Document:

Exhibit 10.4

 

THIRD AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Agreement”), is entered into as of the 17th day of May 2012 (the “Effective Date”) by
and between BRETT D. NICHOLAS (the “Executive”) and REDWOOD TRUST, INC., a Maryland Corporation (the
“Company”).

 

WHEREAS, the Executive and the Company
have entered into an Amended and Restated Employment Agreement dated as of March 31, 2009 (as subsequently amended as of March
17, 2010 and as of February 24, 2011, the “Employment Agreement”); and

 

WHEREAS, the Executive and the Company
desire to enter into this Agreement for purposes of amending the Employment Agreement as set forth herein;

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and adequacy which is hereby acknowledged, the Executive and the Company hereby agree that the Employment
Agreement is hereby amended as follows effective upon the Effective Date:  

 

	 	(1)	Section 1 of the Employment Agreement shall be amended to replace each occurrence of the phrase “Chief Operating Officer, Chief Investment Officer, and Executive Vice President” therein with “President”.

 

	 	(2)	Section 3(b) of the Employment Agreement shall be amended to replace the target annual bonus percentage of “150%” specified therein with “160%”.

 

Except as hereby specifically amended or
modified, the terms of the Employment Agreement, as amended by this Agreement, shall remain in full force and effect.  This
Agreement may be executed by the parties hereto in two counterparts, each of which shall be an original and all of which together
shall constitute one and the same agreement.  This Agreement shall be governed in all respects by the laws of the State
of California (without regard to conflict of law principles).

 

[Signature Page Follows]

 

    	-1-

    	 

    

 

IN WITNESS WHEREOF, the Company
has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed this Agreement, as of the
date first above written.

 

	REDWOOD TRUST, INC.	 
	 	 	 
	
         

        By:  
	
         

        /s/ Martin S. Hughes
	 
	 	Name: Martin S. Hughes	 
	 	Title: Chief Executive Officer	 
	 	 	 
	
         

        BRETT D. NICHOLAS
	 
	
         

         
	 
	 	/s/ Brett D. Nicholas	 

 

 

    	-2-Exhibit 10.5

 

SECOND AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
(this “Agreement”), is entered into as of the 17th day of May 2012 (the “Effective Date”) by and between
HAROLD F. ZAGUNIS (the “Executive”) and REDWOOD TRUST, INC., a Maryland Corporation (the “Company”).

 

WHEREAS, the Executive and the Company
have entered into an Amended and Restated Employment Agreement dated as of March 31, 2009 (as subsequently amended as of February
24, 2011, the “Employment Agreement”); and

 

WHEREAS, the Executive and the Company
desire to enter into this Agreement for purposes of amending the Employment Agreement as set forth herein;

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and adequacy which is hereby acknowledged, the Executive and the Company hereby agree that the Employment
Agreement is hereby amended as follows effective upon the Effective Date:  

 

	 	(1)	Section 1 of the Employment Agreement shall be amended to replace each occurrence of the phrase “Chief Risk Officer” therein with “Managing Director”.

 

Except as hereby specifically amended or
modified, the terms of the Employment Agreement, as amended by this Agreement, shall remain in full force and effect.  This
Agreement may be executed by the parties hereto in two counterparts, each of which shall be an original and all of which together
shall constitute one and the same agreement.  This Agreement shall be governed in all respects by the laws of the State
of California (without regard to conflict of law principles).

 

[Signature Page Follows]

 

    	-1-

    	 

    

  

IN WITNESS WHEREOF, the Company
has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed this Agreement, as of the
date first above written.

 

	REDWOOD TRUST, INC.	 
	 	 	 
	
         

        By:  
	
         

        /s/ Martin S. Hughes
	 
	 	Name: Martin S. Hughes	 
	 	Title: Chief Executive Officer	 
	 	 	 
	
         

        HAROLD F. ZAGUNIS
	 
	
         

         
	 
	 	/s/ Harold F. Zagunis	 

 

 

    	-2-NEITHER THIS NOTE NOR THE SECURITIES
THAT ARE ISSUABLE TO THE HOLDER UPON CONVERSION HEREOF (COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
NEITHER THE SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED: (I) IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS; OR
(II) IN THE ABSENCE OF AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED
UNDER THE 1933 ACT OR; (III) UNLESS SOLD, TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

 

CONVERTIBLE PROMISSORY NOTE

 

Keyport, New Jersey

 

As of February 27, 2012

$250,000.00

 

FOR VALUE RECEIVED, Cono Italiano, Inc.,
a corporation incorporated under the laws of the State of Nevada and located at 10 Main Street, Keyport, New Jersey 07735 (the
“Company”), hereby promises to pay to the order of TCA Global Credit Master Fund, LP, a Cayman
Islands limited partnership and located at 1404 Rodman Street, Hollywood, FL 33020, and its successors or assigns (the “Holder”),
the principal amount of Two Hundred Fifty Thousand and 00/100 United States Dollars (US$250,000.00) on or prior to February 27,
2013 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of
twelve percent (12%) per annum (the “Applicable Rate”) commencing as of the date the proceeds hereunder
are funded to the Company (the “Funding Date”), in accordance with the terms hereof. This Convertible
Promissory Note (this note, and all modifications, extensions, future advances, supplements, and renewals thereof, and any substitutions
therefor, hereinafter referred to as the “Note”) shall be payable in accordance with the terms set forth
below.

 

1.           Payments
of Principal and Interest.

 

(a)          Payment
of Principal. The principal amount of this Note shall be paid to the Holder on or prior to the Maturity Date.

 

(b)          Payment
of Interest. Interest on the unpaid principal balance of this Note shall accrue at the Applicable Rate commencing on the Funding
Date. Interest shall be computed on the basis of a 360-day year and paid for the actual number of days elapsed. Accrued and unpaid
interest under this Note shall be paid in full on the Maturity Date. Any accrued but unpaid interest shall, at the option of the
Holder, be included, from time to time, in the Conversion Amount (as defined herein).

 

Company Initials _______

 

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(c)          Payment
of Default Interest. Any amount of principal or interest on this Note which is not paid when due shall bear interest from the
date due until such past due amount is paid at a rate of interest equal to the lesser of: (i) eighteen percent (18%) per annum;
or (ii) the highest non-usurious rate permitted by applicable law (the “Default Rate”). Any accrued but
unpaid interest at the Default Rate shall, at the option of the Holder, be included, from time to time, in the Conversion
Amount.

 

(d)          General
Payment Provisions. All payments of principal and interest on this Note shall be made in lawful money of the United States
of America by certified bank check or wire transfer to such account as the Holder may designate by written notice to the Company
in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a Business Day, the same shall instead be due on the next succeeding Business Day. For purposes of this Note,
“Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the State of
Florida are authorized or required by law or executive order to remain closed.

 

(e)          Optional
Prepayment. At any time prior to the Maturity Date and/or the Conversion Date, the Company may pre-pay this Note in full or
in part (provided that partial prepayments may only be made and will only be accepted by the Holder if such partial prepayments
are of an amount of at least $50,000), without penalty. Upon prepayment of this Note in full, the Holder shall have no further
rights under this Note (except for such rights that may specifically survive the payment of the Note), including no rights of conversion.

 

2.           Conversion
of Note. At any time and from time to time after the Funding Date and up to the Maturity Date, this Note may be, at the sole
option of the Holder, convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), in accordance with the terms and conditions set forth in this Section 2.

 

(a)          Voluntary
Conversion. At any time while this Note is outstanding on or after the Funding Date, the Holder may convert all or any portion
of the outstanding principal and accrued and unpaid interest (such total amount, the “Conversion Amount”)
into shares of Common Stock of the Company (the “Conversion Shares”) at a price equal to: (i) the Conversion
Amount (the numerator); divided by (ii) ninety-five percent (95%) of the lowest daily volume weighted average price of the
Company’s Common Stock during the five (5) trading days immediately prior to the Conversion Date (as defined below) as indicated
in the conversion notice (in the form attached hereto as Exhibit “A”, the “Conversion Notice”)
(the denominator) (the “Conversion Price”). The Holder shall submit a Conversion Notice indicating the
amount of the Note being converted, the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares
should be delivered.

 

Company Initials _______

 

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(b)          The
Holder’s Conversion Limitations. The Company shall not affect any conversion of this Note, and the Holder shall not have
the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the Conversion
Notice submitted by the Holder, the Holder (together with the Holder’s affiliates (as defined herein) and any Persons acting
as a group together with the Holder or any of the Holder’s affiliates) would beneficially own in excess of the Beneficial
Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice,
the Holder shall have the right to request that the Company provide to the Holder a written statement of the percentage ownership
of the Company’s Common Stock that would by beneficially owned by the Holder and its affiliates in the Company if the Holder
converted such portion of this Note then intended to be converted by Holder. The Company shall, within two (2) business days of
such request, provide Holder with the requested information in a written statement, and the Holder shall be entitled to rely on
such written statement from the Company in issuing its Conversion Notice and ensuring that its ownership of the Company’s
Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived
by Holder, in whole or in part, upon sixty-one (61) days’ prior notice from the Holder to the Company to increase such percentage.

 

For purposes of this Note, the “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock issuable upon conversion of this Note.  The limitations contained in this Section
shall apply to a successor holder of this Note. For purposes of this Note, “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any
department or agency thereof.

 

(c)          Mechanics
of Conversion. The conversion of this Note shall be conducted in the following manner:

 

(1)         Holder's Delivery
Requirements. To convert this Note into shares of Common Stock on any date set forth in the Conversion Notice by the Holder
(the “Conversion Date”), the Holder shall: (A) transmit by facsimile or electronic mail (or otherwise
deliver) a copy of the fully executed Conversion Notice to the Company (or, under certain circumstances as set forth below, by
delivery of the Conversion Notice to the Company’s transfer agent); and (B) upon receipt by the Holder of the Conversion
Shares, surrender the original Note to a nationally recognized overnight courier for delivery to the Company.

 

Company Initials _______

 

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(2)         Company’s
Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company shall as soon as practicable, but
in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or
otherwise deliver) a confirmation of receipt of such Conversion Notice (the “Conversion Confirmation”)
to the Holder indicating that the Company will process such Conversion Notice in accordance with the terms herein. In the event
the Company fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Holder shall have the
absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Company’s transfer agent,
and pursuant to the Irrevocable Transfer Agent Instructions and Transfer Agent Acknowledge Agreement to be entered into simultaneously
herewith between the Company, Holder and the Company’s transfer agent (the “ITAI”), the Company’s
transfer agent shall issue the applicable Conversion Shares to Holder as hereby provided. Within five (5) Business Days after the
date of the Conversion Confirmation (or the date of the Conversion Notice, if the Company fails to issue the Conversion Confirmation),
provided that the Company’s transfer agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer (“FAST”) program, the Company shall cause the transfer agent to (or,
if for any reason the Company fails to instruct or cause its transfer agent to so act, then pursuant to the ITAI, the Holder may
request and require the Company’s transfer agent to) electronically transmit the applicable Conversion Shares to which the
Holder shall be entitled by crediting the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent
Commission (“DWAC”) system, and provide proof satisfactory to the Holder of such delivery. In the event
that the Company’s transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible, within
five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Company fails
to issue the Conversion Confirmation), the Company shall instruct and cause its transfer agent to (or, if for any reason the Company
fails to instruct or cause its transfer agent to so act, then pursuant to the ITAI, the Holder may request and require the Company’s
transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the
Conversion Notice, a certificate, registered in the name of the Holder, for the number of Conversion Shares to which the Holder
shall be entitled. If less than the full principal and accrued but unpaid interest amount of this Note is submitted for conversion,
then the Company shall within five (5) Business Days after receipt of the original Note, at its own expense, issue and deliver
to the Holder a new Note for the outstanding principal and interest amount not so converted; provided that such new Note
shall be substantially in the same form as this Note.

 

(3)         Record
Holder. The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated
for all purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.

 

(4)         Failure
to Deliver Certificates. If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as
directed by the Holder by the date required hereby, the Holder shall be entitled to elect by written notice to the Company at any
time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Company
shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company
the Common Stock certificates representing the principal amount of this Note unsuccessfully tendered for conversion to the Company.

 

Company Initials _______

 

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(5)         Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other person or entity of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other person or entity, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided,
however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against
the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof and
accrued but unpaid interest thereon in accordance with the terms of this Note, the Company may not refuse conversion based on any
claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or
for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or
part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the
amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in
effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such
Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares upon a properly
noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates representing
Conversion Shares pursuant to timing and delivery requirements of this Note, the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for each day after
the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit
a Holder’s right to pursue actual damages or declare an Event of Default pursuant this Note or any agreement securing the
indebtedness under this Note for the Company’s failure to deliver Conversion Shares within the period specified herein and
such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking
to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having
the Conversion Shares issued directly by the Company’s transfer agent in accordance with the ITAI, in the event for any reason
the Company fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon
exercise of Holder’s conversion rights hereunder.

 

(6)         Transfer
Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge
to the Holder hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that
may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the
Company.

 

(d)          Adjustments
to Conversion Price.

 

(1)         Stock
Dividends and Stock Splits.  If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of
shares of Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding
immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately
after such event.  Any adjustment made pursuant to this Section 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.

 

Company Initials _______

 

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(2)         Fundamental
Transaction. If, at any time while this Note is outstanding: (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction or
a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property,
or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for
each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental
Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share
of Common Stock (the “Alternate Consideration”).  For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount
of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such Fundamental Transaction.  To the extent necessary
to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall
issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder’s right to convert such
note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring that this Note
(or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

(3)         Adjustment
to Conversion Price.  Whenever the Conversion Price is adjusted pursuant to any provision of this Note, the Company
shall promptly deliver to Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

 

Company Initials _______

 

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(4)         Notice
to Allow Conversion by Holder.  If: (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Company’s records, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such notice.  The Holder is entitled to convert this Note
during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.

 

(e)          Reservation
of Common Stock. The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of this Note, such number of shares of Common Stock as shall from time to time be sufficient
to effect such conversion, based upon the Conversion Price. If at any time the Company does not have a sufficient number of Conversion
Shares authorized and available, the Company shall immediately take such action as is required to increase the number of Conversion
Shares authorized and available to allow for the Holder to effectuate a full conversion of this Note at the Conversion Price.

 

3.          Voting
Rights. The Holder shall have no voting rights under this Note, except as required by applicable law, including, but not limited
to, the Nevada Corporations Law, and as expressly provided in this Note.

 

4.          Short
Sales. Holder represents and agrees, as applicable: (i) Holder has not prior to the date hereof, entered into or effected any
Short Sales; and (ii) so long as the Note remains outstanding, Holder will not enter into or effect any Short Sales. The Company
acknowledges and agrees that upon submission of a Conversion Notice as set forth herein, Holder immediately owns the Common Stock
described in the Conversion Notice and any sale of that Common Stock issuable under such Conversion Notice would not be considered
Short Sales. For purposes herein, “Short Sales” shall mean entering into any short sale or other hedging transaction
which establishes a net short position with respect to the Company’s Common Stock.

 

Company Initials _______

 

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5.          Secured
Nature of Note. The indebtedness evidenced by this Note is secured by certain assets and property of the Company pursuant to
that certain Security Agreement by and between the Company and Holder made of even date herewith (the “Security Agreement”).
This Note, the Security Agreement, and all other documents and instruments heretofore or hereafter executed in connection with
the indebtedness evidenced by this Note, and all modifications, extensions, future advances, and renewals thereof, and any substitutions
therefor, being herein collectively referred as the “Transaction Documents.” All of the agreements, conditions,
covenants, provisions, representations, warranties and stipulations contained in any of the Transaction Documents which are to
be kept and performed by the Company are hereby made a part of this Note to the same extent and with the same force and effect
as if they were fully set forth herein, and the Company covenants and agrees to keep and perform them, or cause them to be kept
or performed, strictly in accordance with their terms.

 

6.           Defaults
and Remedies.

 

(a)          Events
of Default. The occurrence of any of the following events shall constitute an “Event of Default”
hereunder: (i) the Company shall fail to pay any installment of interest, principal or other sums due under this Note or any other
Transaction Document within one (1) business day of when any such payment shall be due and payable; (ii) the Company makes an assignment
for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a
receiver, liquidator or trustee for the Company, and the order or decree is not vacated within thirty (30) days from the date of
entry thereof; (iv) any order or decree is rendered by a court adjudicating the Company insolvent, and the order or decree is not
vacated within thirty (30) days from the date of entry thereof; (v) the Company files a petition in bankruptcy under the provisions
of any bankruptcy law or any insolvency act; (vi) the Company admits, in writing, its inability to pay its debts as they become
due (provided, however, that receipt by the Company of an audit letter from its accountants questioning the viability of the Company
as a going concern shall not, in and of itself, be construed as an admission by the Company of its inability to pay its debts as
they become due; further provided, however, that receipt of any such letter shall not preclude the Holder from declaring any other
default that may be applicable as a result of such a letter or the financial state of the Company giving rise to such a latter,
either under this Note or any other Transaction Documents); (vii) a proceeding or petition in bankruptcy is filed against the Company
and such proceeding or petition is not dismissed within forty-five (45) days from the date it is filed; (viii) the Company files
a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States
or any other foreign country or state; or (ix) the Company shall fail to perform, comply with or abide by any of the stipulations,
agreements, conditions and/or covenants contained in this Note or any other Transaction Documents on the part of the Company to
be performed complied with or abided by, and such failure is not cured within ten (10) days after written notice of such failure
is delivered by Holder to the Company.

 

(b)          Remedies.
Upon the occurrence of one or more Events of Default, the Holder, at its option and without further notice, demand or presentment
for payment to the Company or others, may declare the then outstanding principal balance of this Note, together with all other
sums due under the Note and the other Transaction Documents, immediately due and payable, together with all accrued and unpaid
interest thereon and thereafter all such sums shall bear interest at the Default Rate, together with all reasonable attorneys’
fees, paralegals’ fees and costs and expenses incurred by the Holder in collecting or enforcing payment thereof (whether
such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy
proceedings or otherwise), and all other sums due by the Company hereunder and under the Transaction Documents, all without any
relief whatsoever from any valuation or appraisement laws and payment thereof may be enforced and recovered in whole or in part
at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Note or the other Transaction
Documents.

 

Company Initials _______

 

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7.          Lost
or Stolen Note. Upon notice to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of
loss, theft or destruction, of an indemnification undertaking by the Holder to the Company in a form reasonably acceptable to the
Company and customary for similar circumstances in commercial lender/borrower circumstances, and, in the case of mutilation, upon
surrender and cancellation of the Note, the Company shall execute and deliver a new Note of like tenor and date and in substantially
the same form as this Note; provided, however, the Company shall not be obligated to re-issue a Note if the Holder contemporaneously
requests the Company to convert such remaining principal amount and interest into Common Stock.

 

8.          Cancellation.
After all principal, accrued interest and all other sums at any time owed on this Note or any other Transaction Documents have
been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall
not be re-issued.

 

9.          Waivers.
The Company hereby waives and releases all benefit that might accrue to the Company by virtue of any present or future laws exempting
any property that may serve as security for this Note, or any other property, real or personal, or any part of the proceeds arising
from any sale of any such property, from attachment, levy, or sale under execution, exemption from civil process, or extension
of time for payment, including, without limitation, any and all homestead exemption rights of the Company; and the Company agrees
that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon,
may be sold upon any such writ in whole or in part in any order or manner desired by Holder. In addition, the Company and all others
who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment
or dishonor, protest and notice of protest of this Note or the other Transaction Documents, and all other notices in connection
with the delivery, acceptance, performance, default, or enforcement of the payment of this Note or the other Transaction Documents;
(ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Note or the other Transaction
Documents from time to time prior to or after the maturity of this Note without notice, consent or further consideration to any
of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies
against the Company or any other person or party to become liable hereunder or against any collateral that may secure this Note
in order to enforce the payment of this Note; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing
(except the express written release by the Holder of any such person), the undersigned shall be and remain, directly and primarily
liable for all sums due under this Note.

 

Company Initials _______

 

    	9

    	 

    

 

10.         Governing
Law. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the laws of the State of Florida, without giving effect to provisions
thereof regarding conflict of laws. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the state
and federal courts sitting in Broward County, Florida for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper, provided, however,
nothing contained herein shall limit the Holder’s ability to bring suit or enforce this Note in any other jurisdiction. Each
party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by sending by certified mail or overnight courier a copy thereof to such party at the address indicated in the preamble
hereto and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.         Indemnity
and Expenses. The Company agrees:

 

(a)          To
indemnify and hold harmless the Holder and each of its partners, employees, agents and affiliates from and against any and all
claims, damages, demands, losses, obligations, judgments, suits, actions, threats and liabilities (including, without limitation,
attorneys’ fees and expenses) in any way arising out of or in connection with this Note; and

 

(b)          To
pay and reimburse the Holder upon demand for all costs and expenses (including, without limitation, attorneys’ fees and expenses)
that the Holder may incur in connection with (i) the exercise or enforcement of any rights or remedies (including, but not limited
to, collection) granted hereunder or otherwise available to it (whether at law, in equity or otherwise), or (ii) the failure by
the Company to perform or observe any of the provisions hereof. The provisions of this Section 11 shall survive the execution and
delivery of this Note, the repayment of any or all of the principal or interest owed pursuant hereto, and the termination of this
Note.

 

12.         Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies of the Holder as provided herein, or the
other Transaction Documents, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole
discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such
right or remedy shall in no event be construed as a waiver or release thereof.

 

13.         Specific
Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general
provision contained herein. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed
against any person as the drafter hereof.

 

Company Initials _______

 

    	10

    	 

    

 

14.         Failure
or Indulgence Not Waiver. Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights
or remedies hereunder or under any Transaction Documents, unless such waiver is in writing and signed by Holder, and then only
to the extent specifically set forth in the writing. A waiver on one event shall not be construed as continuing or as a bar to
or waiver of any right or remedy to a subsequent event.

 

15.         Notice.
Notice shall be given to each party at the address indicated in the preamble hereto or at such other address as provided to the
other party in writing, and such notice shall be deemed properly given in accordance with the notice provisions set forth in the
Security Agreement securing this Note.

 

16.         Usury
Savings Clause. Notwithstanding any provision in this Note or the other Transaction Documents, the total liability for payments
of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums
which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing
this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest,
including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall,
for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds
the limit imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as
interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied
to the reduction of the outstanding principal balance of this Note immediately upon receipt of such sums by the Holder hereof,
with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction
of such outstanding principal balance and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal;
provided, however, that the Holder of this Note may, at any time and from time to time, elect, by notice in writing to the Company,
to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest rather than accept such
sums as a prepayment of the outstanding principal balance. It is the intention of the parties that the Company does not intend
or expect to pay nor does the Holder intend or expect to charge or collect any interest under this Note greater than the highest
non-usurious rate of interest which may be charged under applicable law.

 

17.         Binding
Effect. This Note shall be binding upon the Company and the successors and assigns of the Company and shall inure to the benefit
of Holder and the successors and assigns of Holder.

 

18.         Severability.
In the event any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal, or unenforceable,
in whole or in part, in any respect, or in the event that any one or more of the provisions of this Note operates or would prospectively
operate to invalidate this Note, then and in any of those events, only such provision or provisions shall be deemed null and void
and shall not affect any other provision of this Note. The remaining provisions of this Note shall remain operative and in full
force and effect and shall in no way be affected, prejudiced, or disturbed thereby.

 

Company Initials _______

 

    	11

    	 

    

 

19.         Participations.
Holder may from time to time sell or assign, in whole or in part, or grant participations in this Note and/or the obligations evidenced
hereby, subject, however, to first obtaining the Company’s written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. The holder of any such sale, assignment or participation, if the applicable agreement between Holder and
such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Holder (to the extent of such
holder’s interest or participation); and (b) deemed to hold and may exercise the rights of setoff or banker’s lien
with respect to any and all obligations of such holder to the Company (to the extent of such holder’s interest or participation),
in each case as fully as though the Company was directly indebted to such holder. Holder may in its discretion give notice to the
Company of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder’s
or such holder’s rights hereunder.

 

20.         Fees.
The Company agrees to pay to Holder a funding fee equal to six percent (6.0%) of the original face amount of this Note, due and
payable upon the execution of this Note. Such fee may be withheld and deducted by Holder from the proceeds of this Note otherwise
payable to the Company. In addition, the Company agrees to pay to its counsel, Lucosky Brookman LLP, a fee of $30,000 in connection
with such firm’s work in connection with such firm’s preparation and filing of an S-1 registration statement for the
Company, which fees the Company agrees may be withheld and deducted by Holder from the proceeds of this Note otherwise payable
to the Company, and paid directly to such law firm.

 

21.         Amendments.
The provisions of this Note may be changed only by a written agreement executed by the Company and Holder.

 

[Signature pages follows]

 

Company Initials _______

 

    	12

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Note to be executed on and as of the date set forth above.

 

	 	CONO ITALIANO, INC.
	 	 
	 	By:	 
	 	Name:	Mitchell Brown
	 	Title:	Chief Executive Officer

 

[ signature page to Promissory Note ]

 

    	13

    	 

    

 

Exhibit
A

 

NOTICE OF CONVERSION

 

The undersigned hereby
elects to convert principal and/or interest under the Convertible Promissory Note (the “Note”) of Cono
Italiano, Inc., a corporation incorporated under the laws of the State of Nevada (the “Company”), into
shares of common stock, par value $________ per share (the “Common Shares”), of the Company in accordance
with the conditions of the Note, as of the date written below.  

 

Based solely on information
provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares
does not exceed the amounts determined in accordance with Section 13(d) of the Exchange Act of 1934, as amended, specified under
Section 2(b) of the Note.

 

Conversion calculations

 

	Effective Date of Conversion: 	 	 	 
	 	 	 	 
	Principal Amount and/or Interest to be Converted:	 	 	 
	 	 	 	 
	Number of Common Shares to be Issued:	 	 	 

 

	 	[HOLDER]
	 	 
	 	By: 	 	 
	 	 	 	 
	 	Name: 	 	 
	 	 	 	 
	 	Title: 	 	 
	 	 	 	 
	 	Address: 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

    	14

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