NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES FILED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
Principal Amount: $___________
Issue Date: [Applicable Closing Date]
FORM OF SENIOR CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, GENERAL CANNABIS CORP, a Colorado corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of [____________________], or its registered assigns (the “Holder”) the principal sum of [$______________] (the “Principal Amount”), together with interest at the rate of ten percent (10%) per annum on the aggregate unconverted and then outstanding Principal Amount of this Note, at maturity or upon acceleration or otherwise, as set forth herein (this “Note”).
This Note is one of a series of Notes issued pursuant to that certain Securities Purchase Agreement entered into by the Borrower and the Holder on even date herewith (the “Purchase Agreement”), and capitalized terms not defined herein will have the meanings set forth in the Purchase Agreement.
The maturity date of this Note shall be on that day that is thirty-six (36) months after the Issue Date (the “Maturity Date”), and is the date upon which the Principal Amount, as well as all accrued and unpaid interest and other fees, shall be due and payable.
Interest on the outstanding Principal Amount shall accrue for the period from the Issue Date through December 31, 2021.1 Beginning with the calendar quarter ending on March 31, 2022, (i) interest that has accrued for the period from the Issue Date through December 31, 2021 shall be due and payable, in arrears, in eight (8) equal installments payable on the on the fifth (5th) Business Day following the end of each calendar quarter; and (ii) Interest covering the period from January 1, 2022 until the Maturity Date shall be due and payable, in arrears, on the fifth (5th) Business Day following the end of each calendar quarter.
Any amount of principal or interest on this Note, which is not paid by the Maturity Date, shall bear interest at the rate of the lesser of (i) fourteen percent (14%) per annum or (ii) the
1 Note to Draft: For Additional Closings on or after January 1, 2021, this date will be March 31, 2022 and the other dates will be adjusted to reflect payment beginning after the quarter ending on June 30, 2022.