Exhibit
4.1


 


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


 


Original
Issue Date: September 29, 2021


 


$1,150,000
Principal


$1,035,000
Purchase Price


$115,000
Original Issue Discount


 


original
issue discount


SENIOR
SECURED


Convertible
PROMISSORY NOTE


 


THIS
ORIGINAL ISSUE DISCOUNT SENIOR SECURED CONVERTIBLE PROMISSORY NOTE is duly authorized and validly issued at an original issue discount
by AMERICAN REBEL HOLDINGS, INC., a Nevada corporation (the “Company”) (the “Note”).


 


FOR
VALUE RECEIVED, the Company promises to pay to Cavalry Fund I LP or its permitted assigns (the “Holder”), the principal
sum of $1,150,000 on the date that is the 12 month anniversary of the Original Issue Date, or September 29, 2022
(the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder,
and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with
the provisions hereof. Provided that there is no Event of Default, the Maturity Date may be extended six months at the discretion of
the Company. This Note is subject to the following additional provisions:


 


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


 


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


 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Subsidiary thereof commences a case or other proceeding under
any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary
thereof any such case or proceeding that is not dismissed within 30 days after commencement, (c) the Company or any Subsidiary thereof
is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the
Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property
that is not discharged or stayed within 30 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general
assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts or (g) the Company or any Subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose
of effecting any of the foregoing.


 




    	1



    	 



    

 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




    	2



    	 



    

 


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


 


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


 


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


 


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


 


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


 


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


 


“Mandatory
Default Amount” means the sum of 125% of the aggregate of (i) the outstanding principal amount of this Note and the
accrued and unpaid interest thereon, including default interest, and (b) all other amounts, costs, expenses and liquidated damages due
in respect of this Note.


 


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


 


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


 


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


 


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


 


“Permitted
Indebtedness” means (a) the indebtedness evidenced by this Note and the other Original Issue Discount Convertible Promissory Notes
sold to purchasers on the date hereof, (b) capital lease obligations and purchase money indebtedness incurred in connection with the
acquisition of machinery and equipment as long as such capital leases and indebtedness and (c) the Indebtedness set forth on Schedule
3.1(aa) to the Purchase Agreement).


 


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


 




    	3



    	 



    

 


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


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of September 29, 2021, among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“SEC”
means the Securities and Exchange Commission.


 


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


 


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


 


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


 


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


 


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


 


“Transaction
Documents” has the meaning ascribed to it in the Purchase Agreement.


 


“VWAP”
has the meaning ascribed to it in the Purchase Agreement.


 


Section
2. Interest/Repayment.


 


(a)
Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this Note
at the rate of 6% per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the Original
Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued and
unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During the existence of an Event
of Default, interest shall accrue at the lesser of (i) the rate of 15% per annum, or (ii) the maximum amount permitted by law (the lesser
of clause (i) or (ii), the “Default Interest Rate”). Interest shall be due on the first Trading Day of each calendar month
during the existence of an Event of Default. Once an Event of Default is cured, the interest rate shall return to 6%.


 


Section
3. Registration of Transfers and Exchanges.


 


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


 


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


 


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


 




    	4



    	 



    

 


Section
4. Conversion.


 


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


 


(b)
Conversion Price. The “Conversion Price” shall be $0.075 per share, subject to any adjustments contained in
this Note. All such Conversion Price determinations are to be appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction that proportionately decreases or increases the Common Stock.


 


(c)
Mechanics of Conversion or Repayment.


 


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


 


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


 


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


 




    	5



    	 



    

 


(iv)
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Note in accordance with the terms hereof, are absolute and unconditional, irrespective of any action or inaction by
the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of such Conversion Shares. In the event the Holder of this Note shall elect to convert any or all of
the outstanding principal amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated
or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from
a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained,
and the Company posts a surety bond for the benefit of the Holder in accordance with Section 4.1(f) of the Purchase Agreement. The exercise
of any such rights shall not prohibit the Holder from seeking to collect damages under this Note, the Purchase Agreement or under applicable
law.


 


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


 


(vi)
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion
Price or round up the fraction to the next whole share as long as it does not violate the Beneficial Ownership Limitation in which case
the fractional share shall be disregarded.to the next whole share.


 


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


 


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


 




    	6



    	 



    

 


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


 


(e)
Mandatory Conversion. This Note (and any accrued or unpaid interest) shall automatically convert into the Company’s common
stock, or into the Company’s common stock and warrants (if warrants are included in the Qualified Financing), upon the closing
of a Qualified Financing at a price per share equal to the lower of (i) the Conversion Price and (ii) 75% of the offering price in the
Qualified Financing. At least five days prior to the closing of the Qualified Financing, the Company will notify the Holder in writing
of the terms of the Qualified Financing. The Warrants issued upon conversion would have the same terms as the warrants sold in the Qualified
Offering. The Holder agrees that any shares of Common Stock received by the Holder in connection with a mandatory conversion pursuant
to this section may not be sold by it until the date that is six months following the Original Issue Date of this Note.


 


Section
5. Certain Adjustments.


 


(a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split)
outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the
Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event,
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made
pursuant to this Section 5(a) shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.


 




    	7



    	 



    

 


(b)
Subsequent Equity Sales.


 


(1)
At any time this Note or any amounts accrued and payable thereunder remain outstanding, the Company or any Subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any
sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is lower than the Conversion Price then in effect (such lower price, the
“Base Conversion Price” and each such issuance or announcement a “Dilutive Issuance”), then the Conversion Price
shall be immediately reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock
Equivalents are issued.


 


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


 


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


 


(4)
If the Company enters into a Variable Rate Transaction despite the prohibition (or not in accordance with the requirements) set forth
in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible
conversion price at which such securities may be converted or exercised under the terms of such Variable Rate Transaction.


 


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


 




    	8



    	 



    

 


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


 


(7)
The provisions of this Section 5(b) shall not apply to Exempt Issuances nor shall it apply anytime that the Company’s Common Stock
is listed on a national securities exchange.


 


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


 


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


 




    	9



    	 



    

 


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


 




    	10



    	 



    

 


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


 


(g)
Notice to the Holder.


 


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


 


(ii)
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on its Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock, (C) the
Company shall authorize the granting to all holders of its Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with
any reclassification of its Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby its Common Stock is converted into other securities,
cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion
of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least 5
calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the
date as of which the holders of its Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is expected that holders of its Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined
in good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. If the Company does not simultaneously file the required Form 8-K, the Holder shall be entitled penalties in accordance
with Section 4.6 of the Purchase Agreement The Holder shall remain entitled to convert this Note during the 20-day period commencing
on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth
herein.


 


Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 75% in principal
amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit any
of the Subsidiaries to, directly or indirectly:


 


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


 


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


 


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


 


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


 




    	11



    	 



    

 


(e)
repay, or offer to repay, any Indebtedness other than the Note as provided in Section 2(b) or Permitted Indebtedness, as such terms Indebtedness
and Permitted Indebtedness are in effect as of the Original Issue Date, provided that such payments other than on the Notes shall not
be permitted if, at such time, or after giving effect to such payment, any Event of Default exists or occurs or the Company is not be
able to satisfy obligations owing to the Noteholders;


 


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


 


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


 


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


 


Section
7. Events of Default.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




    	12



    	 



    

 


(vii)
if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary, by
any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or
appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part of its assets,
and such order, judgment or decree shall continue unstayed and in effect for any period of 10 days;


 


(viii)
the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or any
Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the aggregate,
and any such levy, seizure or attachment shall not be set aside, bonded or discharged within 10 days after the date thereof;


 


(ix)
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their respective
property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or
unstayed for a period of 10 days;


 


(x)
any Material Adverse Effect on the Company or any Subsidiary occurs or any other circumstance or event that could, with or without the
passage of time or the giving of notice, result in a default or event of default under any agreement binding upon the Company or any
Subsidiary, which default or event of default could or is reasonably likely to have a Material Adverse Effect on the Company or any Subsidiary;


 


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


 


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


 


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


 


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


 


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


 


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


 


(xvii)
the Company fails to comply in any material respect with the reporting requirements of the Exchange Act (including but not limited to
becoming delinquent in the filing of any report required to be filed under the Exchange Act including any extension permitted by Rule
12b-25 under the Exchange Act) or ceases to be subject to the reporting requirements of the Exchange Act. For avoidance of doubt, a failure
to file an Exchange Act report within such time shall be deemed to be a failure to comply in a material respect;


 




    	13



    	 



    

 


(xviii)
the Transfer Agent is terminated;


 


(xix)
the Company incurs any Indebtedness other than Permitted Indebtedness;


 


(xxx)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event of
Default has occurred;


 


(xxi)
a Lien other than a Permitted Lien is imposed on the assets of the Company or any subsidiary and such Lien is not dissolved within 10
calendar days;


 


(xxii)
the Company fails to deliver the original Note and Warrants to the Purchasers within five Trading Days as of each Closing;


 


(xxiii)
the Company provides the Holder with material - non-public information concerning the Company without the Holder’s prior written
consent;


 


(xxiv)
the Company restates any financial statements included in its reports or registration statements filed pursuant to the Securities Act
or the Exchange Act for any date or period from two years prior to the Original Issue Date of this Note and until this Note is or the
Warrants issued to the Holder are no longer outstanding, if following first public announcement or disclosure that a restatement will
occur the VWAP on the next Trading Day is 20% less than the VWAP on the prior Trading Day. For the purposes of this clause (xxv) the
next Trading Day if an announcement is made before 4:00 pm New York, NY time is either the day of the announcement or the following Trading
Day;


 


(xxv)
the Company or a Subsidiary enters into a Variable Rate Transaction or a similar transaction prohibited under the Purchase Agreement,
without the prior written consent of the Holder.


 


(b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus liquidated
damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately
due and payable in cash at the Mandatory Default Amount. Provided, however, if the Event of Default originally occurs at such time as
the Company’s Common Stock is listed on a national securities exchange, the Mandatory Default Amount shall be reduced to 100%.
Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company.
In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and
annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time,
if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon.


 


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


 


(d)
Notice of an Event of Default. Upon learning of an Event of Default with respect to this Note, the Company shall within two Trading
Days deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified) to the
Holder


 


Section
8. Miscellaneous.


 


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


 




    	14



    	 



    

 


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


 


	 	If
    to the Company:	American
    Rebel Holdings, Inc.	 
	 	 	 ________________________	 
	 	 	 _______________________	 
	 	 	Attention:
    Charles A. Ross, Jr., CEO 	 
	 	 	Email:
    ___________@__________.com	 
	 	 	 	 
	 	with
    a copy to:	 	 
	 	(which
    shall not constitute notice)	 	 



 


	 	If
    to the Purchaser:	To  the address listed on the Purchaser Signature Page to   the Securities Purchase Agreement.	 


 


  


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


 


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


 


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


 


(e)
Exclusive Jurisdiction; Governing Law; Prevailing Party Attorneys’ Fees. All questions concerning the construction, validity,
enforcement and interpretation of this Note and venue shall be governed by and construed and enforced in accordance with Section 5.8
of the Purchase Agreement. If any party shall commence an Action or Proceeding to enforce or otherwise relating to this Note, then, in
addition to the other obligations of the Company elsewhere in this Note, the prevailing party in such action or proceeding shall be reimbursed
by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Action or Proceeding.


 


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


 


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


 




    	15



    	 



    

 


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


 


(i)
Secured Obligation. The obligations of the Company under this Note are secured by all assets of the Company and each Subsidiary
pursuant to the Security Agreement, dated as of September 29, 2021 between the Company, the Subsidiaries of the Company and the Secured
Parties (as defined therein).


 


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


 


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


 


Signature
Page Immediately Follows


 




    	16



    	 



    

 


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


 


	 	AMERICAN REBEL HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name:	Charles
    A. Ross, Jr.
	 	Title:	Chief
    Executive Officer 


 






    	17



    	 



    

 






ANNEX
A


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Original Issue Discount Convertible Note due ______________, 2022 of American
Rebel Holdings, Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written below.


 


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


 


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


 


Conversion
calculations:


 


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


 




    	18