.15” means the daily statistical release designated as such, or any successor publication, published by the Board of Governors of the United States Federal Reserve System that establishes yield on actively traded U.S. Treasury securities under the caption “Treasury constant maturities”, or any successor site or publication that establishes yield on actively traded U.S. Treasury securities, and “most recent H.15” means the H.15 which includes a yield to maturity for U.S. Treasury securities with a maturity of five years published closest in time but prior to the Reset Determination Date.

 

(d)                             “Reset Business Day” means a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in Sydney, Australia, New York, New York and London, United Kingdom.

 

(e)                               “Reset Determination Date” means the second Reset Business Day immediately preceding the Reset Date.

 

(f)                                “Spread” means 1.350 per cent per year, being the difference between the re-offer yield on January 23, 2020 and the Benchmark 5-Year Treasury Yield at the time of pricing on January 23, 2020.

 

Section 2.05                Place of Payment.  The Place of Payment where the Notes may be presented or surrendered for payment, where the Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served initially shall be the 

 

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Corporate Trust Office of the Trustee maintained for that purpose in the Borough of Manhattan, City of New York.

 

Section 2.06                Redemption.  The Company shall have the right to redeem the Notes pursuant to Sections 13.1 and 13.6 of the Indenture.

 

Section 2.07                Form.  The Notes shall be issued initially as Registered Securities (as defined in the Indenture) in the form of one or more permanent notes in global form, without coupons, substantially in the form attached hereto as Exhibit A, deposited with The Bank of New York Mellon, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as provided in the Indenture.

 

Section 2.08                Denomination.  The Notes shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.  The Notes shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the Officers of the Company executing the same may determine with the approval of the Trustee.

 

Section 2.09                Depositary.  The Depository Trust Company shall be the initial Depositary for the Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

Section 2.10                Discharge.  The provisions of Article VII of the Indenture will apply to the Notes.

 

Section 2.11                Status, Non-Viability, Conversion and Write-off.  The provisions of Articles IV, V and VI of the Indenture will apply to the Notes.

 

ARTICLE III
 MISCELLANEOUS

 

Section 3.01                Integral Part; Effect of Supplement on Indenture.  This Third Supplemental Indenture constitutes an integral part of the Indenture.  Except for the supplements made by this Third Supplemental Indenture, the Base Indenture shall remain in full force and effect as executed.

 

Section 3.02                Adoption, Ratification and Confirmation.  The Indenture, as supplemented by this Third Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

 

Section 3.03                Trustee Not Responsible for Recitals.  The recitals in this Third Supplemental Indenture shall be taken as statements of the Company, and the Trustee 

 

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assumes no responsibility for their correctness.  The Trustee makes no representations as to the validity or adequacy of this Third Supplemental Indenture.

 

Section 3.04                Counterparts.  This Third Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one instrument.

 

Section 3.05                Separability.  In case any provision of this Third Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 3.06                Governing Law.  This Third Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York, including all matters of construction, validity and performance, without regard to conflict of law principles, except for the provisions relating to Articles IV, V and VI of the Base Indenture and any provisions of the Base Indenture and the Notes which relate to, or define terms used in, such Articles, which shall be governed by and construed in accordance with the laws of the State of New South Wales, Commonwealth of Australia.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Company and the Trustee have executed this Third Supplemental Indenture as of the date first above written.

 

	
 
    	
WESTPAC BANKING   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yvette Adiguzel
    
	
 
    	
 
    	
Name: Yvette Adiguzel
    
	
 
    	
 
    	
Title:     Tier 1 Attorney
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE BANK OF NEW   YORK MELLON, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Laurence J.   O’Brien
    
	
 
    	
 
    	
Name: Laurence J. O’Brien
    
	
 
    	
 
    	
Title:   Vice President
    

 

7

 

Exhibit A

 

 

 

 

 

(FORM OF FACE OF NOTE)

 

[THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS SECURITY WILL BE IN GLOBAL FORM, SUBJECT TO THE FOREGOING.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]1

 

 

	
No.        
    	
CUSIP No. 961214 EM1
    
	
 
    	
ISIN No. US961214EM13
    

 

WESTPAC BANKING CORPORATION

 

2.894% SUBORDINATED NOTE DUE 2030

 

WESTPAC BANKING CORPORATION, a company incorporated in the Commonwealth of Australia under the Corporations Act 2001 of the Commonwealth of Australia and registered in New South Wales (the “Company”, which term includes any 

 

1  Insert in Global Notes only

 

A-1

 

successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to                                or registered assigns, the principal sum of                           (US$                       ) (such initial principal amount being the Outstanding Principal Amount at the Issue Date (as defined below) under paragraph (a) of the definition of Outstanding Principal Amount in the Indenture) as such initial principal amount may be reduced due to Conversion or Write-off upon the occurrence of a Non-Viability Trigger Event in accordance with Article V and Article VI of the Indenture or otherwise reduced in accordance with paragraph (c) of the definition of Outstanding Principal Amount in the Indenture, on February 4, 2030 (the “Stated Maturity”).  From and including January 31, 2020 (the “Issue Date”), to but excluding the interest payment date on February 4, 2025 (the “Reset Date”), this Note will bear interest on the Outstanding Principal Amount at a rate of 2.894% per year, and on and after the Reset Date until the Outstanding Principal Amount of the Notes shall have been paid or duly provided for, this Note will bear interest on the Outstanding Principal Amount at a fixed rate per year equal to the 5-Year U.S. Treasury Rate plus the Spread (rounded to three decimal places with 0.0005 rounded upwards) (each as defined below).  Interest on the Notes shall be payable semi-annually in arrears on February 4 and August 4 of each year (each such date, an “Interest Payment Date”), beginning on August 4, 2020.  Interest will accrue on this Note from and including the Issue Date.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual days elapsed in a partial month in such period.  Subject to Section 6.1(b) of the Indenture, any payment of principal or interest required to be made on an Interest Payment Date that is not a Business Day shall be made on the next succeeding Business Day, and no interest will accrue on that payment for the period from and after such Interest Payment Date to the date of payment on the next succeeding Business Day.  For purposes hereof, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

“5-Year U.S. Treasury Rate” is calculated by the calculation agent as an interest rate expressed as a percentage determined to be the per annum rate equal to the yield to maturity for U.S. Treasury securities with a maturity of five years as published in the most recent H.15.

 

“H.15” means the daily statistical release designated as such, or any successor publication, published by the Board of Governors of the United States Federal Reserve System that establishes yield on actively traded U.S. Treasury securities under the caption “Treasury constant maturities”, or any successor site or publication that establishes yield on actively traded U.S. Treasury securities, and “most recent H.15” means the H.15 which includes a yield to maturity for U.S. Treasury securities with a maturity of five years published closest in time but prior to the Reset Determination Date.

 

A-2

 

“Reset Business Day” means a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in Sydney, Australia, New York, New York and London, United Kingdom.

 

“Reset Determination Date” means the second Reset Business Day immediately preceding the Reset Date.

 

“Spread” means 1.350 per cent per year, being the difference between the re-offer yield on January 23, 2020 and the Benchmark 5-Year Treasury Yield at the time of pricing on January 23, 2020.

 

Interest on this Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the close of business on the January 20 or July 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date, at the office or agency maintained for such purpose pursuant to the Indenture; provided, however, that at the option of the Company, interest on this Note may be paid (i) by check mailed to the address of the Person entitled thereto as it shall appear on the Register or (ii) to a Holder of US$1,000,000 or more in aggregate Outstanding Principal Amount of the Notes by wire transfer to an account maintained by the Person entitled thereto as specified in the Register.  Any interest on this Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest shall instead be payable to the Person in whose name this Note is registered on the Special Record Date or other specified date in accordance with the Indenture.  Notwithstanding the foregoing, interest payable on an Interest Payment Date that is also the Stated Maturity of this Note will be paid at such office or agency to the Person to whom the principal hereof is payable, upon surrender of this Note at such office or agency.

 

This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

 

The provisions of this Note, including the provisions relating to Conversion or possible Write-off upon the occurrence of a Non-Viability Trigger Event, are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be executed on this     day of                     , 20   .

 

	
 
    	
WESTPAC BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated herein and issued under the within-mentioned Indenture.

 

 

	
 
    	
 
    	
The Bank of New York Mellon, as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized Signatory
    

 

A-4

 

(FORM OF REVERSE OF NOTE)

 

This Note is one of a duly authorized series of securities of the Company, issued and to be issued in one or more series under and pursuant to a Third Amended and Restated Subordinated Indenture, dated as of November 9, 2018 (the “Base Indenture”), duly executed and delivered between the Company and The Bank of New York Mellon, as trustee (the “Trustee”, which term includes any successor trustee under the Indenture (as defined below)), as supplemented by the Third Supplemental Indenture, dated as of January 31, 2020, between the Company and the Trustee (the “Third Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), to which Indenture and all Indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.  This Note is one of a series of securities designated on the face hereof (the “Notes”).  The Notes are issued pursuant to the Indenture and are limited in aggregate Outstanding Principal Amount to US$1,500,000,000; provided, however, that the Company may from time to time, without the consent of the Holders of the Notes, create and issue additional notes having the same terms and conditions as the Notes in all respects or in all respects except for the Issue Date, the issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon.  Additional notes issued in this manner will be consolidated with, and will form a single series with, the Notes, unless such additional notes will not be treated as fungible with the Notes for U.S. federal income tax purposes.  The Notes and any such additional notes would rank equally and ratably.

 

In accordance with Articles V and VI of the Indenture, this Note is subject, upon the occurrence of a Non-Viability Trigger Event, to Conversion or possible Write-off.  If this Note is Converted following a Non-Viability Trigger Event, it is likely that the Maximum Conversion Number will apply and limit the number of Ordinary Shares to be issued.  In this case, the value of the Ordinary Shares received is likely to be significantly less than the Outstanding Principal Amount of this Note.  The Australian Dollar may depreciate in value against the U.S. dollar by the time of Conversion.  In that case, the Maximum Conversion Number is more likely to apply.  If Conversion of this Note (or a percentage of the Outstanding Principal Amount of this Note) does not occur for any reason within five ASX Business Days after the Non-Viability Trigger Event Date, this Note (or a percentage of the Outstanding Principal Amount of this Note to be Converted) will be Written-off and the Holder’s rights in relation to this Note (including with respect to payments of interest or accrued interest, and the repayment of Outstanding Principal Amount and, upon Conversion, the receipt of Ordinary Shares issued in respect of this Note) will be immediately and irrevocably written-off and terminated with effect on and from the Non-Viability Trigger Event Date.

 

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In the case of Conversion, the Company will allot and issue to each Holder of this Note the Conversion Number of Ordinary Shares for this Note (subject always to the Conversion Number being no greater than the Maximum Conversion Number).

 

Conversion Number means:

 

	
Conversion Number for this   Note
    	
=
    	
Outstanding Principal   Amount of this Note

(translated into   Australian Dollars in accordance with paragraph (b) of the definition of   Outstanding Principal Amount in the Indenture where the calculation date   shall be the Non-Viability Trigger Event Date)
    
	
P x VWAP
    

 

where:

 

Outstanding Principal Amount has the meaning given to it in Section 1.1 of the Indenture, as adjusted in accordance with Section 6.13 of the Indenture.

 

P means 0.99

 

VWAP means the VWAP during the VWAP Period, as adjusted in accordance with Article VI of the Indenture

 

Maximum Conversion Number means a number calculated according to the following formula:

 

	
Maximum Conversion Number   for this Note
    	
=
    	
Outstanding Principal Amount   of this Note

(translated into   Australian Dollars in accordance with paragraph (b) of the   definition of Outstanding Principal Amount in the Indenture where the   calculation date shall be the ASX Business Day prior to the Issue Date of   this Note)
    
	
0.20 x Issue Date VWAP
    

 

where:

 

 

Outstanding Principal Amount has the meaning given to it in Section 1.1 of the Indenture, as adjusted in accordance with Section 6.13 of the Indenture.

 

Issue Date VWAP means the VWAP during the period of 20 ASX Business Days on which trading in Ordinary Shares took place immediately preceding but not including the Issue Date of this Note, as adjusted in accordance with Article VI of the Indenture.

 

A-6

 

If this Note is Converted following a Non-Viability Trigger Event, it is likely that the Maximum Conversion Number will apply and limit the number of Ordinary Shares to be issued.  In this case, the value of the Ordinary Shares received is likely to be significantly less than the Outstanding Principal Amount of this Note.  The Australian Dollar may depreciate in value against the U.S. dollar by the time of Conversion.  In that case, the Maximum Conversion Number is more likely to apply.

 

In accordance with Section 5.4(a) of the Indenture, subject to any Write-off, the Holder of this Note (including each holder of beneficial interests in this Note in global form) by its purchase or holding of this Note shall be deemed to have irrevocably agreed that, upon Conversion, it consents to becoming a holder of Ordinary Shares and agrees to be bound by the constitution of the Company.

 

In accordance with Section 6.10 of the Indenture, Ordinary Shares issuable upon Conversion may be sold for the benefit of the Holder of this Note.

 

In accordance with Sections 13.1 and 13.6 of the Indenture, pursuant to the procedures set forth in Article XIII of the Indenture, if the Company has received the prior written approval of APRA (approval is at the discretion of APRA and may or may not be given), the Company may redeem the Notes, in whole, but not in part, at its option on the Reset Date, and upon the occurrence of an Adverse Tax Event or a Regulatory Event, provided that the Company has obtained, in the case of an Adverse Tax Event, a supporting opinion of legal or tax advisers of recognized standing in Australia (or, if a Relevant Transaction occurs and the home jurisdiction for tax purposes of such other entity is not Australia, legal or tax advisers of recognized standing in such other jurisdiction) or, in the case of a Regulatory Event, a supporting opinion of advisers of recognized standing in Australia or confirmation from APRA, and (i) before or concurrently with such redemption, the Company replaces this Note with a capital instrument which is of the same or better quality (for the purposes of the Prudential Standards) than this Note and the replacement of this Note is done under conditions that are sustainable for the income capacity of the Company (for the purposes of the Prudential Standards), or (ii) the Company obtains confirmation from APRA that APRA is satisfied having regard to the capital position of the Company and the Group that the Company does not have to replace this Note.

 

Before the Company may redeem this Note, the Company must give the Holder of this Note at least 30 days’ written notice and not more than 60 days’ written notice of its intention to redeem this Note.  Upon surrender of this Note for redemption in accordance with said notice, this Note shall be paid by the Company at the Redemption Price for this Note, which shall equal 100% of the Outstanding Principal Amount of this Note.  Except as provided in the next succeeding paragraph, the Company will pay to the Holder of this Note redeemed in accordance with Article XIII of the Indenture accrued but unpaid interest to, but excluding, the Redemption Date.

 

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If this Note is called for redemption and shall not be so paid upon surrender hereof for redemption, the Outstanding Principal Amount shall, until paid, bear interest from the Redemption Date at the rate prescribed herein.

 

In the event of the occurrence of any Event of Default, no remedy against the Company (including, without limitation, any right to sue for a sum of damages which has the same economic effect as an acceleration of the Company’s payment obligations) shall be available to the Trustee or any Holder of this Note for the recovery of amounts owing in respect of this Note or in respect of any breach by the Company of any obligation, condition or provision binding on it under the terms of this Note other than as set forth in the Base Indenture.  A Holder of this Note has no right to accelerate payment or exercise any other remedies (including any right to sue for damages) as a consequence of any default other than as set forth in the Base Indenture.  In the event of a Winding-Up in Australia (but not in any other jurisdiction), this Note will become immediately due and payable, unless it has been Converted or Written-off.  This shall be the only circumstance in which the payment of principal on this Note may be accelerated.

 

In accordance with Section 12.8 of the Indenture, the Company will pay all amounts that it is required to pay in respect of this Note without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or other governmental charges imposed or levied by or on behalf of the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein, unless such withholding or deduction is required by law.  In that event, the Company will pay such additional amounts as may be necessary so that the net amount received by the Holder of this Note, after such withholding or deduction, will equal the amount that the Holder of this Note would have received in respect of this Note without such withholding or deduction; provided that the Company will pay no additional amounts in respect of this Note for or on account of:

 

(1)                              any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder, or the beneficial owner, of this Note was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein or otherwise had some connection with the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein other than merely holding this Note or receiving payments under this Note;

 

(2)                              any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment in the Commonwealth of Australia, unless the 

 

A-8

 

Holder was required to present this Note for payment and it could not have been presented for payment anywhere else;

 

(3)                              any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment more than 30 days after the date such payment became due and was provided for, whichever is later, except to the extent that the Holder would have been entitled to the additional amounts on presenting this Note for payment on any day during that 30 day period;

 

(4)                              any estate, inheritance, gift, sale, transfer, personal property or similar tax, duty, assessment or other governmental charge;

 

(5)                              any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding or deduction;

 

(6)                              any tax, duty, assessment or other governmental charge that would not have been imposed if the Holder, or the beneficial owner, of this Note complied with the Company’s request to provide information concerning his, her or its nationality, residence or identity or to make a declaration, claim or filing or satisfy any requirement for information or reporting that is required to establish the eligibility of the Holder, or the beneficial owner, of this Note to receive the relevant payment without (or at a reduced rate of) withholding or deduction for or on account of any such tax, duty, assessment or other governmental charge;

 

(7)                              any tax, duty, assessment or other governmental charge that would not have been imposed but for the Holder, or the beneficial owner, of this Note being an associate of the Company’s for purposes of Section 128F of the Income Tax Assessment Act 1936 of the Commonwealth of Australia, as amended, or any successor act (the “Australian Tax Act”) (other than in the capacity of a clearing house, paying agent, custodian, funds manager or responsible entity of a registered scheme under the Corporations Act 2001 of the Commonwealth of Australia, as amended, or any successor act);

 

(8)                              any tax, duty, assessment or other governmental charge that is imposed or withheld as a consequence of a determination having been made under Part IVA of the Australian Tax Act (or any modification thereof or provision substituted therefor) by the Australian Commissioner of Taxation that such tax, duty, assessment or other governmental charge is payable in circumstances where the Holder, or the beneficial owner, of this Note is a party to or participated in a scheme to avoid such tax which the Company was not a party to;

 

A-9

 

(9)                              any tax, duty, assessment or other governmental charge to, or to a third party on behalf of, a Holder of this Note, or any beneficial owner of any interest in, or rights in respect of, this Note, upon, with respect to, or by reason of, such Person being issued Ordinary Shares;

 

(10)                      any tax, duty, assessment or other governmental charge arising under or in connection with Section 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended, including any regulations or official interpretations issued, agreements (including, without limitation, intergovernmental agreements) entered into or non-U.S. laws enacted with respect thereto (“FATCA”); or

 

(11)                      any combination of the foregoing.

 

Subject to the foregoing, additional amounts will also not be payable by the Company with respect to any payment on this Note to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that payment would, under the laws of the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein, be treated as being derived or received for tax purposes by a beneficiary or settler of that fiduciary or member of that partnership or a beneficial owner, in each case, who would not have been entitled to those additional amounts had it been the actual Holder of this Note.

 

If, as a result of the Company’s consolidation or merger with or into an entity organized under the laws of a country other than the Commonwealth of Australia or a political subdivision of a country other than the Commonwealth of Australia or the sale, conveyance or transfer by the Company of all or substantially all its assets to such an entity, such an entity assumes the obligations of the Company, such entity will pay additional amounts on the same basis, except that references to “the Commonwealth of Australia” (other than in clause (7) above) will be treated as references to both the Commonwealth of Australia and the country in which such entity is organized or resident (or deemed resident for tax purposes).

 

The Company, and any other Person to or through which any payment with respect to this Note may be made, shall be entitled to withhold or deduct from any payment with respect to this Note amounts required to be withheld or deducted under or in connection with FATCA, and Holders and beneficial owners of this Note shall not be entitled to receive any gross up or other additional amounts on account of any such withholding or deduction.

 

All references in this Note to the payment of the principal of or interest on this Note shall be deemed to include the payment of additional amounts to the extent that, in that context, additional amounts are, were or would be payable as provided above.

 

A-10

 

The Indenture contains provisions permitting the Company and the Trustee, with the written consent of the Holders of not less than a majority of the aggregate Outstanding Principal Amount (calculated as provided in the Indenture) of the Securities of each series adversely affected thereby to add any provisions to or to change or eliminate any provisions of the Indenture or any supplemental indenture or to modify the rights of the Holders of the Securities of each such series, provided that, without the consent of the Holder of each Outstanding Security so affected, no such modification shall (a) change the Stated Maturity of the principal of, or any instalment of interest on, any Security, provided that the Stated Maturity for the Securities may not be earlier than the fifth anniversary of the Issue Date of such series of Securities or reduce the Outstanding Principal Amount of any Security or the rate of interest thereon payable upon the redemption thereof, or change the coin or currency in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Security (or, in the case of redemption, on or after the Redemption Date), or (b) reduce the percentage in Outstanding Principal Amount of the Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture, or (c) change any obligation of the Company to maintain an office or agency in the places and for the purposes specified in Section 12.2 of the Indenture, or (d) except to the extent provided in Section 11.1(8) of the Indenture, make any change in Section 8.2, 8.7, 8.10 or 11.2 of the Indenture except to increase any percentage or to provide that certain other provisions of the Indenture cannot be modified or waived except with the consent of the Holders of each Outstanding Security affected thereby, or (e) modify any Conversion or Write-off provision, or (f) modify the provisions of Article IV of the Indenture with respect to the subordination of Outstanding Securities of any series in a manner adverse to the Holders thereof.  In addition, no amendment to the terms and conditions of a Security that at the time of such amendment qualifies as Tier 2 Capital is permitted without the prior written consent of APRA if such amendment may affect the eligibility of the Notes as Tier 2 Capital as described in the Prudential Standards.  Any such consent given by the Holder of this Note shall be conclusive and binding upon such Holder and all future Holders of this Note and of any Notes issued on registration hereof, the transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent is made upon this Note.

 

Upon surrender for registration of transfer of this Note, the Company shall execute and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note or Notes of like tenor and authorized denominations for an equal aggregate Outstanding Principal Amount in exchange herefor, subject to the limitations provided in the Indenture.  Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Registrar or the Trustee) be duly endorsed, or be accompanied by a written instrument of 

 

A-11

 

transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing.  No service charge shall be made for any registration of transfer or for any exchange of this Note, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration or transfer or exchange of this Note, other than exchanges pursuant to Section 3.4 of the Indenture not involving any transfer.

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes (subject to the provisions hereof with respect to determination of the Person to whom interest is payable).

 

Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are to be authenticated and delivered.

 

No past, present or future director, officer, employee, agent, member, manager, trustee or stockholder, as such, of the Company or any successor Person shall have any liability for any obligations of the Company or any successor Person, either directly or through the Company or any successor Person, under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation, whether by virtue of any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise.  By accepting a Note, each Holder agrees to the provisions of Section 1.13 of the Indenture and waives and releases all such liability.  Such waiver and release shall be part of the consideration for the issue of the Notes.

 

The Notes of this series shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.  [This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture.]2  At the option of the Holder, the Notes (except a Note in global form) may be exchanged for other Notes, of any authorized denominations and of a like aggregate Outstanding Principal Amount containing identical terms and provisions, upon surrender of the Notes to be exchanged at such office or agency.

 

All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

2  Insert in Global Notes only

 

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THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES, EXCEPT FOR ARTICLES IV, V AND VI OF THE BASE INDENTURE, AND THE PROVISIONS OF THIS NOTE RELATING TO ARTICLES IV, V AND VI OF THE BASE INDENTURE, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW SOUTH WALES, COMMONWEALTH OF AUSTRALIA.

 

A-13

 

TRANSFER NOTICE

 

FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.

 

 

Please print or typewrite name and address including zip code of assignee

 

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer such Note on the books of the Company with full power of substitution in the premises.

 

Your Signature:

 

	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

 

 

	
Signature Guarantee:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
(Participant in a Recognized Signature
    	
 
    
	
 
    	
Guaranty Medallion Program)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

A-14Exhibit 4.7

  

  

  

  
    EXECUTION VERSION

  

  

  

  
    THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF ARE SUBORDINATED TO ANY PRESENT OR FUTURE INDEBTEDNESS OWING FROM THE COMPANY UNDER THAT LOAN FACILITIES LETTER AGREEMENT DATED DECEMBER 19, 2019 AMONG THE
      COMPANY, BRIDGING FINANCE INC. (THE “SENIOR AGENT”) AND THE LENDERS PARTY THERETO, AND MAY BE ENFORCED ONLY IN ACCORDANCE WITH THAT CERTAIN SUBORDINATION AGREEMENT DATED DECEMBER 19, 2019 AMONG THE COMPANY, INVESTOR AND THE SENIOR AGENT.

    

    

    THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY
      NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES
      MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

    

    

    BETTER CHOICE COMPANY INC.

    

    

    SUBORDINATED CONVERTIBLE PROMISSORY NOTE

    

    

    
      	
              $

            	 	 

    

    

    

    December 19, 2019

    

    

    FOR VALUE RECEIVED, BETTER CHOICE COMPANY INC., a Delaware corporation (the “Company”) promises to pay to                   , a Delaware
      limited partnership, or its registered assigns (“Investor”), in lawful money of the United States of America the principal sum of $                  , or such greater or lesser amount as shall equal the then
      outstanding principal amount hereof.  The Company promises to pay interest on this note at 10.00% per annum (the “Note Rate”) from December 19, 2019 until the Maturity Date.  The Company will pay interest
      quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, or if any such day is not a Business Day, on the next succeeding Business Day.  Interest shall be payable by increasing the aggregate principal amount of the Notes
      (such increase being referred to herein as “PIK Interest”).

    

    

    Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from December 19, 2019 until the principal hereof is due. The first Interest Payment Date
      shall be March 31, 2020.  Interest will be computed on the basis of a 360−day year of twelve 30−day months.  All then outstanding principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and
      payable on June 30, 2023 (the “Maturity Date”).

    

    

    This Note is one of the Subordinated Convertible Promissory Notes designated as a Subordinated Convertible Promissory Note issued on the date hereof (collectively with such other Subordinated Convertible Promissory
      Notes issued by the Company at any time, the “Notes”).

    
      
         

        

        
          1.            Definitions. As used in this Note, the following capitalized terms have the following meanings:

        

         

        

      

    

    “Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for the general transaction of business.

    

    

    “Change of Control” means the occurrence of any of the following:

     

    

    
      
        

    

    
    (a)         the direct or indirect sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the
      Company and its subsidiaries, taken as a whole, to any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) (a “Group”) (other than to the
      Company or one or more Subsidiaries); or

     

    

    (b)         any Person or Group shall become the beneficial owner, directly or indirectly, of more than 50% of the voting capital stock of the Company (measured by voting power
      rather than number of shares).

     

    

    “Conversion Price” is equal to the lower of (a) $4.00 per share or (b) the IPO Price.

     

    

    “Customary Documents” shall mean all or any of: a purchase agreement, an investor rights agreement, a voting agreement, a right of first refusal and co-sale
      agreement and/or other ancillary agreements, with customary representations and warranties and transfer restrictions (including, without limitation, a customary lock-up agreement in connection with an initial public offering) or other similar
      documents.

    

    

    “Default Interest Rate” means 12.00% per annum.

    

    

    “First Priority Notes” mean (a) all Notes held by HH-Halo and its permitted transferees and (b) that certain Note, $77,336.99 initial principal amount, issued
      by the Company to Werner von Pein on December 19, 2019.

     

    

    “Halo Acquisition” shall mean the acquisition by the Company of Halo, Purely For Pets, Inc., Thriving Paws, LLC, HH-Halo LP (the “Sellers”), pursuant to a Stock Purchase Agreement dated October 15, 2019, as amended.

     

    

    “HH-Halo” means HH-Halo LP, a Delaware limited partnership.

     

    

    “Indebtedness” means, without duplication, all obligations of the Company or any of its subsidiaries for (a) indebtedness for borrowed money or indebtedness
      issued in substitution for or exchange of indebtedness for borrowed money, (b) other indebtedness evidenced by notes, bonds, debentures, mortgages or other debt instruments or debt securities, (c) the deferred purchase price of property or other
      assets (including “earn-outs”), excluding ordinary course trade payables and accrued expenses, (d) obligations as arising under capital leases, (e) payment obligations under any interest rate swap agreements, interest rate hedge agreements or other
      derivative agreements to which the Company is a party to the extent such obligation is required to be paid in full at the Closing upon termination of any such agreement, (f) interest owed with respect to the indebtedness referred to above and
      prepayment penalties, premiums, breakage or fees related thereto, (g) all interest expense accrued but unpaid, and any penalties, costs (breakage or otherwise), premiums, overage charges, make-whole payments,
      indemnities and fees on or related to Indebtedness, (h) obligations under any performance bond or letter of credit and (i) indebtedness of another person or entity of the types described in clauses (a) and (h) guaranteed,
      directly or indirectly, in any manner by the Company or any of its subsidiaries; provided that, Indebtedness shall not include any intercompany accounts, payables or loans of any kind or nature.

    “Investors” shall mean the investors that are the registered holders of the Notes.

     

    

    “IPO” means the listing of the Company’s common stock, par value $0.001 (the “Common Stock”) on the NASDAQ, NYSE or
      other national securities exchange in the United States or Canada whether through a firm commitment underwritten public offering by the Company of shares of common stock pursuant to an effective registration statement under the Securities Act of 1933
      or other uplist transaction permitted by the applicable exchange.

     

    

    “IPO Price” means the price at which the Company’s Common Stock was sold in an IPO.

     

    

    
      2

      
        

    

    “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, restriction on transfer or use, hypothecation, easement, right-of-way, defect in title,
      security interest, charge, option, right of first refusal or first offer, preemptive right, other transfer restriction or any similar claim.

    

    

    “Obligations” shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Company to Investor of every kind
      and description, now existing or hereafter arising under or pursuant to the terms of this Note, including all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by the Company
      hereunder and thereunder, in each case, whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et
      seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding. Notwithstanding the foregoing, the term “Obligations” shall not include any obligations of Company under
      or with respect to any warrants to purchase Company’s capital stock.

    

    

    “Permitted Indebtedness” means Indebtedness incurred by the Company or its subsidiaries that is made expressly subordinate in right of payment to the
      Indebtedness evidenced by this Note, as reflected in a written agreement acceptable to the Required Investors and approved by the Required Investors in writing, and which Indebtedness does not provide at any time for the payment, prepayment,
      repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon, until 91 days after the Maturity Date or later.

    

    

    “Permitted Liens” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and similar Liens arising in the ordinary course of business for amounts that are
      not yet due and payable or are being contested in good faith, (b) Liens for taxes, assessments or other governmental charges not yet due and payable as of the date of determination or which are being contested in good faith and for which adequate
      reserves have been established and maintained in accordance with GAAP, (c) encumbrances and restrictions on real property (including, but not limited to, easements, covenants, conditions, rights of way and similar restrictions) that do not,
      individually or in the aggregate, materially interfere with the Company’s or its subsidiaries’ present uses or occupancy of such property or the current operation of the business of the Company and its subsidiaries, (d) zoning, building codes and
      other land use laws imposed by a governmental entity affecting the use or occupancy of real property or the activities conducted thereon, (e) any right, interest, Lien or title of a licensor, sublicensor, licensee, sublicensee, lessor or sublessor
      under any license, sublicense, lease, sublease or other similar agreement or in the property being leased or licensed, in each case, in the ordinary course of business, (f) purchase money Liens and Liens securing rental payments under lease
      arrangements and (g) other Liens which do not materially impair the use or value of the underlying asset.

    

    

    “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company,
      an unincorporated association, a joint venture or other entity or a governmental authority.

    

    

    “Required Investors” shall mean (a) HH-Halo, (b) Investors holding more than 50% of the aggregate then outstanding principal amount of the Notes if no First
      Priority Notes remain outstanding or (c) Investors holding more than 60% of the aggregate then outstanding principal amount of the Notes in connection with any amendment, waiver or modification pursuant to Section 8(b) that would have a material and
      adverse effect on Investors (other than HH-Halo) that is disproportionate to its effect on HH-Halo.

    

    

    “Second Priority Notes” means Notes that are not First Priority Notes.

    

    

    “Senior Credit Agreement” has the meaning set forth in the Subordination Agreement.

    

    

    “Senior Debt” means (a) Senior Debt (as defined in the Subordination Agreement) and (b) any other Indebtedness to the extent the proceeds of which are used to
      repay all or a portion of the Indebtedness under the Senior Credit Agreement.

     

    

    
      3

      
        

    

    “Subordination Agreement” means that certain Subordination Agreement dated December 19, 2019 among Bridging Finance Inc., Investor, the Company and the other
      parties thereto.

     

    

    “Trading Day” shall mean any day on which the Common Stock is traded on the Trading Market.

     

    

    “Trading Market” shall mean the principal securities exchange or securities market, including an over-the-counter market, on which the Common Stock is then
      traded in the United States.

     

    

    “Transaction Documents” means this Note, any other Notes and the Subscription Agreement, Registration Rights Agreement and Common Stock Purchase Warrant
      entered into and delivered in connection herewith.

     

    

    
      
        
          2.            Payments. Subject to the terms of the Subordination Agreement:

        

      

    

    

    

    (a)          Interest. Accrued interest on this Note shall be payable as set forth in the first paragraph of this Note.  In the event of a conversion
      hereunder, the accrued interest shall convert along with the outstanding principal amount.

    

    

    (b)         Prepayment. The Company may prepay the Notes without penalty at any time prior to the Maturity Date; provided that the Company shall not
      prepay the Notes at any time within 90 days prior to a Change of Control; provided further that the Company shall prepay the Notes held by HH-Halo or its permitted transferees, if any, and any Notes pari passu in right of payment with
      HH-Halo pursuant to Section 7(a) prior to any prepayment of Notes held by any other Investor.

     

    

    (c)         Change of Control. Subject to Section 5(c), in the event of a Change of Control, each Investor shall have the option to elect either (i) to
      convert all of the outstanding principal amount of, and all accrued interest on, the Notes held by such Investor into a replacement note issued by the new issuer resulting from the Change of Control in an aggregate principal amount equal to (A) 104%
      of the outstanding principal amount of Notes held by such Investor plus (B) accrued interest or (ii) to require the Company to repay all of the outstanding principal amount of the Notes held by such Investor plus all accrued interest thereon and pay
      a repayment premium equal to 4% of the sum of all outstanding principal amount of the Notes held by such Investor plus all accrued interest thereon.

     

    

    (d)         Payments Generally. The Company will make all cash payments due under this Note in immediately available funds by 1:00 p.m. ET on the date such
      payment is due at the address for such purpose specified below Investor’s signature hereto, or at such other address, or in such other manner, as an Investor or other registered holder of a Note may from time to time direct in writing.

    

    

    (e)          Treatment of Notes. Subject to Section 7(a), (i) all or any portion of the then outstanding principal amount of any First Priority Note and all
      interest thereon shall be (A) senior in right of payment and in all other respects to any Second Priority Notes and (B) pari passu in right of payment and in all other respects to any other First Priority Note; and (ii) all or any portion of the then
      outstanding principal amount of any Second Priority Note and all interest thereon shall be (A) junior in right of payment and in all other respects to all First Priority Notes and (B) pari passu in right of payment and in all other respects to any
      other Second Priority Note. If Investor receives payments in excess of its appropriate share of the Company’s payments to the holders of the Notes, then Investor shall hold in trust all such excess payments for the benefit of the holders of other
      Notes and shall pay such amounts held in trust to such other holders upon demand by such holders. Except in connection with incurrence of Senior Debt but subject to Section 7(b), no Notes issued after the date of this Note or any agreements or other
      instruments and documents entered into or delivered in connection therewith shall provide any Investor with rights and privileges that are more favorable in the aggregate to such Investor than the rights and privileges of Investor hereunder.

     

    

    
      4

      
        

    

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

    

    

    (a)         Failure to Pay. The Company shall fail to pay (i) when due any principal payment on the due date hereunder or (ii) any interest payment or other
      payment required under the terms of this Note on the due date hereunder and such payment shall not have been made within five (5) business days of the Company’s receipt of written notice to the Company of such failure to pay;

    

    

    (b)       Other Breach. The Company shall breach, in any material manner, any representation, warranty or covenant or other term or condition of any
      Transaction Document (other than the Registration Rights Agreement), except, in the case of a breach of a covenant that is curable, only if such breach continues for a period of at least fifteen (15) consecutive days after written notice thereof is
      delivered to the Company.

    

    

    (c)          Senior Debt Default. The occurrence of an Event of Default (as defined in the Senior Credit Agreement) or any Event of Default (or its
      equivalent) under any other Senior Debt.

    

    

    (d)         Suspension from Trading. The suspension from trading or failure of the Common Stock to be listed on the OTC markets, the pink sheets, NASDAQ,
      NYSE or other national securities exchange in the United States or Canada for a period of five (5) consecutive days or for more than ten (10) days in any 365-day period.

    

    

    (e)       Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator
      or custodian of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its or any of its creditors, (iii) be dissolved or liquidated, (iv) commence a voluntary case or other proceeding seeking
      liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its
      property by any official in an involuntary case or other proceeding commenced against it, or (v) take any action for the purpose of effecting any of the foregoing.

    

    

    (f)          Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the
      Company, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or any of its subsidiaries, if any, or the debts thereof
      under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within 60 days of commencement.

    

    

    4.            Rights of Investor upon Default. Subject to the terms of the Subordination Agreement:

    

    

    (a)        Upon the occurrence of any Event of Default (other than an Event of Default described in Sections 3(e) or 3(f)) and at any time thereafter during the continuance of such Event of Default,
      Investor may, with the written consent of the Required Investors, by written notice to the Company, declare all outstanding Obligations payable by the Company hereunder to be immediately due and payable without presentment, demand, protest or any
      other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding. Upon the occurrence of any Event of Default described in Sections 3(e) and 3(f), immediately and without notice, all
      outstanding Obligations payable by the Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein
      to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, Investor may, with the written consent of the Required Investors, exercise any other right, power or
      remedy granted to it by this Note or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

     

    

    
      5

      
        

    

    (b)       For so long as any Event of Default exists under this Note, regardless of whether or not there has been an acceleration of the Indebtedness evidenced by this Note, and in addition to all
      other rights and remedies of Investor hereunder, interest shall accrue on the Note principal at the Default Interest Rate, and such accrued interest shall be immediately due and payable. The Company acknowledges that it would be extremely difficult
      or impracticable to determine Investor’s actual damages resulting from any late payment or Event of Default, and such late charges and accrued interest are reasonable estimates of those damages and do not constitute a penalty.

    

    

    
      
        
          5.            Conversion.

        

      

    

    

    

    (a)         Automatic Conversion on IPO. If, on or prior to the Maturity Date, the Company consummates an IPO, then the then outstanding principal amount of
      this Note together with all accrued and unpaid interest under this Note shall automatically convert into Common Stock at the Conversion Price.

    

    

    (b)        Elective Conversion.  At any time prior to 5:00 p.m. on the last Business Day immediately preceding the Maturity Date, each Investor shall have
      the option to convert all or part of the principal and accrued interest under the Notes into that number of shares of Common Stock equal to the quotient of (1) all principal and accrued interest under the Notes being so converted, divided by (2) the
      Conversion Price.

    

    

    (c)          Automatic Conversion Upon Change of Control.  If any Investor fails to make an election in accordance with Section 2(c) within 30 days of receipt
      of written notice of the applicable Change of Control from the Company, all principal and accrued interest under the Notes held by such Investor shall automatically convert into that number of shares of Common Stock equal to the quotient of (1) all
      principal and accrued interest under the Notes being so converted, divided by (2) the Conversion Price.

    

    

    (d)         Additional Shares of Common Stock Issuable In Certain Circumstances.  If the Company has not completed an IPO by December 31, 2020, then upon any
      conversion of Notes by an Investor thereafter, such Investor shall be entitled to an additional number of shares of Common Stock at a conversion price of $4.00 per share upon conversion equal to 10% of the number of shares of Common Stock originally
      issuable upon conversion.

    

    

    (e)          Conversion Procedures.

    

    

    (i)          Conversion Pursuant to Section 5(a). If this Note is to be automatically converted pursuant to Section 5(a), written notice shall be delivered to Investor at
      the address last shown on the records of the Company for Investor or given by Investor to the Company for the purpose of notice, notifying Investor of the general terms of the conversion to be effected, specifying the Conversion Price, the principal
      amount of the Note to be converted, together with all accrued and unpaid interest and the date on which such conversion is expected to occur and calling upon Investor to surrender to the Company, in the manner and at the place designated, this Note.
      Upon such conversion of this Note, Investor hereby agrees to execute and deliver to the Company all transaction documents entered into by other purchasers participating in the IPO, including but not limited to any Customary Documents. Investor also
      agrees to deliver the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by
      it in connection with this Note) at the closing of the IPO for cancellation; provided, however, that upon the closing of the IPO, this Note shall be deemed converted and of no further force and effect, whether or not it is delivered for cancellation
      as set forth in this sentence. Any conversion of this Note pursuant to Section 5(a) shall be deemed to have been made immediately prior to the closing of the IPO and on and after such date the Persons entitled to receive the units issuable upon such
      conversion shall be treated for all purposes as the record holder of such units.

    

    

    
      
        
          (ii)          Elective Conversion.

           

            

          
            6

            
              

          

        

      

    

    (1)         Prior to conversion of this Note pursuant to any elective conversion under this Section 5, Investor shall surrender this Note to the Company (or a notice to the effect
      that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the holder agrees to indemnify the Company from any loss incurred by it in connection with this Note).  If the Required Investors elect to
      convert the Notes pursuant to this Section 5 (other than an automatic conversion under Section 5(a)), the Required Investors shall give written notice to the Company at least thirty (30) days prior to the event triggering the elective conversion at
      the Company’s principal corporate office of the election to convert the same pursuant to the applicable paragraph of this Section 5, and shall state therein the amount of the then outstanding principal amount of the Notes, together with all accrued
      and unpaid interest, to be converted.

     

    

    (2)       Investor hereby agrees to execute and deliver to the Company upon such elective conversion of this Note all transaction documents entered into by other recipients of
      capital stock and, if applicable, any Customary Documents.

    

    

    (3)         The Company shall, as soon as practicable thereafter, issue and deliver to such Investor a certificate or certificates (or a notice of issuance of uncertificated units,
      if applicable) for the number of units to which Investor shall be entitled upon such conversion, including a check payable to Investor for any cash amounts payable as described in Section 5(e)(iii). Any elective conversion of this Note shall be
      deemed to have been made upon the satisfaction of all of the conditions set forth in this Section 5(e)(ii) and on and after such date the Persons entitled to receive the units issuable upon such conversion shall be treated for all purposes as the
      record holder of such units.

    

    

    (iii)        Fractional Units; Interest; Effect of Conversion. No fractional units shall be issued upon conversion of this Note. In lieu of the Company issuing any
      fractional units to Investor upon the conversion of this Note, the Company shall pay to Investor an amount equal to the product obtained by multiplying the applicable conversion price by the fraction of a unit not issued pursuant to the previous
      sentence. In addition, to the extent not converted into units of capital stock, the Company shall pay to Investor any interest accrued on the amount converted and on the amount to be paid by the Company pursuant to the previous sentence. Upon
      conversion of this Note in full and the payment of the amounts specified in this paragraph, the Company shall be forever released from all its Obligations and liabilities under this Note and this Note shall be deemed of no further force or effect,
      whether or not the original of this Note has been delivered to the Company for cancellation. Notwithstanding anything herein to the contrary, Investor hereby waives the right to payment for fractional units pursuant to this Section 5(e)(iii) if the
      aggregate amount owed to Investor upon conversion of this Note is less than $5.00.

    

    

    (f)         Notices of Record Date. In the event of any Change of Control, the Company will mail written notice of such event to Investor at least ten (10)
      days prior to the closing of a Change of Control, which notice period may be waived with the written consent of the Required Investors.

    

    

    
      
        
          6.            Certain Adjustments

        

         

        

      

    

    (a)         Stock Dividends and Splits.  If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a
      distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
      exercise of this Note), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
      reclassification of shares of the Common Stock any shares of capital stock of the Company (collectively with the actions described in (i), (ii), (iii) and (iv), a “Share Reorganization”), then in each case the
      Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of
      shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Note shall be proportionately adjusted such that the aggregate Conversion Price of this Note shall remain unchanged.  Any
      adjustment made pursuant to this Section 6(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or re-classification, but if the Company shall legally abandon any such dividend, distribution, subdivision, combination or reclassification prior to effecting such action, no adjustment shall be made
      pursuant to this Section 6(a) in respect of such action.

     

    

    
      7

      
        

    

    (b)          Pro Rata Distributions.  If the Company, at any time while this Note is outstanding, shall distribute to all or substantially all holders of
      Common Stock (and not to the Investors) evidences of its Indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than a Share Reorganization, then, in each such case, the
      Conversion Price shall be adjusted by multiplying the Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the
      VWAP (as defined below) determined as of the record date, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of Indebtedness so
      distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith; provided that in no event shall the Conversion Price be increased as a result of the application of this Section 6(b). 
      Simultaneously with any adjustment to the Conversion Price pursuant to this Section 6(b), the number of shares of Common Stock that may be issuable upon conversion of this Note shall be increased proportionately, so that after such adjustment the
      aggregate Conversion Price payable hereunder for the adjusted number of shares of Common Stock shall be the same as the aggregate Conversion Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained
      herein).  In either case the adjustments shall be described in a statement provided to the Investor that holds the portion of assets or evidences of Indebtedness so distributed or such subscription rights applicable to one share of Common Stock. 
      Such adjustments shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above, but if the Company shall legally abandon any such distribution prior to effecting such distribution,
      no adjustments shall be made pursuant to this Section 6(b) in respect of such action.  For purposes of this Section 6(b), “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is
      then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg
      L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
      date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc.  (or a similar
      organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent
      appraiser selected in good faith by the Required Investors and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

     

    

    (c)         Calculations.  All calculations under this Section 6 shall be made to the nearest cent or rounded down to the nearest whole share, as the case
      may be.  For purposes of this Section 6, any calculation of the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall not include treasury shares, if any.  Notwithstanding anything to the contrary in this
      Section 6, no adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share in such price; provided, however, that any adjustments which by reason of the
      immediately preceding sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  In any case in which this Section 6 shall require that an adjustment in the Conversion Price be made effective
      as of a record date for a specified event, if an Investor converts this Note after such record date, the Company may elect to defer, until the occurrence of such event, the issuance of the shares of Common Stock and other capital stock of the Company
      in excess of the shares of Common Stock and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Conversion Price in effect prior to such adjustment; provided, however, that in such case the
      Company shall deliver to the Investor a due bill or other appropriate instrument evidencing the Investor’s right to receive such additional shares and/or other capital securities upon the occurrence of the event requiring such adjustment.

     

    

    
      8

      
        

    

    (d)         Par Value.  Notwithstanding anything to the contrary in this Note, in no event shall the Conversion Price be reduced below the par value of the
      Company’s Common Stock.

     

    

    
      
        
          7.            Covenants.

        

      

    

    

    

    (a)         November 2019 Notes. By January 6, 2020, the Company shall cause all Notes issued by the Company on or about November 11, 2019 to be amended and
      restated, or cancelled and exchanged, so that they are in form and substance identical in all respects to the Notes issued by the Company to Thriving Paws, LLC on the date hereof, except (i) with respect to their dates of issuance, the names of each
      Investor and their respective principal amounts and (ii), subject to Section 7(b)(i) such replacement Notes may be pari passu in right of payment with the First Priority Notes.

     

    

    (b)        Incurrence of Debt. So long as this Note is outstanding, the Company shall not, and shall not permit any of its subsidiaries to, directly or
      indirectly, incur or guarantee, assume or suffer to exist any Indebtedness, other than (i) the Senior Debt not to exceed $30,000,000 in the aggregate together with all Notes that are First Priority Notes pursuant to Section 7(a)(ii), (ii)
      Indebtedness under this Note and all other Notes in the aggregate not to exceed $19,900,000 in initial principal amount and (iii) Permitted Indebtedness.

     

    

    (c)         Existence of Liens. So long as this Note is outstanding, the Company shall not, and shall not permit any of its subsidiaries to, directly or
      indirectly, allow or suffer to exist Liens other than (i) pursuant to the Senior Debt and (ii) Permitted Liens.

     

    

    (d)        Restricted Payments. The Company shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, redeem, defease, repurchase,
      repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Permitted Indebtedness
      (other than the Senior Debt), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such payment, an event
      constituting, or that with the passage of time and without being cured would constitute, an Event of Default has occurred and is continuing.

     

    

    (e)        Participation. Investor, as the holder of this Note, shall be entitled to receive such dividends paid and distributions made to the holders of
      Common Stock to the same extent as if Investor had converted this Note into Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and
      distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.

     

    

    (f)          Noncircumvention. The Company shall not, by amendment of its Certificate of Incorporation, 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 of the provisions of this Note and take all action as may be required to protect the rights of Investor.

     

    

    
      
        
          8.            Miscellaneous.

        

      

    

    

    

    (a)          Subordination.  This Note is subordinated to all Senior Debt but is and shall remain at all times senior in right of payment and in all other
      respects to any other Indebtedness.

     

    

    
      9

      
        

    

    (b)        Waivers and Amendments. Subject to the terms of the Subordination Agreement, any provision of this Note may be amended, waived or modified only
      with the written consent of the Company and of the Required Investors; provided, however, that no such amendment, waiver or consent shall: (i) reduce the principal amount of any Note without the affected Investor’s written consent, or
      (ii) reduce the rate of interest of any Note without the affected Investor’s written consent. Any amendment or waiver effected in accordance with this paragraph shall be binding upon all of the parties hereto.

    

    

    (c)         Governing Law. This Note and all actions arising out of or in connection herewith or therewith shall be governed by and construed in accordance
      with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York or of any other state.

    

    

    (d)        Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Note.

    

    

    (e)          Jurisdiction and Venue. Investor and the Company irrevocably consent to the exclusive jurisdiction of, and venue in, the state courts in New
      York County in the State of New York or the United Stated District Court for the State of New York, in connection with any matter based upon or arising out of this Note or the matters contemplated herein or therein, and agree that process may be
      served upon them in any manner authorized by the laws of the State of New York for such Persons.

    

    

    (f)          Waiver of Jury Trial; Judicial Reference. Investor hereby agrees and the Company hereby agrees to waive their respective rights to a jury trial
      of any claim or cause of action based upon or arising out of this Note.

    

    

    (g)       Successors and Assigns. Subject to the restrictions on transfer set forth herein, the rights and obligations of the Company and Investor under
      this Note shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

    

    

    (h)       Transfer and Replacement of this Note. The Company will keep, at its principal executive office, books for the recordation of the Investors and
      recordation of transfer of this Note. Prior to presentation of this Note for transfer, the Company shall treat the Person in whose name this Note is recorded as the owner and holder of this Note for all purposes whatsoever, whether or not this Note
      shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to any restrictions on or conditions to transfer set forth in this Note, the holder of this Note, at its option, may in person or by duly authorized attorney
      surrender the same for exchange at the Company’s chief executive office, and promptly thereafter and at the Company’s expense, except as provided below, receive in exchange therefor this Note in the principal requested by such holder, dated the date
      to which interest shall have been paid on this Note or, if no interest shall have yet been so paid, dated the date of this Note and recorded in the name of such Person or Persons as shall have been designated in writing by such holder or its attorney
      for the same principal amount as the then unpaid principal amount of this Note. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Note and (a) in the case
      of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b) in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new Note executed in the same manner as this
      Note, in the same principal amount as the unpaid principal amount of this Note and dated the date to which interest shall have been paid on this Note or, if no interest shall have yet been so paid, dated the date of this Note.

    

    

    (i)         Transfer of this Note or Securities Issuable on Conversion Thereof. This Note may not be transferred by Investor without the prior written
      consent of the Company; provided that all or any portion of Investor’s rights in and to this Note may be sold, transferred or assigned by Investor at any time or from time to time to any person or entity who or which is an affiliate, partner,
      member, stockholder or other holder of equity securities of Investor or any of its controlling affiliates. Any shares of Common Stock of the Company into which this Note may be converted shall be subject to any transfer restrictions set forth in any
      Customary Documents.

     

    

    
      10

      
        

    

    (j)          Assignment by the Company. The rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise,
      in whole or in part, by the Company without the prior written consent of the Required Investors.

    

    

    (k)         Entire Agreement. This Note and the Transaction Documents to which Investor is a party constitute and contain the entire agreement among the
      Company and Investor and supersedes any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.

    

    

    (l)          Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and
      faxed, mailed, emailed or delivered to each party as follows: (i) if to Investor, at Investor’s address, facsimile number or electronic mail address set forth beneath Investor’s name on the signature page hereto, or at such other address, facsimile
      number or electronic mail address as Investor shall have furnished the Company in writing, or (ii) if to the Company, at the Company’s address, facsimile number or electronic mail address set forth beneath the Company’s name on the signature page
      hereto, or at such other address, facsimile number or electronic mail address as the Company shall have furnished to Investor in writing. All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when
      delivered personally, (iii) one business day after being deposited with an overnight courier service of recognized standing, (iv) four days after being deposited in the U.S. mail, first class with postage prepaid, (v) if sent via facsimile, upon
      confirmation of facsimile transfer or (vi) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then
      on the recipient’s next business day.

    

    

    (m)        Expenses. The Company and Investor shall be responsible for their own legal fees and other expenses incurred in connection with the negotiation,
      drafting and execution of this Note. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or Investor otherwise takes action to collect amounts due under this
      Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
      the reasonable costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements.

    

    

    (n)        Severability of this Note. If any provision of this Note shall be judicially determined to be invalid, illegal or unenforceable, the validity,
      legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

    

    

    (o)        Payment. Unless converted into the Company’s equity securities pursuant to the terms hereof, payment shall be made in lawful tender of the United
      States.

    

    

    (p)        Usury. If any interest is paid on this Note that is deemed to be in excess of the then legal maximum rate, then that portion of the interest
      payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

    

    

    (q)        Waivers. The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all
      other notices or demands relative to this instrument.

    

    

    (r)         Counterparts. This Note may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will
      constitute one and the same agreement. Facsimile or similar electronic copies (including .PDF format) of signed signature pages will be deemed binding originals.

    

    

    (Signature Page Follows)

     

    

    
      11

      
        

    

    The parties have caused this Note to be duly executed and delivered as of the date first written above.

    

    

    	
            COMPANY:

          	 
	 	 
	
            BETTER CHOICE COMPANY INC.

          	 
	
            a Delaware corporation

          	 
	 	 
	
            By:

          	 	 
	
            Name:

          	 
	
            Title:

          	 
	
            Address:

            

          	
            164 Douglas Rd E

            Oldsmar, Florida 34677

          	 

    

    

    
      12

      
        

    

    
      INVESTOR:

      

      

      
        	
                By:

              	 	
                 

              
	 	
                By: 

              	 

      

      

      

    

    	
            By: 

          	 	 
	 	
            (Signature)

          	 

    

    

    	
            Name: 

          	 	 
	 	
            (Print name of Investor)

          	 

    

    

    	
            Title: 

          	 	 
	 	
            (If signing on behalf of an entity)

          	 

    

    

    Address:

    

    

    
      Attention:

      Phone:

      
        
          
            E-mail: 

            

          

        

      

      

      

      with a copy (which shall not constitute notice) to:

      

      

      Attention:

      Phone:

      Facsimile:

      E-mail:

       

      

       

      

      
        13

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