NEITHERTHEISSUANCE NOR SALE OF THESECURITIESREPRESENTED BY THIS CERTIFICATENORTHE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVEBEEN REGISTEREDUNDER THESECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATESECURITIES LAWS.THE SECURITIES MAYNOTBE OFFERED FOR SALE, SOLD,TRANSFERREDOR ASSIGNED(I) INTHEABSENCE OF (A)ANEFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIESUNDER THESECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINlON OFCOUNSEL(WHICH COUNSEL SHALL BE SELECTED BYTHE HOLDER),IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR(II)UNLESSSOLD PURSUANT TO RULE 144 OR RULE144A UNDER SAIDACT. NOTWITHSTANDING THE FOREGOING, THESECURITIES MAYBE PLEDGEDINCONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
ELITEPERFORMANCEHOLDING CORP.
$157,500.00 NOTE
EIGHTPERCENT(8%)CONVERTIBLE NOTE DATED
January 7, 2019
THIS NOTE(the" Note")isadulyauthorized Convertible Note of ELITE PERFORMANCE HOLDING CORP. a Nevada corporation (the" Company").
FORVALUERECEIVED,theCompanypromisestopay DavidStoccardo (the"Holder''),theprincipalsum of OneHundredFifty-Seven Thousand Five Hundred DollarsandNo Cents ($157,500.00)pursuantto theredemptionscheduleoutlinedinSection9below{the"Principal Amount'')in theamountof One Hundred Fifty-Seven Thousand Five HundredDollarsand No Cents ($157,500.00) (the"Loan" )on January 8, 2020 (the "MaturityDate"),and topayinterest ontheOutstanding PrincipalAmount("Interest'')inalumpsum ontheMaturityDate,atthe rateof EIGHT PERCENT(8%)per Annum (the"Rate")fromthe dateofissuance.
l) Accrual oflnterestshallcommence onthe dateof this Note at theRateof eightpercent(8%)and continueuntilthe Companyrepaysinfullthe outstanding PrincipalAmountplusall accrued butunpaid Interestandany prepaymentfees. Upon an Event of Default,theRateshallbeadjusted as set forth in Section 8. The outstanding Principal Amount of this Noteispayable on theMaturity Date insuch coin or currency oftheUnited States asat thetime of paymentislegal tenderforpayment of publicandprivate debts,at the addresslastappearing ontheNoteRegisteroftheCompany as designatedin writing by theHolder fromtime to time.TheCompany will paythe outstanding Principal Amount ofthis Note on the MaturityDate, freeof any withholding ordeductionof any kind to theHolderas of theMaturity Dateand addressed to the Holder attheaddress appearing on the Note Register.
This Note issubjectto the following additional provisions:
2)Allpaymentson account oftheoutstandingPrincipalAmount ofthisNote and all otheramounts payable under this Note (whethermade by theCompanyorany otherperson) toor fortheaccount of the Holderhereundershall bemade free and clear of andwithout reduction byreason ofany present andfutureincome,stamp,registrationand other taxes, levies,duties, cost,and charges whatsoeverimposed,assessed,leviedor collected bytheUnited States or any political subdivisionor taxing authoritythereofortherein,togetherwithinterestthereon and penalties with respectthereto,if any, on orin respectof this Note (such taxes,levies,duties,costs andchargesbeing herein collectively called"Taxes").
3)TheHolderofthis Note is entitled,atitsoption, after180 days haveelapsedsince theissuance ofthisNote, to convert all or anylesser portionof theoutstandingPrincipal Amountplusaccrued butunpaidlnterest intoCommonStock at a conversionprice pershareequal tothelesserof (a) $0.05 (the "Fixed Conversion Price"),or(b) sixty-fivepercent(65%)oftheaveragelowestclosingbid pricefor the Company'scommonstock duringthe three (3) trading daysimmediately precedingthe dateofdeliveryby HoldertoCompanyof the Conversion Notice(the"Conversion Price" ).The Common stock into whichthe Note is converted shall be referred to inthisagreement as"Conversion
Shares"). [ShouldtheCompany's Commonstock become chilledfordeposit atOTCatany point while thisNoteremainsoutstanding,theDiscountassociatedwiththeConversionPriceshallbe adjusted tofortypercent(40%), and theconversiondollaramountper conversionshallbe reduced by aflatfee of $1,500.00shallbe chargedtotheCompanyto covercosts associatedwith thedeposit of chilled stocks foreach conversion.]TheHoldermayconvert this NoteintoCommonStockbydeliveringaconversion notice,theformofconversion notice attachedto theNote as Exhibit B ("ConversionNotice"),executedbytheHolderof the Note evidencing suchHolder's intention to convert the Note. The Company shall bearany andall miscellaneousexpenses that mayarise as aresultof conversionanddelivery of sharesofcommonstock inrespect oftheNote,includingbut are notlimited to the cost oftheissuance ofa Rule 144legalopinion,transferagentfees, equityissuance and depositfees,etc.At Holder'soption, anyaccrued costspaid by Holdermay be subtracted fromthe dollaramountofanyconversionof the Note.
MostFavored Nation/Share Issuance.So longasthis Note is outstanding,andpriorto thecomplete conversion orpaymentof this Note,ifthe Company shallissueanyCommonStockforconsideration pershare that is less thantheConversionPricethatwouldbe ineffectatthe timeof such issuance,then,andthereaftersuccessivelyuponeach such issuance,theConversionPriceshall bereduced to such otherlowerissuance price.Forpurposesof this adjustment, theissuanceof anysecurity ordebtinstrumentofthe Companycarrying the right to convertsuch security ordebt
instrument into CommonStock,orofany warrant,right or optiontopurchase Common Stock shallresultinanadjustmenttotheConversionPriceuponthe issuance of the above describedsecurity,debtinstrument,warrant,right oroption,andagainupon theissuanceof shares of CommonStock uponexercise of such conversionorpurchaserightifsuchissuanceisat aprice lower thanthe thenapplicable ConversionPrice.The reductionof theConversionPricedescribedinthisparagraph is inadditionto allotherrightsofthe HolderofthisNote.
TheCompany will notissuefractionalshares or scriptrepresentingfractionsof shares of Common Stock on conversion,but theCompanywill round the numberof shares of Common Stockissuable uptothenearest whole share. Thedateonwhich aNoticeofConversionis givenshallbe deemed to bethedate onwhich theHoldernotifies the Company ofitsintentionto so convertby delivery,byfacsimiletransmission,email,or otherwise,of a copy of the Notice of Conversion.Noticeof Conversion maybe sent by emailtotheCompany,Attn:Chief Executive Officer.At the Maturity Date,subject toSection 13 below,theCompany willpay any unconvertedoutstandingPrincipalAmount and accruedInterestthereon,attheoption ofthe Holder,ineither(a) cashor(b)CommonStock valued at aprice equal to theConversion Pricedetermined asifthe Notewasconvertedinaccordancewithits termsintoCommon Stock onthe Maturity Date.
4)Noprovisionofthis Note shallalterorimpair theobligationofthe Company,which isabsolute andunconditional,to the paymentoftheoutstandingPrincipalAmountofthisNoteatthe Maturity Date,and in the coinorcurrency herein prescribed. ThisNoteisa directobligationoftheCompany. Intheeventof anyliquidation,reorganization,windingup ordissolution,repayment ofthisNote shallnotbesubordinate in anyrespecttoany otherindebtedness of the Company outstandingasofthe dateofthis NoteorhereafterincurredbytheCompany. Suchnon-subordination shallextend without limitingthe generality oftheforegoing,toallindebtednessoftheCompany to banks,financial institutions; othersecured lenders, equipment lessors andequipmentfinancecompanies,butshallexclude tradedebts.Any warrants, optionsorother securities convertibleinto stock oftheCompany issuedbefore the datehereof shall rank pari passu with the Noteinallrespects.
5)Ifatanytime orfrom timeto timeafterthe dateofthisNote,theCommon Stock issuableupontheconversion of the Noteis changedintothesame or different numbers of shares of any class orclassesof stock,whetherbyrecapitalization or otherwise,thenineachsucheventtheHolder shallhavethe right thereafter toconvert the Note into the kind of securityreceivableinsuch recapitalization,reclassification orotherchangeby holdersof Common Stock, all subject to furtheradjustmentasprovided herein.Insuchevent,the formulae set forthherein forconversion and redemption shall beequitably adjustedtoreflect suchchangeinnumberof shares or,ifshares of anewclassof stockare issued,toreflect themarketpriceof theclassorclasses ofstockissued in connection withthe abovedescribed transaction.
6)This Noteshallbegovernedby and construed inaccordancewiththelawsofthe Stateof Florida. Each ofthe parties consentsto theexclusivejurisdiction of thestate or Federal courts ofthe Stateof Floridaresiding inMiami-Dade County in connectionwith any disputearisingunder thisNote, andhereby waives,to themaximumextent permittedby law, any objection, includingany objectionbasedonforumnoncoveniens,tothebringing of anysuchproceeding insuch
jurisdictions. Each of the parties hereby waives the right toatrial by jury inconnection withany dispute arisingunderthisNote.
7)The followingshallconstitutean"Eventof Default":
a.The Companyshalldefault in the paymentofprincipalandinterestonthisNote and same shall continue for a period of five(5)days;or
b.Any of therepresentationsor warranties madeby theCompanyherein,in anycertificate or financial or other written statementsheretoforeorhereafter furnishedbytheCompanyinconnectionwith theexecutionand delivery of thisNote shallbefalse ormisleading in any material respect atthetime made;or
c.The Company shall fail toperformor observe,in any materialrespect,anyother covenant, term, provision, condition, agreementorobligation of any Notandsuch failure shall continueuncuredfor aperiodofthirty
(30)daysafterwritten noticefromtheHolder of such failure; or
d.TheCompany failstoauthorize or to causeitsTransfer Agent toissueshares of Common Stockuponexercise bytheHolder of the conversion rightsofthe Holder inaccordance with the terms ofthisNote, failstotransfer ortocauseitsTransfer Agentto transfer any certificatefor shares of Common Stock issued totheHolder upon conversion ofthisNote and whenrequired by this Note,and suchtransfer is otherwiselawful,or failsto remove any restrictive legendonanycertificate or failstocauseitsTransfer Agentto removesuch restricted legend, ineachcasewhere suchremoval is lawful,as and whenrequired by thisNote, the Agreement,and any such failure shall continueuncuredforfive(5)businessdays;or
e.The Company shallmake anassignment for thebenefitof creditors or commenceproceedingsfor its dissolution;or shall apply for or consenttotheappointmentof atrustee,liquidatororreceiverfor its or for a substantialpartofits propertyorbusiness;or
f.Atrustee,liquidatororreceivershallbeappointed for the Company or for a substantialpartofits propertyor business without its consent and shallnot bedischarged within sixty (60)daysaftersuchappointment; or
g.Anygovernmental agency oranycourt of competent jurisdiction at theinstanceof any governmental agency shall assume custody or control of thewholeor anysubstantial portionofthepropertiesor assets of the Companyandshallnot be dismissed withinsixty (60)daysthereafter;or
h.Anymoney judgment,writor warrant of attachment, or similarprocessin excess of Five Hundred Thousand ($500,000)Dollars in theaggregate shallbeentered orfiledagainsttheCompanyor any ofits propertiesor other assets and shallremain unpaid,unvacated,unbondedorunstayedfor a period of sixty (60)daysor inany eventlaterthanfive(5)days priorto the date of anyproposedsalethereunder;or
1.Bankruptcy,reorganization,insolvencyorliquidation proceedingsorother proceedingsforrelief underany bankruptcylawor anylawforthe reliefofdebtorsshallbe instituted byor againsttheCompanyand,ifinstitutedagainst the Company, shallnot be dismissedwithin sixty (60)days aftersuchinstitutionortheCompanyshall by anyaction oranswerapprove of,consentto,or acquiesce in anysuchproceedings or admit thematerialallegations of,ordefault in answeringapetitionfiledinanysuch proceeding;or
J.The Company shallhaveits Common Stocksuspendedor delisted from an exchange or over- the-counter marketfrom trading forinexcessoffive trading daysorshallfail to remaincurrent with itsfinancial filings.
Then,orat any timethereafter,and in eachandevery suchcase,unless suchEvent ofDefaultshall havebeen waived
in writingbytheHolder(whichwaivershall notbedeemedtobe awaiverof anysubsequentdefault) at theoption of
theHolder and intheHolder'ssolediscretion,theHoldermayconsider allobligationsunderthisNoteimmediately dueand payablewithin five(5)daysofnotice, withoutpresentment,demand,protestor notice of any kinds,all ofwhich arehereby expresslywaived,anythingherein or in any noteorotherinstrumentscontained to the contrary notwtih stan d in g, andtheHoldermayimmediatelyenforce anyandallofthe Holder'srightsand remediesprovidedhereinor any ot herrights orremediesafforded bylaw.
8)Ifoneor more of the"Events of Default"asdescribedaboveshalloccur,then(a)the Rateshall increasetoeighteen percent (18%),and(b)theCompanyagrees topayallcostsandexpenses,includingreasonable attorney's fees,which the Holdermayincurincollectingany amount due under, or enforcing any termsof,thisNote.
9)Redemption.Redemption maybemadewithin360calendardaysfrom thedate of theloan. Between day Oto360, theCompany mayredeemthe outstanding principal,inwholeor inpart,uponthree(3)businessdays'written notice (the''Redemption Notice")totheHolder,bymaking paymentbywire transfer toHolderof110%oftheentire outstandingPrincipalAmountof theNoteplusany accrued but unpaidInterest.Ifthe Companydelivers a written RedemptionNotice,the Holdershallhavetherighttoconvertprincipaland interestonthe Note into ConversionShares foraperiod of three(3) businessdaysfromthedate oftheRedemption Notice.
10)The Company covenantsthatuntilallamountsdueunderthis Noteare paidinfull,by conversionorotherwise, unlesswaived bytheHolder orsubsequent Holderinwriting,theCompany shallnot(a)change thenature ofits business;
(b)sell,divest,change thestructureofanymaterialassetsother than in theordinary course ofbusiness;or(c)enter into any variableratetransactions, whether asimilartransactionor anyotherdebtinstrument unlessapproved by the Holder. Moreover,theCompany shall:
•givepromptwritten notice to the HolderofanyEvent ofDefaultorofanyothermatter which hasresultedin, orcould reasonablybe expected toresult inamaterially adversechangeinits financialcondition oroperations;
•givepromptno tice totheHolderof any claim, actionorproceeding which,intheevent ofanyunfavorable outcome, wouldor couldreasonablybe expected to havea MaterialAdverse Effect (asdefined in theNote PurchaseAgreement)onthe financial conditionoftheCompany;
•at alltimesreserve andkeepavailable outofits authorized butunissued CommonStock,forthe purposeof effectingtheconversion ofthisNoteintoCommonStock,such numberofits duly authorizedshares of CommonStock as shallfromtimetotime besufficient toeffect theconversion ofthetwo (2) times outstanding Principal Amountofthis Noteplusaccrued interestintoCommon Stockat theFixed Conversion Price.
I I)Uponreceiptby theCompany ofevidence from the Holder reasonably satisfactorytothe Company of theloss, theft,destruction ormutilationof this Note,
a.in thecase ofloss,theftordestruction,upon provisionofindemnity reasonably satisfactorytoitand/orits transferagent.or
b.(ii) in thecaseofmutilation,uponsurrenderandcancellation of this Note,thenthe Company at its expense willexecute anddelivertothe Holder anewNote,dated thedateofthelost,stolen,destroyedormutilated Note,andevidencingtheoutstandingandunpaidprincipalamount ofthelost,stolen,destroyedormutilated
Note.
12)Reservation ofShares.Company shall instruct its transfer agent to reserve at least Three million onehundred fifty (3,150,000) shares of its CommonStockfor issuancetoHolderinconnection with conversion of this Note and shallprovide Holder with a copy of suchinstructionletter.
13)TheHoldermay notconvert this Noteto theextent such conversion would resultinthe Holder,togetherwith any affiliatethereof,beneficiallyowning (asdetermined inaccordance with Sectionl3(d)of the Exchange Act and therules promulgated thereunder) inexcess of9.99% of the thenissuedand outstandingsharesof Common Stock heldby such Holder after application of this Section. Since the Holder willnotbe obligated to report to the Company the number of shares of Common Stockit may holdatthe timeof a conversion hereunder,unless theconversion at issue wouldresult inthe issuanceofsharesof CommonStock inexcess of 9.99% of thethenoutstanding shares ofCommonStock withoutregardto any other shares whichmay be beneficiallyownedbythe Holder or an affiliate thereof,the Holder shallhavetheauthorityand obligation todeterminewhethertherestriction containedin thisSection willlimit any particularconversionhereunder andto the extentthatthe Holderdeterminesthat the limitationcontainedinthis Section applies,thedetermination of whichportionof theprincipalamount of Note are convertibleshallbe theresponsibility and obligation oftheHolder. Ifthe Holderhasdelivereda Conversion Notice foraprincipalamount of Note that would result in theissuance ofinexcess of thepermittedamount hereunder, withoutregardto any othersharesthat the Holder or its affiliatesmay beneficiallyown, the Company shallnotifythe Holder of this fact and shall honor the conversion forthe maximum principalamountpermitted to beconverted on such Conversion Date and, at the option of the Holder, either retain anyprincipalamounttenderedfor conversion in excess ofthe permittedamount hereunder for future conversions or return such excessprincipal amountto the Holder. TheprovisionsofthisSection may be waived by a Holder (but only asto itselfandnotto any other Holder)upon not lessthan 65dayspriornotice to the Company.
14)MaximumRate. All provisionshereinmade are expresslylimitedso thatinno event whatsoever, whether byreasonof advancement of proceedshereof;acceleration ofmaturityof theunpaid balance hereofor otherwise, shalltheamount paid or agreed tobe paid to Holderfor theuseofthe moneyadvancedhereunderexceedthemaximum rate ofinterestallowed tobe charged under applicablelaw(the"MaximumRate"),regardlessof whether or nottherehas been an accelerationofthe payment of principal assetforthherein.If,from any circumstances whatsoever,thefulfillment of any provision of this Note or any other agreement or instrumentnoworhereafterevidencing, securing or in any way relating to theindebtednessevidenced hereby shall involvethepayment of interestinexcess oftheMaximum Rate, then,ipsofacto, the obligation to payinterest hereunder shallbereduced to theMaximum Rate;and iffrom any circumstance whatsoever,Holder shall ever receiveinterest, theamount of which would exceedthe amountcollectible at the MaximumRate, suchamount as would be excessive interest shall be appliedtothereductionof theprincipal balanceremaining unpaidhereunderand not to thepaymentofinterest.Thisprovision shallcontrol every otherprovision in any andall other agreements and instruments existing orhereafterarising betweenthe CompanyandHolder with respect tothe indebtednessevidenced hereby.
INWITNESS WHEREOF,the Company has causedthisinstrumenttobedulyexecuted by anofficerthereuntodulyauthorized,as ofthe datefirst writtenabove.
ELITEPERFORMANCEHOLDING CORP.
/s/ Jon McKenzie
Jon McKenzie
CEO
ExhibitB.
NOTICEOF CONVERSION
The undersigned hereby elects to convert$____ principal amount(plusaccruedinterest) ofthisNote
into Shares ofCommon Stock of ELITEPERFORMANCEHOLDING CORP.,(the"Company"),as of the date written below. No fee willbechargedtothe Holder or Holder's Custodian for anyconversion,except for transfer taxes,if any.
BoxChecked as to applicableinstructions:
[]TheBorrower shall electronicallytransmit theCommon Stock issuablepursuantto this Notice ofConversion to the account ofthe undersignedor itsnomineewith OTCthrough
its DepositWithdrawal Agent Commission system("DWAC Transfer").
Name of OTC PrimeBroker:_
Account Number:----------
[]Theundersigned hereby requeststhat the Borrowerissuea certificate or certificates for thenumberofshares of CommonStockset forth below (whichnumbersare based ontheHolder's calculation attachedhereto) inthename(s)specifiedimmediatelybelow:
Date of Conversion:----- ---------
Conversion Price:_ _ _ _ _ _ _ _ _ _ ___ _ _
SharestoBe Delivered:----------- --
Outstanding Shares:_ ___
_ _ _ _
_ __ ___
Isthis Conversion Below 9.99%:
RemainingPrincipalBalance Due: _ _ __ ___ _ _
Signature_ _ _
_ _ _ _ _
_ _ _
__ __ _ __
PrintName:_ _ _ _
_ _ __
_ _ __ _ _
_ _ _ _
