Document:

Exhibit 10.38

 

THIS
INSTRUMENT CONTAINS AN AFFIDAVIT OF CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS BORROWER MAY HAVE
AND ALLOWS THE HOLDER TO OBTAIN A JUDGMENT AGAINST BORROWER WITHOUT ANY FURTHER NOTICE.

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A
OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	Principal
    Amount: $444,444.00	Issue
    Date: October 19, 2021
	Actual
    Amount of Purchase Price: $400,000.00	 

 

PROMISSORY
NOTE

 

FOR
VALUE RECEIVED, DATA443 RISK MITIGATION, INC., a Nevada corporation (hereinafter called the “Borrower” or the
“Company”) (Trading Symbol: ATDS), hereby promises to pay to the order of MAST HILL FUND, L.P., a Delaware limited
partnership, or registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal
sum of $444,444.00, which amount is the $400,000.00 actual amount of the purchase price (the “Consideration”) hereof plus
an original issue discount in the amount of $44,444.00 (the “OID”) (subject to adjustment herein) (the “Principal Amount”)
and to pay interest on the unpaid Principal Amount hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum
from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration
or by prepayment or otherwise, as further provided herein. The maturity date shall be twelve (12) months from the Issue Date (the “Maturity
Date”), and is the date upon which the Principal Amount (which includes the OID) and any accrued and unpaid interest and other
fees, shall be due and payable.

 

This
Note may not be prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.

 

Any
Principal Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent
(16%) per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”).
Interest and Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

All
payments due hereunder (to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall
be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of
this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day.

 

Each
capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used
in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks
in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading
Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase
Agreement), provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.

 

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This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

In
connection with the issuance of this Note, the Borrower issued the Second Warrant (as defined in the Purchase Agreement) (the “Second
Warrant”) to Holder as a commitment fee, provided, however, that the Second Warrant must be cancelled and extinguished in its entirety
if the Note is fully repaid and satisfied on or prior to the Maturity Date, subject further to the terms and conditions of this Note.

 

The
following terms shall also apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1
Conversion Right. The Holder shall have the right, on any calendar day, at any time on or following the date that an Event of
Default (as defined in this Note) occurs under this Note, to convert all or any portion of the then outstanding and unpaid Principal
Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock
exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter
be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein (a “Conversion”); provided,
however, that notwithstanding anything to the contrary contained herein, the a Holder shall not have the right to convert any portion
of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth
on the applicable Notice of Conversion, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any
other Persons (as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), 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 Attribution Parties 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 would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules
required to be filed in accordance therewith. 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
1.1, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B)
a more recent public announcement by the Company or (C) a more recent written notice by the Company or the 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 or Attribution Parties 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
at the time of the respective calculation hereunder. “Person” and “Persons” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental
entity or any department or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note.
The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by
the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other
means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m.,
New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means,
with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus
(2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2).

 

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1.2
Conversion Price.

 

(a)
Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including any Default
Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”) shall equal
$4.00. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common
Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the
Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means
such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable
upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted
by the Holder to the par value price. The Conversion Price is subject to equitable adjustments for stock splits, stock dividends or rights
offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events. Holder shall be entitled to deduct $1,750.00 from
the conversion amount in each Notice of Conversion to cover Holder’s fees associated with each Notice of Conversion.

 

1.3
Authorized and Reserved Shares. The Borrower
covenants that at all times until the Note is satisfied in full, the Borrower will reserve from its authorized and unissued Common Stock
a sufficient number of shares, free from preemptive rights, to provide for the issuance of a number of Conversion Shares equal to the
greater of: (a) 222,222 shares of Common Stock or (b) the sum of (i) the number of Conversion Shares issuable upon the full conversion
of this Note (assuming no payment of Principal Amount or interest) at the time of such calculation (taking into consideration any adjustments
to the Conversion Price as provided in this Note) multiplied by (ii) two (2) (the “Reserved Amount”). The Borrower
represents that upon issuance, the Conversion Shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i)
acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares or instructions to
have the Conversion Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute
full authority to its officers and agents who are charged with the duty of executing stock certificates or cause the Company to electronically
issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares
to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

 

If,
at any time, the Borrower does not maintain the Reserved Amount, it will be considered an Event of Default under this Note.

 

1.4
Method of Conversion.

 

(a)
Mechanics of Conversion. This Note may be converted by the Holder in whole or in part, on any calendar day, at any time on or
following the date that an Event of Default occurs under this Note, by submitting to the Borrower or Borrower’s transfer agent
a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59
p.m., New York, New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have
been delivered and received on the next Trading Day.

 

(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire
unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted
and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to
require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Holder
shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion
of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note
to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining
unpaid Principal Amount of this Note. 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 represented by this Note may be less than the amount stated on the face hereof.

 

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(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held
for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has been paid.

 

(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower or Borrower’s transfer agent from the Holder of a
facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order
of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section
1.4(f) hereof) within one (1) Trading Day after such receipt (the “Deadline”) (and, solely in the case of conversion of the
entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company
shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion
Shares or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or to credit
the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled upon
the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available to
the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount
equal to 2.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and
to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last
possible date which the Company could have issued such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii)
the Holder, upon written notice to the Company, may void all or any portion of such Notice of Conversion; provided that the voiding of
all or any portion of a Notice of Conversion shall not affect the Company’s obligations to make any payments which have accrued
prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver
a certificate to the Holder and register such Conversion Shares on the Company’s share register or credit the Holder’s balance
account with DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant
to the Company’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit
such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise.
Nothing shall limit the 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 certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the
conversion of this Note as required pursuant to the terms hereof.

 

(e)
Obligation of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or
Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such conversion,
the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this Note shall
be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect
to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities,
cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein,
the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic delivery of
the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any
action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the
holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of
any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower
to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date
so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York
time, on such date.

 

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(f)
Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion
Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically
transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of Holder’s Prime Broker
with DTC through its Deposit Withdrawal Agent Commission system.

 

1.5
Concerning the Shares. The Conversion Shares
issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration
statement under the 1933 Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion
shall be the Legal Counsel Opinion (as defined in the Purchase Agreement)) to the effect that the shares to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule
144, Rule 144A, Regulation S, or other applicable exemption, or (iv) such shares are transferred to an “affiliate” (as defined
in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is
an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to
the removal provisions set forth below), until such time as the Conversion Shares have been registered under the 1933 Act or otherwise
may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of
securities as of a particular date that can then be immediately sold, each certificate for the Conversion Shares that has not been so
included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption
that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A,
REGULATION S UNDER SAID ACT, OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The
legend set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares
without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery
by crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws: (a)
such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated
by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares
may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected.
The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees
to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance
with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided
by the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A,
Regulation S, or other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation
S, or other applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.

 

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1.6
Effect of Certain Events.

 

(a)
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other
Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default pursuant
to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount
equal to the Default Amount (as defined in this Note) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall
mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

 

(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion
of all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of
another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially
all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this
Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which
the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower
shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least
five (5) days prior written notice of the record date of the special meeting of shareholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or
sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity
(if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply
to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend
or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note
after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder
of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(d)
Purchase Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any convertible
securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record
holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) 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 Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

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(e)
Dilutive Issuance. If the Borrower, at any time on or after the Issue Date and while this Note or any amounts due hereunder are
outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of or issues,
any Common Stock or other securities convertible into, exercisable for, or otherwise entitle any person or entity the right to acquire,
shares of Common Stock (including, without limitation, upon conversion of this Note, and conversion or exercise of any Common Stock Equivalents
(as defined below) issued prior to the Issue Date (the “Prior Common Stock Equivalents”)), in each or any case at an effective
price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities so issued
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, such issuance shall be deemed to have
occurred for less than the Conversion Price on such date of the Dilutive Issuance, provided, further, that the Dilutive Issuance must
occur on or after the Issue Date with respect to Prior Common Stock Equivalents), then the Conversion Price shall be reduced, at the
option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or other
securities are issued, provided, further, that the Dilutive Issuance must occur on or after the Issue Date with respect to Prior Common
Stock Equivalents. By way of example, and for the avoidance of doubt, if the Company issues a convertible promissory note (including
but not limited to a Variable Rate Transaction), and the holder of such convertible promissory note has the right to convert it into
Common Stock at an effective price per share that is lower than the then Conversion Price (including but not limited to a conversion
price with a discount that varies with the trading prices of or quotations for the Common Stock), then the Holder has the right to reduce
the Conversion Price to such Base Conversion Price (including but not limited to a conversion price with a discount that varies with
the trading prices of or quotations for the Common Stock) in perpetuity regardless of whether the holder of such convertible promissory
note ever effectuated a conversion at the Base Conversion Price, provided, however, that the Dilutive Issuance must occur on or after
the Issue Date with respect to Prior Common Stock Equivalents. In the event of an issuance of securities involving multiple tranches
or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial
closing. For the avoidance of doubt, the Holder shall be entitled to utilize the Base Conversion Price with respect to a Dilutive Issuance,
even if the Dilutive Issuance occurs prior to the date that the Holder is entitled to convert this Note, provided, however, that the
Dilutive Issuance must occur on or after the Issue Date with respect to Prior Common Stock Equivalents. “Common Stock Equivalents”
shall mean any securities of the Company or the Company’s 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. Notwithstanding
anything to the contrary contained in this Section 1.6(e) of this Note, this Section 1.6(e) shall not apply to a Dilutive Issuance unless
the Base Conversion Price with respect to such Dilutive Issuance is equal to or less than $1.00 (subject to equitable adjustments for
stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).

 

(f)
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in Section 1.6 of this Note, the Borrower shall, at its expense and within one (1) calendar day after the occurrence of each
respective adjustment or readjustment of the Conversion Price, compute such adjustment or readjustment and prepare and furnish to the
Holder a certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including
but not limited to relevant transaction documents) that evidences the adjustment or readjustment. In addition, the Borrower shall, within
one (1) calendar day after each written request from the Holder, furnish to such Holder a like certificate setting forth (i) the Conversion
Price in effect at such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon conversion of the Note, (iii) the detailed facts upon which such adjustment
or readjustment is based, and (iv) copies of the documentation (including but not limited to relevant transaction documents) that evidences
the adjustment or readjustment. For the avoidance of doubt, each adjustment or readjustment of the Conversion Price as a result of the
events described in Section 1.6 of this Note shall occur without any action by the Holder and regardless of whether the Borrower complied
with the notification provisions in Section 1.6 of this Note.

 

    	7 

     

    

  

1.7
[Intentionally Omitted].

 

1.8
Status as Shareholder. Upon submission of a Notice
of Conversion by a Holder, (i) the Conversion Shares covered thereby (other than the Conversion Shares, if any, which cannot be issued
because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease
and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or
otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding
the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after
the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder
of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted
Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been
converted. In all cases, the Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.

 

1.9
Prepayment. At any time prior to the date that
an Event of Default occurs under this Note (the “Prepayment Period”), the Borrower shall have the right, exercisable on three
(3) Trading Days prior written notice to the Holder of the Note, to prepay the outstanding Principal Amount and interest then due under
this Note in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall
be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to
prepay the Note, and (2) the date of prepayment which shall be three (3) Trading Days from the date of the Optional Prepayment Notice
(the “Optional Prepayment Date”). On the Optional Prepayment Date, the Borrower shall make payment of the amounts designated
below to or upon the order of the Holder as specified by the Holder in writing to the Borrower. If the Borrower exercises its right to
prepay the Note in accordance with this Section 1.9, the Borrower shall make payment to the Holder of an amount in cash equal to the
sum of: (w) 100% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the Principal Amount
to the Optional Prepayment Date plus (y) $750.00 to reimburse Holder for administrative fees.

 

If
the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as
provided in this Section 1.9, then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section
1.9 and the Holder shall no longer be required to cancel and extinguish the Second Warrant under any circumstances.

 

1.10
Repayment from Proceeds. If, at any time prior
to the full repayment or full conversion of all amounts owed under this Note, the Company receives cash proceeds of more than $500,000.00
(the “Minimum Threshold”) in the aggregate (for the avoidance of doubt, each time that the Company receives cash proceeds
on or after the Issue Date (except with respect to this Note), such amount shall be aggregated together for purposes of calculating the
Minimum Threshold)from the issuance of equity or debt, the issuance of securities pursuant to an equity line of credit of the Borrower,
or the sale of assets, the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder
of or publicly disclose such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower
to immediately apply up to 50% of such proceeds after the Minimum Threshold to repay all or any portion of the outstanding Principal
Amount and interest (including any Default Interest) then due under this Note. Failure of the Borrower to comply with this provision
shall constitute an Event of Default.

 

ARTICLE
II. RANKING AND CERTAIN COVENANTS

 

2.1
[Intentionally Omitted].

 

2.2
Other Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly or indirectly
through any Subsidiary or affiliate) incur or guarantee after the Issue Date any unsecured indebtedness that is senior to or pari passu
with (in priority of payment and performance) the Borrower’s obligations hereunder.

 

    	8 

     

    

  

2.3
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without
the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash,
property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional
shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its
capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s
disinterested directors.

 

2.4
[Intentionally Omitted].

 

2.5
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any
consent by the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.6
Advances and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any person,
firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the
Borrower, except conversions of the Company’s Series A Preferred Stock, and except loans, credits or advances (a) in existence
or committed on the Issue Date and which the Borrower has informed Holder in writing prior to the Issue Date, (b) in regard to transactions
with unaffiliated third parties, made in the ordinary course of business or (c) in regard to transactions with unaffiliated third parties,
not in excess of $100,000. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, repay any affiliate (as defined in Rule
144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such party.

 

2.7
Section 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement
structured in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a
“3(a)(10) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to
a 3(a)(10) Transaction while this Note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this
Note, but not less than $25,000, will be assessed and will become immediately due and payable to the Holder at its election in the form
of a cash payment or added to the balance of this Note (under Holder’s and Borrower’s expectation that this amount will tack
back to the Issue Date).

 

2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, (a) change the nature of its business; (b) sell, divest, change the structure of
any material assets other than in the ordinary course of business; (c) enter into a Variable Rate Transaction; or (d) enter into any
merchant cash advance transactions. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower
shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and
become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or
remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary.

 

2.9
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate or Articles
of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to
protect the rights of the Holder.

 

2.10
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note.

 

ARTICLE
III. EVENTS OF DEFAULT

 

It
shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”)
shall occur:

 

    	9 

     

    

  

3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.

 

3.2
Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form)
any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, (iii) fails to reserve the Reserved Amount at all times, (iv) the Borrower directs
its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically
or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to
this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or
hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on
any certificate for any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this
paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for two (2) Trading Days after the Holder shall have delivered a Notice of Conversion, and/or (v)
fails to remain current in its obligations to its transfer agent (including but not limited to payment obligations to its transfer agent).
It shall be an Event of Default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by
the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent
in order to process a conversion, such advanced funds shall be added to the principal balance of the Note.

 

3.3
Breach of Agreements and Covenants. The Borrower breaches any covenant, agreement, or other term or condition contained in the
Purchase Agreement, this Note, Irrevocable Transfer Agent Instructions, Warrant (as defined in the Purchase Agreement) (the “Warrant”),
or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith.

 

3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this
Note, Irrevocable Transfer Agent Instructions, Warrant, or in any agreement, statement or certificate given in writing pursuant hereto
or in connection herewith or therewith shall be false or misleading in any material respect when made and the breach of which has (or
with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall otherwise be appointed.

 

3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the
Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary
of the Borrower.

 

3.8
Failure to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements
of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.

 

3.9
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

    	10 

     

    

  

3.10
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its
debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.11
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property
or other assets which are necessary to conduct its business (whether now or in the future).

 

3.12
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or
period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, unless such restatement is solely
in connection with satisfying SEC rules for the effectiveness of the Pending S-1.

 

3.13
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.14
Cross-Default. The declaration of an event of default by any lender or other extender of credit to the Company under any notes,
loans, agreements or other instruments of the Company evidencing any indebtedness of the Company (including those filed as exhibits to
or described in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.

 

3.15
[Intentionally Omitted].

 

3.16
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or
any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.

 

3.17
Unavailability of Rule 144. If, at any time on or after the date that is six (6) calendar months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s
brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion
of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or (ii) thereupon
deposit such shares into the Holder’s brokerage account.

 

3.18
Delisting, Suspension, or Quotation of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s
Common Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on a
Principal Market.

 

3.19
Rights and Remedies Upon an Event of Default. Upon the occurrence of any Event of Default specified in this Article III, (i) the
Holder shall no longer be required to cancel and extinguish the Second Warrant under any circumstances, (ii) this Note shall become immediately
due and payable, and (iii) the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the date of full repayment multiplied
by 125% (collectively the “Default Amount”), as well as all costs, including, without limitation, legal fees and expenses,
of collection, all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower. Holder may, in its
sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes of payments in Common Stock, the conversion
formula set forth in Section 1.2 shall apply as well as all other provisions of this Note. The Holder shall be entitled to exercise all
other rights and remedies available at law or in equity.

 

    	11 

     

    

  

Upon
the occurrence of any Event of Default, and in addition to any other right or remedy of the Holder hereunder, under the related transaction
documents, or otherwise at law or in equity, the Borrower hereby irrevocably authorizes and empowers Holder or its legal counsel, each
as the Borrower’s attorney-in-fact, to appear ex parte and with notice to the Borrower to confess judgment against the Borrower
for the unpaid amount of this Note. The judgment shall set forth the amount then due hereunder, plus attorney’s fees and cost of
suit, and to release all errors, and waive all rights of appeal. The Borrower waives the right to contest Holder’s rights under
this section, including without limitation the right to any stay of execution and the benefit of all exemption laws now or hereafter
in effect. No single exercise of the foregoing right and power to confess judgment will be deemed to exhaust such power, whether or not
any such exercise shall be held by any court to be invalid, voidable, or void, and such power shall continue undiminished and may be
exercised from time to time as the Holder may elect until all amounts owing on this Note have been paid in full. The Borrower shall provide
a signed and notarized copy of the of the affidavit of confession of judgment attached hereto as Exhibit “B” on or before
the Closing Date.

 

ARTICLE
IV. MISCELLANEOUS

 

4.1
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Holder existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be
in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:

 

If
to the Borrower, to:

 

DATA443
RISK MITIGATION, INC.

101
J Morris Commons Lane, Suite 105

Morrisville,
NC 27560

Attention:
Jason Remillard

e-mail:
jason@data443.com

 

If
to the Holder:

 

MAST
HILL FUND, L.P.

48
Parker Road

Wellesley,
MA 02482

e-mail:
admin@masthillfund.com

 

4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the
Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. The Borrower shall not assign this Note or any rights or obligations hereunder without
the prior written consent of the Holder. The Holder may assign its rights hereunder to any “accredited investor” (as defined
in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined
under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance
of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof.

 

    	12 

     

    

  

4.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

4.6
Governing Law; Venue;
Attorney’s Fees. This Note shall be
governed by and
construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought
by either party against the other concerning the transactions contemplated by this Note or any other agreement, certificate, instrument
or document contemplated hereby shall be brought only in the state courts located in the Commonwealth of Massachusetts or federal courts
located in the Commonwealth of Massachusetts. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably
waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note
or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party in any action
or dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated hereby or
thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.

 

4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal
Amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt
of a cash payment without the opportunity to convert this Note into shares of Common Stock.

 

4.8
Purchase Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement and the documents
entered into in connection herewith and therewith.

 

4.9
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification
of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the
event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive
payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger,
consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other
right, or for the purpose of determining shareholders who are entitled to vote in connection with any change in control or any proposed
liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior
to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier),
of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief
statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The
Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section 4.9.

 

4.10
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder,
by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at
law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the
Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach
of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.

 

    	13 

     

    

  

4.11
Construction; Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed
against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.

 

4.12
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right
or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided
that the total liability of the Company under this Note for payments which under the applicable law are in the nature of interest shall
not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which under the applicable
law in the nature of interest that the Company may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if
the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any
official governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the Maximum
Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Holder with respect to indebtedness
evidenced by this the Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be
refunded to the Company, the manner of handling such excess to be at the Holder’s election.

 

4.13
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of
law (including any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision of this Note.

 

4.14
[Intentionally Omitted].

 

4.15
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic
calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit
the disputed determinations or arithmetic calculations via facsimile (i) within one (1) Trading Day after receipt of the applicable notice
giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination
or calculation within one (1) Trading Day of such disputed determination or arithmetic calculation (as the case may be) being submitted
to the Borrower or the Holder, then the Borrower shall, within one (1) Trading Day, submit (a) the disputed determination of the Conversion
Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by
the Borrower and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower.
The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify
the Borrower and the Holder of the results no later than one (1) Trading Day from the time it receives such disputed determinations or
calculations. Such investment bank’s or accountant’s determination or calculation shall be binding upon all parties absent
demonstrable error.

 

4.16
Right of First Refusal. Other than arrangements that are in place or disclosed in SEC Documents prior to the Issue Date or transactions
in which the Company receives net proceeds less than $150,000, if at any time while this Note is outstanding, the Borrower has a bona
fide offer of capital or financing from any 3rd party, that the Borrower intends to act upon, then the Borrower must first offer such
opportunity to the Holder to provide such capital or financing to the Borrower on the same terms as each respective 3rd party’s
terms. Should the Holder be unwilling or unable to provide such capital or financing to the Borrower within five (5) Trading Days from
Holder’s receipt of written notice of the offer (the “Offer Notice”) from the Borrower, then the Borrower may obtain
such capital or financing from that respective 3rd party upon the exact same terms and conditions offered by the Borrower to the Holder,
which transaction must be completed within 30 days after the date of the Offer Notice. If the Borrower does not receive the capital or
financing from the respective 3rd party within 30 days after the date of the respective Offer Notice, then the Borrower must again offer
the capital or financing opportunity to the Holder as described above, and the process detailed above shall be repeated. The Offer Notice
must be sent via electronic mail to admin@masthillfund.com.

 

[signature
page follows]

 

    	14 

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on October 19, 2021.

 

	DATA443
    RISK MITIGATION, INC.	 
	 	 	 
	By:		 
	Name:	Jason
    Remillard	 
	Title:	Chief
    Executive Officer	 

 

    	15 

     

    

 

EXHIBIT
A — NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert $________ principal amount of the Note (defined below) into that number of shares of Common Stock to be
issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of DATA443 RISK MITIGATION, INC.,
a Nevada corporation (the “Borrower”), according to the conditions of the promissory note of the Borrower dated as of October
19, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for
transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

	 	☐	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
    or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name
    of DTC Prime Broker:
	 	 	Account
    Number:
	 	 	 
	 	☐	The
                                                                              undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth
                                                                              below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if
                                                                              additional space is necessary, on an attachment hereto:

 

	 	 	Date of Conversion:	 	 
	 	 	Applicable Conversion Price:	$	 
	 	 	Number
of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:

	 

    _____________________ 
	 
	 	 	Amount
of Principal Balance Due remaining Under the Note after this conversion:
	 

    _____________________ 
	 

 

 

	 	By:
    	 
	 	Name:	 
	 	Title:	 
	 	Date:	 

 

    	 

     

    

  

EXHIBIT
B – CONFESSION OF JUDGMENT

 

(see
attached)

 

    	 

     

    

 

Affidavit of Confession of Judgment

 

	COMMONWEALTH
    OF MASSACHUSETTS	 	 
	————————————————————————
    X	 	 
	MAST
    HILL FUND, L.P.,	 	 
	    	 	Index
    No.
	      Plaintiff,	 	 
	 	 	AFFIDAVIT
    OF CONFESSION OF
	   -
    against -     	 	JUDGMENT
	          	 	 
	DATA443
    RISK MITIGATION, INC.,      	 	
	      Defendant.	 	 
	————————————————————————
    X	 	 
	 	 	 
	COMMONWEALTH
    OF MASSACHUSETTS            )	 	 
	                                                                                             )
    ss.:	 	 

 

Jason
Remillard, being duly sworn, hereby deposes and says:

 

1.
I am the Chief Executive Officer of defendant DATA443 RISK MITIGATION, INC., a Nevada corporation (“Borrower”). As such,
I am fully familiar with all the facts and circumstances recited herein on personal knowledge. Borrower has its principal place of business
at 101 J Morris Commons Lane, Suite 105, Morrisville, North Carolina 27560. On behalf of the Borrower, I hereby confess judgment in favor
of MAST HILL FUND, L.P., a Delaware limited partnership (“Mast Hill”), with its address at 48 Parker Road, Wellesley, MA
02482, in the amount of $444,444.00, less any payments made on or after the date of this affidavit of confession of judgment, plus Default
Interest (as defined in the Note (as defined herein)) on said amount and all other applicable penalties under the Note. In no event shall
interest payable hereunder exceed the maximum permissible under applicable law.

 

2.
I hereby authorize the federal courts and/or state courts located in the Commonwealth of Massachusetts to enter judgment against Borrower
in the amount of in the amount of $444,444.00, less any payments made on or after the date of this affidavit of confession of judgment,
plus Default Interest on said amount and all other applicable penalties under the Note, plus the costs and attorneys’ fees that
are set forth below, less any payments made on or after the date of this affidavit of confession of judgment, upon Borrower’s failure
for any reason to timely make any payment to Mast Hill called for by the promissory note between of the parties, dated October 19, 2021
(the “Note”), due to the occurrence of an Event of Default (as defined in the Note) under the Note.

 

    	 

     

    

  

3.
In order to secure these obligations, Borrower agreed to simultaneously deliver with the execution of the Note this Affidavit of Confession
of Judgment.

 

4.
The sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Mast Hill under the following circumstances:
Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Mast Hill the principal sum of $444,444.00
plus interest as provided for therein. The amounts confessed by this affidavit represent a promissory note investment by Mast Hill in
Borrower and arise out of Borrower’s breach of its obligations under the Note.

 

5.
Borrower agrees to pay any and all costs and expenses incurred by Mast Hill in enforcing the terms of this affidavit of confession of
judgment, including reasonable attorneys’ fees and expenses at the rate of $475.00 per hour that Mast Hill incurs or is billed
for in connection with enforcing the terms of the affidavit of confession of judgment, entering any Judgment, collecting upon said Judgment,
and defending or prosecuting any appeals.

 

[signature
page to follow]

 

    	 

    	 

    

 

	 	DATA443 RISK MITIGATION, INC.
	 	 	 
	 	By:	 
	 	Name:
	 Jason Remillard
	 	Title:	 Chief Executive Officer
	 	 	 
	STATE
    OF ________________)	 	
	ss.:	 	 
	COUNTY
    OF ______________ )	 	

 

ACKNOWLEDGMENT

 

On
__________, 2021 before me personally came ________________________________________, to me known, who, by me duly sworn, did depose and
say that deponent is an officer of DATA443 RISK MITIGATION, INC., the corporation described in, and which executed the foregoing affidavit
of confession of judgment, that deponent knows the seal of the corporation, that the seal affixed to the affidavit of confession of judgment
is the corporation’s seal, that it was affixed by order of the board of directors of the corporation and that deponent signed deponent’s
name by like order.

 

_____________________________

Notary
Public

 

SEAL:

 

[Signature
Page to Affidavit of Confession of Judgment]Document

EMPLOYMENT AGREEMENT FOR
HEATHER E. BRILLIANT

This Employment Agreement (this “Agreement”) is entered into as of the 26th day of October 2021, by and between Diamond Hill Capital Management, Inc. (“DHCM”), a wholly-owned subsidiary of Diamond Hill Investment Group, Inc. (“DHIG”, and together with DHCM, the “Employer”) and Heather E. Brilliant (the “Executive”).

WHEREAS, the Employer and Executive entered into an employment agreement dated July 5, 2019, whereby Employer and Executive agreed to the terms of the Executive’s employment with Employer (“Initial Agreement”);

WHEREAS, the term of employment under the Initial Agreement was to commence as soon as was permitted by the Executive’s restrictions with her previous employer but no later than November 1, 2019, and to end on December 31, 2024 (“Initial Term”);

WHEREAS, the Employer made significant changes to its compensation practices subsequent to the date of the Initial Agreement;

WHEREAS, the Employer and Executive each desire to enter into this Agreement to modify the terms of the Executive’s compensation consistent with such practices and to extend the Initial Term to end on December 31, 2026; and

WHEREAS, the Employer views it as being in the best interest of its employees, clients, and shareholders to enter into this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and adequacy of which are agreed to by the parties, the Employer and the Executive hereby mutually agree as follows:

1.    Term of Employment. The Executive shall be employed by the Employer for a period beginning as of the date hereof (the “Effective Date”), and ending on December 31, 2026 (“Five- Year Term”), subject to the terms and conditions set forth in this Agreement; provided, however, that beginning on December 31, 2026 and each anniversary thereof, the term of employment under this Agreement shall automatically renew and be extended for an additional one-year period, unless the Employer or the Executive provides the other party not less than 120 days prior written notice that the term shall not be so extended (the Five-Year Term plus any extension thereof, the “Term”).

2.    Position and Duties.

(a)    During the Term, the Executive shall serve as the President and Chief Executive Officer (“CEO”) of the Employer at the Employer’s principal offices in Columbus, Ohio. In such capacity, the Executive shall have all the authorities and duties commensurate with such positions that are customary for a corporation of the Employer’s size and nature, and such other duties consistent with such positions that are customary for a corporation of the Employer’s size and nature, and such other duties consistent with such positions as shall be reasonably determined 
1

from time to time by the DHIG Board of Directors (the “Board”). The Executive shall report directly to the Board. The Executive shall hold such other positions at Affiliates of the Employer as are consistent with her positions with the Employer, and as may from time to time be reasonably requested of her by the Board.

For purposes of this Agreement, an “Affiliate” shall mean any corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, trust, association, or organization which is, directly or indirectly, controlled by, or under common control with, the Employer.

(b)    During the Term, the Executive will continue to serve as a member of the Board pursuant to the rules applicable to all such Board members.

(c)    Except as otherwise set forth in this Agreement, the Executive will devote all of her skills and her full business time and attention to her duties hereunder and in furtherance of the business and interests of the Employer and its Affiliates and, during the Term, will not directly or indirectly render any services of a business, commercial or professional nature to any person or organization without the prior written consent of the Board; provided, however, that the Executive will not be precluded from participation in community, civic, charitable, or similar activities that do not unreasonably interfere with her responsibilities hereunder, subject to the prior written consent of the Board, which consent shall not be unreasonably withheld.

(d)    Upon termination of the Executive’s employment hereunder for any reason, the Executive shall cease to hold any Board position or other position as an officer or director (or any other similar position) of Employer or any Affiliate and shall resign from all positions as an officer or director (or any other similar position) in all corporations, partnerships, limited liability companies or other entities for which the Executive is serving, at the Employer’s request, as an officer or director (or in such other similar position).

3.    Compensation.

(a)    Base Salary. During the Term, the Executive will receive an annual base salary of
$400,000. The Board will review the Executive’s base salary annually and, in its discretion, may recommend increases, but not decreases, to the amount of such base salary based upon procedures of the Employer that determine adjustments for other executives of the Employer. The initial annual base salary, together with any increases, shall be the Executive’s annual base salary (“Base Salary”). The Base Salary will be payable in accordance with the Employer’s regular payroll payment practices.

(b)    Annual Incentive Award. Each calendar year during the Term, the Executive will be eligible for an incentive award with an annual target fair market value equal to $1,750,000, subject to the sole discretion of the Board (“Incentive Award”). Notwithstanding the foregoing, in each calendar year, the Executive shall be entitled to receive a minimum Incentive Award of at least $600,000. The Board in its discretion may determine whether to pay any such Incentive Award in cash, vested shares of Employer stock, or any combination thereof, except that at least 40% of any Incentive Award must be paid in cash. Receipt of any such annual Incentive Award shall be determined, based upon: (i) the Executive’s satisfaction of goals and objectives 
2

established by the Board in consultation with the Executive for the relevant calendar year, (ii) the Employer’s performance during the relevant calendar year, and (iii) the Executive meeting employee eligibility requirements under the Diamond Hill Investment Group, Inc. Equity and Cash Incentive Plan (“Plan”).

Any payments or stock issuance to be made pursuant to this Section 3(b) will be made to the Executive no later than March 15th of the calendar year following the calendar year for which such Incentive Award is payable and shall be subject to the Employer’s Compensation Recoupment and Restitution Policy. The Employer may prorate any such Incentive Award where appropriate.

(c)    Annual Long-Term Incentive Equity Award. Each calendar year during the Term the Executive will be eligible for a long-term incentive equity award with an annual target fair market value equal to: (i) $600,000 for each calendar year prior to the full vesting of the initial five-year cliff-vested award of restricted stock granted to Executive under the Initial Agreement (the “Initial Equity Award”), and (ii) $1,200,000 for each calendar year following the full vesting of the Initial Equity Award, subject to the sole discretion of the Board (“LTI Award”). Receipt of such annual LTI Award shall be determined, based upon the Executive’s satisfaction of goals and objectives established by the Board in consultation with the Executive for the relevant calendar year, and shall be governed by the terms of the Plan. Any stock grant to be made in connection with an LTI Award pursuant to this Section 3(c) will be made to the Executive no later than April 1st of the calendar year following the calendar year for which such LTI Award is awarded and shall vest annually over the next three-year period on a pro-rata basis.

(d)    Additional Compensation Plan Awards. The Executive will be eligible to participate in other compensation plans and receive any applicable awards thereunder, which are made available by the Employer to other senior executives, at levels commensurate with the Executive’s position and performance, on terms and conditions no less favorable than those provided to other senior executives generally.

4.    Fringe Benefits and Expenses.

(a)    Fringe Benefits. During the Term, the Employer will provide the Executive with all health and life insurance coverages, disability programs, tax-qualified retirement plans, equity compensation programs, paid holidays, paid vacation, perquisites, and such other fringe benefits of employment as the Employer may provide from time to time to actively employed senior executives of the Employer. Notwithstanding anything herein to the contrary, the Employer may discontinue or terminate at any time any employee benefit plan, policy or program described in this Section 4(a), now existing, or hereafter adopted, to the extent permitted by the terms of such plan, policy, or program and will not be required to compensate the Executive for such discontinuance or termination.

(b)    Expenses. During the Term, the Employer shall reimburse the Executive for all reasonable travel, industry, entertainment, out-of-pocket, and miscellaneous expenses incurred by the Executive in connection with the performance of the Executive’s duties and other business activities under this Agreement in accordance with the existing policies and procedures of the Employer pertaining to reimbursement of such expenses to senior executives. In addition, within
3

30 days following the date of this Agreement, the Employer shall reimburse the Executive for reasonable attorneys’ fees incurred by her in the negotiation and drafting of this Agreement up to a maximum amount of $10,000.

(c)    Paid Vacation. During the Term, the Executive shall be entitled to six (6) weeks paid vacation each year. Vacation time will not accrue or be paid out upon termination of this Agreement or the Executive’s termination of employment with the Employer.

5.    Termination of Employment. For purposes of this Agreement, any reference to the Executive’s “termination of employment” (or any form thereof) shall mean the Executive’s “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation §1.409A-1(h).

(a)    Death of Executive. The Term and the Executive’s employment will terminate upon the Executive’s death and the Executive’s beneficiary (as designated by the Executive in writing with the Employer prior to the Executive’s death) will be entitled to the following payments and benefits:

(i)    Any Base Salary that is accrued but unpaid and any business expenses that are unreimbursed, in each case, as of the date of termination of employment;

(ii)    Any rights and benefits (if any) provided under plans and programs of the Employer, determined in accordance with the applicable terms and provisions of such plans and programs;

(iii)    Any annual Incentive Award for a completed year that has not yet been paid as of the date of the Executive’s death; and

(iv)    Any LTI Award and/or Initial Equity Award for a completed year that has been granted but not yet vested shall vest in accordance with the terms of the Plan and, if applicable, the relevant award agreement.

The payments described in Sections 5(a)(i), (ii), and (iii) are hereinafter collectively referred to as the “Accrued Obligations”. In the absence of a beneficiary designation by the Executive, or, if the Executive’s designated beneficiary does not survive her, payments and benefits described in this Section 5(a) will be paid to the Executive’s estate. Any payments due under Section 5(a)(i) and Section 5(a)(iii) shall be made within 30 days after the date of the Executive’s termination of employment.

(b)    Disability. The Term, and the Executive’s employment, may be terminated by the Employer upon 60 days written notice from the Employer following the determination, as set forth immediately below, that the Executive suffers from a Permanent Disability. For purposes of this Agreement, “Permanent Disability” means a physical or mental impairment that renders the Executive incapable of performing the essential functions of the Executive’s job, on a full-time basis, even taking into account reasonable accommodation required by law, qualifying the Executive for benefits under the Employer’s long-term disability plan.
During any period that the Executive fails to perform the Executive’s duties hereunder as a result of a Permanent Disability (“Disability Period”), the Executive will 
4

continue to receive the Executive’s Base Salary at the rate then in effect for such period until the Executive’s employment is terminated pursuant to this Section 5(b); provided, however, that payments of Base Salary so made to the Executive will be reduced by the sum of the amounts, if any, that were payable to the Executive at or before the time of any such salary payment under any disability benefit plan or plans of the Employer and that were not previously applied to reduce any payment of Base Salary. In the event that the Employer elects to terminate the Executive’s employment due to Permanent Disability, the Executive will be entitled to payment, within 30 days following termination of employment, of the Accrued Obligations.

(c)    Termination of Employment for Cause. The Employer may terminate the Term and the Executive’s employment upon written notice at any time for “Cause”.

(i)    For purposes of this Agreement, “Cause” means the Executive has (A) caused the Employer or any of its Affiliates, other than pursuant to the advice of the Employer’s legal counsel, to violate a law which, in the opinion of the Employer’s legal counsel, is reasonable grounds for civil penalties in excess of $250,000 or criminal penalties against the Employer, an Affiliate or the Board; (B) engaged in conduct which constitutes a material violation of the established written policies or procedures of the Employer regarding the conduct of its employees, including policies regarding sexual harassment of employees and use of illegal drugs or substances in the course of the Executive’s employment with the Employer; (C) committed fraud, or acted with willful misconduct or gross negligence, in carrying out her duties under this Agreement; (D) been convicted of any crime involving moral turpitude or a violation of federal or state securities or investment advisor laws; or (E) committed a material breach of any material covenant or obligation, or failed to undertake in good faith any material covenant, provision or undertaking set forth in this Agreement.

(ii)    In the event that the Employer terminates the Executive’s employment for Cause, the Executive will be entitled to payment of the Accrued Obligations set forth in Sections 5(a)(i) and (ii).

(d)    Termination Without Cause. The Employer may terminate the Term and the Executive’s employment for any reason upon 60 days prior written notice to the Executive. If the Executive’s employment is terminated by the Employer for any reason other than the reasons set forth in subsections (a), (b) or (c) of this Section 5, subject to Board approval, the Executive will be entitled to the following payments and benefits:

(i)    Payment of the Accrued Obligations;

(ii)    A single lump sum payment equal to the Executive’s Base Salary in effect at termination of employment;

(iii)    A single lump sum payment equal to the annual Incentive Award received by Executive for the calendar year preceding termination of employment, which amount
shall be prorated for the number of days during such calendar year preceding the termination of employment; and

5

(iv)    A single lump sum payment equal to the fair market value of the portion of any LTI Award that would have vested for the calendar year in which termination of employment occurs.

In the event that Executive is terminated without Cause pursuant to this Section 5(d), but Executive and Employer agree to state publicly that Executive voluntarily resigned (either for (i) Other than Good Reason pursuant to Section 5(e) below, or (ii) for Good Reason pursuant to Section 5(f) below), Executive shall be entitled to receive all amounts set forth above in this Section 5(d) instead of the amounts set forth in either 5(e) or 5(f) below.

(e)    Voluntary Termination by Executive Other Than for Good Reason. The Executive may resign and terminate the Term and the Executive’s employment with the Employer other than for Good Reason upon not less than 60 days prior written notice to the Employer. In the event that the Executive terminates the Executive’s employment voluntarily pursuant to this Section 5(e), the Executive will be entitled to payment of the Accrued Obligations set forth in Sections 5(a)(i) and (ii).

(f)    Good Reason Termination. The Executive may resign and terminate the Term and the Executive’s employment with the Employer for Good Reason if: (i) the Executive gives written notice of the Good Reason event to the Employer within 90 days after the Executive first learns of the event constituting Good Reason, (ii) the Good Reason event remains uncured for 30 days after notice of the event is given, and (iii) the Executive gives 30 days prior written notice of her resignation within 30 days after expiration of such cure period.

For purposes of this Agreement, the Executive will have “Good Reason” to terminate the Executive’s employment with the Employer if any of the following events occur without the Executive’s consent (provided the Employer does not fully cure the effect of such event within 30 days following its receipt of written notice of such event from the Executive):

(i)    A material reduction of the Executive’ Base Salary;

(ii)    The Employer requires the Executive to relocate her principal place of employment to a location more than 50 miles from her principal place of employment before such relocation;

(iii)    The Employer assigns duties to the Executive that are materially inconsistent in any respect with the Executive’s position (including, without limitation, her status, office, and title), authority, duties, or responsibilities, or takes any other action that results in a material diminution in the Executive’s position, authority, duties, or responsibilities;

(iv)    The Employer changes the Executive’s reporting structure within the organization so that she no longer reports directly to the Board; or
(v)    The Employer materially breaches any material covenant, or obligation set forth in this Agreement or any other written agreement, plan, or arrangement.

6

In the event that the Executive terminates the Term and the Executive’s employment with the Employer for Good Reason pursuant to this Section 5(f), the Executive will be entitled to receive the payments and benefits described in Section 5(d) hereof, as if her employment had been terminated by the Employer without Cause.

(g)    Expiration of Term of Agreement. If the Term expires and the Employer and the Executive have not mutually agreed in writing to extend the Term, the Executive’s employment will terminate at the end of the Term and the Executive will be entitled to payment of the Accrued Obligations.

6.    Change In Control.

(a)    Occurrence of Change in Control Event. In the event that a Change in Control occurs and, within six (6) months prior or 24 months following such Change in Control, the Executive’s employment is terminated by the Employer or its successor without Cause as described in Section 5(c) or is terminated for Good Reason by the Executive as described in Section 5(f), then, in lieu of any payment that might be provided under Section 5 of this Agreement, the Executive will be entitled to the following payments and benefits from the Employer or its successors:

(i)    Payment of the Accrued Obligations;

(ii)    A single lump sum payment equal to the greater of: (A) the Executive’s annual Base Salary in effect at termination of employment; or (B) the Base Salary paid or payable to the Executive with respect to the most recently completed calendar year of the Employer;

(iii)    A single lump sum payment equal to the annual Incentive Award made to the Executive for the calendar year preceding termination of employment;

(iv)    A single lump-sum payment equal to the Executive’s target annual Incentive Award for the calendar year in which termination of employment occurs, multiplied by a fraction, the numerator of which is 365 minus the number of days remaining in the calendar year after the date of termination of employment and the denominator of which is 365;

(v)    Full vesting of any previously granted LTI Award, to the extent not previously vested in a Change in Control transaction; and

(vi)    Full vesting of the Initial Equity Award, to the extent not previously vested in a Change in Control transaction.

Any payments due under this Section 6(a) shall be made within 60 days after the date of the Executive’s termination of employment.
(b)    Definition of Change in Control. For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following:

7

(i)    Any transaction or series of transactions, whereby any “person” is or becomes the “beneficial owner” (as those terms are each used in Section 13 and 14(d)(2) of the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of DHIG representing fifty percent (50%) or more of the combined voting power of DHIG’s then outstanding securities; provided, that for purposes of this paragraph, the term “person” will exclude: (A) a trustee or other fiduciary holding securities under an employee benefit plan of DHIG or an Affiliate, and (B) a corporation owned directly or indirectly by the stockholders of DHIG in substantially the same proportions as their ownership in DHIG;

(ii)    Any merger, consolidation, other corporate reorganization, or liquidation of DHIG in which DHIG is not the continuing or surviving corporation or entity or pursuant to which its common shares would be converted into cash, securities, or other property, other than: (A) a merger or consolidation with a wholly-owned subsidiary, (B) a reincorporation of DHIG in a different jurisdiction, or (C) any other transaction in which there is no substantial change in the stockholders of DHIG;

(iii)    Any merger or consolidation of DHIG with or into another entity or any other corporate reorganization, if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation, or other reorganization is owned by persons who were not stockholders of DHIG immediately prior to such merger, consolidation, or other reorganization;

(iv)    The sale, transfer, or other disposition of all or substantially all of the assets of DHIG in one transaction or a series of transactions; or

(v)    A change or series of related or unrelated changes in the composition of the Board, during any twenty-four (24) month period beginning on the Effective Date, as a result of which fewer than fifty percent (50%) of the incumbent directors are directors who either: (A) had been directors of DHIG on the later of the Effective Date or the date twenty- four (24) months prior to the date of the event that may constitute a Change in Control (the “Original Directors”), or (B) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the Original Directors who were still in office at the time of the election or nomination and the directors whose election or nomination was previously so approved.

(c)    Excess Parachute Payments and Other Limitations on Payment.

(i)    Notwithstanding anything herein to the contrary, if any payments or benefits paid or payable to the Executive pursuant to this Agreement or any other plan, program or arrangement maintained by the Employer or an Affiliate would constitute a “parachute payment” within the meaning of Section 280G of the Code, then the Executive shall receive the greater of: (A) one dollar ($1.00) less than the amount which would cause
the payments and benefits to constitute a “parachute payment”, or (B) the amount of such payments and benefits, after taking into account all federal, state and local taxes, including the excise tax imposed under Section 4999 of the Code payable by the 
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Executive on such payments and benefits, if such amount would be greater than the amount specified in Section 6(c)(i)(A), after taking into account all federal, state and local taxes payable by the Executive on such payments and benefits. Any reduction to any payment made pursuant to this Section 6(c)(i) shall be made consistent with the requirements of Section 409A of the Code.

(ii)    If any payments otherwise payable to the Executive pursuant to this Agreement are prohibited or limited by any statute, regulation, order, consent decree, or similar limitation in effect at the time the payments would otherwise be paid (a “Limiting Rule”), the Employer: (A) shall pay the maximum amount that may be paid after applying the Limiting Rule; and (B) shall use commercially reasonable efforts to obtain the consent of the appropriate agency or body to pay any amounts that cannot be paid due to the application of the Limiting Rule. The Executive agrees that the Employer shall not have breached its obligations under this Agreement if it is not able to pay all or some portion of any payment due to the Executive as a result of the application of a Limiting Rule.

7.    Release. As a condition to receiving any payments, other than payment of the Accrued Obligations, pursuant to this Agreement, the Executive agrees to release the Employer and all of its Affiliates, employees and directors from any and all claims that the Executive may have against the Employer and all of its Affiliates, employees and directors up to and including the date the Executive signs a Waiver and Release of Claims (“Release”), in a conforming form of release provided by the Employer that does not impose any additional restrictions on the Executive that are more restrictive than those provided under this Agreement. Notwithstanding anything herein to the contrary, the Executive acknowledges that the Executive is not entitled to receive, and will not receive, any severance payments pursuant to this Agreement (excluding payments related to Accrued Obligations) unless and until the Executive provides the Employer with said Release prior to the first date that such severance payment is to be made or is to commence. Notwithstanding anything herein to the contrary, to the extent that the date for which a severance payment constituting “nonqualified deferred compensation” (as defined in Section 409A of the Code) could be in one calendar year or a subsequent calendar year, such severance payments shall not be made until the subsequent calendar year.

8.    Non-Exclusivity of Rights. Nothing in this Agreement will prevent or limit the Executive’s continuing or future participation in any incentive, fringe benefit, deferred compensation, or other plan or program provided by the Employer and for which the Executive may qualify, nor will anything herein limit or otherwise affect such rights as the Executive may have under any other agreements with the Employer. Amounts that are vested benefits or that the Executive is otherwise entitled to receive under any plan or program of the Employer at or after the date of termination of employment, will be payable in accordance with such plan or program.

9.    Covenants.

(a)    Non-Competition. Executive agrees that, during the Term, including any extension thereof, and for a period of one year thereafter following the Executive’s termination ofemployment, the Executive shall not, without the express written consent of the Employer, directly or indirectly, either for the Executive or for or with any other person, partnership, 
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corporation or company, own, manage, control, participate in, consult with, render services for, permit the Executive’s name to be used or in any other manner engage in any activity that is in material and direct competition with any material investment strategy conducted by the Employer or an Affiliate at the time of the Executive’s termination of employment.

For purposes of this Agreement, the term “participate” includes any direct or indirect interest in any enterprise, whether as an officer, director, employee, consultant, partner, investor, sole proprietor, agent, member, representative, independent contractor, executive, franchisor, franchisee, creditor, owner or otherwise; provided, however, that the foregoing investment limitations shall not include passive ownership of less than 1% of the stock of a publicly held corporation whose stock is traded on a national securities exchange or in the over-the-counter market, so long as the Executive has no active participation in the business of such corporation.

(b)    Non-Solicitation. The Executive agrees that, during the Term, including any extension thereof, and for a period of one year thereafter following the Executive’s termination of employment, the Executive shall not, without the express written consent of the Employer:

(i)    Call upon or solicit, either for the Executive or for any other person or firm that engages in material and direct competition with any material investment strategy conducted by the Employer or an Affiliate, any customer with whom the Employer or any Affiliate directly conducts business during the Term; or interfere with any relationship, contractual or otherwise, between the Employer or any Affiliate and any customer with whom the Employer or any Affiliate directly conducts business during the Term; or

(ii)    Induce any person who is at the date of the Executive’s termination of employment an employee, officer or agent of the Employer or any Affiliate to terminate said relationship.

(c)    Confidential Information. The Executive will hold in a fiduciary capacity, for the benefit of the Employer and its current and future Affiliates, all trade secrets (as defined in Ohio Revised Code section 1331.61), secret or confidential information, knowledge, and data relating to the Employer and any current or future Affiliate, that shall have been obtained by the Executive in connection the Executive’s employment with the Employer and that is not public knowledge (other than by acts by the Executive or the Executive’s representatives in violation of this Agreement) (collectively, “Confidential Information”). During the Term and after termination of the Executive’s employment with the Employer, the Executive will not, without the prior written consent of the Employer, communicate or divulge any Confidential Information to anyone other than the Employer or those designated by it, unless such communication is: (i) required pursuant to a compulsory proceeding in which the Executive’s failure to provide such Confidential Information would subject the Executive to criminal or civil sanctions and then only to the extent that the Executive provides prior notice to the Employer prior to disclosure, or (ii) permitted by the last sentence of Section 9(d).

(d)    Non-Disparagement. The parties agree that during the Term and following Executive’s termination of employment, neither the Executive nor the Employer shall make any
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public statements which disparage the other party, including without limitation, any director, officer, or employee of the Employer or an Affiliate. Nothing in this Agreement or elsewhere is intended to prohibit either party from: (i) making truthful statements (A) when required by order of a court, governmental body, or regulatory body having appropriate jurisdiction or (B) when requested by a governmental or quasi-governmental agency or body, or when disclosure is protected by law; or (ii) making disclosures in the course of any proceeding described in Section 16, or in confidence to an attorney or other professional advisor for the purpose of securing professional advice.

(e)    Enforcement of Restrictive Covenants.

(i)    In the event of a breach by the Executive of any covenant set forth in Section 9(a) or (b), the term of such covenant will be extended by the period of the duration of such breach and such covenant will survive any termination of this Agreement but only for the limited period of such extension.

(ii)    The restrictions on competition, solicitation, the release of Confidential Information and non-disparagement provided herein shall be in addition to any similar restrictions contained in any other agreement between the Employer and the Executive and may be enforced by the Employer and/or any successor thereto, by an action to recover payments made under this Agreement, an action for injunction, and/or an action for damages. The provisions of Sections 9(a), (b), (c) and (d) of this Agreement constitute an essential element of this Agreement, without which the Employer would not have entered into this Agreement. Notwithstanding any other remedy available to the Employer at law or at equity, the parties hereto agree that the Employer or any successor thereto, will have the right, at any and all times, to seek injunctive relief in order to enforce the terms and conditions of Sections 9(a), (b), (c) and/or (d).

(iii)    If the scope of any restriction contained in Section 9(a), (b) or (c) of this Agreement is too broad to permit enforcement of such restriction to its fullest extent, then such restriction will be enforced to the maximum extent permitted by law, and the Executive hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

(f)    Return of Property. The Executive agrees that, upon the Executive’s termination of employment, the Executive shall promptly return to Employer any keys, credit cards, passes, confidential documents or material, or other property belonging to the Employer, and the Executive shall also return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) containing Confidential Information or relating to the business or proposed business of the Employer or any Affiliate or containing any Confidential Information relating to the Employer of any Affiliate, except any personal diaries, calendars, rolodexes, personal notes or correspondence and copies of documents evidencing the Executive’s personal rights and obligations. The Executive is also permitted to disclose her post employment restrictions, in confidence, to any subsequent or prospective employer.

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(g)    Cooperation. The Executive agrees that during the Term and following the Executive’s termination of employment, the Executive shall be reasonably available to testify
truthfully on behalf of the Employer or any Affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist the Employer, or any Affiliate, in all reasonable respects in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board, or their representatives or counsel, or representatives or counsel to Employer, or any Affiliate, as requested; provided, however that the same does not materially interfere with the Executive’s then-current professional activities. The Executive shall be reimbursed for her out-of-pocket expenses reasonably incurred in providing such cooperation, even if she is no longer employed by the Employer at the time of such cooperation.

10.    No Mitigation. The Executive is not required to mitigate the amount of any payment or benefit described in this Agreement by seeking other employment or otherwise, nor will the amount of any payment or benefit hereunder be reduced by any compensation that the Executive earns in any capacity after termination of employment or by reason of the Executive’s receipt of or right to receive any retirement or other benefits after termination of employment.

11.    Indemnification. The Executive shall be indemnified (and advanced expenses) by the Employer to the fullest extent permitted in the case of officers under the Employer’s Articles of Incorporation or Code of Regulations, to the maximum extent permitted under applicable law. The Executive will be covered at all times during the Term under the Employer’s Director and Officer Liability Insurance (“DOL Insurance”) and, after the Term ends for whatever reason, the Employer shall use commercially reasonable efforts to continue its DOL Insurance for the Executive under substantially similar terms and in substantially similar amounts as in existence prior to the termination of the Executive’s employment. The DOL Insurance shall be maintained for at least six (6) years from termination of employment and without limiting the foregoing, the Executive shall not be excluded from coverage under such DOL Insurance during such period.

12.    Representations of Executive. The Executive hereby represents and warrants, which representations and warranties will survive the execution and delivery of this Agreement, that: (a) Executive is not a party to or otherwise subject to any other plan, agreement or arrangement that would prohibit Executive from performing the duties described herein; and (b) Executive has taken all other steps as may be required by law or by any applicable regulatory body, for Executive to perform the duties described herein.

13.    Assignment and Survivorship of Benefits. The rights and obligations of the Employer under this Agreement will inure to the benefit of, and will be binding upon, the successors and assigns of the Employer. If the Employer shall at any time be merged or consolidated into, or with, any other company, or if substantially all of the assets of the Employer are transferred to another company, the provisions of this Agreement will be binding upon and inure to the benefit of the company resulting from such merger or consolidation or to which such assets have been transferred, and this provision will apply in the event of any subsequent merger, consolidation, or transfer.

14.    Notices. Any notice given to either party to this Agreement will be in writing, and will be deemed to have been given when delivered personally or sent by certified mail, postage prepaid, 
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return receipt requested, duly addressed to the party concerned, at the address indicated below or to such changed address as such party may subsequently give notice of:

If to the Employer:
Diamond Hill Investment Group, Inc. Attention: Chairman, Board of Directors 325 John H. McConnell Blvd.
Suite 200
Columbus, Ohio 43215

If to the Executive:
Heather E. Brilliant
At the last address on file with the Employer

15.    Taxes. Notwithstanding anything herein to the contrary, all payments and benefits required to be made or provided hereunder by the Employer to the Executive will be subject to withholding of such amounts relating to taxes as the Employer may reasonably determine that it should withhold pursuant to any applicable law or regulations.

16.    Arbitration Enforcement of Rights. Any controversy or claim arising out of, or relating to this Agreement, or the breach thereof, except with respect to Section 9, will be settled by arbitration in Columbus, Ohio in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. Each party will bear its own costs of arbitration, except that the Employer shall bear the cost of the arbitrator.

17.    Governing Law; Captions; Severance. This Agreement will be construed in accordance with, and pursuant to, the laws of the State of Ohio, excluding any conflicts of laws principles. The captions of this Agreement will not be part of the provisions hereof and will have no force or effect. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement. Except as otherwise specifically provided in this Section 17, the failure of either party to insist in any instance on the strict performance of any provision of this Agreement or to exercise any right hereunder will not constitute a waiver of such provision or right in any other instance. No waiver of the applicability of any provision of this Agreement shall be effective unless it is in a writing that expressly incorporates the provision being waived and it is executed by the party against whom it is sought to be enforced.

18.    Supersedes Prior Agreements; Entire Agreement; Amendment. This Agreement supersedes the Initial Agreement and any other prior agreements between the parties, whether written or oral, and any such prior agreements are cancelled as at the date of this Agreement but without prejudice to any rights which have already accrued to either of the parties. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement may be amended only by mutual written agreement executed by the parties that incorporates the provision(s) being amended. This Agreement may be executed in one or more counterparts, and signatures delivered by facsimile (including, without limitation, by portable document format) shall be effective for all purposes.
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19.    Six-Month Distribution Delay for Specified Employees. Notwithstanding anything herein to the contrary, in the event that the Executive is a “specified employee” (as defined in
Section 409A of the Code) of the Employer or any of its Affiliates, as determined pursuant to the Employer’s policy for identifying specified employees, on the date of the Executive’s termination of employment and the Executive is entitled to a payment and/or a benefit under this Agreement that is required to be delayed pursuant to Section 409A(a)(2)(B)(i) of the Code, then such payment or benefit, as applicable, shall not be paid or provided (or begin to be paid or provided) until the first day of the seventh month following the date of the Executive’s termination of employment (or, if earlier, the date of the Executive’s death). The first payment that can be made to the Executive following such period shall include the cumulative amount of any payments or benefits that could not be paid or provided during such period due to the application of Section 409A(a)(2)(B)(i) of the Code.

20.    Compliance with Section 409A of the Code. This Agreement is intended, and shall be construed and interpreted, to comply with Section 409A of the Code and the parties agree to amend any provision (or part thereof) to the extent necessary to comply with Section 409A of the Code (or any exemption thereunder) without diminution of the economic benefits of such provision. For purposes of Section 409A of the Code, each individual payment payable under the Agreement shall be deemed to be a “separate payment” within the meaning of Section 409A of the Code. Any amounts payable solely on account of an involuntary termination shall be excludible from the requirements of Section 409A of the Code, either as separation pay or as short-term deferrals, to the maximum possible extent.

21.    Remedies Cumulative. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or current or future law or in equity. The failure of either party to insist in any instance on the strict performance of any provision of this Agreement or to exercise any right hereunder will not constitute a waiver of such provision or right in any other instance.

22.    Opportunity to Review. The Executive represents that the Executive has been provided with an opportunity to review the terms of this Agreement with legal counsel.

23.    No Presumption. The parties agree that this Agreement is the product of negotiations between parties representing by legal counsel and that the presumption of interpreting ambiguities against the drafter of this Agreement shall not apply.

[Remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

DIAMOND HILL CAPITAL MANAGEMENT, INC.

By:    /s/ Thomas E. Line            
Name:    Thomas E. Line                 
Title:    Chief Financial Officer     

HEATHER E. BRILLIANT

By:    /s/ Heather E. Brilliant           
Date:    October 26, 2021                   

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