Attached files
EXHIBIT 10.10
CONVERTIBLE PROMISSORY NOTE
$850,000
dateMonth3Day20Year2014March 20, 2014
Strainwise, Inc., a Colorado Corporation, with its executive offices located at
1350 Independence Street, Suite 300, Lakewood, CO 80215 ("Borrower") for value
received, hereby promises to pay to Randall Taylor, an individual residing at
1550 W. Dry Creek Road, Littleton, CO 80120, his heirs and permitted assigns
(the "Noteholder"), or its assigns, the sum of Eight-Hundred-and-Fifty-Thousand
Dollars ($850,000) ("Note"), or such other amount as may be outstanding, plus
interest accrued on unpaid principal, compounded annually , at a rate per annum
of twenty-five percent (25%), from the date of this Note until the principal
amount hereof and all interest accrued thereon is paid in
The principal amount of this Note, and the interest accrued thereon, shall be
payable at the principal residence of the Noteholder, or by mail to the
registered address of the Noteholder in installments, as follows:
Due Date Principal Interest Total Due
April 17, 2014 $ 75,000 $ 16,301 $ 91,301
May 22, 2014 75,000 18,579 93,579
June 19, 2014 175,000 13,904 188,904
July 24, 2014 175,000 12,586 187,586
August 28, 2014 175,000 6,712 181,712
September 21, 2014 175,000 3,236 178,236
-------- ------ -------
$ 850,000 $ 71,318 $ 921,318
======== ======== =======
All past due amounts and accrued interest thereon shall bear interest at
the maximum rate permitted by law, compounded monthly, until paid.
Conversion Election. Noteholder may elect, at the Noteholder's sole discretion,
at anytime during the term of this Note, to convert the total of the unpaid
principal balance, or any portion thereof, plus any accrued interest owing on
the Note at the time of the election, or any portion thereof, to shares of
unrestricted common stock of Strainwise at a conversion price of $1 per share.
Noteholder may designate which monthly payment is being converted.
Default. The Borrower will be in default if the Borrower fails to make any
payment when due hereunder. No notice need be provided Borrower for default
caused for non-payment. The Borrower will also be in default if any of the
following occurs and such default is not cured within a five (5) day period
after the Noteholder has given the Borrower written notice of such default:
The Borrower breaches any material obligation to the Noteholder hereunder.
A receiver is appointed for any part of the Borrower's property, the
Borrower makes an assignment for the benefit of creditors, any proceeding is
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commenced either by the Borrower or against the Borrower under any bankruptcy or
insolvency laws, or the Borrower becomes unable, admits in writing its inability
to pay or generally fails to pay its debts as they mature or become due.
The dissolution or insolvency of, appointment of a receiver by or on behalf
of, application of any debtor relief law, the assignment for the benefit of
creditors by or on behalf of, the voluntary or involuntary termination of
existence by, or the commencement of any proceeding under any present or future
federal or state insolvency, bankruptcy, reorganization, composition or debtor
relief law by or against the Borrower or any co-signer, endorser, surety or
guarantor of this Note or any other obligations Borrower has with the
Noteholder.
Borrower merges, dissolves, reorganizes, ends the business or existence, or
a partner or majority owner dies or is declared legally incompetent.
The Borrower fails to perform any condition or to keep any promise or
covenant of this Note.
A default occurs under the terms of any other Note Document.
Borrower is in default on any other debt or agreements the Noteholder may
have with the Borrower or any of its affiliates.
Borrower makes any verbal or written statement or provides any financial
information that is untrue, inaccurate, or conceals a material fact at the time
it is made or provided.
The Borrower fails to satisfy or appeal any material judgment against
Borrower.
The Borrower changes its corporate name or assumes an additional name
without notifying the Noteholder before making such a change.
The Borrower transfers all or a substantial part of its money or property.
Payment under the terms of the loan are paid in cash.
Without first notifying the Noteholder, there is a material change in the
business, including ownership, management, and financial conditions.
Noteholder determines in good faith that a material adverse change has
occurred in the Borrower's financial condition from the conditions set forth in
its most recent financial statement before the date of this Note or that the
prospect for payment or performance of the Note is impaired for any reason.
Remedies. Upon any default by the Borrower, Noteholder may at Noteholder's
option do any one or more of the following:
Noteholder may accelerate the terms of this Note and may make all or any
part of the amount owing by the terms of this Note immediately due,
Noteholder may use any and all remedies the Noteholder has under state or
federal law or in any Note Document.
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Collection Expenses and Attorney's Fees. On or after Default, to the extent
permitted by law, Borrower agrees to pay all expenses of collection, enforcement
or protection of the Noteholder's rights and remedies under this Note or any
other Note Document. Expenses include, but are not limited to, reasonable
attorneys' fees after default and referral to an attorney, court costs, and all
other collection costs. These expenses are due and payable immediately. If not
paid immediately, these expenses will bear interest from the date of payment
until paid in full at the highest interest rate in effect, as provided for in
the terms of this Note. In addition, to the extent permitted by the United
States Bankruptcy Code, the Borrower agrees to pay the reasonable attorneys'
fees incurred by the Noteholder to protect the Noteholder's rights and interests
in connection with any bankruptcy proceedings initiated by or against the
Noteholder. If Borrower should default and full payment is not tendered to
Noteholder within fifteen days after the date of default, a late payment fee
shall be incurred equal to 25% of all the sums, including interest, due and
payable. Full payment after five days of default but before fifteen days after
the date of default does not cure the default, but does prevent incurring the
late payment fee.
Waiver and Amendment. ANY PROVISION OF THIS NOTE stocktickerMAY BE AMENDED,
WAIVED, MODIFIED, DISCHARGED OR TERMINATED SOLELY UPON THE WRITTEN CONSENT OF
BOTH THE BORROWER stocktickerAND THE NOTEHOLDER.
Assignment; Binding upon Successors and Assigns. The Borrower may not assign any
of its obligations hereunder without the prior written consent of Noteholder.
The terms and conditions of this Note shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties. Noteholder
shall be entitled to voluntarily assign this Note upon written notice to
Borrower provided that the assignee is an "accredited investor" or otherwise a
permitted assignee under federal securities laws.
Waiver of Notice; Attorneys' Fees. The Borrower and all endorsers of this Note
hereby waive notice, demand, notice of nonpayment, presentment, protest and
notice of dishonor. If any action at law or in equity is necessary to enforce
this Note or to collect payment under this Note, the Noteholder shall be
entitled to recover, as an element of the costs of suit and not as damages,
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which it may be entitled. Noteholder will be entitled to recover
its costs of suit, regardless of whether such suit proceeds to final judgment.
Construction of Note. The terms of this Note have been negotiated by the
Borrower, the original holder of this Note and their respective attorneys and
the language hereof will not be construed for or against either Borrower or
Noteholder. Unless otherwise explicitly set forth, a reference to a Section will
mean a Section in this Note. The titles and headings herein are for reference
purposes only and will not in any manner limit the construction of this Note
which will be considered as a whole.
Notices. Unless otherwise required by law, any notice will be given by
delivering it or mailing it by first class mail, national recognized courier
delivery service (FedEx, stocktickerUPS, etc.) or hand delivery to the
appropriate party or party's address listed in the first paragraph of this Note,
or to any other address designated in writing. The Borrower will inform the
Noteholder in writing of any change in their name, address or other application
information.
Joint and Individual Liability and Successors. The Borrower's obligation to pay
the Loan is independent of the obligation of any other person who has also
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agreed to pay it. Noteholder may sue the Borrower alone, or anyone else who is
obligated on the Note to collect the Note. Extending the Note or new obligations
under the Note, will not affect the Borrower's duty under the Note and the
Borrower will still be obligated to pay the Note. This Note shall inure to the
benefit of and be enforceable by the Noteholder and the Noteholder's successors
and assigns and shall be binding upon and enforceable against the Borrower and
its personal representatives, successors, heirs and assigns.
Time is of the Essence. Time is of the essence for all terms of this agreement.
Standby Fee. Borrower may elect not to draw down funds from the loan at any
time up until 5PM, MDT, March 24; at which time Noteholder will be due a standby
fee of $10,000, payable on March 25, 2014.
Prepayment Fee. Borrower may prepay the loan at any time. In the event of a
prepayment, Borrow shall also pay a prepayment fee of seven-and-one-half percent
(7.5%) of the then outstanding balance.
Usury. In the event the interest provisions hereof, or any exactions provided
for herein, or in the Note Documents, or any other instrument securing this Note
shall result, because of any reduction of principal, or for any other reason at
any time during the life of this Note, in any effective rate of interest which,
for any month, transcends the limit of the usury or any other law applicable to
the Note, all sums in excess of those lawfully collectible as interest for the
period in question shall, without further agreement or notice between or by any
party hereto, be applied upon principal immediately upon receipt of such moneys
by Noteholder, with the same force and effect as though the payor had
specifically designated such extra sums to be so applied to principal and
Noteholder had agreed to accept such extra payment as a premium-free prepayment.
In no event shall any agreed to or actual exaction as consideration for this
Note transcend the limits imposed or provided by the laws applicable to this
transaction, or the Borrower hereof, in the jurisdiction in which the
corporation is located for the use or detention of money or for forbearance in
seeking its collection.
Application of Payments. All payments made on this Note shall be applied first
to any collection costs Noteholder may have incurred by procuring Borrower's
performance hereunder and under the other Note Documents, then to payment of the
interest then accrued and due on the unpaid principal balance of this Note, then
to any other sums due to the Noteholder under the Note Documents, and the
remainder of all such payments shall be applied to the reduction of the unpaid
principal.
No Waiver by Lender. The Noteholder's course of dealing, or forbearance from, or
delay in, the exercise of any of the Noteholder's rights, remedies, privileges
or right to insist upon the Borrower's strict performance of any provisions
contained in this Note, or any other Note Document, shall not be construed as a
waiver by the Noteholder, unless any such waiver is in writing and is signed by
the Noteholder.
Governing Law. This Note shall be governed by and construed under the internal
laws of the United States and the State of Colorado as applied to agreements
among Colorado residents entered into and to be performed entirely within
Colorado, without reference to principles of conflict of laws or choice of laws.
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Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. A facsimile electronic
scan or email of a signature shall be deemed to be the same, and equally
enforceable, as an original of such signature.
Waiver of Jury Trial. Borrower hereby irrevocably waives, to the fullest extent
permitted by law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note, the other Note Documents or the
transactions contemplated thereby.
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IN WITNESS WHEREOF, the undersigned have caused this Note to be signed in the
name of Strainwise, Inc., as of the date first above written.
STRAINWISE, INC.
By:/s/ Shawn D. Phillips
--------------------------------------
Shawn D. Phillips, Chief Executive Officer
By:/s/ Erin Phillips
--------------------------------------
Erin Phillips, President
NOTEHOLDER
/s/ Randal Taylor
--------------------------------------
Randall Taylor, Lender
Personal Guaranty
Of
Shawn Phillips and Erin Phillips
Whereas, Randall Taylor, an individual residing at 1550 Dry Creek Road,
Littleton, CO 80150 (the "Lender"), has made a convertible loan of $850,000 (the
"Loan") to Strainwise, Inc., a Colorado Company, with its executive offices 1350
Independence Street, Suite 300, Lakewood, CO 80215 (the "Borrower") in reliance
upon the personal guarantees of both Shawn and Erin Phillips, individuals who
reside at 8468 Lewis Court, Arvada, CO 80005-5242 ("Guarantors").
Now, therefore, in consideration of the premises and of other good and
valuable consideration, and in order to induce Lender to grant the Loan to the
Borrower, the Guarantors pledge unconditionally to the Lender the payment of all
principal, interest and fees, whether now existing or hereafter incurred, in
connection with the Loan.
The undersigned agrees that, with or without notice or demand, the
undersigned shall reimburse Lender, to the extent that such reimbursement is not
made by the Borrower, for all expenses (including counsel fees) incurred by
Lender in connection with the Loan or the collection thereof.
All monies available to Lender for application in payment or reduction of
the Loan will be applied by the Lender in such manner and in such amounts and at
such time or times as defined under the terms of the Loan.
The undersigned hereby waives (a) notice of acceptance of this guaranty (b)
presentment and demand for payment of any of the Loan by the Borrower (c)
protest and notice of dishonor or default to the undersigned or to any other
party with respect to the Loan; (d) all other notices to which the undersigned
might otherwise be entitled; and (e) any demand for payment under this guaranty.
This is a guaranty of payment and of collection, and the undersigned
further waives any right to require that any action be brought against the
Borrower or any other person or to require that resort be had to any security or
to any balance of any deposit account or credit on the books of Lender in favor
of the Borrower or any other person.
Guarantors will reimburse Lender for all expenses incurred by it in the
collection, enforcement or attempted enforcement of any of its rights hereunder
against Borrower or Guarantor including, but not limited to, reasonable attorney
fees and costs and collection agent fees and expenses. Guarantors subordinate
any obligations that Borrower may have to the Guarantors to the obligations of
Borrower owed to Lender. Guarantors agree to so pay and perform without
requiring Lender to exercise, pursue or enforce any right or remedy Lender has
against Borrower, any co-guarantor, or any other party.
No delay on the part of Lender in exercising any rights hereunder or
failure to exercise the same shall operate as a waiver of such rights; no notice
to or demand on the undersigned shall be deemed to be a waiver of the
obligations of the undersigned or of the right of Lender to take further action
without notice or demand as provided herein; not in any event shall any
modifications or waiver of the provisions of this guaranty be effective unless
in writing nor shall any such waiver be applicable except in the specific
instance for which given.
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The guarantee of the Guarantors to pay the Loan is independent of the
obligation of any other person who has also agreed to pay it. Lender may sue the
Guarantors alone, or anyone else who is obligated on the Loan or any number of
them together, to collect the Loan. This Guarantee shall inure to the benefit of
and be enforceable by the Lender and the Lender's successors and assigns and
shall be binding upon and enforceable against the Guarantors and their personal
representatives, successors, heirs and assigns.
This guaranty is, and shall be deemed to be, a contract entered into under
and pursuant to the laws of the state of Colorado and shall be in all respects
governed, construed, applied and enforced in accordance with the laws of said
State, and no defense given or allowed by the laws of any other state of the
United States of America shall be interposed in any action hereon unless defense
is also given or allowed by the laws of the State of Colorado.
This Guarantee may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument. A facsimile electronic scan or email of a signature shall
be deemed to be the same, and equally enforceable, as an original of such
signature.
Accepted and agreed to this 20th day of March, 2014.
/s/ Shawn Phillips
---------------------------------------
Shawn Phillips, an Individual Guarantor
/s/ Erin Phillips
---------------------------------------
Erin Phillips, an Individual Guarantor
AMENDMENT TO
CONVERTIBLE PROMISSORY NOTE
The parties hereto agree as follows:
1. On March 20, 2014 Strainwise, Inc. (the "Company") executed a
convertible promissory note (the "Note") in favor of Randall Taylor, ("Taylor").
As of July 16, 2014 the Company had borrowed $850,000 from Taylor in accordance
with the terms of the note.
2. Effective July 15, 2014, based on information and representations
provided Taylor regarding the Company's planned merger into a Target Shell and
number of shares involved in that contemplated transaction, Taylor agrees to
convert $200,000 in Note principal into 293,000 shares of the Company's
restricted common stock. The amount converted represents the $175,000 payment
due on September 21, 2014 and $25,000 of the payment due on August 28, 2014.
3. With the conversion of the Note, the Company will use its best efforts
to cause the 293,000 shares of restricted common stock issuable upon the
conversion of the Note to be registered with the Securities and Exchange
Commission at the earliest practicable time, but in no case later than six
months from the date that the Company completes its merger with a Target Shell.
If the Company fails to deliver said 293,000 shares of common stock under the
projected terms within six months from the date the Company completes its
merger, this amendment may be terminated or extended at Taylor's sole option and
discretion. If this amendment is terminated, the Company shall pay Taylor the
$200,000 subject to the conversion plus interest as proscribed under the terms
of the note.
4. Further, Taylor agrees to reduce the number of shares per the
Confirmation to Issue Shares of Common Stock agreement by between the Company
and Taylor dated March 20, 2014 from 50,000 shares to 15,592 shares.
5. In addition to the principal payment of $175,000 plus interest due on
July 24, 2014, on or before July 29 2014, the Company will pay Taylor all
remaining principal in the amount of $150,000, plus accrued but unpaid interest
on the Note in the amount $308, as well as a prepayment penalty of $11,250, for
a total of payment amount of $161,558.
6. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. A facsimile electronic scan or email of a signature
shall be deemed to be the same, and equally enforceable, as an original of such
signature.
July 16, 2014
STRAINWISE, INC.
By:/s/ Shawn Phillips
----------------------------------
Shawn Phillips, Chief Executive
Officer
/s/ Randall Taylor
----------------------------------
Randall Taylor
