Exhibit 10.1

 

Note: July 15, 2019

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A
PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING ANY REDEMPTION OR
CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM
REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL SUM AND ACCRUED INTEREST
SET FORTH BELOW.

  

10% FIXED CONVERTIBLE PROMISSORY NOTE

 

OF

 

JRSIS HEALTH CARE CORP

 

Issuance Date: July 15, 2019

Total Face Value of Note: $275,000

Initial Consideration: $175,000

Initial Original Issue Discount: $17,500

Initial Principal Sum Due: $192,500

 

This Note is a duly authorized Fixed Convertible Promissory Note of JRSIS Health
Care Corp a corporation duly organized and existing under the laws of the State
of Florida (the “Company”), designated as the Company’s 10% Fixed Convertible
Promissory Note in the principal amount of $275,000 (the “Note”). This Note will
become effective only upon execution by both parties and delivery of the first
payment of consideration by the Holder (the “Effective Date”).

 

For Value Received, the Company hereby promises to pay to the order of Harbor
Gates Capital, LLC or its registered assigns or successors-in-interest (the
“Holder”) the principal sum of $275,000 (the “Total Face Value of Note”) or such
lesser amount of aggregate Consideration, defined below, plus the applicable OID
thereon (as provided herein) drawn by the Company hereunder and to pay interest
at an annual rate of 10% of the Principal Sum (as defined below), such interest
shall be calculated on the basis of a year of 365 days, to the extent that such
Principal Sum and interest and any other interest, fees, liquidated damages
and/or items due to Holder herein have not been repaid or converted into the
Company's common stock (the “Common Stock”), in accordance with the terms
hereof. The sum of $175,000 (the “Initial Consideration”) shall be remitted and
delivered to the Company, and $17,500 (the “Initial Original Issue Discount”)
shall be retained by the Holder through an original issue discount (the “OID”)
for due diligence and legal bills related to this transaction. The OID is set at
10% of any Consideration, defined below, paid. The Company covenants that within
months of the Effective Date of the Note, it shall utilize approximately
$175,000 of the proceeds in the manner set forth on Schedule 1, attached hereto
(the “Use of Proceeds”), and shall promptly provide evidence thereof to Holder,
in sufficient detail as reasonably requested by Holder.

 

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The Holder may pay additional consideration, plus (each, a “Consideration”),
plus the prorated 10% OID (each Consideration and its respective 10% OID, shall
together be referred to as a “Tranche”) to the Company in such amounts and at
such dates (each, an “Additional Tranche Date”) as Holder may choose in its sole
discretion. The Principal Sum due to Holder shall be prorated based on the
Consideration actually paid by Holder, plus the 10% OID, such that the Company
is only required to repay the amount funded and the Company is not required to
repay any unfunded portion of this Note. The Maturity Date is six months from
the Effective Date of each payment (the “Maturity Date”) and is the date upon
which the Principal Amount of this Note, as well as any unpaid interest and
other fees, shall be due and payable.

 

In addition to the interest referenced above, and in the Event of Default
pursuant to Section 3.00(a), additional interest will accrue from the date of
the Event of Default at the rate equal to the lower of 20% per annum or the
highest rate permitted by law (the “Default Rate”).

 

This Note will become effective only upon the execution by both parties,
including the execution of Exhibits B, C, D, E, Schedule 1 (collectively, the
“Exhibits”), and the Irrevocable Transfer Agent Instructions (the “Date of
Execution”) and delivery of the initial payment of consideration by the Holder
(the “Effective Date”). The Company acknowledges and agrees the Exhibits are
material provisions of this Note.

 

For purposes hereof the following terms shall have the meanings ascribed to them
below:

 

“Business Day” shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the City of New York are authorized or required by law
or executive order to remain closed.

 

“Fixed Conversion Price” shall be fixed at a price equal to $5.00.

 

“Principal Sum” shall refer to the sum of all Tranches funded under the Note.

 

“Principal Amount” shall refer to the sum of (i) the original principal amount
of this Note (including the original issue discount, prorated if the Note has
not been funded in full), (ii) all accrued but unpaid interest hereunder, (iii)
any fees due hereunder, (iv) liquidated damages, and (v) any default payments
owing under the Note, in each case previously paid or added to the Principal
Amount.

 

“Principal Market” shall refer to the primary exchange on which the Company’s
common stock is traded or quoted.

 

“Trading Day” shall mean a day on which there is trading or quoting for any
security on the Principal Market.

 

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“Underlying Shares” means the shares of common stock into which the Note is
convertible (including interest, fees, liquidated damages and/or principal
payments in common stock as set forth herein) in accordance with the terms
hereof.

 

The following terms and conditions shall apply to this Note:

 

Section 1.00 Repayment.

 

(a) The Company may pay this Note, in whole or in part, in cash or in other good
funds, according to the following schedule:

 

Days Since Effective Date Payment Amount Under 90 125% of Principal Amount so
paid 91-180 135% of Principal Amount so paid

 

(b) After 180 days from the Effective Date, the Company may not pay this Note,
in whole or in part, in cash or in other good funds, without prior written
consent from Holder, which consent may be withheld, delayed, denied, or
conditioned in Holder’s sole and absolute discretion. Whenever any amount
expressed to be due by the terms of this Note is due on any day that is not a
Business Day, the same shall instead be due on the next succeeding day that is a
Business Day. Upon the occurrence of an Event of Default, the Company may not
pay the Note, in whole or in part, in cash or in other good funds without
written consent of the Holder, which consent may be withheld, delayed, denied,
or conditioned in Holder’s sole and absolute discretion. Further, the Company
shall provide the Holder with two weeks’ prior written notice of the Company’s
determination to pay any or all of its obligations hereunder. During such
two-week period, the Holder may exercise any or all of its conversion rights
hereunder. In the event that the Holder does not exercise its conversion rights
in respect of any or all of such noticed, prospective payment, the Company shall
tender the full amount set forth in such notice (less any amount in respect of
which the Holder has exercised its conversion rights) to the Holder within 2
Business Days following the Holder’s exercise (or notification to the Company of
non-exercise) of the Holder’s conversion rights in respect of the amount set
forth in such notice. Any such payment by the Company in connection with this
provision shall be deemed to have been made on the date that the Holder first
receives the above-referenced notice.

 

Section 2.00 Conversion.

 

(a) Conversion Right. Subject to the terms hereof and restrictions and
limitations contained herein, the Holder shall have the right, at the Holder's
sole option, at any time and from time to time to convert in whole or in part
the outstanding and unpaid Principal Amount under this Note into shares of
Common Stock as per the Conversion Price, but not to exceed the Restricted
Ownership Percentage, as defined in Section 2.00(f). The date of any conversion
notice (“Conversion Notice”) hereunder shall be referred to herein as the
“Conversion Date”. The Conversion Price shall be equitably adjusted in the event
of a forward split, stock dividend, or the like, but shall not be adjusted in
the event of a reverse split, recombination, or the like.

 

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(b) Stock Certificates or DWAC. The Company will deliver to the Holder, or
Holder’s authorized designee, no later than 2 Trading Days after the Conversion
Date, a certificate or certificates (which certificate(s) shall be free of
restrictive legends and trading restrictions if the shares of Common Stock
underlying the portion of the Note being converted are eligible under a resale
exemption pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the
Securities Act of 1933, as amended) representing the number of shares of Common
Stock being acquired upon the conversion of this Note. In lieu of delivering
physical certificates representing the shares of Common Stock issuable upon
conversion of this Note, provided the Company's transfer agent is participating
in Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer
(“FAST”) program, the Company shall instead use commercially reasonable efforts
to cause its transfer agent to electronically transmit such shares issuable upon
conversion to the Holder (or its designee), by crediting the account of the
Holder’s (or such designee’s) broker with DTC through its Deposits and
Withdrawal at Custodian (“DWAC”) program (provided that the same time periods
herein as for stock certificates shall apply).

 

(c) Charges and Expenses. Issuance of Common Stock to Holder, or any of its
assignees, upon the conversion of this Note shall be made without charge to the
Holder for any issuance fee, transfer tax, legal opinion and related charges,
postage/mailing charge or any other expense with respect to the issuance of such
Common Stock. Company shall pay all transfer agent fees incurred from the
issuance of the Common Stock to Holder, as well as any and all other fees and
charges required by the transfer agent as a condition to effectuate such
issuance. Any such fees or charges, as noted in this Section that are paid by
the Holder (whether from the Company’s delays, outright refusal to pay, or
otherwise), will be automatically added to the Principal Sum of the Note and
tack back to the Effective Date for purposes of Rule 144.

 

(d) Delivery Timeline. If the Company fails to deliver to the Holder such
certificate or certificates (or shares through the DWAC program) pursuant to
this Section (free of any restrictions on transfer or legends, if eligible)
prior to 3 Trading Days after the Conversion Date, the Company shall pay to the
Holder as liquidated damages an amount equal to $2,000 per day, until such
certificate or certificates are delivered. The Company acknowledges that it
would be extremely difficult or impracticable to determine the Holder’s actual
damages and costs resulting from a failure to deliver the Common Stock and the
inclusion herein of any such additional amounts are the agreed upon liquidated
damages representing a reasonable estimate of those damages and costs. Such
liquidated damages will be automatically added to the Principal Sum of the Note
and tack back to the Effective Date for purposes of Rule 144.

 

(e) Reservation of Underlying Securities. The Company covenants that it will at
all times reserve and keep available for Holder, out of its authorized and
unissued Common Stock solely for the purpose of issuance upon conversion of this
Note, free from preemptive rights or any other actual contingent purchase rights
of persons other than the Holder, ten times the number of shares of Common Stock
as shall be issuable (taking into account the adjustments under this Section
2.00, but without regard to any ownership limitations contained herein) upon the
conversion of this Note (consisting of the Principal Amount), under the formula
in Section 3.00(c) below, to Common Stock (the “Required Reserve”). The Company
covenants that all shares of Common Stock that shall be issuable will, upon
issue, be duly authorized, validly issued, fully-paid, non-assessable and
freely-tradable (if eligible). If the amount of shares on reserve in Holder’s
name at the Company’s transfer agent for this Note shall drop below the Required
Reserve, the Company will, within 2 Trading Days of notification from Holder,
instruct the transfer agent to increase the number of shares so that the
Required Reserve is met. In the event that the Company does not instruct the
transfer agent to increase the number of shares so that the Required Reserve is
met, the Holder will be allowed, if applicable, to provide this instruction as
per the terms of the Irrevocable Transfer Agent Instructions attached to this
Note. The Company agrees that the maintenance of the Required Reserve is a
material term of this Note and any breach of this Section 2.00(e) will result in
a default of the Note.

 

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(f) Conversion Limitation. The Holder will not submit a conversion to the
Company that would result in the Holder beneficially owning more than 9.99% of
the then total outstanding shares of the Company (“Restricted Ownership
Percentage”).

 

(g) Conversion Delays. If the Company fails to deliver shares in accordance with
the timeframe stated in Section 2.00(d), the Holder, at any time prior to
selling all of those shares, may rescind any portion, in whole or in part, of
that particular conversion attributable to the unsold shares. The rescinded
conversion amount will be returned to the Principal Sum with the rescinded
conversion shares returned to the Company, under the expectation that any
returned conversion amounts will tack back to the Effective Date.

 

(h) Shorting and Hedging. Holder may not engage in any “shorting” or “hedging”
transaction(s) in the Common Stock of the Company prior to conversion.

 

(i) Conversion Right Unconditional. If the Holder shall provide a Conversion
Notice as provided herein, the Company's obligations to deliver Common Stock
shall be absolute and unconditional, irrespective of any claim of setoff,
counterclaim, recoupment, or alleged breach by the Holder of any obligation to
the Company.

 

Section 3.00 Defaults and Remedies.

 

(a) Events of Default. An “Event of Default” is: (i) a default in payment of any
amount due hereunder; (ii) a default in the timely issuance of underlying shares
upon and in accordance with terms of Section 2.00, which default continues for 2
Trading Days after the Company has failed to issue shares or deliver stock
certificates within the 3rd Trading Day following the Conversion Date; (iii) if
the Company does not issue the press release or file the Current Report on Form
8-K, in each case in accordance with the provisions and the deadlines referenced
Section 5.00(j); (iv) failure by the Company for 3 days after notice has been
received by the Company to comply with any material provision of this Note; (v)
any representation or warranty of the Company in this Note that is found to have
been incorrect in any material respect when made, including, without limitation,
the Exhibits; (vi) failure of the Company to remain compliant with DTC, thus
incurring a “chilled” status with DTC; (vii) any default of any mortgage,
indenture or instrument which may be issued, or by which there may be secured or
evidenced any indebtedness, for money borrowed by the Company or for money
borrowed the repayment of which is guaranteed by the Company, whether such
indebtedness or guarantee now exists or shall be created hereafter; (viii) if
the Company is subject to any Bankruptcy Event; (ix) any failure of the Company
to satisfy its “filing” obligations under Securities Exchange Act of 1934, as
amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News
Service, OTCMarkets.com and their affiliates; (x) failure of the Company to
remain in good standing under the laws of its state of domicile; (xi) any
failure of the Company to provide the Holder with information related to its
corporate structure including, but not limited to, the number of authorized and
outstanding shares, public float, etc. within 3 Trading Day of request by
Holder; (xii) failure by the Company to maintain the Required Reserve in
accordance with the terms of Section 2.00(e); (xiii) failure of Company’s Common
Stock to maintain a closing bid price in its Principal Market for more than 3
consecutive Trading Days; (xiv) any delisting from a Principal Market for any
reason; (xv) failure by Company to pay any of its transfer agent fees in excess
of $2,000 or to maintain a transfer agent of record; (xvi) failure by Company to
notify Holder of a change in transfer agent within 24 hours of such change;
(xvii) any trading suspension imposed by the United States Securities and
Exchange Commission (the “SEC”) under Sections 12(j) or 12(k) of the 1934 Act;
(xviii) failure by the Company to meet all requirements necessary to satisfy the
availability of Rule 144 to the Holder or its assigns, including but not limited
to the timely fulfillment of its filing requirements as a fully-reporting issuer
registered with the SEC, requirements for XBRL filings, and requirements for
disclosure of financial statements on its website; or (xix) failure of the
Company to abide by the Use of Proceeds or failure of the Company to inform the
Holder of a change in the Use of Proceeds.

 

5

 

 

(b) Remedies. If an Event of Default occurs, the outstanding Principal Amount of
this Note owing in respect thereof through the date of acceleration, shall
become, at the Holder's election, immediately due and payable in cash at the
“Mandatory Default Amount”. The Mandatory Default Amount means 35% of the
outstanding Principal Amount of this Note will be automatically added to the
Principal Sum of the Note and tack back to the Effective Date for purposes of
Rule 144. Commencing 5 days after the occurrence of any Event of Default that
results in the eventual acceleration of this Note, this Note shall accrue
additional interest, in addition to the Note’s interest rate of 10% per annum,
at a rate equal to the lesser of 20% per annum or the maximum rate permitted
under applicable law. In connection with such acceleration described herein, the
Holder need not provide, and the Issuer hereby waives, any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such
acceleration may be rescinded and annulled by the Holder at any time prior to
payment hereunder and the Holder shall have all rights as a holder of the note
until such time, if any, as the Holder receives full payment pursuant to this
Section 3.00(b). No such rescission or annulment shall affect any subsequent
event of default or impair any right consequent thereon. Nothing herein shall
limit the Holder's right to pursue any other remedies available to it at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Issuer's failure to timely deliver
certificates representing shares of Common Stock upon conversion of the Note as
required pursuant to the terms hereof.

 

(c) Variable Conversion Price. If the Note is not retired on or before the
Maturity Date, then at any time and from time to time after the Maturity Date,
and subject to the terms hereof and restrictions and limitations contained
herein, the Holder shall have the right, at the Holder's sole option, to convert
in whole or in part the outstanding and unpaid Principal Amount under this Note
into shares of Common Stock at the Variable Conversion Price. The “Variable
Conversion Price” (together with the Fixed Conversion Price, the “Conversion
Price”) shall be equal to the Fixed Conversion Price. For the purpose of
calculating the Variable Conversion Price only, any time after 4:00 pm Eastern
Time (the closing time of the Principal Market) shall be considered to be the
beginning of the next Business Day. If the Company is placed on “chilled” status
with the DTC, the discount shall be increased by 10%, i.e., from 40% to 50%,
until such chill is remedied. If the Company is not DWAC eligible through their
transfer agent and DTC’s FAST system, the discount will be increased by 5%,
i.e., from 40% to 45%. In the case of both, the discount shall be a cumulative
increase of 15%, i.e., from 40% to 55%.

 

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Section 4.00 Representations and Warranties of Holder.

 

Holder hereby represents and warrants to the Company that:

 

(a) Holder is an “accredited investor,” as such term is defined in Regulation D
of the Securities Act of 1933, as amended (the “1933 Act”), and will acquire
this Note and the Underlying Shares (collectively, the “Securities”) for its own
account and not with a view to a sale or distribution thereof as that term is
used in Section 2(a)(11) of the 1933 Act, in a manner which would require
registration under the 1933 Act or any state securities laws. Holder has such
knowledge and experience in financial and business matters that such Holder is
capable of evaluating the merits and risks of the Securities. Holder can bear
the economic risk of the Securities, has knowledge and experience in financial
business matters and is capable of bearing and managing the risk of investment
in the Securities. Holder recognizes that the Securities have not been
registered under the 1933 Act, nor under the securities laws of any state and,
therefore, cannot be resold unless the resale of the Securities is registered
under the 1933 Act or unless an exemption from registration is available. Holder
has carefully considered and has, to the extent Holder believes such discussion
necessary, discussed with its professional, legal, tax and financial advisors,
the suitability of an investment in the Securities for its particular tax and
financial situation and its advisers, if such advisors were deemed necessary,
and has determined that the Securities are a suitable investment for it. Holder
has not been offered the Securities by any form of general solicitation or
advertising, including, but not limited to, advertisements, articles, notices or
other communications published in any newspaper, magazine, or other similar
media or television or radio broadcast or any seminar or meeting where, to
Holders’ knowledge, those individuals that have attended have been invited by
any such or similar means of general solicitation or advertising. Holder has had
an opportunity to ask questions of and receive satisfactory answers from the
Company, or any person or persons acting on behalf of the Company, concerning
the terms and conditions of the Securities and the Company, and all such
questions have been answered to the full satisfaction of Holder. The Company has
not supplied Holder any information regarding the Securities or an investment in
the Securities other than as contained in this Agreement, and Holder is relying
on its own investigation and evaluation of the Company and the Securities and
not on any other information.

 

(b) The Holder is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of its incorporation and has
all requisite corporate power and authority to carry on its business as now
conducted. The Holder is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business or properties.

 

(c) All limited liability company action has been taken on the part of the
Holder, its officers, directors, managers and members necessary for the
authorization, execution and delivery of this Note. The Holder has taken all
limited liability company action required to make all of the obligations of the
Holder reflected in the provisions of this Note, valid and enforceable
obligations.

 

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(d) Each certificate or instrument representing Securities will be endorsed with
the following legend (or a substantially similar legend), unless or until
registered under the 1933 Act or exempt from registration:

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

 

Section 5.00 General.

 

(a)  Payment of Expenses. The Company agrees to pay all reasonable charges and
expenses, including attorneys' fees and expenses, which may be incurred by the
Holder in successfully enforcing this Note and/or collecting any amount due
under this Note.

 

(b)  Assignment, Etc. The Holder may assign or transfer this Note to any
transferee at its sole discretion. This Note shall be binding upon the Company
and its successors and shall inure to the benefit of the Holder and its
successors and permitted assigns.

 

(c) Amendments. This Note may not be modified or amended, or any of the
provisions of this Note waived, except by written agreement of the Company and
the Holder.

 

(d) Funding Window. The Company agrees that it will not enter into a convertible
debt financing transaction, including 3(a)9 and 3(a)10 transactions, with any
party other than the Holder for a period of 30 Trading Days following the
Effective Date and each Additional Tranche Date, as relevant, other than
convertible debt financing transactions with Labrys Fund, LP and Auctus Fund,
LLC (each, a “Funding Party”) for up to an aggregate amount of $250,000, in one
or more transactions, per Funding Party. The Company agrees that this is a
material term of this Note and any breach of this Section 5.00(d) will result in
a default of the Note.

 

(e) Piggyback Registration Rights. The Company shall include on the next
registration statement that the Company files with the SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note. Failure to do so will result in
liquidated damages of 30% of the outstanding Principal Sum of this Note, but not
less than $20,000, being immediately due and payable to the Holder at its
election in the form of a cash payment or an addition to the Principal Sum of
this Note.

 

(f) Terms of Future Financings. So long as this Note is outstanding, upon any
issuance by the Company or any of its subsidiaries of any convertible debt
security (whether such debt begins with a convertible feature or such feature is
added at a later date) with any term more favorable to the holder of such
security or with a term in favor of the holder of such security that was not
similarly provided to the Holder in this Note, then the Company shall notify the
Holder of such additional or more favorable term and such term, at the Holder's
option, shall become a part of this Note and its supporting documentation.. The
types of terms contained in the other security that may be more favorable to the
holder of such security include, but are not limited to, terms addressing
conversion discounts, terms addressing maturity, conversion look back periods,
interest rates, original issue discount percentages and warrant coverage.

 

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(g) Governing Law; Jurisdiction.

 

(i) Governing Law. This Note will be governed by, and construed and interpreted
in accordance with, the laws of the Commonwealth of Puerto Rico without regard
to any conflicts of laws or provisions thereof that would otherwise require the
application of the law of any other jurisdiction.

 

(ii) Jurisdiction and Venue. Any dispute, claim, suit, action or other legal
proceeding arising out of or relating to this Note or the rights and obligations
of each of the parties shall be brought only in the San Juan, Puerto Rico or in
the federal courts of the United States of America located in San Juan, Puerto
Rico.

 

(iii) No Jury Trial. The Company hereto knowingly and voluntarily waives any and
all rights it may have to a trial by jury with respect to any litigation based
on, or arising out of, under, or in connection with, this Note.

 

(iv) Delivery of Process by the Holder to the Company. In the event of an action
or proceeding by the Holder against the Company, and only by the Holder against
the Company, service of copies of summons and/or complaint and/or any other
process that may be served in any such action or proceeding may be made by the
Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email,
fax, or process server, or by mailing or otherwise delivering a copy of such
process to the Company at its last known attorney as set forth in its most
recent SEC filing.

 

(v) Notices. Any notice required or permitted hereunder (including Conversion
Notices) must be in writing and either personally served, sent by facsimile or
email transmission, or sent by overnight courier. Notices will be deemed
effectively delivered at the time of transmission if by facsimile or email, and
if by overnight courier the business day after such notice is deposited with the
courier service for delivery.

 

(h) No Bad Actor. No officer or director of the Company would be disqualified
under Rule 506(d) of the Securities Act of 1933, as amended, on the basis of
being a “bad actor” as that term is established in the September 13, 2013 Small
Entity Compliance Guide published by the SEC.

 

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

 

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(j) Securities Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m.
Eastern Time on the Trading Day immediately following the Date of Execution,
issue a press release disclosing the material terms of the transactions
contemplated hereby, and (b) file a Current Report on Form 8-K, including a copy
of this Note as an exhibit thereto, with the SEC within the time required by the
1934 Act. From and after the filing of such press release, the Company
represents to the Holder that it shall have publicly disclosed all material,
non-public information delivered to the Holder by the Company, or any of its
officers, directors, employees, or agents in connection with the transactions
contemplated by this Note. The Company and the Holder shall consult with each
other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Holder shall issue any such
press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of the Holder, or
without the prior consent of the Holder, with respect to any press release of
the Company, none of which consents shall be unreasonably withheld, delayed,
denied, or conditioned except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior
notice of such public statement or communication. Notwithstanding the foregoing,
the Company shall not publicly disclose the name of the Holder, or include the
name of the Holder in any filing with the SEC or any regulatory agency or
Principal Market, without the prior written consent of the Holder, except to the
extent such disclosure is required by law or Principal Market regulations, in
which case the Company shall provide the Holder with prior notice of such
disclosure permitted hereunder.

 

The Company agrees that this is a material term of this Note and any breach of
this Section 5.00(j) will result in a default of the Note.

 

(k) Attempted Below-par Issuance. In the event that (i) any requested conversion
hereunder shall be at a Conversion Price that is less than then-current par
value of the Company’s Common Stock and that any or all of such requested
conversion would be precluded by state law or otherwise and (ii) within three
business days of the requested conversion, the Company shall not have reduced
its par value such that all of the requested conversion may then be
accomplished, then the Company and the Holder agree to the following conversion
protocol: the Holder shall generate and transmit to the Company (X) a
“preliminary” Conversion Notice for the full number of shares of Common Stock of
the above-referenced conversion at the Conversion Price without regard to any
below-par value conversion issues; (Y) a “par value” Conversion Notice for the
number of shares of Common Stock for the above-referenced conversion with the
Conversion Price increased from the Conversion Price set forth in the
“preliminary” Conversion Notice to a Conversion Price at par value; and (Z) a
“liquidated damages” Conversion Notice for that number of shares of Common Stock
that represents the difference between the number of shares of Common Stock in
the “preliminary” Conversion Notice and the number of shares of Common Stock in
the “par value” Conversion Notice and the Conversion Price of such “liquidated
damages Common Shares” would be the par value of the Common Stock. The Company
acknowledges that any failure by it to provide the Holder with its full
conversion rights under this Note (as a result of a proposed “below par”
conversion) will cause the Holder to incur substantial economic damages and
losses of types and in amounts that are impossible to compute and ascertain with
certainty as a basis for recovery by the Holder of actual damages and that
liquidated damages would represent a fair, reasonable, and appropriate estimate
thereof. Accordingly, in the event that the Holder is precluded from exercising
any or all of its conversion rights hereunder as a result of a proposed “below
par” conversion, the Company agrees that, in lieu of actual damages for such
failure, liquidated damages may be assessed and recovered by the Holder without
being required to present any evidence of the amount or character of actual
damages sustained by reason thereof. The amount of such liquidated damages shall
be an amount equivalent to the trading price (without discount) utilized in the
“preliminary” Conversion Notice multiplied by the number of shares calculated on
the “liquidated damages” Conversion Notice. Such amount shall be assessed and
become immediately due and payable to the Holder (at its election) in the form
of a cash payment, an addition to the Principal Sum of this Note, or the
immediate issuance of that number of shares of Common Stock as calculated on the
“liquidated damages” Conversion Notice. Such liquidated damages are intended to
represent estimated actual damages and are not intended to be a penalty, but, by
virtue of their genesis and subject to the election of the Holder (as set forth
in the immediately preceding sentence), will be automatically added to the
Principal Sum of the Note and tack back to the Effective Date for purposes of
Rule 144.

  

[Signature Page to Follow.]

 

10

 

 

IN WITNESS WHEREOF, the Company has caused this Fixed Convertible Promissory
Note to be duly executed on the day and in the year first above written.

 

  JRSIS HEALTH CARE CORP         By: /s/ Lihua Sun   Name: Lihua Sun   Title:  
CHIEF EXECUTIVE OFFICER   Email:     Address:  1st - 7th Floor Industrial and
Commercial Xingfu Street,     Hulan District Heilongjiang Province 150025 China

 

This Fixed Convertible Promissory Note of July 15, 2019 is accepted this ___ day
of , 2019 by

 

HARBOR GATES CAPITAL, LLC

 

By:       Name:     Title: Manager  

 

11

 

 

EXHIBIT A

 

FORM OF CONVERSION NOTICE

 

(To be executed by the Holder in order to convert all or part of that certain
$275,000 Fixed Convertible Promissory Note identified as the Note)

 

DATE:  ____________________________

FROM: Harbor Gates Capital, LLC (the “Holder”)

 

Re:$275,000 Fixed Convertible Promissory Note (this “Note”) originally issued by
JRSIS Health Care Corp, a Florida corporation, to Harbor Gates Capital, LLC on
July 15, 2019.

 

The undersigned on behalf of Harbor Gates Capital, LLC, hereby elects to convert
$_______________________ of the aggregate outstanding Principal Amount (as
defined in the Note) indicated below of this Note into shares of Common Stock,
$0.001 par value per share, of JRSIS Health Care Corp (the “Company”), according
to the conditions hereof, as of the date written below. If shares are to be
issued in the name of a person other than undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any. The undersigned represents as of the date hereof
that, after giving effect to the conversion of this Note pursuant to this
Conversion Notice, the undersigned will not exceed the “Restricted Ownership
Percentage” contained in this Note.

Conversion information:

 

      Date to Effect Conversion           Aggregate Principal Sum of Note Being
Converted           Aggregate Interest/Fees of Principal Amount Being Converted
          Remaining Principal Balance           Number of Shares of Common Stock
to be Issued           Applicable Conversion Price           Signature          
Name           Address

 

12

 

 

EXHIBIT B

 

WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF

 

JRSIS HEALTH CARE CORP

 

 

The undersigned, being directors of JRSIS Health Care Corp, a Florida
corporation (the “Company”), acting pursuant to the Bylaws of the Corporation,
do hereby consent to, approve and adopt the following preamble and resolutions:

 

Convertible Note with Harbor Gates Capital, LLC

 

The board of directors of the Company has reviewed and authorized the following
documents relating to the issuance of a Fixed Convertible Promissory Note in the
amount of $275,000 with Harbor Gates Capital, LLC.

 

The documents agreed to and dated July 15, 2019 are as follows:

 

10% Fixed Convertible Promissory Note of JRSIS Health Care Corp

Irrevocable Transfer Agent Instructions

Certificate of Corporate Chief Executive Officer

Disbursement Instructions

Schedule 1 – Use of Proceeds

 

The board of directors further agree to authorize and approve the issuance of
shares to the Holder at Conversion prices that are below the Company’s then
current par value.

 

IN WITNESS WHEREOF, the undersign member(s) of the board of the Company executed
this unanimous written consent as of July 15, 2019.

 

 

 

By: Junsheng Zhang, Lihua Sun, Xuewei Zhang, Yanhui Xing, Yanming Zhang and
Guoqing Jin

 

Its: Directors

 

13

 

 

EXHIBIT C

 

CERTIFICATE OF CORPORATE CHIEF EXECUTIVE OFFICER OF

 

JRSIS HEALTH CARE CORP

 

(Two Pages)

 

The undersigned, _______________________ is the duly elected Corporate Chief
Executive Officer of JRSIS Health Care Corp, a Florida corporation (the
“Company”).

 

I hereby warrant and represent that I have undertaken a complete and thorough
review of the Company’s corporate and financial books and records, including,
but not limited to, the Company’s records relating to the following:

 

(A)The issuance of that certain convertible promissory note dated July 15, 2019
(the “Note Issuance Date”) issued to Harbor Gates Capital, LLC (the “Holder”) in
the stated original principal amount of $275,000 (the “Note”);

 

(B)The Company’s Board of Directors duly approved the issuance of the Note to
the Holder;

 

(C)The Company has not received and does not contemplate receiving any new
consideration from any persons in connection with any later conversion of the
Note and the issuance of the Company’s Common Stock upon any said conversion;

 

(D)To my best knowledge and after completing the aforementioned review of the
Company’s stockholder and corporate records, I am able to certify that the
Holder (and the persons affiliated with the Holder) are not officers, directors,
or directly or indirectly, ten percent (10.00%) or more stockholders of the
Company and none of said persons has had any such status in the one hundred
(100) days immediately preceding the date of this Certificate;

 

(E)The Company’s Board of Directors have approved duly adopted resolutions
approving the Irrevocable Instructions to the Company’s Stock Transfer Agent
dated July 15, 2019;

 

(F)Mark the appropriate selection:

 

___ The Company represents that it is not a “shell company,” as that term is
defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended, and
has never been a shell company, as so defined; or

 

___ The Company represents that (i) it was a “shell company,” as that term is
defined in Section 12b-2 of the Securities Exchange Act of 1934, as amended,
(ii) since ______, 201__, it has no longer been a shell company, as so defined,
and (iii) on _______, 201__, it provided Form 10-type information in a filing
with the United States Securities and Exchange Commission.

 

14

 

 

(G)I understand the constraints imposed under Rule 144 on those persons who are
or may be deemed to be “affiliates,” as that term is defined in Rule 144(a)(1)
of the Securities Act of 1933, as amended.

 

(H)I understand that all of the representations set forth in this Certificate
will be relied upon by counsel to Harbor Gates Capital, LLC in connection with
the preparation of a legal opinion.

 

 

I hereby affix my signature to this Certificate and hereby confirm the accuracy
of the statements made herein.

 

Signed:     Date:                                                        Name:  
  Title:                                               

 

15

 

 

EXHIBIT D

 

TO:Harbor Gates Capital, LLC

FROM:JRSIS Health Care Corp

DATE:July 15, 2019

RE:Disbursement of Funds

 

Pursuant to that certain Fixed Convertible Promissory Note between the parties
listed above and dated July 15, 2019, a disbursement of funds will take place in
the amount and manner described below:

 

Please disburse to:   Amount to disburse: $175,000 Form of distribution Wire
Name JRSIS Health Care Corp Company Address

 

 

 

Wire Instructions:

Bank: 

ABA Routing Number: 

Account Number: 

SWIFT Code:

Account Name:

Phone:

 

TOTAL: $175,000

 

For: JRSIS Health Care Corp

 

By:   Dated: July 15, 2019

Name:

Its:

 

16

 

 

EXHIBIT E

 

COMPANY CAPITALIZATION TABLE AS OF JULY 15, 2019

 

COMMON STOCK AND COMMON STOCK EQUIVALENTS

ISSUED, OUTSTANDING AND RESERVED

 

DESCRIPTION     AMOUNT Authorized Common Stock        Authorized Capital Stock  
    Authorized Common Stock        Issued Common Stock           Outstanding
Common Stock       Treasury Stock      *Authorized, but unissued      
Authorized Preferred Stock   Issued Preferred Stock          Reserved for Equity
Incentive Plans   Reserved for Convertible Debt   Reserved for Options and
Warrants   Reserved for Other Purposes      

TOTAL COMMON STOCK AND COMMON

STOCK EQUIVALENTS OUTSTANDING

 

 

 

* This number includes all shares reserved for Convertible Debt

 

Note: If not applicable, enter “n/a” or “zero” in Column 2.

 

17

 

 

CURRENT DEBT AND LIABILITIES TABLE

 

CONVERTIBLE PROMISSORY NOTE BALANCES AND PROMISSORY NOTE BALANCES

 

DESCRIPTION      ISSUANCE DATE AMOUNT Convertible Promissory Note               
                    Promissory Note                                   Other Debt
and Liabilities                                   

 

Note: If not applicable, enter “n/a” or “zero” in Column 2.

 

To my best knowledge and after completing the aforementioned review of the
Company’s stockholder and corporate records, I am able to certify the accuracy
of the statements made herein.

 

JRSIS HEALTH CARE CORP

 

By:   Dated: July 15, 2019

Name:

Title:

 

18

 

 

SCHEDULE 1

 

USE OF PROCEEDS

 

Pursuant to that certain Fixed Convertible Promissory Note between the parties
listed above and dated July 15, 2019, the Company covenants that it will within,
                          month(s) of the Effective Date of the Note, it shall
use approximately $175,000 of the proceeds in the manner set forth below (the
“Use of Proceeds”):

 

 

 

 

 

 

 

 

 

  

JRSIS HEALTH CARE CORP

 

By:   Dated: July 15, 2019

Name:

Title:

 

 

19