Document:

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

 

GIGGLES
‘N HUGS, INC.

 

WARRANT

 

TO
PURCHASE COMMON STOCK OF THE COMPANY

 

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

 

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

 

Section
1. Grant.

 

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

 

Section
2. Number of Shares of Common Stock Purchasable.

 

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

 

    	 	1	 

     

    

 

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

 

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

 

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

 

Section
4. Exercise.

 

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

 

    	 	2	 

     

    

 

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

 

	 	 	Y
        (A-B)

        X
        = ——————

        A
	 	 	 	 

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	3	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	4	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	5	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature
appears on following page.]

 

    	 	6	 

     

    

 

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

 

	 	COMPANY:
	 	 
	 	GIGGLES
    ‘N HUGS, INC.
	 	 
	 	By:	/s/
    Joey Parsi
	 	 	Joey
    Parsi
	 	 	Chief
    Executive Officer
	 	 
	 	HOLDERS:
	 	 
	 	Firelight,
    LLC 
	 	 
	 	By:	/s/
    Jillian Michaels
	 	Name:
    	Jillian
    Michaels
	 	Title:	Authorized
    Signatory
	 	 
	 	G-Money,
    LLC
	 	 
	 	By:	/s/
    Giancarlo Chersich
	 	Name:
    	Giancarlo
    Chersich
	 	Title:	Authorized
    Signatory

 

    	 	7	 

     

    

 

EXHIBIT
1

 

NOTICE
OF EXERCISE PURSUANT TO

ATTACHED WARRANT

_________________,
20__

To:
GIGGLES ‘N HUGS, INC.

 

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

 

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

 

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

 

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

 

	 	
	 	 
	 	By:	
	 	 
	 	Name:	 
	 	 
	 	Title:	 

 

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

 

    	 	8NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. 

 

THIS
NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING
ANY REDEMPTION OR CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM REPRESENTED BY THIS NOTE MAY BE LESS THAN
THE PRINCIPAL SUM AND ACCRUED INTEREST SET FORTH BELOW.

 

8%
CONVERTIBLE PROMISSORY NOTE 

 

OF

 

GIGGLES
N’ HUGS, INC.

 

Issuance
Date: December 21, 2015

Total
Face Value of Note: $161,250

 

This
Note is a duly authorized Convertible Promissory
Note of Giggles N’ Hugs, Inc. a corporation duly organized and existing under the laws of the State of Nevada (the
“Company”), designated as the Company’s 8% Convertible Promissory Note due December 21, 2016 (“Maturity
Date”) in the principal amount of $161,250 (the “Note”).

 

For
Value Received, the Company hereby promises to
pay to the order of Iconic Holdings, LLC or its registered assigns or successors-in-interest (“Holder”)
the Principal Sum of $161,250 (the “Principal Sum”) and to pay “guaranteed” interest on the principal
balance hereof at an amount equivalent to 10% of the Principal Sum, to the extent such Principal Sum and “guaranteed”
interest and any other interest, fees, liquidated damages and/or items due to Holder herein have been repaid or converted into
the Company’s Common Stock (the “Common Stock”), in accordance with the terms hereof. The sum of $150,000
shall be remitted and delivered to the Company, and $11,250 shall be retained by the Purchaser through an original issue discount
(the “OID”) for due diligence and legal bills related to this transaction.

 

In
addition to the “guaranteed” interest referenced above, and in the Event of Default pursuant to Section 2(a), additional
interest will accrue from the date of the Event of Default at the rate equal to the lower of 18% per annum or the highest rate
permitted by law (the “Default Rate”).

 

    	 	 1	 

    	 

    

 

This
Note will become effective only upon the execution by both parties, including the execution of Exhibits B, C and D and the Irrevocable
Transfer Agent Instructions and delivery of the initial payment of consideration by the Holder (the “Effective Date”).

 

This
Note may be prepaid by the Company, in whole or in part, according to the following schedule:

 

	Days
    Since Effective Date	Prepayment
    Amount
	Under
    30	110%
    of Principal Amount
	31-60	115%
    of Principal Amount
	61-90	120%
    of Principal Amount
	91-120	125%
    of Principal Amount
	121-150	130%
    of Principal Amount
	151-180	135%
    of Principal Amount

 

After
180 days from the Effective Date this Note may not be prepaid without written consent from Holder, which consent may be withheld,
delayed, denied, or conditions in Holder’s sole and absolute discretion. Whenever any amount expressed to be due by the
terms of this Note is due on any day which is not a Business Day (as defined below), the same shall instead be due on the next
succeeding day which is a Business Day.

 

For
purposes hereof the following terms shall have the meanings ascribed to them below:

 

“Business
Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the City of New York
are authorized or required by law or executive order to remain closed.

 

“Conversion
Price” shall be equal to 65% of the lowest volume weighted average price (the “VWAP”) of the Company’s
common stock during the 10 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.
For the purpose of calculating the Conversion Price only, any time after 4:00 pm Eastern Time (the closing time of the Principal
Market) shall be considered to be the beginning of the next Business Day. If the Company is placed on “chilled” status
with the Depository Trust Company (“DTC”), the discount shall be increased by 10%, i.e., from
35% to 45%, until such chill is remedied. If the Company is not Deposits and Withdrawal at Custodian (“DWAC”)
eligible through their Transfer Agent and DTC’s Fast Automated Securities Transfer (“FAST”) system, the
discount will be increased by 5%, i.e., from 35% to 40%. In the case of both, the discount shall be a cumulative
increase of 15%, i.e., from 35% to 50%. Any default of this Note not remedied within the applicable cure period
will result in a permanent additional 10% increase, i.e., from 35% to 45%, in addition to any other discount, as
provided above, to the Conversion Price discount. Notwithstanding anything contained herein to the contrary, the Conversion Price
shall never be less than the Floor.

 

    	 	 2	 

    	 

    

 

“Conversion
Price Floor” shall be set at $0.08 (the “Floor”).

 

“Principal
Amount” shall refer to the sum of (i) the original principal amount of this Note (including the original issue discount,
prorated if the Note has not been funded in full), (ii) all guaranteed and other accrued but unpaid interest hereunder, (iii)
any fees due hereunder, (iv) liquidated damages, and (v) any default payments owing under the Note, in each case previously paid
or added to the Principal Amount.

 

“Principal
Market” shall refer to the primary exchange on which the Company’s common stock is traded or quoted.

 

“Trading
Day” shall mean a day on which there is trading or quoting for any security on the Principal Market.

 

“Underlying
Shares” means the shares of common stock into which the Note is convertible (including interest, fees, liquidated
damages and/or principal payments in common stock as set forth herein) in accordance with the terms hereof.

 

The
following terms and conditions shall apply to this Note:

 

Section
1.00 Conversion.

 

(a)
Conversion Right. Subject to the terms hereof and restrictions and limitations contained herein, the Holder shall have
the right, at the Holder’s sole option, at any time and from time to time to convert in whole or in part the outstanding
and unpaid Principal Amount under this Note into shares of Common Stock as per the Conversion Formula. The date of any conversion
notice (“Conversion Notice”) hereunder shall be referred to herein as the “Conversion Date”.

 

(b)
Stock Certificates or DWAC. The Company will deliver to the Holder, or Holder’s authorized designee, no later than
2 Trading Days after the Conversion Date, a certificate or certificates (which certificate(s) shall be free of restrictive legends
and trading restrictions if the shares of Common Stock underlying the portion of the Note being converted are eligible under a
resale exemption pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the Securities Act of 1933, as amended) representing
the number of shares of Common Stock being acquired upon the conversion of this Note. In lieu of delivering physical certificates
representing the shares of Common Stock issuable upon conversion of this Note, provided the Company’s transfer agent is
participating in DTC’s FAST program, the Company shall instead use commercially reasonable efforts to cause its transfer
agent to electronically transmit such shares issuable upon conversion to the Holder (or its designee), by crediting the account
of the Holder’s (or such designee’s) broker with DTC through its DWAC program (provided that the same time periods
herein as for stock certificates shall apply).

 

(c)
Charges and Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall
be made without charge to the Holder for any issuance fee, transfer tax, postage/mailing charge or any other expense with respect
to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from the issuance of the Common stock
to Holder. Any such charges related to the issuance of Common Stock required to be paid by the Holder (whether from the Company’s
delays or outright refusal to pay) will be automatically added to the Principal Sum of the Note and tack back to the Effective
Date for purposes of Rule 144.

 

    	 	 3	 

    	 

    

 

(d)
Delivery Timeline. If the Company fails to deliver to the Holder such certificate or certificates (or shares through the
DWAC program) pursuant to this Section (free of any restrictions on transfer or legends, if eligible) prior to 3 Trading Days
after the Conversion Date, the Company shall pay to the Holder as liquidated damages an amount equal to $2,000 per day, until
such certificate or certificates are delivered. The Company acknowledges that it would be extremely difficult or impracticable
to determine the Holder’s actual damages and costs resulting from a failure to deliver the Common Stock and the inclusion
herein of any such additional amounts are the agreed upon liquidated damages representing a reasonable estimate of those damages
and costs. Such liquidated damages will be automatically added to the Principal Sum of the Note and tack back to the Effective
Date for purposes of Rule 144.

 

(e)
Reservation of Underlying Securities. The Company covenants that it will at all times reserve and keep available for Holder,
out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of this Note, free from preemptive
rights or any other actual contingent purchase rights of persons other than the Holder, one times the number of shares
of Common Stock as shall be issuable (taking into account the adjustments under this Section 1, but without regard to any ownership
limitations contained herein) upon the conversion of this Note (consisting of the Principal Amount) to Common Stock (the “Required
Reserve”). The Company covenants that all shares of Common Stock that shall be issuable will, upon issue, be duly authorized,
validly issued, fully-paid, non-assessable and freely-tradable (if eligible). If the amount of shares on reserve in Holder’s
name at the Company’s transfer agent for this Note shall drop below the Required Reserve, the Company will, within 2 Trading
Days of notification from Holder, instruct the transfer agent to increase the number of shares so that the Required Reserve is
met. In the event that the Company does not instruct the transfer agent to increase the number of shares so that the Required
Reserve is met, the Holder will be allowed, if applicable, to provide this instruction as per the terms of the Irrevocable Transfer
Agent Instructions attached to this Note. The Company agrees that the maintenance of the Required Reserve is a material term of
this Note and any breach of this Section 1.00(e) will result in a default of the Note.

 

The
Company agrees that this is a material term of this Note and any breach of this Section 1.00(e) will result in a default of the
Note.

 

(f)
Conversion Limitation. The Holder will not submit a conversion to the Company that would result in the Holder owning more
than 9.99% of the then total outstanding shares of the Company (“Restricted Ownership
Percentage”).

 

(g)
Conversion Delays. If the Company fails to deliver shares in accordance with the timeframe stated in Section 1.00(b), the
Holder, at any time prior to selling all of those shares, may rescind any portion, in whole or in part, of that particular conversion
attributable to the unsold shares. The rescinded conversion amount will be returned to the Principal Sum with the rescinded conversion
shares returned to the Company, under the expectation that any returned conversion amounts will tack back to the Effective Date.

 

    	 	 4	 

    	 

    

 

(h)
Shorting and Hedging. Holder may not engage in any “shorting” or “hedging” transaction(s) in the
Common Stock prior to conversion.

 

(i)
Conversion Right Unconditional. If the Holder shall provide a Conversion Notice as provided herein, the Company’s
obligations to deliver Common Stock shall be absolute and unconditional, irrespective of any claim of setoff, counterclaim, recoupment,
or alleged breach by the Holder of any obligation to the Company.

 

(j)
Make-Good Provision. If, at the time a Conversion Notice is submitted by the Holder, the trading price of the Company’s
common stock is below $0.11, this Make-Good Provision will go into effect (the “Make-Good”). Once the Make-Good is
in effect, the Company agrees to pay the Holder the difference, in cash, of: a) 135% of the portion of the Principal Amount being
converted per the Conversion Notice and b) the Principal Amount being converted per the Conversion Notice/$0.08 x closing price
of the Company’s common stock at the time of conversion. The Company will have 10 business days from receiving written notice
to make this cash payment. However, if the balance owed by the Company per this Make-Good is greater than $25,000, the holder
agrees to allow the Company 40 business days from the date of the Conversion Notice to make full payment. The Company and Holder
agree that if the Stock price rises above $0.11 at any time while the cash balance is outstanding and owed to the Holder by Company,
the Holder will have the ability to convert the outstanding balance into free trading shares of the Company at the Conversion
Price, per its rights in the Note and in accordance with applicable law.

 

Section
2.00 Defaults and Remedies.

 

(a)
Events of Default. An “Event of Default” is: (i) a default in payment of any amount due hereunder which
default continues for more than 5 Trading Days after the due date; (ii) a default in the timely issuance of underlying shares
upon and in accordance with terms of Section 2.00, which default continues for 2 Trading Days after the Company has failed to
issue shares or deliver stock certificates within the 3rd Trading Day following the Conversion Date; (iii) failure by the Company
for 3 days after notice has been received by the Company to comply with any material provision of this Note; (iv) failure of the
Company to remain compliant with DTC, thus incurring a “chilled” status with DTC; (v) if the Company is subject to
any Bankruptcy Event; (vi) any failure of the Company to satisfy its “filing” obligations under Securities Exchange
Act of 1934, as amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News Service, OTCMarkets.com
and their affiliates; (vii) any failure of the Company to provide the Holder with information related to its corporate structure
including, but not limited to, the number of authorized and outstanding shares, public float, etc. within 1 Trading Day of request
by Holder; (viii) failure by the Company to maintain the Required Reserve in accordance with the terms of Section 1.00(e); (ix)
failure of Company’s Common Stock to maintain a closing bid price in its Principal Market above a price of $.09 for more
than 5 consecutive Trading Days; (x) any delisting from a Principal Market for any reason; (xi) failure by Company to pay any
of its Transfer Agent fees in excess of $2,000 or to maintain a Transfer Agent of record; (xii) any trading suspension imposed
by the Securities and Exchange Commission (“SEC”) under Sections 12(j) or 12(k) of the 1934 Act; (xiii) failure
by the Company to meet all requirements necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including
but not limited to the timely fulfillment of its filing requirements as a fully-reporting issuer registered with the SEC, requirements
for XBRL filings, and requirements for disclosure of financial statements on its website; or (xiv) any breach of the Make-Good
Provision outlined in Section 1.00 (j).

 

    	 	 5	 

    	 

    

 

(b)
Remedies. If an event of default occurs, the outstanding Principal Amount of this Note owing in respect thereof through
the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the “Mandatory
Default Amount”. The Mandatory Default Amount means 125% of the outstanding Principal Amount of this Note. Commencing
5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, this Note shall accrue
additional interest, in addition to the Note’s “guaranteed” interest, at a rate equal to the lesser of 18% per
annum or the maximum rate permitted under applicable law. In connection with such acceleration described herein, the Holder need
not provide, and the Issuer hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately
and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available
to it under applicable law. Such acceleration may be rescinded and annulled by the Holder at any time prior to payment hereunder
and the Holder shall have all rights as a holder of the note until such time, if any, as the Holder receives full payment pursuant
to this Section 2.00(b). No such rescission or annulment shall affect any subsequent event of default or impair any right consequent
thereon. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Issuer’s failure
to timely deliver certificates representing shares of Common Stock upon conversion of the Note as required pursuant to the terms
hereof.

 

Section
3.00 General.

 

(a)
Payment of Expenses. The Company agrees to pay all reasonable charges and expenses, including attorneys’ fees and
expenses, which may be incurred by the Holder in successfully enforcing this Note and/or collecting any amount due under this
Note.

 

(b)
Assignment, Etc. The Holder may assign or transfer this Note to any transferee at its sole discretion. This Note shall
be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and permitted assigns.

 

(c)
Funding Window. The Company agrees that it will not enter into a convertible debt financing transaction with any party
other than the Holder for a period of 15 Trading Days following the Effective Date. The Company agrees that this is a material
term of this Note and any breach of this will result in a default of the Note.

 

(d)
Piggyback Registration Rights. The Company shall include on the next eligible registration statement that the Company files
with the SEC (or on the subsequent registration statement if such registration statement is withdrawn) all shares issuable upon
conversion of this Note. Failure to do so will result in liquidated damages of 30% of the outstanding Principal Sum of this Note,
but not less than $20,000, being immediately due and payable to the Holder at its election in the form of a cash payment or an
addition to the Principal Sum of this Note.

 

    	 	 6	 

    	 

    

 

(e)
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Company or any of its subsidiaries
of any convertible debt security (whether such debt begins with a convertible feature or such feature is added at a later date)
with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not
similarly provided to the Holder in this Note, then the Company shall notify the Holder of such additional or more favorable term
and such term, at the Holder’s option, shall become a part of this Note and its supporting documentation.. The types of
terms contained in the other security that may be more favorable to the holder of such security include, but are not limited to,
terms addressing conversion discounts, conversion look back periods, interest rates, original issue discount percentages and warrant
coverage.

 

(f)
Governing Law; Jurisdiction.

 

(i)
Governing Law. This Note will be governed by and construed in accordance with
the laws of the state of California without regard to any conflicts of laws or provisions thereof that would otherwise require
the application of the law of any other jurisdiction.

 

(ii)
Jurisdiction and Venue. Any dispute or claim
arising to or in any way related to this Note or the rights and obligations of each of the parties shall be brought only in the
state courts of California or in the federal courts located in San Diego County, California.

 

(iii)
No Jury Trial. The Company hereto knowingly and voluntarily waives any and all rights it may have to a trial by jury with
respect to any litigation based on, or arising out of, under, or in connection with, this Note.

 

(iv)
Delivery of Process by the Holder to the Company. In the event of an action or proceeding by the Holder against the Company,
and only by the Holder against the Company, service of copies of summons and/or complaint and/or any other process that may be
served in any such action or proceeding may be made by the Holder via U.S. Mail, overnight delivery service such as FedEx or UPS,
email, fax, or process server, or by mailing or otherwise delivering a copy of such process to the Company at its last known attorney
as set forth in its most recent SEC filing.

 

(v)
Notices. Any notice required or permitted hereunder (including Conversion Notices) must be in writing and either personally
served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at
the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited
with the courier service for delivery.

 

(g)
No Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act of 1933,
as amended, on the basis of being a “bad actor” as that term is established in the September 13, 2013 Small Entity
Compliance Guide published by the SEC.

 

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

 

    	 	 7	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be duly executed on the day and in the year first
above written.

 

	 	GIGGLES N’
    HUGS, INC.
	 	 	 
	 	By:	 
	 	Name:	Joey
    Parsi
	 	Title:
    	Chief
    Executive Officer 
	 	Email:	joey@gigglesnhugs.com
	 	Address:
    	10250
    Santa Monica Blvd, Suite #155
	 	 	Los
    Angeles, CA 90067

 

This
Convertible Promissory Note of December 21, 2015 is accepted this ____ day of ______, 2015 by

 

Iconic
Holdings, LLC

 

	By:	 	 
	Name:
    	 	 
	Title:
    	Manager	 

 

    	 	 8	 

    	 

    

 

EXHIBIT
A

 

FORM
OF CONVERSION NOTICE

 

(To
be executed by the Holder in order to convert all or part of that certain $161,250 Convertible Promissory Note identified as the
Note)

 

	DATE:	 		 
	 	 	 	 
	FROM:	 	Iconic
    Holdings, LLC	 

 

	 	Re:	$161,250
    Convertible Promissory Note (this “Note”) originally issued by Giggles N’ Hugs, Inc., a Nevada corporation,
    to Iconic Holdings, LLC on December 21, 2015.

 

The
undersigned on behalf of Iconic Holdings, LLC, hereby elects to convert $_______________________ of the aggregate
outstanding Principal Sum (as defined in the Note) indicated below of this Note into shares of Common Stock, $0.001 par value
per share, of Giggles N’ Hugs, Inc. (the
“Company”), according to the conditions hereof, as of the date written below. If shares are to be issued in the name
of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged
to the holder for any conversion, except for such transfer taxes, if any. The undersigned represents as of the date hereof that,
after giving effect to the conversion of this Note pursuant to this Conversion Notice, the undersigned will not exceed the “Restricted
Ownership Percentage” contained in this Note.

 

	Conversion
    information:	 
	 	Date
    to Effect Conversion
	 	 
	 	 
	 	Aggregate
    Principal Sum of Note Being Converted
	 	 
	 	 
	 	Aggregate
    Interest on Amount Being Converted
	 	 
	 	 
	 	Remaining
    Principal Balance
	 	 
	 	 
	 	Number
    of Shares of Common Stock to be Issued
	 	 
	 	 
	 	Applicable
    Conversion Price
	 	 
	 	 
	 	Signature
    
	 	 
	 	 
	 	Name
	 	 
	 	 
	 	Address

 

    	 	 9	 

    	 

    

 

EXHIBIT
B

 

WRITTEN
CONSENT OF THE BOARD OF DIRECTORS OF

 

GIGGLES
N’ HUGS, INC.

 

The
undersigned, being directors of Giggles N’ Hugs, Inc., a Nevada corporation (the “Company”), acting pursuant
to the Bylaws of the Corporation, do hereby consent to, approve and adopt the following preamble and resolutions:

 

Convertible
Note with Iconic Holdings, LLC

 

The
board of directors of the Company has reviewed and authorized the following documents relating to the issuance of a Convertible
Promissory Note in the amount of $161,250 with Iconic Holdings, LLC.

 

The
documents agreed to and dated December 21, 2015 are as follows:

 

8%
Convertible Promissory Note of Giggles N’ Hugs, Inc.

Irrevocable
Transfer Agent Instructions

Notarized
Certificate of Corporate Secretary

Disbursement
Instructions

 

IN
WITNESS WHEREOF, the undersign member(s) of the board of the Company executed this unanimous written consent as of December 21,
2015.

 

_________________________________

By:

Its:

 

_________________________________

By:

Its:

 

    	 	 10	 

    	 

    

 

EXHIBIT
C

 

NOTARIZED
CERTIFICATE OF CORPORATE SECRETARY OF

 

GIGGLES
N’ HUGS, INC.

 

(Two
Pages)

 

The
undersigned, _______________________ is the duly elected Corporate Secretary of Giggles N’ Hugs, Inc., a Nevada corporation
(the “Company”).

 

I
hereby warrant and represent that I have undertaken a complete and thorough review of the Company’s corporate and financial
books and records, including, but not limited to, the Company’s records relating to the following:

 

	 	(A)	 The
    issuance of that certain convertible promissory note dated December 21, 2015 (the “Note Issuance Date”) issued
    to Iconic Holdings, LLC (the “Holder”) in the stated original principal amount of $161,250 (the “Note”);
	 	 	 
	 	(B)	The
    Company’s Board of Directors duly approved the issuance of the Note to the Holder;
	 	 	 
	 	(C)	The
    Company has not received and does not contemplate receiving any new consideration from any persons in connection with any
    later conversion of the Note and the issuance of the Company’s Common Stock upon any said conversion;
	 	 	 
	 	(D)	To
    my best knowledge and after completing the aforementioned review of the Company’s stockholder and corporate records,
    I am able to certify that the Holder (and the persons affiliated with the Holder) are not officers, directors, or directly
    or indirectly, ten percent (10.00%) or more stockholders of the Company and none of said persons has had any such status in
    the one hundred (100) days immediately preceding the date of this Certificate;
	 	 	 
	 	(E)	The
    Company’s Board of Directors have approved duly adopted resolutions approving the Irrevocable Instructions to the Company’s
    Stock Transfer Agent dated December 21, 2015;
	 	 	 
	 	(F)	Mark
    the appropriate selection:
	 	 	 
	 	 	___
    The Company represents that it is not a “shell company,” as that term is defined in Section 12b-2 of the Securities
    Exchange Act of 1934, as amended, and has never been a shell company, as so defined; or
	 	 	 
	 	 	___
    The Company represents that (i) it was a “shell company,” as that term is defined in Section 12b-2 of the Securities
    Exchange Act of 1934, as amended, (ii) since ______, 201__, it has no longer been a shell company, as so defined, and (iii)
    on _______, 201__, it provided Form 10-type information in a filing with the Securities and Exchange Commission.

 

    	 	 11	 

    	 

    

 

	 	(G)	I
    understand the constraints imposed under Rule 144 on those persons who are or may be deemed to be “affiliates,”
    as that term is defined in Rule 144(a)(1) of the Securities Act of 1933, as amended.
	 	 	 
	 	(H)	I
    understand that all of the representations set forth in this Certificate will be relied upon by counsel to Iconic Holdings,
    LLC in connection with the preparation of a legal opinion.

 

I
hereby affix my signature to this Notarized Certificate and hereby confirm the accuracy of the statements made herein.

 

	Signed:	 	 	Date:	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Name:	 	 	Title:
    	 	 

 

SUBSCRIBED
AND SWORN TO BEFORE ME ON THIS ________ DAY OF ____________________ 2015.

 

Commission
Expires:______________

____________________________________

Notary
Public

 

    	 	 12	 

    	 

    

 

EXHIBIT
D

 

	TO:	Iconic
    Holdings, LLC
	 	 
	FROM:	Giggles
    N’ Hugs, Inc.
	 	 
	DATE:	December
    21, 2015
	 	 
	RE:	Disbursement
    of Funds

 

Pursuant
to that certain Note Purchase Agreement between the parties listed above and dated December 21, 2015, a disbursement of funds
will take place in the amount and manner described below:

 

	Please
    disburse to:	 
	Amount
    to disburse:	$138,750
	Form
    of distribution	Wire
	Name	Giggles
    N’ Hugs, Inc.
	Company
    Address	 

         

         

	Wire
    Instructions:	Bank:

        ABA
        Routing Number:

        Account
        Number:

        SWIFT
        Code:

        Account
        Name:

        Phone:

 

	Please
    disburse to:	 
	Amount
    to disburse:	$11,250
	Form
    of distribution	Wire
	Name	Equinox
    Securities
	Company
    Address	 

         

         

	Wire
    Instructions:	Bank:

        ABA
        Routing Number:

        Account
        Number:

        SWIFT
        Code:

        Account
        Name:

        Phone:

	 	 	TOTAL: $150,000

 

	For: Giggles N’ Hugs, Inc.	 	 
	 	 	 	 
	By:	    	 	Dated:
    December 21, 2015
	Name:	Joey
    Parsi	 	
	Its:	Chief
    Executive Officer 	 	

 

 

    	 	 13

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