Document:

EXHIBIT
10.3

 

 

May
19, 2017

 

Via
Hand Delivery to Benjamin T. Rashleger

 

Dear
Benji:

 

This
letter (“Agreement”) describes our agreement regarding the separation of your employment with WSI Industries, Inc.
(“WSI Industries” or the “Company”), effective May 19, 2017 and to specify the terms of the general release
you are obligated to provide pursuant to Section 1(c) of the severance letter agreement between you and the Company dated October
20, 2011 (the “Severance Letter Agreement”).

 

Capitalized
terms used but not defined in this Agreement have the meanings ascribed to them in the Severance Letter Agreement.

 

1. Separation
of Employment; Resignation as Director. Your employment with the Company will end effective May 19, 2017 without further action
by either you or WSI Industries. For the purposes of the Severance Letter Agreement, the separation of your employment effective
May 19, 2017 will be considered a termination without Cause. Effective May 19, 2017, you also resign as a director of the Company
and from any position you hold with any subsidiary of the Company and have deliver a resignation letter to the Board of Directors
to the foregoing effect.

 

2. Severance
and Benefits. The Company will pay to you the severance and provide the other benefits described in Section 1(a) of the Severance
Letter Agreement only if you sign and deliver, following the termination of your employment but on or before the 21st
day thereafter and you do not rescind or revoke, a release of claims attached to this Agreement as Exhibit A (the “Release”).
The payments of the amounts specified in the Severance Letter Agreement will begin within twenty (20) days of the expiration of
any right you have to rescind or revoke the properly executed, delivered and accepted Release.

 

In
consideration for the benefits outlined above, you agree to the following:

 

3. Consideration
Period. You may review this Agreement with an attorney of your choosing and are hereby advised to do so. You have 21 calendar
days from the date you receive this Agreement to consider whether you wish to sign it. You acknowledge that if you sign this Agreement
before the end of the 21 calendar day period, it is your voluntary decision to do so, and you waive the remainder of the 21 calendar
day period.

 

    	 	 	 

    	 

    

 

4. Other
Agreements. You acknowledge and agree that the Restrictive Covenant Agreement dated as of October 12, 2009 by and between
the Company and you (the “Restrictive Covenant Agreement”) remains in full force and effect. You hereby affirm your
continuing obligations to the Company under the Restrictive Covenant Agreement, including the confidentiality, non-compete and
non-solicit obligations as described therein. You agree that the Employment (Change in Control) Agreement dated October 12, 2009
is hereby terminated and is of no further force or effect as of the date hereof.

 

5. Non-Disparagement.
You agree you will not defame or disparage the reputation, character, image, products or services of the Company, or the reputation
or character of the Company’s directors, officers, employees or agents. The Company will direct its officers and directors
not to defame or disparage your reputation or character. Nothing in this Section will be construed to limit or restrict you or
the Company from taking any action that such party in good faith reasonably believes is necessary to fulfill such party’s
fiduciary obligations to the Company or from providing truthful information in connection with any legal proceeding, government
investigation or other legal matter.

 

This
Agreement shall not in anyway be construed as an admission by WSI Industries of any liability or unlawful conduct whatsoever.

 

In
the event that any provision of this Agreement is found to be illegal or unenforceable, such provision shall be severed or modified
to the extent necessary to make it enforceable, and as so severed or modified, the remainder of this Agreement shall remain in
full force and effect. This Agreement shall be governed and construed in accordance with laws of the state of Minnesota, other
than its law dealing with conflicts of law.

 

No
amendment or modification of this Agreement will be effective unless made in writing and signed by you and WSI Industries. This
Agreement, the Restrictive Covenant Agreement, the Severance Letter Agreement, any written stock option agreements and restricted
stock award agreements to which you and the Company are parties, and the employee benefit plans sponsored by the Company in which
you are a participant are intended to define the full extent of the legally enforceable undertakings of the parties, and no promises
or representations, written or oral, that are not set forth or referenced explicitly in this Agreement, such other agreements
or such other plans are intended by either party to be legally binding. You are not eligible for any other payment or benefits
except for those expressly described in this Agreement as provided under the Severance Letter Agreement, provided that you sign
and do not rescind the Release.

 

By
signing this Agreement, you acknowledge that you have read this Agreement, including the Release. By signing, you also acknowledge
and agree that you have entered into this Agreement knowingly and voluntarily and knew that you could consult with any attorney
regarding this Agreement.

 

If
you agree to the terms and conditions of this Agreement, please sign and return the signed Agreement to me, keeping a copy for
yourself.

 

    	 	2 	 

    	 

    

 

	 	Sincerely,
	 	 	 
	 	WSI Industries, Inc. 
	 	 	 
	 	By:	/s/
    Jack R. Veach
	 	 	Jack
    R. Veach
	 	 	Chair
    of the Compensation Committee of the
	 	 	Board
    of Directors of WSI Industries, Inc.

 

I,
Benjamin T. Rashleger have read and understand and agree to the terms and conditions set forth above and have signed this Agreement
dated May 19, 2017 voluntarily and with full knowledge and understanding of its meaning.

 

Dated
May 19, 2017

 

	 	/s/
    Benjamin T. Rashleger
	 	Benjamin
    T. Rashleger

 

    	 	3 	 

    	 

    

 

EXHIBIT
A

 

RELEASE
BY BENJAMIN T. RASHLEGER 

 

THIS
RELEASE AGREEMENT (the “Release Agreement” or the “Release”) is entered into as of the date indicated
below by Benjamin T. Rashleger for the benefit of WSI Industries and the Company (each as defined below).

 

Definitions.
I intend all words used in this Release to have their plain meanings in ordinary English. Specific terms that I use in this
Release have the following meanings:

 

	 	A.	I,
    me, and my include both me and anyone who has or obtains any legal rights or claims through me. 
	 	 	 
	 	B.	WSI
    Industries means WSI Industries, Inc., any company related to WSI Industries, Inc. in the present or past (including,
    without limitation, its predecessors, parents, subsidiaries, affiliates, and divisions), and any successors of WSI Industries,
    Inc. 
	 	 	 
	 	C.	Company
    means WSI Industries; the present and past officers, directors, committees, shareholders, and employees of WSI Industries;
    any company providing insurance to WSI Industries in the present or past; the present and past employee benefit plans sponsored
    or maintained by WSI Industries and the present and past fiduciaries of such plans; the attorneys for WSI Industries; and
    anyone who acted on behalf of WSI Industries or on instructions from WSI Industries. 
	 	 	 
	 	D.	Severance
    Letter Agreement means the Severance Letter Agreement between WSI Industries and me dated as of October 20, 2011.
	 	 	 
	 	E.	May
    2017 Letter Agreement means the Letter Agreement between WSI Industries and me dated as of May 19, 2017.
	 	 	 
	 	F.	My
    Claims means all of my rights that I now have to any relief of any kind from the Company, including without limitation:
    

 

	 	 	1.	all
    claims arising out of or relating to my employment with WSI Industries or the termination of that employment, or otherwise,
    including, without limitation, all claims arising out of or relating to WSI Industries’ offer letter to me dated October
    5, 2009, the Employment (Change in Control) Agreement between me and WSI Industries dated October 12, 2009, or any cash incentive
    compensation plan for fiscal 2017 or any other period; 
	 	 	 	 
	 	 	2.	all
    claims arising out of or relating to the statements, actions, or omissions of the Company; 
	 	 	 	 
	 	 	3.	all
    claims I may have for compensation of any kind, including without limitation salary, wages, bonuses, deferred compensation,
    commissions, penalties, vacation pay, separation pay and/or benefits, incentive compensation, equity compensation of any kind
    (including stock awards), perquisites, relocation expenses, and expense reimbursements; 

 

    	 	4 	 

    	 

    

 

	 	 	4.	all
    claims I may have for defamation, improper discharge or retaliation (based on contract, common law, or statute), alleged violation
    of the Minnesota Human Rights Act, Title VII of the Civil Rights Act of 1964 as amended, the Older Workers Benefit Protection
    Act and Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and any
    claim for discrimination or harassment under local, state or federal law;
	 	 	 	 
	 	 	5.	all
    claims for alleged wrongful discharge; breach of contract; breach of implied contract; failure to keep any promise; breach
    of a covenant of good faith and fair dealing; breach of fiduciary duty; estoppel; my activities, if any, as a “whistleblower”;
    defamation; infliction of emotional distress; fraud; misrepresentation; negligence; constructive discharge; assault; battery;
    false imprisonment; invasion of privacy; interference with contractual or business relationships; any other wrongful employment
    practices; and violation of any other principle of common law; 
	 	 	 	 
	 	 	6.	all
    claims for back pay, front pay, reinstatement, other equitable relief, compensatory damages, damages for alleged personal
    injury, liquidated damages, and punitive damages; 
	 	 	 	 
	 	 	7.	all
    claims that a past unlawful decision has or has had a continuing effect on my compensation; and 
	 	 	 	 
	 	 	8.	all
    claims for attorneys’ fees, costs, and interest. 

 

Notwithstanding
the foregoing, My Claims does not include: any claims that the law does not allow to be waived; any claims that may arise
after the time I sign this Release; any claims for breach of the Severance Letter Agreement or the May 2017 Letter Agreement;
any rights I have under any written stock option or restricted stock award agreement with WSI Industries; my right to benefits
under any employee benefit plan sponsored by WSI Industries in which I am currently a participant; or any rights that I may have
to indemnification from WSI Industries as a current or former officer, director, or employee of WSI Industries, including without
limitation indemnification rights under applicable laws, the Articles of Incorporation or Bylaws of WSI Industries, or any liability
insurance policy maintained by WSI Industries.

 

Nothing
contained in this Release Agreement shall be construed to prohibit me from seeking recourse through a government agency providing
information to a government agency regarding any employee dispute; exercising any rights that are not allowed to be released by
law; or to testify, assist, or participate in an investigation, hearing or proceeding conducted by a governmental agency regarding
a charge or claim of alleged discrimination, harassment or retaliation filed with the governmental agency. Notwithstanding, this
Release includes a release of my right to file a court action or to seek individual remedies or damages in any action filed by
any such government agency and my release of these rights shall apply with full force and effect to any proceedings arising from
or relating to such recourse including, but not limited to, the right to monetary damages or other individual legal or equitable
relief awarded.

 

    	 	5 	 

    	 

    

 

Agreement
to Release My Claims. I acknowledge that I will receive consideration from WSI Industries if I sign and do not rescind
or revoke this Release as provided below. I acknowledge that that consideration is in addition to anything of value that I would
be entitled to receive from WSI Industries if I did not sign this Release or if I rescinded or revoked this Release. In exchange
for that consideration, I hereby release, agree not to sue, and forever discharge the Company from all of My Claims to the full
extent allowed by law. I will not make any demands or claims against the Company for compensation or damages relating to My Claims.
The consideration that I am receiving is a fair consideration for the release of My Claims.

 

Additional
Agreements and Understandings. Even though WSI Industries will provide consideration for me to settle and release My Claims,
the Company does not admit that it is responsible or legally obligated to me. In fact, the Company denies that it is responsible
or legally obligated to me for My Claims, denies that it engaged in any unlawful or improper conduct toward me, and denies that
it treated me unfairly.

 

Advice
to Consult with an Attorney. I am hereby being advised by the Company to consult with an attorney prior to signing this
Release. My decision whether to sign this Release is my own voluntary decision made with full knowledge that the Company has advised
me to consult with an attorney.

 

Period
to Consider the Release. I have 21 days from the day that I receive this Release, not counting the day upon which I receive
it, to consider whether I wish to sign this Release. If I sign this Release before the end of the 21-day period, it will be my
voluntary decision to do so and I waive any remaining days in the 21-day period.

 

My
Right to Rescind/Revoke this Release. I have the right to revoke this Release within 7 calendar days of signing this Release
to reinstate federal claims under the Age Discrimination in Employment Act. I have the right to rescind this Release within 15
calendar days of signing this Release to reinstate claims arising under the Minnesota Human Rights Act. This Release will not
become effective or enforceable unless and until the 7-day or 15-day revocation or rescission period has expired without my revoking
or rescinding it.

 

Procedure
for Accepting or Rescinding/Revoking the Release. To accept the terms of this Release, I must deliver the Release, after
I have signed and dated it, to WSI Industries by hand or by mail no later than the last day of the 21-day period that I have to
consider this Release. To rescind or revoke my acceptance of this Release, I must timely deliver to WSI Industries a written,
signed statement that I rescind or revoke my acceptance. All deliveries must be made to WSI Industries at the following address:

 

Chief
Financial Officer

WSI Industries, Inc.

213 Chelsea Avenue

Monticello,
MN 55362

 

    	 	6 	 

    	 

    

 

If
I choose to deliver my acceptance or the rescission/revocation of my acceptance by mail, it must be:

 

	 	(1)	postmarked
    within the period stated above; and 
	 	(2)	properly
    addressed to WSI Industries at the address stated above; and
	 	(3)	sent
    by certified mail return receipt requested.

 

I
UNDERSTAND THAT IF I RESCIND OR REVOKE ANY PART OF THIS RELEASE THE SEVERANCE LETTER AGREEMENT IS VOIDABLE AT THE DISCRETION OF
WSI INDUSTRIES.

 

Interpretation
of the Release. This Release should be interpreted as broadly as possible to achieve my intention to resolve all of My
Claims against the Company. If this Release is held by a court to be inadequate to release a particular claim encompassed within
My Claims, this Release will remain in full force and effect with respect to all the rest of My Claims.

 

My
Representations. I am legally able and entitled to receive the consideration being provided to me in settlement of My
Claims. I have not been involved in any personal bankruptcy or other insolvency proceedings at any time since I began my employment
with WSI Industries. No child support orders, garnishment orders, or other orders requiring that money owed to me by WSI Industries
be paid to any other person are now in effect. No Medicaid payment has been made to me or on my behalf, and no liens, claims,
demands, subrogated interests, or actions of any nature exist or have been asserted related to employment with WSI Industries.
I have returned all WSI Industries property, including keys, credit cards, security access cards, codes, personal computers, cell
phones, memoranda, data, records, notes and other information. I have read this Release carefully. I understand all of its terms.
In signing this Release, I have not relied on any statements or explanations made by WSI Industries except as specifically set
forth in the Severance Letter Agreement and the May 2017 Letter Agreement. I am voluntarily releasing My Claims against the Company.
I intend this Release and the May 2017 Letter Agreement to be legally binding.

 

	 	 
	 	Benjamin
    T. Rashleger
	 	 
	 	 
	 	Date

 

    	 	7EXHIBIT 10.1

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)
 US $75,000.00
 
RICH CIGAR, INC.
8% CONVERTIBLE REDEEMABLE NOTE
DUE MARCH 24, 2018

FOR VALUE RECEIVED, Rich Cigar, Inc. (the “Company”) promises to pay to the order of EAGLE EQUITIES, LLC and its authorized successors and Permitted Assigns, defined below, ("Holder"), the aggregate principal face amount Seventy Five Thousand Dollars exactly (U.S. $75,000.00) on March 24, 2018 ("Maturity Date") and to pay interest on the principal amount outstanding hereunder at the rate of 8% per annum commencing on March 24, 2017. This Note shall contain an 10% OID such that the purchase price shall be $67,500.00. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable at 91 Shelton Ave, Suite 107, New Haven, CT 06511, initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein. Permitted Assigns means any Holder assignment, transfer or sale of all or a portion of this Note accompanied by an Opinion of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement. 
This Note is subject to the following additional provisions: 
/s/RD

Initials 

	
  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 will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith. To the extent that Holder subsequently transfers, assigns, sells or exchanges any of the multiple lesser denomination notes, Holder acknowledges that it will provide the Company with Opinions of Counsel as provided for in Section 2(f) of the Securities Purchase Agreement.
  

  
   

  
  

	
  The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.
  

  
   

  
  

	
  This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act"), applicable state securities laws and Sections 2(f) and 5(f) of the Securities Purchase Agreement. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer 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 Company's records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prequalified prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date. All notices of conversion will be accompanied by an Opinion of Counsel.
  

  
   

  
  

	
  (a) The Holder of this Note is entitled, at its option, at any time, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") at a price ("Conversion Price") for each share of Common Stock equal to 55% of the  lowest trading price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange"), for the  twenty prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered together with an Opinion of Counsel, by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion.  Accrued, but unpaid interest shall be subject to conversion.  No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share. To the extent the Conversion Price of the Company’s Common Stock closes below the par value per share, the Company will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Company agrees to honor all conversions submitted pending this

  
   

  
 /s/RD

Initials 

  

  
  

  

increase. In the event the Company experiences a DTC “Chill” on its shares, the Conversion Price shall be decreased to 45% instead of 55% while that “Chill” is in effect. If the Company fails to maintain the share reserve at the 4x discount of the note 60 days after the issuance of the note, the conversion discount shall be increased by 10%. In no event, shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially owned by the Holder and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company (which may be increased up to 9.9% upon 60 days’ prior written notice by the Investor).
  

  
  
  

  (b)Interest on any unpaid principal balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in Common Stock ("Interest Shares"). Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice. (c) During the first six months this Note is in effect, the Company may redeem this Note by paying to the Holder an amount as follows:  (i) if the redemption is within the first 90 days this Note is in effect, then for an amount equal to 135% of the unpaid principal amount of this Note along with any interest that has accrued during that period, (ii) if the redemption is after the  91st day this Note is in effect, but less than the 180th day this Note is in effect, then for an amount equal to 150% of the unpaid principal amount of this Note along with any accrued interest. This Note may not be redeemed after 180 days. The redemption must be closed and paid for within 3 business days of the Company sending the redemption demand or the redemption will be invalid and the Company may not redeem this Note. Such redemption must be closed and funded within 3 days of giving notice of redemption of the right to redeem shall be null and void. (d)Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization (excluding an increase in authorized capital) or other change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock split or stock dividend, or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price. (e)

In case of any Sale Event (not to include a sale of all or substantially all of the Company’s assets) in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have
  

  
/s/RD

Initials 

  

  
  

  

the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith. 

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

    
     

    
    

	
    The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.
    

    
     

    
    

	
    The Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due under this Note.
    

    
     

   
8. If one or more of the following described "Events of Default" shall occur: 
 

  (a) The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or
  

   

  (b) Any of the representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities Purchase Agreement under which this note was issued shall be false or misleading in any respect; or
  

   

  (c) The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or any other note issued to the Holder; or
  

   

  (d)The Company shall (1) become insolvent (which does not include a  going
  concern opinion); (2) admit in writing its inability to pay its debts
  generally as they mature; (3)make an assignment for the benefit of creditors
  or commence proceedings for its dissolution; (4) apply for or consent to the
  appointment of a trustee, liquidator or receiver for its or for a substantial
  part of its property or business; (5) file a petition for bankruptcy relief,
  consent to the filing of such petition or have filed against it an involuntary
  petition for bankruptcy relief, all under federal or state laws as applicable;
  or 

  
   

  
  /s/RD

Initials 

  

  
  

(e)

A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or
  

  (f) Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or
  

  (g) One or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or
  

  (h)

Defaulted on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such default within the appropriate grace period; or
  

  (i) The Company shall have its Common Stock delisted from an exchange (including the OTC Markets exchange) or, if the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days or ceases to file its 1934 act reports with the SEC;
  

  (j) If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;
  

  (k)

The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of a Notice of Conversion which includes an Opinion of Counsel expressing an opinion which supports the removal of a restrictive legend; or
  

  (l) The Company shall not replenish the reserve set forth in Section 12, within 3 business days of the request of the Holder.
  

  (m)

The Company shall be delinquent in its periodic report filings with the Securities and Exchange Commission; or
  

  (n) The Company shall cause to lose the “bid” price for its stock in a market (including the OTC marketplace or other exchange).
  

  Then, or at any time thereafter, unless cured within 5 days, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly 
/s/RD

Initials 

  

  
  

  

  
  
  
 
  waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day beginning on the 10th day. The penalty for a breach of Section 8(n) shall be an increase of the outstanding principal amounts by 20%.  In case of a breach of Section 8(i), the outstanding principal due under this Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%. Further, if a breach of Section 8(m) occurs or is continuing after the 6 month anniversary of the Note, then the Holder shall be entitled to use the lowest closing bid price during the delinquency period as a base price for the conversion. For example, if the lowest closing bid price during the delinquency period is $0.01 per share and the conversion discount is 50% the Holder may elect to convert future conversions at $0.005 per share. 
If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. 
Make-Whole for Failure to Deliver Loss. At the Holder’s election, if the Company fails for any reason to deliver to the Holder the conversion shares by the by the 3rd business day following the delivery of a Notice of Conversion to the Company and if the Holder incurs a Failure to Deliver Loss, then at any time the Holder may provide the Company written notice indicating the amounts payable to the Holder in respect of the Failure to Deliver Loss and the Company must make the Holder whole as follows: Failure to Deliver Loss = [(High trade price at any time on or after the day of exercise) x (Number of conversion shares)] 
The Company must pay the Failure to Deliver Loss by cash payment, and any such cash payment must be made by the third business day from the time of the Holder’s written notice to the Company.
 
	
    In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.
    

    
     

    
    

	
    Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.
    

    
     

     

  11. The Company represents that it is not a “shell” issuer and that if it previously has been a “shell” issuer that at least 12 months have passed since the Company has reported Form 10 type information indicating it is no longer a “shell issuer.  
/s/RD

Initials 

  

  
  

	
  The Company shall issue irrevocable transfer agent instructions reserving 1,816,000 shares of its Common Stock for conversions under this Note (the “Share Reserve”).  Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all transfer agent costs associated with issuing and delivering the share certificates to Holder. If such amounts are to be paid by the Holder, it may deduct such amounts from the Conversion Price. The company should at all times reserve a minimum of four times the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from time to time to reserve such amounts. The Company will instruct its transfer agent to provide the outstanding share information to the Holder in connection with its conversions.

   

  
  

	
  The Company will give the Holder direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc.  This notice shall be given to the Holder as soon as possible under law.
  

  
   

  
  

	
  This Note shall be governed by and construed in accordance with the laws of Nevada applicable to contracts made and wholly to be performed within the State of Nevada and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York or in the Federal courts sitting in the county or city of New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.
  

  
   

/s/RD

Initials 

  

  
  

  

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized. 
Dated: 3/27/17
RICH CIGAR, INC.
By: /s/ Richard Davis
__________________________________ 
Title: Chief Executive Officer
_________________________________ 
 

   

   

  
  /s/RD

Initials 

  

  
  

  

  
EXHIBIT A  

  NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Note) 
The undersigned hereby irrevocably elects to convert $___________ of the above
  Note into _________ Shares of Common Stock of Rich Cigar, Inc. ("Shares")
  according to the conditions set forth in such Note, as of the date written
  below. 
If Shares are to be issued in the name of a person other than the undersigned,
  the undersigned will pay all transfer and other taxes and charges payable with
  respect thereto. 
Date of Conversion: _______________________________
Applicable Conversion Price: ________________________
Signature:________________________________________
[Print Name of Holder and Title of Signer] 
Address: ________________________________________

   

  SSN or EIN: _____________________________________
Shares are to be registered in the following name:
  ___________________________

   

  Name: ________________________________
Address: ______________________________ 
Tel: __________________________________
Fax: __________________________________
SSN or EIN: ___________________________
 
Shares are to be sent or delivered to the following account: 
 
Account Name: _________________________
Address: _______________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]