Promissory Note Issued by the Company on August 31, 2020 to Pocono Coated Products, LLC
$1,500,000 August 31, 2020
FOR VALUE RECEIVED, NUTRIBAND INC., a Nevada corporation (hereinafter called “Borrower” or the “Company”), hereby promises to pay to POCONO COATED PRODUCTS, LLC, a Pennsylvania limited liability company (“Holder”), or order, the sum of One Million Five Hundred Thousand ($1,500,000) Dollars, with interest accruing at the annual rate seventeen hundredths (0.17%) of a percent, on August 31, 2021 or immediately following the earlier capital raise of no less than $4,000,000 and/or a public offering of no less than $4,000,000 (the “Maturity Date”).
This Note is issued pursuant to a certain purchase agreement, dated as of August , 2020 (the “Agreement”) between the Company and Holder, and is subject to the terms of the Agreement
The following terms shall apply to this Note:
Payment of the principal and interest on this Note is secured, pursuant to the terms of a Security Agreement of even date between Borrower and Holder, as more fully described therein and in the Agreement
PAYMENT RELATED PROVISIONS
1.1 Payment Grace Period. The Borrower shall have a five (5) day grace period to pay any monetary amounts due under this Note, after which grace period a default interest rate of five (5.0%) percent per annum shall apply to the amounts owed hereunder calculated from the date of the default. In no event shall the rate of interest calculated hereunder exceed the maximum amount allowed by law and automatically shall be reduced to such maximum amount.
1.2 Interest Payments. Borrower shall pay interest on the outstanding principal amount of this Note on the Maturity Date. The principal amount of this Note plus any accrued and unpaid interest shall be collectively referred to herein as the “Debt.”
EVENTS OF DEFAULT
The occurrence of any of the following events of default (each, an “Event of Default”) shall, at the option of the Holder hereof, make all sums or principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, all without demand, presentment or notice, or grace period, all of which hereby are expressly waived, except as set forth below:
2.1 Failure to Pay Principal or Interest. The Borrower fails to pay any installment of principal or interest hereon when due and such failure continues for a period of ten (10) days.
2.2 Breach of Covenant. The Borrower breaches any covenant or other term or condition of this Note and such breach continues for a period of ten (10) days after written notice to the Borrower from the Holder.
2.3 Breach of Representations and Warranties. Any representation or warranty of the Borrower made in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith shall be false or misleading in any material respect.
2.4 Receiver or Trustee. The Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.
2.5 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower.
REPRESENTATIONS BY HOLDER
Holder represents and warrants to Borrower as follows:
3.1 Holder is acquiring this Note for his own account, for investment purposes only, and not with a view to the resale or distribution of all or any part thereof.
3.2 Holder acknowledges that this Note (a) has not been registered under applicable securities laws, (b) will be a “restricted security” as defined in applicable securities laws, (c) has been issued in reliance on the statutory exemptions from registration contemplated by applicable securities laws based (in part) on the accuracy of Holder’s representations contained herein, and (d) will not be transferable without registration under applicable securities laws, unless an exemption from such registration requirements is available.
3.3 Holder has reviewed and understands Borrower’s (i) Annual Report on Form 10-K for the fiscal year ended January 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2020; and (ii) Quarterly Report on Form 10-Q for the quarter ended April 30, 2020, filed with the SEC on June 4, 2020; and (ii) all Current Reports on Form 8-K filed since the filing of its last Form 10-K.
4.1 Failure or Indulgency Not Waiver. No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or the exercise of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
4.2 Notices. Any notice herein required or permitted to be given shall be in writing and may be personally served and shall be deemed to be delivered upon receipt or if sent by United States mail, three (3) days after being deposited in the United States mail, certified, with postage pre-paid and properly addressed, or if sent by fax transmission (with the original sent by certified or registered mail or by overnight courier) and shall be deemed to have been delivered on the day telecopied. For the purposes hereof, the addresses and fax numbers of the Holder and the Borrower are as set forth on the signature page hereof. Both Holder and Borrower may change the address and fax number for service by service of written or fax notice to the other as herein provided.
4.3 Definition of Note. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.
4.4 Assignability. This Note may not be assigned by the Borrower without the written consent of the Holder. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.
4.5 Cost of Collection. If default is made in the payment of this Note, Borrower shall pay the Holder hereof costs of collection, including attorneys’ fees.
4.6 Governing Law. This Note has been executed in and shall be governed by the internal laws of the State of New York, without regard to the principles of conflict of laws.
4.7 No Amendment. This Note shall not be amended without the prior written consent of the Holder.
IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name on the 31st day of August, 2020.
|By:||/s/ Gareth Sherican|
|Title:||Chief Executive Officer|
ADDRESSES FOR NOTICES
Address for Notices to Borrower:
121 South Orange Ave., Suite 1500
Orlando, Florida 32801
Address for Notices to Holder:
100 Sweetree Street,
Cherryville, N.C. 28021