Document:

EX-10.6

 Exhibit 10.6 

September 18, 2020 
 Equity Distribution
Acquisition Corp. 
 Two North Riverside Plaza 
 Chicago, IL
60606 
 Credit Suisse Securities (USA) LLC 
 Eleven Madison
Avenue 
 New York, NY 10010 
  

	 	Re:	 Initial Public Offering 

Ladies and Gentlemen: 
 This letter (the “Letter
Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between Equity Distribution Acquisition Corp., a Delaware corporation (the
“Company”) and Credit Suisse Securities (USA) LLC, as the representative (the “Representative”) of the several underwriters named in Schedule A thereto (the “Underwriters”), relating to an
underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”), each unit comprised of one share of the Company’s Class A common stock, par value $0.0001 per share (the
“Common Stock”), and one-third of one redeemable warrant, each whole warrant exercisable for one share of Common Stock (each, a “Warrant”). Certain capitalized terms used
herein are defined in paragraph 12 hereof. 
 In order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed
with the IPO, and in recognition of the benefit that such IPO will confer upon the undersigned, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees with the
Company as follows: 
  

	1.	 If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all
shares of Common Stock beneficially owned by him or her, whether acquired before, in or after the IPO, in favor of such Business Combination. 

  

	2.	 In the event that the Company does not complete a Business Combination within the time period set forth in the
Company’s amended and restated certificate of incorporation, as the same may be further amended from time to time (the “Charter”), the undersigned will, as promptly as possible, take all necessary actions to cause the Company
to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the IPO Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the Trust Account not previously released to the Company to pay its tax obligations, if any (less up to $100,000 of such net interest
to pay dissolution expenses), divided by the number of then outstanding IPO Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if
any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the

	 	
cases of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
The undersigned hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Account and any remaining net assets of the Company as a result of such liquidation with respect to the Founder Shares owned
by the undersigned. However, if any of the undersigned have acquired IPO Shares in or after the IPO, they will be entitled to liquidating distributions from the Trust Account with respect to such IPO Shares in the event that the Company does not
complete a Business Combination within the time period set forth in the Charter. The undersigned acknowledges and agrees that there will be no distribution from the Trust Account with respect to any Warrants, all rights of which will terminate on
the Company’s liquidation. 

  

	3.	 The undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business
Combination with a target business that is affiliated with the undersigned or any other Insiders of the Company or their affiliates, such transaction must be approved by a majority of the Company’s disinterested independent directors and the
Company must obtain an opinion from an independent investment banking firm, which is a member of the Financial Industry Regulatory Authority, or an independent accounting firm that such Business Combination is fair to the Company’s unaffiliated
stockholders from a financial point of view. 

  

	4.	 None of the undersigned, any member of the family of any of the undersigned, or any affiliate of the
undersigned will be entitled to receive and will not accept any compensation or other cash payment from the Company prior to, or for services rendered in order to effectuate, the completion of the Business Combination; provided that the Company
shall be allowed to make the payments set forth in the Registration Statement adjacent to the caption “Prospectus Summary—The Offering—Limited payments to insiders.” 

 

	5.	 (a) The undersigned agrees that the Founder Shares may not be transferred, assigned or sold (except to certain
permitted transferees as described in the Registration Statement or herein) (the “Lockup”) until the earlier to occur of: (1) one year after the completion of a Business Combination or (2) the date following the completion
of the Company’s initial Business Combination on which the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of
Common Stock for cash, securities or other property. Notwithstanding the foregoing, if the closing price of the Company’s Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination, the Founder Shares will be released
from the Lockup. 

  

	 	(b)	 Notwithstanding the provisions set forth in paragraphs 5(a) and 5(c), during the period commencing on the
effective date of the Underwriting Agreement and ending 180 days after such date, the undersigned will not, without the prior written consent of the Representative pursuant to the Underwriting Agreement, (i) sell, offer to sell, contract or
agree to sell, hypothecate, pledge, hedge or otherwise dispose of or agree to dispose of (or enter into any transaction that is designed to, 

  
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or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any
affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and
Exchange Commission (the “SEC”) in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”) and the rules and regulations of the SEC promulgated thereunder with respect to, any other Units, shares of Common Stock, Founder Shares or Warrants or any securities convertible into, or exercisable,
or exchangeable for, shares of Common Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Common
Stock, Founder Shares, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, whether any such transaction is to be settled by delivery of such securities, in cash or
otherwise, or (iii) publicly announce any intention to effect any transaction, including the filing of a registration statement, specified in clause (i) or (ii). The provisions of this paragraph will not apply (i) to the transfer of
Founder Shares to any independent director appointed or elected to the Company’s board of directors before or after the IPO or (ii) if the release or waiver is effected solely to permit a transfer not for consideration and, in each case
the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer. 

 

	 	(c)	 The undersigned agrees that until the Company completes an initial Business Combination, the undersigned’s
Private Placement Warrants will be subject to the transfer restrictions described in the Private Placement Warrants Purchase Agreement relating to the undersigned’s Private Placement Warrants. 

 

	 	(d)	 Notwithstanding the provisions set forth in paragraphs 5(a) and (c), transfers, assignments and sales by the
undersigned of the Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or conversion of the Founder Shares are permitted (i) to the Company’s officers
or directors, any affiliates or family members of any of the Company’s officers or directors, to Equity Distribution Sponsor LLC, a Delaware limited liability company (the “Sponsor”), any members or partners of the Sponsor or
its affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (ii) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of
the individual’s immediate family, an affiliate of such person or to a charitable organization; (iii) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (iv) in the case of an
individual, pursuant to a qualified domestic relations order; (v) by private sales or transfers made in connection with the completion of the Business Combination at prices no greater than the price at which the Founder Shares, Private
Placement Warrants or shares 

  
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of Common Stock, as applicable, were originally purchased; (vi) by virtue of the Sponsor’s organizational documents upon liquidation or dissolution of the Sponsor; (vii) to the
Company for no value for cancellation in connection with the completion of the Business Combination; (viii) in the event of the Company’s liquidation prior to the completion of a Business Combination; or (ix) in the event of
completion of a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property subsequent to
the completion of a Business Combination; provided, however, that in the case of clauses (i) through (vi) these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions herein. For the avoidance of
doubt, the transfers of Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or conversion of the Founder Shares shall be permitted regardless of whether a
filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made with respect to such transfers. 

  

	 	(e)	 The undersigned acknowledges and agrees that if, in order to complete any Business Combination, the holders of
Founder Shares or Private Placement Warrants are required to contribute back to the capital of the Company a portion of any such securities to be cancelled by the Company or transfer any such securities to third parties, the undersigned will
contribute back to the capital of the Company or transfer to such third parties, at no cost, a proportionate number of Founder Shares or Private Placement Warrants, as applicable, pro rata with the other holders of Founder Shares or Private
Placement Warrants, as applicable. 

  

	6.	 [Reserved]. 

  

	7.	 The undersigned agrees to be a director or officer of the Company, as applicable, until the earlier of the
completion by the Company of an initial Business Combination, the liquidation of the Company, or his or her removal, death or incapacity. In the event of the removal or resignation of the undersigned as a director or officer (as applicable), the
undersigned agrees that he or she will not, prior to the completion of the Business Combination, without the prior express written consent of the Company, (i) use for the benefit of the undersigned or to the detriment of the Company or
(ii) disclose to any third party (unless required by law or governmental authority), any information regarding a potential target of the Company that is not generally known by persons outside of the Company, the Sponsor, or their respective
affiliates. The undersigned’s biographical information previously furnished to the Company and the Representative is true and accurate in all material respects, does not omit any material information with respect to the undersigned’s
background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s FINRA
Questionnaire previously furnished to the Company and the Representative is true and accurate in all material respects. The undersigned represents and warrants that: 

  
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	 	(a)	 he or she is not subject to, or a respondent in, any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; 

 

	 	(b)	 he or she has never been convicted of or pleaded guilty to any crime (i) involving any fraud or
(ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and 

 

	 	(c)	 he or she has never been suspended or expelled from membership in any securities or commodities exchange or
association or had a securities or commodities license or registration denied, suspended or revoked. 

  

	8.	 The undersigned has full right and power, without violating any agreement by which he or she is bound, to enter
into this Letter Agreement and to serve as a director or officer of the Company, as applicable. 

  

	9.	 The undersigned hereby waives his or her right to exercise redemption rights with respect to any of the
Company’s shares of Common Stock owned or to be owned by the undersigned, directly or indirectly, whether such shares be part of the Founder Shares or IPO Shares, and agrees that he or she will not seek redemption with respect to such shares
(or sell such shares to the Company in any tender offer) in connection with any stockholder vote to approve (x) a Business Combination or (y) an amendment to the Charter that would affect the substance or timing of the Company’s
obligation to allow redemption in connection with the Business Combination or to redeem 100% of the shares of Common Stock if the Company has not completed a Business Combination within 24 months from the closing of the IPO. 

 

	10.	 The undersigned hereby agrees to not propose any amendment to the Charter that would affect the substance or
timing of the Company’s obligation to provide for the redemption of the shares of Common Stock held by public stockholders in connection with an initial Business Combination or to redeem 100% of the shares of Common Stock held by public
stockholders if the Company does not complete an initial Business Combination within 24 months from the closing of the IPO unless the Company provides its public stockholders with the opportunity to redeem their Common Stock upon approval of any
such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay taxes, divided by the number of then outstanding shares of Common Stock held by public stockholders. 

  

	11.	 This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State
of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising
out of or relating in any way to this Letter Agreement shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive and (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. 

  
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	12.	 As used herein, (i) a “Business Combination” shall mean a merger, stock exchange, asset
acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders” shall mean all officers, directors and sponsor of the Company immediately prior to
the IPO; (iii) “Founder Shares” shall mean all of the Class B Common Stock of the Company, par value $0.0001 per share, acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares of Common Stock issued
in the Company’s IPO; (v) “Private Placement Warrants” shall mean the warrants that are being sold privately by the Company simultaneously with the consummation of the IPO; (vi) “Trust Account” shall mean the trust account
into which the net proceeds of the Company’s IPO and a portion of the proceeds from the sale of the Private Placement Warrants will be deposited; and (vii) “Registration Statement” means the Company’s registration statements on
Form S-1 (SEC File Nos. 333-248463 and 333-248829) filed with the SEC, as amended. 

 

	13.	 This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of
the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated
hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto. 

 

	14.	 The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the
agreements, representations and warranties set forth herein in proceeding with the IPO. Nothing contained herein shall be deemed to render any Underwriter a representative of, or a fiduciary with respect to, the Company, its stockholders or any
creditor or vendor of the Company with respect to the subject matter hereof. 

  

	15.	 This Letter Agreement shall be binding on the undersigned and such person’s respective successors, heirs,
personal representatives and assigns. This Letter Agreement shall terminate on the earlier of (i) the completion of a Business Combination and (ii) the liquidation of the Company; provided, that such termination shall not relieve the
undersigned from liability for any breach of this agreement prior to its termination. The parties hereto may not assign either this Letter Agreement or any of their rights, interests, or obligations hereunder without the prior written consent of the
other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. 

  
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	Sincerely,
		
	By:	 	 /s/ William A. Galvin

			
	Name of Insider:	 	William A. Galvin

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Robert W. Grubbs

			
	Name of Insider:	 	Robert W. Grubbs

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Ellen Havdala

 

			
	Name of Insider:	 	Ellen Havdala

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Joseph Miron

 
			
	Name of Insider:	 	Joseph Miron

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Bill Simon

 
			
	Name of Insider:	 	Bill Simon

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Charles Swoboda

			
	Name of Insider:	 	Charles Swoboda

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Philip Tinkler

			
	Name of Insider:	 	Philip Tinkler

  
 Signature Page to
Letter Agreement 

 
			
	By:	 	 /s/ Sam Zell

 
			
	Name of Insider:	 	Sam Zell

  
 Signature Page to
Letter Agreement 

 
			
	Acknowledged and Agreed:
	
	EQUITY DISTRIBUTION ACQUISITION CORP.
		
	By:	 	 /s/ Philip Tinkler

	Name:	 	Philip Tinkler
	Title:	 	Chief Financial Officer

  
 15Exhibit 4.1

 

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

 

Original
Issue Date: September 16, 2020

 

$228,000.00
Principal

$199,500.00
Purchase Price

$28,500.000
Original Issue Discount

 

original
issue discount

Convertible
PROMISSORY NOTE

 

THIS
ORIGINAL ISSUE DISCOUNT CONVERTIBLE PROMISSORY NOTE is duly authorized and validly issued at a 12.5% original issue discount
by Innovative Payment Solutions, Inc., a Nevada corporation (the “Company”) (the “Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to Iroquois Master Fund Ltd., or its permitted assigns (the “Holder”),
the principal sum of $228,000.00 on the date that is the 12 month anniversary of the Original Issue Date, or September 16, 2021
(the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder,
and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance
with the provisions hereof. This Note is subject to the following additional provisions:

 

Section
1. Definitions. For the purposes hereof, (a) capitalized terms not otherwise defined herein shall have the meanings
set forth in the Purchase Agreement and (b) the following words and phrases shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company
or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company
or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or
proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or
any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the
Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any
of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

     

     

    

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(e).

 

“Black
Scholes Value” means the value of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Maturity Date, (B) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Maturity Date.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of this Note
or the Warrants issued together with this Note), (b) the Company merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person, (d) a replacement at one time or
within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority
of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving
as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the date hereof), or (d) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms
hereof.

 

“Default
Conversion Price” shall have the meaning set forth in Section 4(b).

 

    2

     

    

 

“Default
Interest Rate” shall have the meaning set forth in Section 2(a).

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“DWAC”
means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.

 

“Event
of Default” shall have the meaning set forth in Section 7(a).

 

“Exchange
Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

 

“Exempt
Issuance” shall have the meaning set forth in the Purchase Agreement.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $125,000 due under leases required to
be capitalized in accordance with GAAP.

 

“Liens”
shall have the meaning set forth in the Purchase Agreement.

 

“Mandatory
Default Amount” means the sum of (a) (i) 140% of the aggregate of outstanding principal amount of this Note and the accrued
and unpaid interest thereon, including default interest, and (b) all other amounts, costs, expenses and liquidated damages due
in respect of this Note.

 

“Note
Register” shall have the meaning set forth in Section 3(c).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading
Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent
if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B)
the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

 

    3

     

    

 

“Original
Issue Date” means the date of the first issuance of this Note, regardless of any transfers of this Note and regardless of
the number of instruments which may be issued to evidence this Note.

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by this Note, (b) the indebtedness evidenced by the Company’s outstanding
Original Issue Discount 10% Senior Secured Convertible Promissory Notes, (c) senior secured non-convertible loans from traditional
commercials banks with interest per annum not to exceed 12%, (d) capital lease obligations and purchase money indebtedness incurred
in connection with the acquisition of machinery and equipment as long as such capital leases and indebtedness are approved in
advance by the Holder and (e) the Indebtedness set forth on Schedule 3.1(aa) to the Purchase Agreement).

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a) through (d) thereunder, and Liens set forth on
Schedule 3.1(aa) to the Purchase Agreement.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of September 16, 2020, among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
the NYSE American, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).

 

“Transaction
Documents” means the Note, the Purchase Agreement, the Warrant, and the Registration Rights Agreement.

 

    4

     

    

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding
to its functions of reporting prices), (b) if no volume weighted average price of the Common Stock is reported for the Trading
Market, the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holderand reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.

 

Section
2. Interest/Prepayment.

 

(a)
Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this
Note at the rate of 10% per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the Original
Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued
and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During the existence
of an Event of Default, interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted
by law (the lesser of clause (i) or (ii), the “Default Interest Rate”). Once an Event of Default is cured, the interest
rate shall return to 10%.

 

(b)
Prepayment. The Note may be prepaid: (i) from Original Issuance Date until and through the day that falls on the third
month anniversary of the Original Issue Date (the “3 Month Anniversary”) at an amount equal to 100% of the aggregate
of the outstanding principal balance of the Note and accrued and unpaid interest, (ii) after the 3 Month Anniversary until and
through the day that falls on the six month anniversary of the Original Issue Date (the “6 Month Anniversary) at an amount
equal to 115% of the aggregate of the outstanding principal balance of the Note and accrued and unpaid interest, and (iii) after
the 6 Month Anniversary at an amount equal to 125% of the aggregate of the outstanding principal balance of the Note and accrued
and unpaid interest. The Company shall provide at least 20 days’ prior written notice to the Holder, during which time the
Holder may convert the Note in whole or in part.

 

Section
3. Registration of Transfers and Exchanges.

 

(a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge or other fees will be payable for such registration
of transfer or exchange.

 

(b)
Investor Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.

 

(c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.

 

    5

     

    

 

Section
4. Conversion.

 

(a)
Conversion. After the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in
whole or in part, at any time, and from time to time, into Conversion Shares at the option of the Holder. The Holder shall effect
conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each,
a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which
such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original
Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any
Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender
this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been
so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount
equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted
in each conversion, the date of each conversion, and the Conversion Price in effect at the time of each conversion. The Company
may deliver an objection to any Notice of Conversion within two Trading Days of delivery of such Notice of Conversion. In the
event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest
error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of
this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be
less than the amount stated on the face hereof. 

 

(b) Conversion
Price. The “Conversion Price” shall be $0.035 per share (as adjusted for stock splits, stock combinations and
similar events). If an Event of Default has occurred, regardless of whether such Event of Default has been cured or remains
ongoing, this Note shall be convertible at 65% of the lowest closing price of the Common Stock as reported on the Trading
Market during the 10 consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery
or deemed delivery of the applicable Notice of Conversion (the “Default Conversion Price”). All such Conversion
Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately decreases or increases the Common Stock.

 

(c)
Mechanics of Conversion or Prepayment.

 

(i)
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price in effect at the time of such conversion.

 

(ii)
Delivery of Certificate Upon Conversion. Not later than two Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required to be
delivered by the Company under this Section 4(c) which shall be free of restrictive legends and trading restrictions except as
provided by the Securities Act (other than those which may then be required by the Purchase Agreement) and such shares shall be
delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

 

(iii) Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or
as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the
Company shall promptly return to the Holder any original Note delivered to the Company.

 

(iv) 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 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 of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, 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.
In the event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, 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 accordance with Section 4.1(e) of the Purchase Agreement. The
exercise of any such rights shall not prohibit the Holder from seeking to collect damages under this Note, the Purchase
Agreement or under applicable law.

 

    6

     

    

 

(v)
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall have the remedies provided for
in accordance with Section 4.1 of the Purchase Agreement. Nothing herein or therein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this
Note as required pursuant to the terms hereof.

 

 

(vi) Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price or round up to the next whole share.

 

(vii) Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the
Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificates. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and
all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required
for same-day electronic delivery of the Conversion Shares.

 

(viii) Attorneys’
Fees etc. The Company shall (A) pay the reasonable fees of the law firm of the Holder’s choice (in an amount not to
exceed $500 per opinion) in connection with the conversion of the Note, (B) cause its attorneys to promptly provide any
reliance opinion to the Transfer Agent, and (C) pay the Holder the sums required under Section 2(c)(iv).

 

    7

     

    

 

(d) Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Note, and a 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 applicable
Notice of Conversion, the Holder (together with the Holder’s Affiliates, 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 below).  For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of
Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the
extent that the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in
relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is
convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be
the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder
together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this
Section 4(d) and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the SEC,
as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the
Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the
written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by
the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the
Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership
Limitation provisions of this Section 4(d) to 9.99% of the number of shares of Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder. In all events, the
provisions of this Section 4(d) shall continue to apply. Any such increase or decrease will not be effective until the 61st
day after such notice is delivered to the Company. The Holder may also decrease the Beneficial Ownership Limitation
provisions of this Section 4(d) solely with respect to the Holder’s Note at any time, which decrease shall be
effectively immediately upon delivery of notice to the Company. The Beneficial Ownership Limitation provisions of this
Section 4(d) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 4(d) to correct any portion which may be defective or inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The
limitations contained in this Section 4(d) shall apply to a successor holder of this Note.

 

Section
5. Certain Adjustments.

 

(a)
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 shares of Common Stock or any Common Stock
Equivalents, (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 the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of
the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this Section 5(a) shall become effective immediately
after the record date for the determination of shareholders 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.

 

(b)
Subsequent Equity Sales. At any time, for so long as the Note or any amounts accrued and payable thereunder remain outstanding,
the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice,
or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),, any Common
Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that
is lower than the Conversion Price then in effect (such lower price, the “Base Conversion Price” and each such issuance
or announcement a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal the Base Conversion
Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.

 

    8

     

    

 

(2)
If any Common Stock Equivalent is amended or adjusted, and such price as so amended shall be less than the Conversion Price in
effect at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon each such issuance or amendment
as provided in this Section 5(b). In case any Common Stock Equivalent is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to
have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the
Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less
(II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued
or sold for cash, the amount of such consideration received by the Company will be deemed to be the net amount received by the
Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be
the average VWAP of such public traded securities for the ten days prior to the date of receipt. If any shares of Common Stock
or Common Stock Equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company
is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the
case may be.

 

(3)
If the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued after the Original
Issuance Date shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price then in
effect, such issuance shall be deemed to have occurred for less than the Conversion Price on such date and such issuance shall
be deemed to be a Dilutive Issuance.

 

(4)
If the Company enters into a Variable Rate Transaction despite the prohibition set forth in the Purchase Agreement, the Company
shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised under the terms of such Variable Rate Transaction.

 

(5)
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.

 

(6)
The provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long
as the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant
to this Section 5(b) shall be downward only.

 

(7)
The provisions of this Section 5(b) shall not apply to Exempt Issuances.

 

    9

     

    

 

(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company
grants, issues or sells any Common Stock, Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

(d) Pro
Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other
than Common Stock, to holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall be
entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder
had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any
limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the
Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation subject to Section 13(d)
of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded
corporation subject to Section 13(d) of the Exchange Act).

 

    10

     

    

 

(e) Fundamental
Transaction. (1) If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization 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, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each 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 (without regard to any limitation on the conversion of this Note),
the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately
prior to such Fundamental Transaction (without regard to any limitation on the conversion of this Note). 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 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. The Company shall not effect a Fundamental Transaction unless it gives the Holder at
least 10 Trading Days prior notice together with sufficient details so the Holder can make an informed decision as to whether
it elects to accept the Alternative Consideration. If a public announcement of the Fundamental Transaction has not been made,
the notice to the Holder may not be given until the Company files a Form 8-K or other report disclosing the Fundamental
Transaction. (2) Notwithstanding anything to the contrary, provided that the Warrant Shares are not registered under an
effective registration statement in accordance with the Registration Rights Agreement, in the event of a Fundamental
Transaction that is (x) an all cash transaction, (y) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under
the Exchange Act, or (z) a Fundamental Transaction involving a person or entity not traded on a national securities exchange
or trading market (with such exchange or market including, without limitation, the Nasdaq Global Select Trading Market, the
Nasdaq Global Market, or the Nasdaq Capital Market, the New York Stock Exchange, Inc., the NYSE American or any market
operated by the OTC Markets, Inc.), the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, concurrently with the consummation of the Fundamental Transaction, purchase this Note from the Holder by paying to
the Holder the higher of (i) an amount of cash equal to the Black Scholes Value of the outstanding principal of this Note on
the date of the consummation of such Fundamental Transaction, or (ii) the product of (a) the number of Conversion Shares
issuable upon full conversion of this Note (without regard to any limitation on conversion of this Note) and (b) the positive
difference between the cash per share paid in such Fundamental Transaction minus the then in effect Conversion Price. (3) If
Section 5(e)(1) and (2) are not applicable, the Company shall cause any successor entity in a Fundamental Transaction in
which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the
Company under this Note and the other Transaction Documents in accordance with the provisions of this Section 5(e) pursuant
to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in
exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note
(without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a
conversion price which applies the Conversion Price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic
value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the
provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the
Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein. Notwithstanding anything in this Section 5(e), an Exempt Issuance (as defined in the Purchase
Agreement) shall not be deemed a Fundamental Transaction.

 

(f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may
be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and
outstanding.

 

    11

     

    

 

(g)
Notice to the Holder.

 

(i)
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.

 

(ii)
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on its Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common
Stock, (C) the Company shall authorize the granting to all holders of its 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 shareholders of the Company shall
be required in connection with any reclassification of its 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, or any compulsory share exchange whereby
its 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 Note Register, at least 5 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 its 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 its 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. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined in
good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. If the Company does not simultaneously file the required Form 8-K, the Holder shall be entitled penalties
in accordance with Section 4.6 of the Purchase Agreement The Holder shall remain entitled to convert this Note during the 20-day
period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

 

Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 50%
(which must include the Lead Investor’s consent) in principal amount of the then outstanding Notes shall have otherwise
given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

(a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;

 

(b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(c)
amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder, increases in authorized shares and stock splits shall not be deemed to materially
and adversely affects any rights of the Holder;

 

(d)
purchase or otherwise acquire more than a de minimis number of shares of its Common Stock or Common Stock Equivalents;

 

(e)
repay, or offer to repay, any Indebtedness other than the Note as provided in Section 2(b) or Permitted Indebtedness, as such
terms Indebtedness and Permitted Indebtedness are in effect as of the Original Issue Date;

 

    12

     

    

 

(f)
pay cash dividends or distributions on any equity securities of the Company;

 

(g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than
a quorum otherwise required for board approval);

 

(h)
issue any equity securities of the Company other than pursuant to the provisions of the Purchase Agreement or an Exempt Issuance;
or

 

(i)
enter into any agreement with respect to any of the foregoing.

 

Section
7. Events of Default.

 

(a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(i)
any default in the payment of (A) principal and interest payment under this Note or any other Indebtedness, or (B) late fees,
liquidated damages and other amounts owing to the Holder of this Note, as and when the same shall become due and payable (whether
on a Conversion Date, or the Maturity Date, or by acceleration or otherwise), which default, solely in the case of a default under
clause (B) above, is not cured within five Trading Days;

 

(ii)
the Company shall fail to observe or perform any other covenant or agreement contained in this Note (other than a breach by the
Company of its obligations to deliver Conversion Shares, which breach is addressed in clause (x) below) or any Transaction Document
which failure is not cured, if possible to cure, within the earlier to occur of 15 Trading Days after notice of such failure is
sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the Company has become aware of such failure;

 

(iii)
except for payment defaults covered under Section 7(a)(i), the Company shall breach, or a default or event of default
(subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under, (A) any
of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any
Subsidiary is obligated (and not covered by any other clause of this Section 7) which default or event of default if not
cured, if possible to cure, within the earlier to occur of (i) 10 Trading Days after notice of such default sent by Holder or
by any other holder to the Company and (ii) five Trading Days after the Company has become aware of such default;

 

(iv)
any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or
thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be
untrue or incorrect in any material respect as of the date when made or deemed made, which failure is not cured, if possible
to cure, within the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any other
Holder to the Company;

 

(v)
the Company or any Subsidiary shall be subject to a Bankruptcy Event;

 

    13

     

    

 

(vi)
the Company or any Subsidiary shall: (A) apply for or consent to the appointment of a receiver, trustee, custodian or
liquidator of it or any of its properties; (B) admit in writing its inability to pay its debts as they mature; (C) make a
general assignment for the benefit of creditors; (D) be adjudicated as bankrupt or insolvent or be the subject of an order
for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute of any other jurisdiction or foreign country; or (E) file a voluntary petition in
bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against it in any proceeding under any such law, or (F) take or permit
to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;

 

(vii)
if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any
Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company
or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or
any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period
of 60 days;

 

(viii)
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the
Company or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000
individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged
within 45 days after the date thereof;

 

(ix)
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 30 days;

 

(x)
any Material Adverse Effect occurs;

 

(xi)
any provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall
be contested by any party thereto, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental
authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the
Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under any
Transaction Document;

 

(xii)
the Company fails to use the proceeds in the manner as described in Section 4.7 of the Purchase Agreement;

 

(xiii)
the Company’s Common Stock is not listed or quoted for trading on a Trading Market which failure is not cured, if
possible to cure, within the earlier to occur of 10 Trading Days after notice of such failure is sent by the Holder or by any
other Holder to the Company or the transfer of shares of Common Stock through the Depository Trust Company System is no
longer available or is subject to a “chill” by the Depository Trust Company or any successor;

 

(xiv)
the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of all or in excess of
50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a Change
of Control Transaction);

 

(xv)
from and after 90 days after the Original Issue Date, the Company fails to have authorized and reserved the amount of shares
designated in Section 4.9 of the Purchase Agreement (without regard to any limitations on conversion hereof, including
without limitation, the Beneficial Ownership Limitation);

 

(xvi)
the Company shall fail for any reason, except if caused by the action or inaction of the Holder to deliver Conversion Shares
to the Holder prior to the third Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at
any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor
requests for conversions of this Note in accordance with the terms hereof; or

 

(xvii)
the Company fails to file with the SEC any required reports under Section 13 or 15(d) of the Exchange Act within the time
required (including any applicable extension period) by the rules and regulations thereunder.

 

    14

     

    

 

(b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus liquidated
damages and other amounts 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. Upon the payment in full of the Mandatory Default Amount,
the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described
herein, the Holder need not provide, and the Company 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 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 7(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.

 

(c)
Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate.

 

(d)
Conversion Price Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall be convertible at the Default Conversion Price.

 

Section
8. Miscellaneous.

 

(a)
No Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 5.

 

(b)
Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted next day delivery, as
follows:

 

	 	If
    to the Company:	 	Innovative
    Payment Solutions, Inc.  
	 	 	 	19355 Business Center
    Drive, #9
	 	 	 	Northridge, CA 91324
	 	 	 	Attention: Chief
    Executive Officer
	 	 	 	 
	 	with
    a copy to:	 	Gracin
    & Marlow, LLP
	 	(which
    shall not constitute notice)	 	1825
    Corporate Blvd NW #110, 
	 	 	 	Boca Raton, FL 33431
	 	 	 	Attention: Leslie
    Marlow, Esq.
	 	 	 	 
	 	If
    to Holder:	 	Iroquois
    Master Fund Ltd.
	 	 	 	125
    Park Avenue, 25th Floor
	 	 	 	New
    York, New York 10017
	 	 	 	Attention:
    Rich Abbe, Managing Member

 

or
to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from,
as the case may be, the date of delivery.

 

(c)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late
fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a
direct debt obligation of the Company.

 

    15

     

    

 

(d)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of this Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

(e)
Exclusive Jurisdiction; Governing Law; Prevailing Party Attorneys’ Fees. All questions concerning the construction,
validity, enforcement and interpretation of this Note and venue shall be governed by and construed and enforced in accordance
with Section 5.9 of the Purchase Agreement. If any party shall commence an Action or Proceeding to enforce or otherwise relating
to this Note, then, in addition to the other obligations of the Company elsewhere in this Note, the prevailing party in such action
or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such Action or Proceeding.

 

(f)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

 

(g)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the 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 shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.

 

(h)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach would be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Note.

 

    16

     

    

 

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

 

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

 

(Signature
Pages Follow)

 

    17

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.

 

 

	 	Innovative
    Payment Solutions, Inc. 
	 	 
	 	By: 	/s/ William Corbett
	 	Name: 	William Corbett
	 	Title:	Chief Executive Officer

 

    18

     

    

 

ANNEX
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Original Issue Discount Convertible Note due September 16, 2021 of Innovative
Payment Solutions, Inc, a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4(e) of this Note, as determined in accordance with Section 13(d) of
the Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

Conversion
calculations:

 

	 	Date
    to Effect Conversion:	 
	 	 	 
	 	Principal
    Amount of Note to be Converted:	 
	 	 	 
	 	Number
    of shares of Common Stock to be issued: 	 
	 	 	 
	 	Signature:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	DWAC
    Instructions:	 
	 	 	 
	 	Broker No: 	 	 
	 	 	 
	 	Account No:	 	 

 

 

19

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