Form 8-K
8-K — AMERICAN REBEL HOLDINGS INC
Accession: 0001493152-26-036535
Filed: 2026-08-07
Period: 2026-07-31
CIK: 0001648087
SIC: 3490 (MISCELLANEOUS FABRICATED METAL PRODUCTS)
Item: Entry into a Material Definitive Agreement
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Unregistered Sales of Equity Securities
Item: Financial Statements and Exhibits
Documents
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EX-10.2 (ex10-2.htm)
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) July 31, 2026
AMERICAN
REBEL HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Nevada
001-41267
47-3892903
(State
or other jurisdiction
of
incorporation)
(Commission
File
Number)
(IRS
Employer
Identification
No.)
218
3rd Avenue North,
#400
Nashville,
Tennessee
37201
(Address
of principal executive offices)
(Zip
Code)
Registrant’s
telephone number, including area code: (833) 267-3235
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act: None
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
GS
Capital SPA and Note
On
July 31, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) with GS Capital Partners, LLC (the “Investor”),
pursuant to which the Company issued to the Investor a Convertible Promissory Note in the original principal amount of $135,000 (the
“Note”).
The
Note bears an original issue discount of $13,500, resulting in net proceeds of $121,500 to the Company before payment of approximately
$5,000 in legal and other transaction-related expenses.
The
Note matures on July 13, 2027, unless earlier converted or repaid in accordance with its terms. Principal payments shall be made in seven
(7) installments, each in the amount of $22,178.57 commencing on the 181st day anniversary following the Issue Date (July 31, 2026) and
continuing thereafter each thirty (30) days for six (6) months.
The
Note is convertible into shares of the Company’s common stock at a conversion price equal to 75% of the lowest trading price of
the Company’s common stock during the five (5) trading days prior to the applicable conversion date, subject to adjustment as set
forth in the Note.
In
connection with the transaction, the Company agreed to issue 59,000 shares of its common stock to the Investor as a commitment fee for
the Note.
The
Company also agreed to reserve a sufficient number of shares of its common stock for issuance upon conversion of the Note, currently
estimated at up to 3,701,799 shares.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities.
On
August 6, 2026, Silverback Capital Corporation (“SCC”) requested the issuance of 500,000 shares of Common Stock to SCC, representing
a payment of approximately $65,700.
On
August 5, 2026, the Company issued GS Capital Partners 59,000 shares of common stock, valued at $0.20 per share, as a commitment fee
for the Note set forth in Item 1.01 above.
All
of the above-described issuances (if any) were exempt from registration pursuant to Section 4(a)(2), and/or Regulation D of the Securities
Act as transactions not involving a public offering. With respect to each transaction listed above, no general solicitation was made
by either the Company or any person acting on its behalf. All such securities issued pursuant to such exemptions are restricted securities
as defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate legends have been placed on the documents evidencing the
securities, and may not be offered or sold absent registration or pursuant to an exemption therefrom.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
Number
Description
10.1
GS Capital Securities Purchase Agreement dated July 31, 2026
10.2
GS Capital Note dated July 31, 2026
104
Cover
Page Interactive Data File
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN
REBEL HOLDINGS, INC.
Date:
August 7, 2026
By:
/s/
Charles A. Ross, Jr.
Charles
A. Ross, Jr.
Chief
Executive Officer
3
EX-10.1
EX-10.1
Filename: ex10-1.htm · Sequence: 2
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 31, 2026, by and between AMERICAN REBEL HOLDINGS,
INC., a Nevada corporation, with headquarters located at 218 3rd Avenue North, #400, Nashville, TN 37201 (the “Company”)
and GS CAPITAL PARTNERS, LLC, a Nevada limited liability company, with its address at 1325 Airmotive Way, Suite 202, Reno, NV
89502 (the “Buyer”).
WHEREAS:
A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);
B.
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a convertible
note of the Company, in the form attached hereto as Exhibit A in the aggregate principal amount of $135,000.00 (the note containing an
original issue discount of $13,500.00 such that the purchase price shall be $121,500.00 for the note) (together with any note(s) issued
in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”),
convertible into shares of common stock, of the Company (the “Common Stock”), upon the terms and subject to the limitations
and conditions set forth in the Note. The Note shall be paid for by the Buyer as set forth herein. In connection with the purchase of
the Note, the Company is issuing to the Buyer 59,000 restricted shares of Common Stock as additional consideration for the purchase of
the Note (the “Commitment Shares”).
C.
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of the Note as is set forth
immediately below its name on the signature pages hereto; and
NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:
1.
Purchase and Sale of the Note.
a.
Purchase of the Note, and the Commitment Shares. On the Closing Date (as defined below), the Company shall issue and sell to the
Buyer, and the Buyer agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s
name on the signature pages hereto, along with the Commitment Shares. The Note and the Commitment Shares are referred to as the “Securities”.
Company Initials
b.
Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Securities to be issued
and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to
the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal amount
equal to the amount as is set forth immediately below the Buyer’s name on the signature pages hereto, (ii) the Company shall deliver
such duly executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price and (i) the Company shall deliver
the Securities to the Buyer.
c.
Closing Date. The date and time of the first issuance and sale of the Note pursuant to this Agreement (the “Closing Date”)
and shall be on or about July 31, 2026, or such other mutually agreed upon time. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.
2.
Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company that:
a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Securities and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the “Conversion
Shares” and, collectively with the Note and the Conversion Shares, the “Securities”) for its own account and not with
a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under
the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the 1933 Act.
b.
Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D (an “Accredited Investor”).
c.
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.
d.
Information. The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be,
furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for
so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding
the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless
such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any
other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s
right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment
in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the
Company’s representations and warranties made herein.
2
e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.
f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of
the Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration,
which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined
in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant
to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”),
and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and
scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable,
any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the
rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such
Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in
each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.
g.
Legends. The Buyer understands that the Note and, until such time as the Conversion Shares and the Commitment Shares have been
registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities
as of a particular date that can then be immediately sold, they may bear a restrictive legend in substantially the following form (and
a stop-transfer order may be placed against transfer of the certificates for such Securities):
3
“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 Company shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under
an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any
restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the
Company with 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 Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the
Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption
from registration, such as Rule 144 or Regulation S, within 2 business days, it will be considered an Event of Default under the Note.
h.
Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered
on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its
terms.
i.
Residency. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages
hereto.
j.
No Short Sales. Buyer/Holder, its successors and assigns, agree that so long as the Note remains outstanding, the Buyer/Holder
shall not enter into or effect “short sales” of the Common Stock or hedging transaction which establishes a short position
with respect to the Common Stock of the Company. The Company acknowledges and agrees that upon delivery of a Conversion Notice by the
Buyer/Holder, the Buyer/Holder immediately owns the shares of Common Stock described in the Conversion Notice and any sale of those shares
issuable under such Conversion Notice would not be considered short sales.
4
3.
Representations and Warranties of the Company. The Company represents and warrants to the Buyer that:
a.
Organization and Qualification. The Company and each of its subsidiaries, if any, is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other)
to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
b.
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement,
to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof,
(ii) the execution and delivery of this Agreement, and the consummation by it of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Securities and the issuance and reservation for issuance of the Conversion Shares issuable upon
conversion thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the
Company, its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company
by its authorized representative, and such authorized representative is the true and official representative with authority to sign this
Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the Securities, each of such instruments will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms.
c.
Issuance of Shares. The Securities are duly authorized and reserved for issuance and, upon conversion of the Note in accordance
with its respective terms, will be validly issued, fully paid and non-assessable, and 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 Company
and will not impose personal liability upon the holder thereof.
d.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon
the issuance of the Securities. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the
Note in accordance with this Agreement, the Note is absolute and unconditional regardless of the dilutive effect that such issuance may
have on the ownership interests of other shareholders of the Company.
5
e.
No Conflicts. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the
Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws,
or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or
lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or
any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the
aggregate, have a material adverse effect). All consents, authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation
of the listing or trading requirements of the OTC marketplace, OTCID, OTCQX, the Texas Stock Exchange (“TXSE”) or any other
exchange or quotation system on which the Common Stock is then listed or quoted (collectively, the “Trading Platforms”) and
does not reasonably anticipate that the Common Stock will be delisted, suspended or removed by any Trading Platform in the foreseeable
future, nor are the Company’s securities “chilled” by DTC. The Company and its subsidiaries are unaware of any facts
or circumstances which might give rise to any of the foregoing.
f.
Absence of Litigation. Except as disclosed in the Company’s public filings, there is no action, suit, claim, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company or any of its subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their
officers or directors in their capacity as such, that could have a material adverse effect. Schedule 3(f) contains a complete list and
summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any
of its subsidiaries, without regard to whether it would have a material adverse effect. The Company and its subsidiaries are unaware
of any facts or circumstances which might give rise to any of the foregoing.
g.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely
in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyer’ purchase of the Securities. The Company further represents to the Buyer that the Company’s decision
to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.
6
h.
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require
registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not
be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval
provisions applicable to the Company or its securities.
i.
Title to Property. The Company and its subsidiaries have good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries, in
each case free and clear of all liens, encumbrances and defects except as disclosed in the Company’s public filings or such as
would not have a material adverse effect. Any real property and facilities held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.
j.
Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the
basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance Guide published
by the Securities and Exchange Commission.
k.
Breach of Representations and Warranties by the Company. If the Company breaches any of the representations or warranties set
forth in Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an
Event of Default under the Note.
4.
COVENANTS.
a.
Expenses. At the Closing, the Company shall reimburse Buyer, up to $5,000.00, for expenses incurred by them in connection with
the negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection
herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses,
transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents
or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the
transactions contemplated by the Documents. When possible, the Company must pay these fees directly; otherwise the Company must make
immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission
of an invoice by the Buyer.
b.
Listing. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common
Stock on the OTC MARKETS, OTCID, OTCQX, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq
SmallCap”), the New York Stock Exchange (“NYSE”), the Texas Stock Exchange (“TXSE”) or any equivalent replacement
exchange or trading platform, and will comply in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges or trading platforms, as
applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the OTC MARKETS, OTCID, OTCQX, TXSE
and any other exchanges, trading platforms or quotation systems on which the Common Stock is then listed or quoted regarding the continued
eligibility of the Common Stock for listing or quotation on such exchanges, trading platforms and quotation systems.
7
c.
Corporate Existence. So long as the Buyer beneficially owns any Securities, the Company shall maintain its corporate existence. The Company
may sell, lease, transfer or otherwise dispose of assets, including all or substantially all of the Company’s assets, and may merge
or consolidate, provided that in any merger, consolidation or sale of all or substantially all of the Company’s assets, the surviving
or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed or quoted for trading on the
OTC MARKETS, OTCID, OTCQX, Nasdaq, Nasdaq SmallCap, NYSE, TXSE or any equivalent replacement exchange or trading platform.
d.
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities
to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.
e.
Filings. The Company shall include the Securities in its next scheduled SEC filing, whether that shall be a Form 8-K, Form 10-Q
or a Form 10-K.
f.
Permitted Borrowings, Asset Sales, Loans and Advances; Section 3(a)(9) or 3(a)(10) Transactions. Notwithstanding anything to the contrary
contained in this Agreement, so long as any Securities are outstanding, the Company may, without the Buyer’s consent, (i) create,
incur, assume, guarantee, endorse, contingently agree to purchase or otherwise become liable upon obligations or indebtedness, including
borrowed money, indebtedness to trade creditors, financial institutions or other lenders, and other liabilities, (ii) sell, lease, transfer
or otherwise dispose of assets, whether in or outside the ordinary course of business, (iii) 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 Company, and (iv) enter into any transaction or arrangement structured in accordance with, based upon, related to or pursuant
to, in whole or in part, either Section 3(a)(9) of the 1933 Act or Section 3(a)(10) of the 1933 Act. No liquidated damages, Event of
Default, penalty, mandatory payment, addition to the balance of the Note or other adverse consequence shall arise solely as a result
of any action described in this Section.
g.
Most Favored Conversion Terms. If, at the time of any conversion of the Note, the Borrower has made or makes available conversion terms,
discounts, formulas, look-back periods or other conversion mechanics that are more favorable to the holder of another convertible security
than the conversion terms then applicable under the Note, then the Holder shall have the right, solely with respect to such conversion
and solely as it relates to the applicable conversion, formula or other conversion mechanics, to elect such more favorable conversion
terms, prices, discounts, formulas, look-back periods or other conversion mechanics for that conversion only. For avoidance of doubt,
this Section shall not apply to non-conversion economic, governance, covenant, default, registration, prepayment, redemption, fee, expense,
penalty or other terms.
8
h.
Commitment Shares. Upon the funding of the Note, the Company shall issue 59,000 Commitment
Shares of Common Stock to the Buyer as additional consideration for the purchase of the Note.
i.
Use of Proceeds. The Company intends to utilize use the proceeds of the Note for the purchase of inventory for American Rebel
Beverages, LLC, a wholly-owned subsidiary of the Company and for general working capital purposes.
j.
Breach of Covenants. If the Company breaches any of the covenants set forth in this Section 4, and in addition to any other remedies
available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.
5.
Governing Law; Miscellaneous.
a.
Governing Law. This Agreement 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 Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the state of Nevada and county
or city of either Washoe County, Nevada or Clark County, Nevada. The parties to this Agreement 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 Company and Buyer waive trial by jury. 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 Agreement 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.
9
b.
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
c.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Agreement.
d.
Severability. In the event that any provision of this Agreement 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.
e.
Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor
the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may
be waived or amended other than by an instrument in writing signed by the majority in interest of the Buyer.
f.
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, (iv) via electronic
mail or (v) 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 delivery via electronic mail, 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:
10
If
to the Company, to:
AMERICAN
REBEL HOLDINGS, INC.
218 3rd Avenue
North, #400
Nashville, TN
37201
Attn: Charles A. Ross, Jr., CEO
If
to the Buyer:
GS
CAPITAL PARTNERS, LLC
1325
Airmotive Way, Suite 202
Reno,
NV 89502
Attn:
Gabe Sayegh
Each
party shall provide notice to the other party of any change in address.
g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases Securities
in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without
the consent of the Company.
h.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
i.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall
survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees
to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result
of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
j.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
k.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.
l.
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Agreement, that the Buyer 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 Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss
and without any bond or other security being required.
+
+ + + +
11
IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.
The
Company:
AMERICAN
REBEL HOLDINGS, INC.
By:
/s/
Charles A. Ross, Jr.
Attn:
Charles
A. Ross, Jr., CEO
Buyer:
GS
CAPITAL PARTNERS, LLC.
By:
/s/
Gabe Sayegh
Name:
Gabe
Sayegh
Title:
Manager
AGGREGATE
SUBSCRIPTION AMOUNT:
Aggregate
Principal Amount of Notes:
$135,000.00
Aggregate
Purchase Price:
$135,000.00,
less $13,500.00 in original issue discount, less $5,000.00 in legal fees.
12
EXHIBIT
A
144
NOTE - $135,000.00
13
EX-10.2
EX-10.2
Filename: ex10-2.htm · Sequence: 3
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 OR OTHER APPLICABLE
EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Principal
Amount: US$135,000.00
Issue
Date: July 31, 2026
Purchase
Price: US$121,500.00
PROMISSORY
NOTE
FOR
VALUE RECEIVED, AMERICAN REBEL HOLDINGS, INC., a Nevada corporation (hereinafter called the “Borrower”) (Trading
Symbol: AREB), hereby promises to pay to the order of GS CAPITAL PARTNERS, LLC, a Nevada limited liability company, or registered
assigns (the “Holder”) the sum of US$135,000.00 (the “Principal”) together with one time guaranteed interest
(the “Interest”) on the Principal balance hereof in the amount of fifteen percent (15%) (the “Interest Rate”)
per calendar year from the date hereof (the “Issue Date”). All Principal and Interest owing hereunder, along with any and
all other amounts, shall be due and owing on July 31, 2027 (the “Maturity Date”). A lump-sum interest payment for twelve
(12) months shall be immediately due on the Issue Date and shall be added to the principal balance and payable on the Maturity Date or
upon acceleration or by prepayment or otherwise, notwithstanding the number of days for which the Principal is outstanding. This note
(the “Note”) shall contain an original issue discount of $13,500.00, resulting in a purchase price of $121,500.00. Principal
payments shall be made in seven (7) installments, each in the amount of US$22,178.57 commencing on the one hundred and eighty-first (181st)
day anniversary following the Issue Date and continuing thereafter each thirty (30) days for six (6) months. Notwithstanding the foregoing,
the final payment of Principal and Interest shall be due on the Maturity Date. This Note may be prepaid in whole or in part as 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 the lesser of
(i) twenty four percent (24%) per annum (which shall be guaranteed and applied to the balance due under the Note upon an Event of Default)
and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the “Default Interest”).
All payments due hereunder (to the extent not converted into common stock, no 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 (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
following terms shall also apply to this Note:
Article
I. CONVERSION RIGHTS
1.1
Conversion Right. The Holder of this Note is entitled, at its option after an Event of Default, to convert all or any part of
the outstanding and unpaid principal, interest, penalties, and all other amounts under 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. 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) by the applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s
transfer agent by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or
e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent
before 11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest 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.
Calculation
of Conversion Price. After an Event of Default and subject to the adjustments described herein, the conversion price (the “Conversion
Price”) shall be equal to 75% of the lowest trading price for the 5 Trading Days immediately preceding the delivery of a Notice
of Conversion. 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. If the shares of the Borrower’s Common Stock have
not been delivered within three (3) business days to the Borrower or the Borrower’s transfer agent, the Notice of Conversion may
be rescinded. 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 OTC Pink, 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 and all DTC fees associated with any such issuance. Holder shall be entitled to deduct $1,750.00 from the conversion amount in
each Notice of Conversion to cover Holder’s deposit fees and legal opinion fees associated with each Notice of Conversion.
Most
Favored Conversion Terms. If, the Borrower has made or makes available conversion terms, discounts, formulas, look-back periods or other
conversion mechanics that are more favorable to the holder of another convertible security than the conversion terms then applicable
under this Note or provides a higher interest rate or original issue discount (collectively the “Interest Rate”) , then the
Holder shall have the right, as it relates to the applicable conversion, formula or other conversion mechanics or Interest Rate, to elect
such more favorable conversion terms, prices, discounts, formulas, look-back periods or other conversion mechanics or Interest Rate.
For avoidance of doubt, this Section shall not apply to non-conversion economic, governance, covenant, default, registration, prepayment,
redemption, fee, expense, penalty or other terms.
(a)
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.
3
(b)
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.
(c)
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 the Conversion Price hereunder shall equal such par value for such conversion and the Conversion
Amount for such conversion shall 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 subject to the minimum price
set forth in this Section 1.2(c).
1.3
Authorized Shares. The Borrower covenants that during the period while any outstanding balance is owing hereunder, 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. The Borrower is required at all times to have authorized and reserved
four (4) 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), initially 3,701,799 shares (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.
4
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 an Event of Default, by (A) submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York
time) 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 Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing,
if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders
this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note represented by this Note may be less than the amount stated on the face hereof.
(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held
for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has been paid.
(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or
other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section
1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the
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.
5
(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 11:59 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 commercially reasonable 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 & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason,
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).
(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 rights 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.
6
(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.”
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 other applicable exemption or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144)
of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited
Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions
set forth below), until such time as the 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 or other applicable exemption without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for 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 OR OTHER APPLICABLE
EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
7
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 or other applicable exemption 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.
(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.
8
(c)
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend
or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note
after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder
of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.
(d)
Purchase Rights. If, at any time when this Note is issued and outstanding, the Borrower issues any convertible securities or rights
to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class
of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
(e)
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.
9
1.7
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.
1.8
Prepayment. The Borrower may prepay the amounts outstanding hereunder by paying an amount equal to 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.
Any
notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered
addresses by physical mail and shall state: (1) that the Borrower is requesting to prepay the Note, and (2) the date of the requested
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.
10
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
Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower may, without the Holder’s consent,
create, incur, assume, guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person,
firm, partnership, joint venture or corporation, and may permit to exist liabilities for borrowed money, including indebtedness to trade
creditors, financial institutions or other lenders, in each case as the Borrower determines to be appropriate.
2.4
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower may, without the Holder’s consent,
sell, lease, transfer or otherwise dispose of its assets in excess of $500,000, whether in or outside the ordinary course of business.
The Borrower shall not be required to apply the proceeds of any such disposition toward repayment of this Note except as the Borrower
may otherwise elect.
2.5
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower may, without the Holder’s 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, in each case as the Borrower determines to be appropriate.
2.6
Section 3(a)(9) or 3(a)(10) Transaction. Notwithstanding anything to the contrary contained in this Note, the Borrower may enter into
any transaction or arrangement structured in accordance with, based upon, related to 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)(10) of the Securities Act (a “3(a)(10) Transaction”).
No liquidated damages, Event of Default, penalty, mandatory payment, addition to the balance of this Note or other adverse consequence
shall arise solely as a result of the Borrower entering into, consummating or making any issuance of Common Stock related to a 3(a)(9)
Transaction or a 3(a)(10) Transaction while this Note is outstanding, provided that with respect to a 3(a)(10) Transaction, such transaction
is with a party the Company has previously entered into a 3(a)(10) settlement agreement with.
11
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.
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.
3.2
Conversion and the Shares. The Borrower (i) 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, (ii) 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, (iii) 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, (iv) 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, (v) fails to remain current in its obligations to its transfer agent, (vi) causes a conversion of this Note is delayed,
hindered or frustrated due to a balance owed by the Borrower to its transfer agent, (vii) fails to repay Holder, within forty eight (48)
hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower’s transfer agent in order to process a conversion,
(viii) fails to reserve sufficient amount of shares of common stock to satisfy the Reserved Amount at all times, (ix) fails to provide
a Rule 144 opinion letter from the Borrower’s legal counsel to the Holder, covering the Holder’s resale into the public market
of the respective conversion shares under this Note, within two (2) business days of the Holder’s submission of a Notice of Conversion
to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that Holder submits the respective Notice
of Conversion and the date of the respective Notice of Conversion must be on or after the date which is six (6) months after the date
that the Holder funded the Purchase Price under this Note), and/or (x) an exemption under Rule 144 is unavailable for the Holder’s
deposit into Holder’s brokerage account and resale into the public market of any of the conversion shares under this Note at any
time after the date which is six (6) months after the date that the Holder funded the Purchase Price under this Note.
12
3.3
Failure to Deliver Expense Amount. The Borrower fails to deliver the Expense amount (as set forth in Section 4(a) 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 five (5) days
after written notice thereof to the Borrower from the Holder.
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 $500,000, and shall remain unvacated, unbonded or unstayed for a period
of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.8
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.
13
3.9
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTC Pink,
OTCQB, Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, Texas Stock Exchange or an equivalent replacement
exchange.
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. To the extent the failure to comply with the provisions of the Exchange Act is due to the Company becoming delinquent
in its filings, the Company shall be granted a 30-day grace period for each such delinquency.
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).
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 un-restated financial statement, have constituted a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement. The foregoing shall be inapplicable if the restatement is not due to any act(s) by the
Borrower, but rather is an issue of the Borrower’s auditor choosing to use a different accounting method then was originally reported.
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.
3.17
Cessation of Trading. Any cessation of trading of the Common Stock on at least one of the OTC Pink, OTCID, OTCQB, OTCQX, Nasdaq
National Market, Nasdaq Small Cap Market, New York Stock Exchange, NYSE MKT, TXSE, or an equivalent replacement exchange, and such cessation
of trading shall continue for a period of five consecutive (5) Trading Days.
14
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 covenant or other term or condition contained in any of the Other Agreements (as defined herein),
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) or any other third party, 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 OTC Pink, OTCID, OTCQB, OTCQX or an equivalent replacement
exchange).
3.20
OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘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.
3.23
Delisting or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock
(i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any level of the
OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American.
UPON
THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3 OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY AND AUTOMATICALLY DUE AND
PAYABLE WITHOUT DEMAND, PRESENTMENT, OR NOTICE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO: (A) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT, 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, MULTIPLED BY ONE point FIVE
(150%).
The
Holder shall have the right at any time after an Event of Default occurs under this Note to require the Borrower, to immediately issue,
in lieu of the Default Amount and/or Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or
Default Sum divided by the Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial
ownership limitations contained herein). 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.
15
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.
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, electronic mail, or facsimile, addressed as set forth below or to such other address as such party shall
have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by electronic mail or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:
If
to the Borrower, to:
AMERICAN
REBEL HOLDINGS, INC.
218
3rd Avenue North, #400
Nashville,
TN 37201
Attn:
Charles A. Ross, Jr., CEO
16
If
to the Holder:
GS
CAPITAL PARTNERS, LLC
1325
Airmotive Way, Suite 202
Reno,
Nevada 89502
Attn:
Gabe Sayegh
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.
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 Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the state of Nevada and county
or city of either Washoe County, Nevada or Clark County, Nevada. 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.
17
4.7
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest,
the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult
to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt
of a cash payment without the opportunity to convert this Note into shares of Common Stock.
4.8
Purchase Agreement. 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.
18
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 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.
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.
[signature
page follows]
19
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.
Borrower:
AMERICAN
REBEL HOLDINGS, INC.
By:
/s/
Charles A. Ross, Jr.
Name:
Charles
A. Ross, Jr.
Title:
CEO
20
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 AMERICAN REBEL HOLDINGS,
INC., a Nevada corporation (the “Borrower”), according to the conditions of the convertible note of the Borrower dated as
of ____________ (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]
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