Document:

Exhibit
10.2

 

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 COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. 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: US$81,000.00 

        Purchase
        Price: US$75,000.00
	 	Issue
    Date: December 17, 2019

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, mPhase Technologies, Inc., a New Jersey corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of [___], or its registered assigns (the “Holder”), the sum of US$81,000.00, together
with any interest as set forth herein, on December 17, 2020 (the “Maturity Date”), and to pay interest on the unpaid
principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the funding date hereof
(the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment
or otherwise. This Note may be prepaid in whole or in part as explicitly set forth herein. Any amount of principal or interest
on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date
thereof until the same is paid (the “Default Interest”). Interest shall commence accruing on the date that the Note
is fully paid and shall be computed on the basis of a 360-day year and the actual number of days elapsed. All payments due hereunder
(to the extent not converted into common stock, $0.01 par value per share (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 and, in the case of any interest payment date which is not the date
on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. 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. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto
in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (as amended
and/or restated from time to time, the “Purchase Agreement”).

 

    	 

    	 

    

 

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.

 

The
undersigned hereby affirm all of their obligations to the Holder under all of the Transaction Documents and agree and affirm as
follows: (i) that as of the date hereof, the undersigned have performed, satisfied and complied in all material respects with
all the covenants, agreements and conditions under each of the Transaction Documents to be performed, satisfied or complied with
by the undersigned; (ii) that the undersigned shall continue to perform each and every covenant, agreement and condition set forth
in each of the Transaction Documents and this Note, and continue to be bound by each and all of the terms and provisions thereof
and hereof; (iii) that as of the date hereof, no default or Event of Default has occurred or is continuing under the Purchase
Agreement, any Note or any other Transaction Documents, and no event has occurred that, with the passage of time, the giving of
notice, or both, would constitute a default or an Event of Default under the Purchase Agreement, the Notes or any other Transaction
Documents; and (iv) that as of the date hereof, no event, fact, or other set of circumstances has occurred which could reasonably
be expected to have, cause, or result in a Material Adverse Effect.

 

The
undersigned hereby acknowledge, represent, warrant and confirm to Holder that: (i) each of the Transaction Documents executed
by the Company are valid and binding obligations of the Company, enforceable against the Company in accordance with their respective
terms; and (ii) no oral representations, statements, or inducements have been made by Holder, or any agent or representative of
Holder, with respect to this Note, any other Note, the Purchase Agreement, and all other Transaction Documents.

 

The
following terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1 Conversion
Right. The Holder shall have the right at any time to convert all or any part of the outstanding and unpaid principal,
interest, fees, or any other obligation owed pursuant to this Note 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 in no event shall the Holder be entitled
to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number
of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted
portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations
contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with
respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived
by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the
provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing the Conversion Amount (as defined below) (the numerator) by the
applicable Conversion Price then in effect on the date specified in the notice of conversion (the denominator), in the form
attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower 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 before 6:00 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 rates provided in
this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all interest in cash 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) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof.

 

    	2

    	 

    

 

1.2
 Conversion Price.

 

(a) Calculation
of Conversion Price. Subject to the adjustments described herein, and provided that no Event of Default (as defined in
Article III) has occurred, the conversion price (the “Conversion Price”) shall equal the Variable
Conversion Price (as defined herein) (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). The “Variable
Conversion Price” shall equal the lesser of (i) 62% multiplied by the lowest Trading Price (as defined below) during
the previous twenty (20) Trading Days (as defined below) before the Issue Date of this Note (representing a discount rate of
38%) or (ii) 62% multiplied by the Market Price (as defined herein) (representing a discount rate of 38%). “Market
Price” means the lowest Trading Price (as defined below) for the Common Stock during the twenty (20) Trading Day period
ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means, for any security
as of any date, the lesser of: (a) the lowest trade price on the Over- the-Counter Bulletin Board (the “OTCBB”),
OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”) designated
by the Holder or, if the OTCBB is not the principal trading market for such security, the trading price of such security on
the principal securities exchange or trading market where such security is listed or traded or, if no trading price of such
security is available in any of the foregoing manners, the average of the trading prices of any market makers for such
security that are listed in the “pink sheets” by the National Quotation Bureau, Inc., or (b) the closing bid
price on the OTCBB, OTCQB or applicable trading market as reported by a Reporting Service designated by the Holder or, if the
OTCBB is not the principal trading market for such security, the closing bid price of such security on the
principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such
security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. To the extent the Conversion
Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary
to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Borrower
agrees to honor all conversions submitted pending this adjustment. Furthermore, the Conversion Price may be adjusted downward
if, within three (3) business days of the transmittal of the Notice of Conversion to the Borrower, the Common Stock has a
closing bid which is 5% or lower than that set forth in the Notice of Conversion. If the shares of the Borrower’s
Common Stock have not been delivered within three (3) business days to the Holder, the Notice of Conversion may be rescinded.
At any time after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable by DWAC
(including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the
Borrower’s Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for all future
conversions under all Notes. If in the case that the Borrower’s Common Stock is “chilled” for deposit into
the DTC system and only eligible for clearing deposit, an additional 7.5% discount shall apply for all future conversions
under all Notes while the “chill” is in effect. If in the case of both of the above, an additional
cumulative 17.5% discount shall apply. Additionally, if the Borrower ceases to be a reporting company pursuant to the 1934
Act or if the Note cannot be converted into free trading shares after one hundred eighty- one (181) days from the Issue Date,
an additional 15% discount will be attributed to the Conversion Price. If the Trading Price cannot be calculated for such
security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the
Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any
day on which the Common Stock is tradable for any period on the OTCBB, OTCQB or on the principal securities exchange or other
securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its
transfer agent, legal opinions, and DTC deposit and clearing fees associated with any such issuance by applying such amount
to the principal amount due under the Note in an amount not to exceed $500 per Notice of Conversion. 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.

 

While
this Note is outstanding, each time any third party has the right to convert monies owed to that third party (or receive shares
pursuant to a settlement or otherwise), including but not limited to under Section 3(a)(9) and Section 3(a)(10), at a discount
to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), then
the Holder, in Holder’s sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments
in this Note) until this Note is no longer outstanding. While this Note is outstanding, each time any third party has a look back
period greater than the look back period in effect under the Note at that time, including but not limited to under Section 3(a)(9)
and Section 3(a)(10), then the Holder, in Holder’s sole discretion, may utilize such greater number of look back days until
this Note is no longer outstanding. The Borrower shall give written notice to the Holder within one (1) business day of becoming
aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding sentences.

 

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(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the
Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a
merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or
transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower)
publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme)
(the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement
Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted
Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been
applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in
effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth
in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with
respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by
this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or
entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

 

(c) Pro
Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder
in connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock
not in dispute and resolve such dispute in accordance with Section 4.13.

 

1.3 Authorized
Shares. The Borrower covenants that during the period the conversion right exists, 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 Common Stock upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is
required at all times to have authorized and reserved six times the number of shares that is actually issuable upon full
conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved
Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations
pursuant to Section 3(d) of the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and
validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to
its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at
the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall
be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the
outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates
for the Common Stock issuable upon conversion of this Note, 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 to execute and issue
the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.
Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of
any prior conversions.

 

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If,
at any time the Borrower does not maintain or replenish the Reserved Amount within three (3) business days of the request of the
Holder, the principal amount of the Note shall increase by Five Thousand and No/100 United States Dollars ($5,000) (under Holder’s
and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

 

1.4 Method
of Conversion.

 

(a) 
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any
time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail
or other reasonable means of communication dispatched on the Conversion Date prior to 5:00 p.m., New York, New York time) and
(B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

(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 of this Note 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. 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.

 

(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.

 

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(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower 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 (or electronic shares via DWAC transfer, at the option of Holder) for the Common Stock issuable upon such conversion
within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire
unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

(e)
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall
be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the
amount of accrued and unpaid interest on 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 Common Stock 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 received by the Borrower before 5:00 p.m., New York, New York time,
on such date.

 

(f)
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, 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 Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with
DTC through its Deposit Withdrawal At Custodian (“DWAC”) system.

 

(g)
DTC Eligibility & Sub-Penny. If the Borrower fails to maintain its status as “DTC Eligible” for any reason,
or, if the Conversion Price is less than $0.01, at any time while this Note is outstanding, the principal amount of the Note shall
increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation
that any principal amount increase will tack back to the Issue Date). In addition, the Variable Conversion Price shall be redefined
to mean fifty percent (50%) multiplied by the Market Price, subject to adjustment as provided in this Note.

 

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(h)
Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue
other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable
upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section
1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each
day beyond the Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate
to the Holder or credit the Holder’s balance account with OTC for the number of shares of Common Stock to which the Holder
is entitled upon such Holder’s conversion of any Conversion Amount (under Holder’s and Borrower’s expectation
that any damages will tack back to the Issue Date). Such cash amount shall be paid to Holder by the fifth day of the month following
the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month
following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall
accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder.
The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible
to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(h) are justified.

 

(i)
Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from
the Conversion Date confirming the details of Notice of Conversion, (ii) the Borrower fails to provide any of the shares of the
Borrower’s Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of
the Note of Conversion, (iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s
Common Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower’s standing, (iv) the Holder
is unable to deposit the shares of the Borrower’s Common Stock requested in the Notice of Conversion for any reason related
to the Borrower’s standing, (v) at any time after a missed Deadline, at the Holder’s sole discretion, or (vi) if OTC
Markets changes the Borrower’s designation to ‘Limited Information’ (Yield), ‘No Information’ (Stop
Sign), ‘Caveat Emptor’ (Skull & Crossbones), ‘OTC’, ‘Other OTC’ or ‘Grey Market’
(Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder maintains
the option and sole discretion to rescind the Notice of Conversion (“Rescindment”) with a “Notice of Rescindment.”

 

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1.5
Concerning the Shares. The shares of Common Stock 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 Act or (ii) the Borrower or its transfer
agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) 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 under the Act
(or a successor rule) (“Rule 144”) 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 shares of Common Stock issuable upon conversion of
this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number
of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable
upon conversion of this Note 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
COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 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 Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is
effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by
the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the
Borrower does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an
exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant
to Section 3.2 of the Note.

 

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, the effectuation by the Borrower of a transaction or series of related transactions in which
more than 50% of the voting power of the Borrower is disposed of, 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 (as defined in Article III) 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 Article
III) 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.

 

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(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 the Notes, 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 affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but
in any event at least fifteen (15) 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.

 

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(d)
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or
sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued
directly to vendors or suppliers of the Borrower in satisfaction of amounts owed to such vendors or suppliers (provided, however,
that such vendors or suppliers shall not have an arrangement to transfer, sell or assign such shares of Common Stock prior to
the issuance of such shares), any shares of Common Stock for no consideration or for a consideration per share (before deduction
of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion
Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”),
then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share
received by the Borrower in such Dilutive Issuance.

 

The
Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants,
rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to
purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”)
(such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”)
and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price
then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the
“price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i)
the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options,
plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options,
plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming
full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities
issuable upon exercise of such Options.

 

Additionally,
the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and
the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then
in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof
at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

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(e)
Purchase Rights. If, at any time when any Notes are 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.

 

(f)
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the
events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and
prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish
to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in
effect and (iii) 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.

 

1.7
Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market
on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant
to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is
then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing Date
(as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits, stock dividends, combinations,
capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share
Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of
any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or
any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in
lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.2 of the Note.

 

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1.8
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than
the 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 (including, without limitation, (i) the right to receive
Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance
with Section 1.3) for the Borrower’s failure to convert this Note.

 

1.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, the Borrower may prepay the amounts outstanding
hereunder with the consent of the Holder pursuant to the following terms and conditions:

 

(a)
At any time during the period beginning on the Issue Date and ending on the date which is thirty (30) calendar days following
the Issue Date, the Borrower shall have the right, exercisable on not less than five (5) Trading Days prior written notice to
the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder
of an amount in cash equal to 120%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, if any.

 

(b)
At any time during the period beginning the day which is thirty-one (31) calendar days following the Issue Date and ending on
the date which is sixty (60) calendar days following the Issue Date, the Borrower shall have the right, exercisable on not less
than five (5) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued
interest), in full by making a payment to the Holder of an amount in cash equal to 125%, multiplied by the sum of: (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note
plus (y) Default Interest, if any.

 

(c)
At any time during the period beginning the day which is sixty-one (61) calendar days following the Issue Date and ending on the
date which is ninety (90) calendar days following the Issue Date, the Borrower shall have the right, exercisable on not less than
five (5) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest),
in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of: (w) the then outstanding
principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus
(y) Default Interest, if any.

 

(d)
At any time during the period beginning the day which is ninety-one (91) calendar days following the Issue Date and ending on
the date which is one hundred eighty (180) calendar days following the Issue Date, the Borrower shall have the right, exercisable
on not less than five (5) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 135%, multiplied by the sum of:
(w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount
of this Note plus (y) Default Interest, if any.

 

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(e)
After the expiration of one hundred eighty (180) days following the date of the Note, the Borrower shall have no right of prepayment.

 

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 not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment
(the “Optional Prepayment Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the
order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional
Prepayment Date. If the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due
to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit
its right to prepay the Note pursuant to this Section 1.9.

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1
 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.

 

2.2
 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property
or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the
Borrower or any warrants, rights or options to purchase or acquire any such shares.

 

2.3
 Removed and Reserved

 

2.4
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 to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5
 Advances and Loans. 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 or make advances to any person, firm, joint venture or corporation,
including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits
or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the
date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

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2.6
 Section 3(a)(9) or 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, either Section 3(a)(9)
of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”).
In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this Note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note,
but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder
at its election in the form of cash payment or addition to the balance of this Note.

 

2.7
Preservation of Existence, etc. 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.

 

2.8
Non-circumvention. The Borrower hereby covenants and agrees that the Borrower 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.

 

2.9
 Removed and Reserved

 

ARTICLE
III. EVENTS OF DEFAULT

 

If
any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise.

 

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3.2 Conversion
and the Shares. The Borrower fails to issue shares of Common Stock 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, fails to transfer or cause its transfer agent to transfer (issue) (electronically
or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, 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 shares of Common Stock to be issued 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 shares of Common Stock 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 three (3) business days
after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its
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 paid by the Borrower to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3
Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined
in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.

 

3.4
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this
Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of
ten (10) days after written notice thereof to the Borrower from the Holder (except that no cure period shall apply for the Borrower’s
breach of Section 4.16 of this Note).

 

3.5
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase
Agreement), 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.

 

3.6
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors
or commence proceedings for its dissolution, 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 for the Borrower or
for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after
such appointment.

 

3.7
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 $50,000, 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.

 

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3.8
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, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have
filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower
admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for
bankruptcy relief, all under international, federal or state laws as applicable.

 

3.9
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCBB,
OTCQB, OTC Pink or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock
Exchange, or the NYSE MKT.

 

3.10
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange
Act (including but not limited to becoming delinquent in its filings); and/or the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.

 

3.11
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.12
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.

 

3.13
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) or any disposition or conveyance of
any material asset of the Borrower.

 

3.14
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, if the result
of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.15
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.

 

3.16
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.

 

    	16

    	 

    

 

3.17
Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTCBB, OTCQB, OTC Pink or an
equivalent replacement exchange, the Nasdaq National Market, the Nasdaq Small Cap Market, the New York Stock Exchange, or the
NYSE MKT, and such cessation of trading shall continue for a period of five consecutive (5) Trading Days.

 

3.18
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any material covenant or other term or condition contained in any of the Other Agreements,
other than any such breach or default which is cured by agreement of the parties, after the passage of all applicable notice and
cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in
which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms
of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements”
means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other
Agreements” shall not include the agreements and instruments defined as the Documents. Each of the loan transactions will
be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

 

3.19
Bid Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask” with
zero market makers on the “Bid” per Level 2) and/or a market (including the OTCBB, OTCQB or an equivalent replacement
exchange).

 

3.20
OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign),
‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’ or ‘Grey Market’
(Exclamation Mark Sign).

 

3.21
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.

 

3.22 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) 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 (ii) thereupon deposit such shares into the Holder’s brokerage account.

 

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Upon
the occurrence of any Event of Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 3.16. 3.17, 3.18, 3.19, 3.20, 3.21, and/or 3.22 exercisable through the delivery of written notice
to the Borrower by such Holders (the “Default Notice”), the Note shall become immediately due and payable and the
Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to (i) 150% (EXCEPT WITH
RESPECT TO SECTION 3.2 AND/OR 3.22, IN WHICH CASE 150% SHALL BE REPLACED WITH 200%) times the sum of (w) the
then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of
this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on
the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and
1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to
in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) at the option of the
Holder, the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of
shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I,
treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for
purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in
respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by
(b) the highest Trading Price for the Common Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach of
Sections 3.9, 3.10 and/or 3.19 occurs or is continuing after the six (6) month anniversary of this Note, then the
principal amount of the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under
Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) and the
Holder shall be entitled to use the lowest Trading Price during the delinquency period as a base price for the conversion
with the Variable Conversion Price shall be redefined to mean fifty percent (50%) multiplied by the Market Price (at the
option of the Holder), subject to adjustment as provided in this Note. For example, if the lowest Trading Price during the
delinquency period is $0.01 per share and the conversion discount is 50%, then the Holder may elect to convert future
conversions at $0.005 per share. If this Note is not paid at Maturity Date, then the outstanding principal due under this
Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000).

 

The
Holder shall have the right at any time, to require the Borrower to immediately issue, in lieu of the Default Amount, the number
of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect, subject
to the terms of this Note. This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default
without the need for any party to give any notice or take any other action.

 

If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging
an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys’
fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

    	18

    	 

    

 

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 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, 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 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:

 

mPhase
Technologies, Inc.

9841
Washingtonian Blvd, Suite 390

Gaithersburg,
Maryland 20878

Attn: Anshu Bhatnagar

 

If
to the Holder:

 

[___]

 

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
(and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then
as so amended or supplemented.

 

    	19

    	 

    

 

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. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the foregoing, 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.

 

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

 

4.6
Governing Law. 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 shall be brought only in the state courts of New York, in the federal courts located in the District of the State
of New York, or in such other jurisdiction and venue as the Holder may determine in its sole discretion.. The parties to this
Note hereby irrevocably waive 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 TO, 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 TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other
agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, 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 any agreement. 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 Agreement or any other Transaction
Document 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 Agreement 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.

 

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.

 

    	20

    	 

    

 

4.8
Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase
Agreement.

 

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 proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower 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 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

 

4.10
Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount
deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will
not seek to claim or take advantage of any usury law that would prohibit or forgive the Borrower from paying all or a portion
of the principal or interest on this Note.

 

4.11
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. No provision of this Note shall alter or impair the obligation
of the Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place,
and rate, and in the form, herein prescribed.

 

    	21

    	 

    

 

4.12
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or
rule of law, 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 provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

4.13
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Default Sum, 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 two (2) Business Days
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 two (2) Business Days 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
two (2) Business Days, submit via facsimile (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, Default Sum 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 ten (10) Business Days 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.

 

4.14
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security
that was not similarly provided to the Holder in this Note, then the Borrower shall notify the Holder of such additional or more
favorable term and such term, at Holder’s option, shall become a part of the transaction documents with the Holder. The
types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited
to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, original issue discounts,
stock sale price, private placement price per share, and warrant coverage.

 

4.15 Piggyback
Registration Rights. The Borrower shall include on the next registration statement the Borrower files with SEC (or on the
subsequent registration statement if such registration statement is withdrawn) all shares issuable upon conversion of this
Note, unless such shares are at that time eligible for sale under Rule 144 under the Securities Act. Failure to do so will
result in liquidated damages of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand and
No/100 United States Dollars ($15,000), being immediately due and payable to the Holder at its election in the form of
cash payment or addition to the balance of this Note.

 

    	22

    	 

    

 

4.16
Variable Security Blocker. The Borrower shall not enter into a similar type financing transaction (e.g. convertible promissory
note) with, or issue a Variable Security (as defined herein) to, any party other than the Holder for a period of forty five (45)
days following the funding date of the Note without written approval from the Holder. A Variable Security shall mean any security
issued by the Borrower that (i) has or may have conversion rights of any kind, contingent, conditional or otherwise in which the
number of shares that may be issued pursuant to such conversion right varies with the market price of the common stock; (ii) is
or may become convertible into common stock (including without limitation convertible debt, warrants or convertible preferred
stock), with a conversion or exercise price that varies with the market price of the common stock, even if such security only
becomes convertible or exercisable following an event of default, the passage of time, or another trigger event or condition;
or (iii) was issued or may be issued in the future in exchange for or in connection with any contract, security, or instrument,
whether convertible or not, where the number of shares of common stock issued or to be issued is based upon or related in any
way to the market price of the common stock, including, but not limited to, common stock issued in connection with a Section 3(a)(9)
exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. The Borrower agrees that this is a material
term of the Note and any breach of this Section 4.16 will result in an Event of Default under Section 3.4 of this Note.

 

[signature
page follows]

 

    	23

    	 

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer as of the date first above
written.

 

	 	MPHASE
    TECHNOLOGIES INC.
	 	 	 
	 	By:	
	 	Name:	Anshu
    Bhatnagar
	 	Title:	Chief
    Executive Officer

 

    	24

    	 

    

 

EXHIBIT
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert $___________principal amount of the Note (defined below) together with $_____________of
accrued and unpaid interest thereto, totaling $__________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 mPhase Technologies Inc., a New Jersey corporation
(the “Borrower”), according to the conditions of the convertible note of the Borrower dated as of December , 2019
(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 At Custodian 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:

 

	 	 	Name:[NAME]
	 	 	Address:[ADDRESS]

 

	 	 	Date
    of Conversion:	 		 
	 	 	Applicable
    Conversion Price:	 	$		 
	 	 	Number
    of Shares of Common Stock to be Issued	 	 	 
	 	 	Pursuant
    to Conversion of the Notes:	 		 
	 	 	Amount
    of Principal Balance Due remaining	 	 	 
	 	 	Under
    the Note after this conversion:	 		 
	 	 	Accrued
    and unpaid interest remaining:	 		 

 

	 	 	[HOLDER] 	 
	 	 	 	 	 
	 	 	By:		 
	 	 	Name:	[NAME]	 
	 	 	Title:	[TITLE]	 
	 	 	Date:	[DATE]EX-10.1

 Exhibit 10.1 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY
CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED. 
 SECOND AMENDMENT TO FORBEARANCE AGREEMENT AND AMENDMENT NO. 2 TO LOAN
AGREEMENT 
 This Second Amendment to Forbearance Agreement and Amendment No. 2 to Loan Agreement, dated as of December 20,
2019 (this “Agreement”) is among KEY ENERGY SERVICES, INC., a Delaware corporation (the “Company”), KEY ENERGY SERVICES, LLC, a Texas limited liability company (“Key Energy
LLC”, and together with the Company, collectively, “Borrowers” or “Borrower”), Lenders party to this Agreement and BANK OF AMERICA, N.A., a national banking association, as administrative
agent for the Lenders (in such capacity, “Administrative Agent”), which amends that certain Forbearance Agreement, dated as of October 29, 2019 (the “Forbearance Agreement”), by and among the
Borrowers, the Administrative Agent and the Lenders and the Loan Agreement referenced below. 
 W I T N
E S S E T H: 
 WHEREAS, Borrowers, the Lenders from time to time party thereto and the
Administrative Agent are parties to that certain Loan and Security Agreement dated as of December 15, 2016 (as amended, supplemented, restated or otherwise modified from time to time, the “Loan Agreement”; unless
otherwise defined herein, capitalized terms used herein that are not otherwise defined herein shall have the respective meanings assigned to such terms in the Loan Agreement or the Forbearance Agreement, as applicable); 

WHEREAS, Borrowers, the Lenders and the Administrative Agent are parties to the Forbearance Agreement, pursuant to which the Lenders and the
Administrative Agent agreed to forbear from exercising certain default-related rights and remedies against Borrowers and the other Obligors with respect to the Specified Defaults during the Forbearance Period; 

WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agent agree to (i) amend the Forbearance Agreement and
waive certain breaches thereof and (ii) amend the Loan Agreement, in each case as set forth therein; and 
 WHEREAS, the Lenders and
the Administrative Agent are willing to agree to such amendments and waivers on terms and subject to conditions set forth herein. 
 NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows: 
 1.
Limited Waiver. Subject to the satisfaction of the conditions set forth in Section 5 hereof, the Administrative Agent and the Lenders hereby waive any breach of the covenant to maintain minimum Availability as set forth in clause xi of
Section 3(b) of the Forbearance Agreement, and any Forbearance Termination Event that has arisen as a result of such breach, solely to the extent such breach and such Forbearance Termination Event have occurred prior to the date hereof. 

The waivers contained in this Section 1 are limited and (i) shall only be relied upon and used for the specific purpose set forth herein,
(ii) shall not constitute nor be deemed to constitute a waiver of (a) any Default or Event of Default under the Loan Agreement, including any Specified Default referenced in the Forbearance Agreement, or any other breach or Forbearance
Termination Event under the Forbearance Agreement or (b) any term or condition of the Forbearance Agreement, Loan Agreement and the other Loan Documents, (iii) shall not constitute nor be deemed to constitute a consent by the
Administrative Agent or any Lender to anything other than the specific purpose set forth herein and (iv) shall not constitute a custom or course of dealing among the parties hereto. 

 2. Amendments to Forbearance Agreement. Subject to the satisfaction of the conditions
set forth in Section 5 hereof, 
 2.1 clause xi of Section 3(b) of the Forbearance Agreement is hereby amended by replacing the
dollar amount “$12,500,000” set forth therein with the dollar amount “$10,000,000”; 
 2.2 clause xii of
Section 3(b) of the Forbearance Agreement is hereby amended by replacing the phrase “the failure to comply with Section 12(b), Section 12(c) or Section 12(d)” set forth therein with the phrase “the failure to
comply with Section 12(b), Section 12(c), Section 12(d) or Section 12(e)”; and 
 2.3 Section 12 of the
Forbearance Agreement is hereby amended by: 
 (a) re-lettering Section 12(e)
thereof as Section 12(f); 
 (b) inserting a new Section 12(e) therein, which shall read in its entirety as follow:

 “(e) During the Forbearance Period, Borrowers shall deliver to the Lenders on or prior to 5:00 p.m. (Eastern time) on Wednesday of
every calendar week, beginning with the calendar week ending on December 20, 2019, a report for the weekly period ended on the most recent Friday that provides a narrative description of any material variances from, or changes to, the 13-Week Borrowing Base Forecast.” 
 (c) amending the
re-lettered Section 12(f) by replacing the phrase “or (iii) deliver a Borrowing Base Report as required by Section 12(d), shall each constitute a Forbearance Termination Event” set
forth therein with the phrase “, (iii) to deliver a Borrowing Base Report as required by Section 12(d) or (iv) to deliver any report required by Section 12(e) hereof, shall each constitute a Forbearance Termination Event”.

 3. Amendments to Loan Agreement. Subject to the satisfaction of the conditions set forth in Section 5 hereof, 

3.1 Schedule 1.1 to the Loan Agreement is hereby amended and restated as Schedule 1.1 to this Agreement; 

3.2 The defined term “Covenant Trigger Period” in Section 1.1 of the Loan Agreement is amended by replacing
the dollar amount “12,500,000” in each place such dollar amount appears in that defined term with the dollar amount “10,000,000”; and 

3.3 The defined term “Sweep Trigger Period” in Section 1.1 of the Loan Agreement is amended by replacing
the dollar amount “12,500,000” in each place such dollar amount appears in that defined term with the dollar amount “10,000,000”. 

  
 2 

 4. No Other Amendments or Waivers. 

This Agreement, and the terms and provisions hereof, constitute the entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes any and all prior or contemporaneous amendments relating to the subject matter hereof. Except for the forbearance expressly set forth in Section 3 of the Forbearance Agreement (as amended hereby), the Loan Agreement (as
amended hereby) shall remain unchanged and in full force and effect. Except as expressly set forth in Section 3 of the Forbearance Agreement (as amended hereby), the execution, delivery, and performance of this Agreement shall not operate as a
waiver of or as an amendment of, any right, power, or remedy of Administrative Agent or the Lenders under the Loan Agreement or any of the other Loan Documents as in effect prior to the date hereof, nor constitute a waiver of any provision of the
Loan Agreement or any of the other Loan Documents. The agreements set forth herein are limited to the specifics hereof, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall not excuse future non-compliance under the Loan Agreement or other Loan Documents, and shall not operate as a consent to any further or other matter, under the Loan Documents. 

5. Conditions Precedent. The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent on the
date hereof: 
 5.1 Execution of Agreement. Each Obligor, Administrative Agent and the Required Lenders shall have duly executed and
delivered this Agreement. 
 5.2 Borrowing Base Forecast. Lenders shall have received a preliminary Borrowing Base forecast of the
Borrowers covering the 13-week period ending March 6, 2020 (the “13-Week Borrowing Base Forecast”), which
13-Week Borrowing Base Forecast and any amendments thereto shall reflect, projected Borrowing Base as of the close of business on Friday of each week covered thereby. 

5.3 Accuracy of Representations and Warranties. All representations and warranties contained in Section 6 hereof shall be true and
correct in all respects. 
 5.4 Fees. The Administrative Agent shall have received for the benefit of each Lender that executes and
delivers a counterpart of this Agreement (each such Lender, a “Consenting Lender”), a fee in an amount equal to (i) [***] payable to Bank of America, N.A., (ii) [***] payable to Wells Fargo Bank, National Association and (iii) [***]
payable to Siemens Financial Services, Inc. 
 6. Representations and Warranties. Each Obligor hereby jointly and severally represents
and warrants to Administrative Agent and Lenders, that 
 6.1 the execution, delivery and performance by the Obligors of this Agreement: 

(a) are within each Obligor’s corporate, limited liability company or partnership powers, as applicable, and have been
duly authorized by all necessary corporate, limited liability company or partnership, as applicable, and, if required, equity holder action (including, without limitation, any action required to be taken by any class of directors or other governing
body of any Obligor or any other Person, whether interested or disinterested, in order to ensure the due authorization of the execution, delivery and performance by the Obligors of this Agreement); 

(b) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority
or any other third Person (including shareholders or other equity holders or any class of directors or other governing body, whether interested or disinterested, of any Obligor or any other Person), nor is any such consent, approval, registration,
filing or other action necessary for the validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby, except such as have been obtained or made and are in full force and effect other than those third
party approvals or consents which, if not made or obtained, would not cause a Default hereunder, or could not reasonably be expected to have a Material Adverse Effect, 

  
 3 

 (c) will not violate any Sanctions and Applicable Law or any Organic
Documents of any Obligor or any Restricted Subsidiary, or any order of any Governmental Authority, 
 (d) will not
violate or result in a default under any Material Contract, or give rise to a right thereunder to require any payment to be made by any Obligor or any Restricted Subsidiary and 

(e) will not result in the creation or imposition of any Lien on any Property of any Obligor or any Restricted Subsidiary
(other than the Liens created by the Loan Documents); 
 6.2 this Agreement has been duly executed and delivered by such Obligor and
constitutes a legal, valid and binding obligation of such Obligor, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law; and 
 6.3 no
Default or Event of Default (other than any Specified Default) has occurred and is continuing. 
 7. Reaffirmation. Each of the
Obligors hereby confirms its respective guarantees, pledges, grants of security interests and other obligations, as applicable, under and subject to the terms of each of the Loan Documents to which it is party, and agrees that such guarantees,
pledges, grants of security interests and other obligations, and the terms of each of the Loan Documents to which it is a party, are not impaired or affected in any manner whatsoever and shall continue to be in full force and effect. Each Obligor
acknowledges and agrees that any of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of this Agreement. 
 8. Miscellaneous. 

8.1 Captions. Section captions used in this Agreement are for convenience only, and shall not affect the construction of
this Agreement. 
 8.2 Governing Law. UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT AND ALL CLAIMS
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS. 

8.3 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid
under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect. 

  
 4 

 8.4 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns, and shall inure to the sole benefit of the parties and their respective successors and assigns. 

8.5 References. Any reference to the Loan Agreement contained in any notice, request, certificate, or other document
executed concurrently with or after the execution and delivery of this Agreement shall be deemed to include this Agreement unless the context shall otherwise require. 

8.6 Loan Document. This Agreement shall be deemed to be and shall constitute a Loan Document. 

8.7 Continued Effectiveness. Notwithstanding anything contained herein, the terms of this Agreement are not intended to
and do not serve to effect a novation as to the Loan Agreement. The Loan Agreement and each of the Loan Documents remain in full force and effect. 

8.8 Entire Agreement. This Agreement constitutes the entire agreement, and supersede all prior understandings and
agreements, among the parties relating to the subject matter thereof. 
 8.9 Counterparts; Execution. This Agreement
may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when Administrative Agent has received counterparts bearing
the signatures of all parties hereto. Delivery of a signature page of this Agreement by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement. Any signature, contract formation or
record-keeping through electronic means shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act. 

[Remainder of Page Intentionally Left Blank] 

  
 5 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written. 
  

			
	BORROWERS:
	
	KEY ENERGY SERVICES, INC.
		
	By	 	 /s/ J. Marshall Dodson

		 	Name: J. Marshall Dodson
		 	Title: Senior Vice President, Chief Financial Officer & Treasurer
	
	KEY ENERGY SERVICES, LLC.
		
	By	 	 /s/ J. Marshall Dodson

		 	Name: J. Marshall Dodson
		 	Title: Senior Vice President, Chief Financial Officer & Treasurer

 [Signature Page to Second Amendment to Forbearance Agreement and 

Amendment No. 2 to Loan Agreement] 

 
			
	ADMINISTRATIVE AGENT AND LENDERS:
	
	BANK OF AMERICA, N.A., as Administrative Agent and a Lender
		
	By	 	 /s/ Ajay Jagsi

		 	Name: Ajay Jagsi
		 	Title: Vice President

 [Signature Page to Second Amendment to Forbearance Agreement and 

Amendment No. 2 to Loan Agreement] 

 
			
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
		
	By	 	 /s/ William Plough

		 	Name: William Plough
		 	Title: Vice President

 [Signature Page to Second Amendment to Forbearance Agreement and 

Amendment No. 2 to Loan Agreement] 

 
			
	SIEMENS FINANCIAL SERVICES, INC., as a Lender
		
	By	 	 /s/ Michael L. Zion

		 	Name: Michael L. Zion
		 	Title: Vice President
		
	By	 	 /s/ William Jentsch

		 	Name: William Jentsch
		 	Title: Vice President

 [Signature Page to Second Amendment to Forbearance Agreement and 

Amendment No. 2 to Loan Agreement] 

 SCHEDULE 1.1 

to 
 Loan and Security Agreement

 COMMITMENTS OF LENDERS 
  

									
	 Lender
	  	Revolver Commitment	 	  	Total Commitments	 
	 Bank of America, N.A.
	  	$	32,000,000.00	 	  	$	32,000,000.00	 
	 Wells Fargo Bank, National Association
	  	$	32,000,000.00	 	  	$	32,000,000.00	 
	 Siemens Financial Services, Inc.
	  	$	16,000,000.00	 	  	$	16,000,000.00	 
		  				  	  
	  
	 
		  				  	$	80,000,000.00

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