UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2019
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INTELLIGENT BUYING, INC.
(Exact name of registrant as specified in its charter)
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California |
001-34861 |
20-0956471 |
(State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
of Incorporation) |
File Number) |
Identification No.) |
400 Seventh Avenue
Brooklyn NY 11215
(Address of Principal Executive Office) (Zip Code)
718-788-4014
(Registrants telephone number, including area code)
17531 Encino Lane, Encino, CA 91316
(registrants previous address)
John B. Lowy, Esq.
645 Fifth Avenue, Suite 400, New York, NY 10022
(212) 371-7799
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨ |
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If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 13, 2019, Intelligent Buying, Inc. ( INTB or the Company), entered into a Reorganization Agreement (the Reorganization Agreement) pursuant to which the Company agreed to acquire Jaguaring Company d/b/a Cannavolve (Cannavolve), a Washington corporation.
Cannavolve, based in Seattle, is a privately-owned accelerator serving the cannabis and hemp industry. Cannavolve has three operating divisions: Green Ambrosia Jamaica; Consumer Products Group; and Seattle Development Group. The business plan calls for (a) taking majority stakes, (b) acquiring companies in their entirety, and/or (c) conducting joint ventures within the global cannabis and hemp space. Cannavolves strategy is to develop these portfolio positions for the purpose of selling them or spinning them off as their own public companies, with the objective of maximizing shareholder value.
The material terms of the Reorganization Agreement are as follows:
(a)
There are currently 7,256,600 shares of INTB issued and outstanding, and that number will remain the same until completion of the Reorganization, except for (1) common shares issuable upon conversion of the 100,000 preferred shares to be issued to and owned by Principal Holdings, LLC, in exchange for its services in negotiating and structuring the Reorganization Agreement and the capitalization, and performing due diligence; and (2) up to 1,415,140 common shares issuable at $.05 per shares upon conversion of the $70,757 convertible promissory note (the Note), owed to PureEnergy714, a New Jersey limited liability company. No common shares may be issued to the holder of the Note until March 6, 2020.
(b)
Upon completion of the Reorganization, the 7,256,600 shares are to be held by the following persons:
INCLUDED IN CANNAVOLVEs 3,446,950 SHARES:
(1)
All current Cannavolve shareholders, both Class A and Class B Common.
(2)
All common shares issued upon conversion of all existing Cannavolve convertible notes.
(3)
All common shares issued to raise $100,000 in its Pre-Closing Offering, at a $10M post-offering valuation, i.e. 72,566 shares.
INCLUDED IN INTBs 3,446,950 shares:
(1)
INTBs currently issued and outstanding common shares, except those not Included In either Cannavolves or INTBs shares.
(2)
All common shares issued to raise $400,000 in its Pre-Closing Offering, at a $10M post-offering valuation, i.e., 290,264 shares.
NOT INCLUDED IN EITHER CANNAVOLVEs OR INTBs SHARES:
(1)
All INTB shares issuable upon conversion of the 100,000 preferred shares.
(2)
362,700 of INTBs 7,256,600 issued and outstanding common shares.
(3)
All shares issuable pursuant to the Convertible Note.
(c)
As of the Closing of the Reorganization, INTB will have five directors, two of whom will be Dante Jones and Eric Swaney, who currently are Cannavolves principal shareholders officers and directors; and three of the directors, as yet unnamed, will be designees of INTB.
(d)
Philip Romanzi, currently the Companys sole officer and director, is expected to resign as an officer and director, and to either cancel most of the 5,653,333 INTB shares his company Bagel Hole, Inc. (Bagel Hole) currently owns, or sell most of them to INTBs new management and others. As a result of the changes in management and ownership of the common shares and the preferred shares, upon completion of the Reorganization, there will be a change of control of INTB.
(e)
As a condition of the Closing, a total of $500,000 must be raised pursuant to a SEC Rule 506(c) offering, for which Cannavolves current management is responsible to raise $100,000; and INTB is responsible to raise the remaining $400,000.
(f)
As another condition of Closing both Cannavolve and INTB must provide audited financial statements in accordance with US GAAP. Currently, INTB has provided audited financial statements for the years ended December 31, 2016 and December 31, 2017, but is delinquent in filing its Forms 10-Q for the quarters ended June 30, 2018 and September 30, 2018. It is also expected that INTB will be required to file its From 10-K for the year ended December 31, 2018, with audited financial statements.
(g)
The Preferred Stock to be issued to Principal Holdings LLC will have voting power equal to the percentage of common shares that equals 51% of the total number of shares issued and outstanding, and which may be voted for any matter requiring 51% approval by shareholder vote of the common shares. The 100,000 shares of Preferred Stock are to be issued to and owned by Principal Holdings, LLC, whose control person is Danielle Doukas .
In furtherance of its proposed reorganization with Cannavolve, on March 15, 2019, Bagel Hole loaned Cannavolve $235,414.71, pursuant to a promissory note (the Cannavolve Note). The Cannavolve Note bears interest at 10% per annum, is due on July 15, 2019, contains customary default provisions, and is to be automatically converted into restricted shares of INTB at the same price to be paid by other INTB investors in INTBs Rule 506(c) Pre-Closing Offering.
All references to the terms of the Reorganization Agreement and the Note are qualified in their entirety by reference to the Reorganization Agreement itself, and the Note, which are Exhibits to this Form 8-K.
ITEM 5.06 CHANGE IN SHELL COMPANY STATUS.
As a result of entering into the Reorganization Agreement described in Item 1.01 of this Form 8-K, and the Notes described therein, the Registrant is commencing with the execution of its business plan, and is no longer a shell, as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
99.1 Reorganization Agreement between INTB and Cannavolve
99.2 Convertible Promissory Note for $70,757 issued to PureEnergy714 LLC
99.3 Convertible Promissory Note for $235,414.71 issued by Bagel Hole to Cannavolve.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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INTELLIGENT BUYING, INC. |
Dated: March 19, 2019 |
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/s/ Philip Romanzi |
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Philip Romanzi, CEO |
EXHIBIT 99.1
3/12/2019
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") as of made this __ day of February, 2019 by, between and among JAGUARING COMPANY d/b/a CANNAVOLVE HOLDINGS, a Washington corporation ("CANNAVOLVE"); the CANNAVOLVE shareholders listed in the CANNAVOLVE CAP TABLE, which will be provided by CANNAVOLVE before or upon the signing of this Agreement, who are all of the shareholders of CANNAVOLVE Class A and Class B common stock ( the HOLDERS); and INTELLIGENT BUYING, INC., a California corporation listed on the OTC Markets Pink Sheets (INTB or the "Company").
R E C I T A L S:
WHEREAS:
A. The respective Boards of Directors of CANNAVOLVE and INTB have determined that INTB should issue up to 3,446,950 restricted INTB common shares to acquire 100% of CANNAVOLVE from the HOLDERS (the Reorganization); and
B. INTB, CANNAVOLVE and HOLDERS agree to make certain representations, warranties, covenants and agreements in connection with the Reorganization, and also to prescribe various conditions to the Reorganization;
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:
ARTICLE I:
THE REORGANIZATION
1.01 The Reorganization .
(a)
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the laws of California (the " Statutes"), INTB agrees to, and shall acquire, one hundred percent (100%) of the issued and outstanding Class A and Class B common shares of CANNAVOLVE, in exchange for the issuance at the Closing as set forth in Section 1.02 herein of up to 3,446,950 shares of restricted Common Stock to the HOLDERS set forth in the CANNAVOLVE CAP TABLE. INTB shares will be issued to those HOLDERS who consent to exchange their shares in accordance with that CAP TABLE.
(b)
Upon the terms and subject to the terms and conditions set forth in this Agreement, at and as of the Closing of the Reorganization, the parties hereto agree that ownership of the common shares and Preferred Shares of INTB shall be as set forth in Exhibit A, attached hereto and made a part hereof.
(c)
Anything herein or in any Exhibits hereto to the contrary notwithstanding, the Parties agree that as of the Closing, (1) the ownership of the issued and outstanding shares of INTB common stock shall be owned as set forth in Exhibit A; (2) the Preferred Stock shall have voting power equal to the percentage of common shares that equals 51% of the total number of shares issued and outstanding and which may be voted for any matter
requiring 51% approval by shareholder vote of the common shares, (3) the Preferred Stock shall be owned as set forth in Section 3.01(c) herein; and (4) at and as of the Closing of this Agreement, an Articles of Amendment shall be approved by INTBs current shareholders and directors and filed with the Secretary of State of California, amending the Articles in accordance with this Section 1.01(c).
1.02 Closing . Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Section 5.01, and subject to the satisfaction or waiver of the conditions set forth in Article III, the closing of the Reorganization (the "Closing") will take place at 10:00 a.m. on the first business day after satisfaction of the conditions set forth in Article VI (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article VI) (the "Closing Date"), at the offices of John B. Lowy, Esq., unless another date, time or place is agreed to in writing by the parties hereto.
1.03 Articles of Incorporation; Bylaws .
(a) The Certificate of Incorporation of the Company in effect immediately prior to the Effective Time of the Reorganization shall remain unchanged, except as set forth in Section 1.01(c) herein.
(b) INTBs Bylaws in effect at the Effective Time of the Reorganization shall continue to be the Bylaws of INTB, unless and until thereafter changed or amended as provided therein or by applicable law, or in conformity with Section 1.01(c).
1.04 Transition Period . Upon the Effective Time of the Closing, the directors and officers of INTB shall be as follows: three designees of INTB and two designees of CANNAVOLVE; provided that Eric Swaney and Dante Jones shall agree to be CANNAVOLVEs two designees.
A RTICLE II:
EFFECT OF THE REORGANIZATION
ON THE CAPITAL STOCK
2.01 Effect on Capital Stock . As of the Effective Time of the Reorganization, neither CANNAVOLVE nor INTB will have any outstanding warrants, options or any other contracts to purchase or issue any equity security of the Company, nor will there exist any convertible debt, preferred stock, or any other instrument convertible into equity securities of the Company, except as set forth in Section 3.01(c) of this Agreement, specifically regarding INTBs Preferred Stock and the Convertible Note. Further, no dividends payable in any equity security of INTB or in cash shall be outstanding and unpaid.
ARTICLE III:
REPRESENTATIONS AND WARRANTIES OF INTB AND CANNAVOLVE
3.01 Representations and Warranties of INTB (the Company) . INTB hereby represents and warrants to CANNAVOLVE and HOLDERS, jointly and severally, as follows:
(a) Organization, Standing and Corporate Power. The Company is duly organized, validly existing and in good standing under the laws of the State of California, and has the requisite corporate power and authority to carry on its business as now being conducted. INTB is not authorized to conduct business, and does not conduct business, in any other state or jurisdiction, except for the States of California and New York.
(b) Authority. The Company has the requisite corporate and other power and authority to enter into this Agreement and to consummate the Reorganization. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company, and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
(c) Capital Structure. The authorized capital stock of the Company consists of 50,000,000 shares of Company common stock at par value $.001 per share, and 25,000,000 shares of Preferred Stock, par value $.001 per share. There are 7,256,600 shares of common stock currently issued and outstanding, and 100,000 shares of Preferred Stock, to be issued to Principal Holdings, LLC (Principal), in consideration of Principal successfully negotiating the purchase of INTB, structuring this Agreement and the capitalization, and performing due-diligence. All outstanding shares of common stock and Preferred Stock of the Company are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights. At and as of the Closing INTBs current principal shareholder (the INTB Principal) will return to INTB, for cancellation and retirement, 3,446,950 shares owned by the INTB Principal, so that, as a result of the retirement of the 3,446,950 shares by the INTB Principal, and the issuance of up to 3,446,950 shares to the HOLDERS, INTB will have issued and outstanding 7,256,600 common shares as of the Closing. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company may vote, except for (1) the INTB Convertible Note (the INTB Note, a copy of which is attached hereto as Exhibit B; (2) INTBs obligation to raise $400,000 (net of fees, costs and commissions) in a Rule 506(c) offering (the Pre-Closing Offering) before the Closing of the acquisition contemplated by this Agreement; and (c) CANNAVOLVEs obligation to raise $100,000 (net of fees, costs and commissions) in the Rule 506(c) Pre-Closing Offering. INTB and CANNAVOLVE both acknowledge and agree that all of the proceeds from both Pre-Closing Offerings will be held in escrow and will not be released to INTB until completion of the Closing. Except for the INTB Note, the Pre-Closing Offering, and proposed issuance of common shares to the HOLDERS pursuant to this Agreement, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company. There are no agreements or
arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Securities Act").
(d) Noncontravention; Consents. Neither the execution and delivery of this Agreement by the Company, nor the consummation of the transactions contemplated hereby will: (i) violate or conflict with any provision of the authorizing documents of the Company; (ii) violate, accelerate or result in, a restriction, lien, charge, pledge, security interest or other encumbrance on the Company of any kind; or (iii) conflict with or violate any governmental regulation, statute, judgment or proceeding of any kind. Other than the approval of this Agreement by the Board of Directors, no consent of any kind is required by either the Company or its shareholders to consummate these transactions, including but not limited to any third party, any governmental agency or regulatory body, wherever located, except as set forth in Section 1 herein.
(e) Absence of Certain Changes or Events. Since June 30, 2018, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been: (i) any material adverse change with respect to the Company; (ii) any condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; (iii) any event which, if it had taken place following the execution of this Agreement, would not have been permitted by any provision of this Agreement without CANNAVOLVEs prior consent; or (iv) any condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.
(f) Litigation; Matters; Compliance with Laws:
(i) There is no suit, judgment, action, proceeding or investigation outstanding, pending or, to the knowledge of the Company, threatened against or affecting the Company, or any basis for any such suit, action, proceeding or investigation, including (without limitation), any Federal or State regulatory authority, the Securities and Exchange Commission, FINRA or State Securities regulators suit, judgment, action, proceeding or investigation, that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company, or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement; nor is there any judgment, decree, injunction, rule or order of any governmental entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future, could have, any such effect.
(ii) The Company has never been involved in any bankruptcy proceedings, or similar proceedings, in any Federal or state court.
(g) Certain Employee Payments. Except for an employment agreement with Gregg Templeton, the Company is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of the Company of any money or
other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a "parachute payment" (within the meaning of Section 280G of the Internal Revenue Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.
(h) Tax Returns and Tax Payments. The Company has filed all state and Federal Tax Returns required to be filed by it, and has paid all or has made all Tax payments that are required. No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, no audit of any Tax Return of the Company is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by the Company and is currently in effect. As used herein, "taxes" shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, "Tax Return" shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(i) Financial Statements. The Companys audited financial statements, as of and for the years ended December 31, 2017 and December 31, 2018, are referred to hereinafter as the INTB Financial Statements). The INTB Financial Statements, when delivered to CANNAVOLVE, will present fairly, in all material respects, the financial position of the Company as of the respective dates indicated and the results of operations and cash flows of the Company for the respective periods indicated, in conformity with generally accepted accounting principles applied on a consistent basis.
(j) Accuracy of Information. No statement, agreement, warranty or representation by the Company set forth herein or in the Exhibits hereto, and no statement set forth in any certificate or other instrument or document required to be delivered by or on behalf of INTB hereto, or in connection with consummation of the transactions contemplated hereby, contains any untrue statement of a material fact, or omits to state any material fact which is necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading.
(k) SEC Filings. INTB is a reporting issuer pursuant to Section 13 of the Securities Exchange Act of 1934 (the Exchange Act). As of the Closing of the Reorganization contemplated by this Agreement, the Company will be current in its SEC filings for at least the previous three years. As of the date immediately preceding the signing of this Agreement, INTB is a shell, as that term is defined in Rule 12b-2 under the Securities Exchange Act of 1934.
(l) Symbol Status. INTBs common shares are quoted on the OTC Markets Pink Sheets, under the symbol INTB. Company has received no stop order or similar order limiting or stopping trading in the Companys common stock.
(m) Effect of Warranties and Representations. All of the warranties and representations in this Section 3.01 shall survive the Closing. No investigation by CANNAVOLVE or Holders shall affect or limit any of the warranties and representations made in this Section 3.01.
3.02. Representations and Warranties of CANNAVOLVE . CANNAVOLVE represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. CANNAVOLVE is duly organized, validly existing and in good standing under the laws of the State of Washington, and has the requisite corporate power and authority to carry on its business as now being conducted. CANNAVOLVE is authorized to conduct business in every state in which it is required to be authorized.
(b) Authority. CANNAVOLVE has the requisite corporate and other power and authority to enter into this Agreement and to consummate the Reorganization. The execution and delivery of this Agreement by CANNAVOLVE and the consummation by CANNAVOLVE of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of CANNAVOLVE. This Agreement has been duly executed and delivered by CANNAVOLVE, and constitutes a valid and binding obligation of CANNAVOLVE, enforceable against CANNAVOLVE in accordance with its terms.
(c) Capital Structure. The authorized capital stock of CANNAVOLVE consists of 5,000,000 shares of Class A common stock, no par value, and 99,000,000 shares of Class B common stock, no par value. CANNAVOLVE has no preferred shares either authorized or issued and outstanding. There are now, and will be as of immediately before the Closing of the Reorganization, no more than 42,044,066 shares of Class A and Class B common shares issued and outstanding, all of which shares, including (I) the INTB common shares to be issued to investors in CANNAVOLVEs Pre-Closing Offering described in this Section 3.02(c) below, and (II) all INTB common shares to be issued upon conversion of all of CANNAVOLVEs existing convertible notes (the CANNAVOLVE Notes, will be exchanged for a maximum of 3,446,950 shares of INTB common stock. All outstanding shares of common stock of CANNAVOLVE are duly authorized, validly issued, fully paid and nonassessable, are not subject to preemptive rights, and were issued in compliance with State and Federal securities laws. Any and all currently outstanding CANNAVOLVE Notes will be converted into common shares before the Closing, as a result of which there will be no outstanding bonds, debentures, notes or other indebtedness or other securities of CANNAVOLVE having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of CANNAVOLVE may vote as of the Closing. Other than as set forth in this Section 3.02(c), there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which CANNAVOLVE is a party or by which it is bound obligating CANNAVOLVE to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of CANNAVOLVE, except for CANNAVOLVEs obligation to raise $100,000 (net of fees, costs and commissions) in its Pre-Closing Offering. There are no agreements or arrangements pursuant to which CANNAVOLVE is or could be required to register shares of Company
Common Stock or other securities under the Securities Act of 1933, as amended (the "Securities Act").
(d) Noncontravention; Consents. Neither the execution and delivery of this Agreement by CANNAVOLVE, nor the consummation of the transactions contemplated hereby will: (i) violate or conflict with any provision of the authorizing documents of CANNAVOLVE; (ii) violate, accelerate or result in, a restriction, lien, charge, pledge, security interest or other encumbrance on CANNAVOLVE of any kind; or (iii) conflict with or violate any governmental regulation, statute, judgment or proceeding of any kind. Other than the approval of this Agreement by the Board of Directors, no consent of any kind is required by CANNAVOLVE to consummate these transactions, including but not limited to any third party, any governmental agency or regulatory body.
(e) Absence of Certain Changes or Events. Since June 30, 2018, CANNAVOLVE has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been: (i) any material adverse change with respect to CANNAVOLVE; (ii) any condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to CANNAVOLVE; (iii) any event which, if it had taken place following the execution of this Agreement, would not have been permitted by any provision of this Agreement without CANNAVOLVEs prior consent; or (iv) any condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of CANNAVOLVE to consummate the transactions contemplated by this Agreement.
(f) Litigation; Matters; Compliance with Laws:
(i) There is no suit, judgment, action, proceeding or investigation outstanding, pending or, to the knowledge of CANNAVOLVE, threatened against or affecting CANNAVOLVE, or any basis for any such suit, action, proceeding or investigation, including (without limitation), any Federal or State regulatory authority, the Securities and Exchange Commission, FINRA or State Securities regulators suit, judgment, action, proceeding or investigation, that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to CANNAVOLVE, or prevent, hinder or materially delay the ability of CANNAVOLVE to consummate the transactions contemplated by this Agreement; nor is there any judgment, decree, injunction, rule or order of any governmental entity or arbitrator outstanding against CANNAVOLVE having, or which, insofar as reasonably could be foreseen by CANNAVOLVE, in the future, could have, any such effect.
(ii) CANNAVOLVE has never been involved in any bankruptcy proceedings, or similar proceedings, in any Federal or state court.
(g) Certain Employee Payments. CANNAVOLVE is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of CANNAVOLVE of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director, except for Eric Swaneys Employment Agreement by which he will be employed by INTB on a full-time basis, overseeing
INTBs operations in Jamaica), and Dante Jones Employment Agreement. Both Swaneys and Jones Employment Agreements have previously been provided to INTB There are no other agreements which could (i) constitute a "parachute payment" (within the meaning of Section 280G of the Internal Revenue Code), or (ii) result in some other subsequent action or event that would be required to cause such payment, acceleration or provision to be triggered.
(h) Tax Returns and Tax Payments. CANNAVOLVE has filed all state and Federal Tax Returns required to be filed by it, and has paid all or has made all Tax payments that are required. No material claim for unpaid Taxes has been made or become a lien against the property of CANNAVOLVE or is being asserted against CANNAVOLVE, no audit of any Tax Return of CANNAVOLVE is being conducted by a tax authority, and no extension of the statute of limitations on the assessment of any Taxes has been granted by CANNAVOLVE and is currently in effect. As used herein, "taxes" shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, "Tax Return" shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.
(i)Financial Statements. As a condition precedent to INTBs obligations pursuant to this Agreement, and at least five days before the Closing of the Reorganization,
CANNAVOLVE shall provide INTB with: (I) audited financial statements, as of and for the years ended December 31, 2017 and December 31, 2018, which audited financial statements will be prepared in accordance with U.S. GAAP and signed by a PCAOB-registered auditing firm; and (II) if required for the filing of the Super 8-K, unaudited financial statements for the relative stub period (the CANNAVOLVE Financial Statements). The CANNAVOLVE Financial Statements will present fairly, in all material respects, the financial position of CANNAVOLVE as of the respective dates indicated and the results of operations and cash flows of CANNAVOLVE for the respective periods indicated, in conformity with generally accepted accounting principles applied on a consistent basis. Upon presentation to INTB of the CANNAVOLVE Financial Statements, INTB shall have the right, upon 10 days written notice to CANNAVOLVE, to terminate this Agreement with no liability to either INTB or CANNAVOLVE.
(j) Accuracy of Information. CANNAVOLVE has disclosed to INTB, and will continue to disclose to INTB from the date of this Agreement up to and including the date of Closing and thereafter, (I) all agreements of any kind or nature to which CANNAVOLVE is a party, and (II) any agreements which affect or could materially affect CANNAVOLVEs business, assets, liabilities. No statement, agreement, warranty or representation by CANNAVOLVE set forth herein or in the Exhibits hereto, and no statement set forth in any certificate or other instrument or document required to be delivered by or on behalf of CANNAVOLVE hereto, or in connection with consummation of the transactions contemplated hereby, contains any untrue statement of a material fact, or omits to state any material fact which is necessary to make the
statements contained herein or therein, in light of the circumstances under which they were made, not misleading.
(k) Recommendation. The Board of Directors of CANNAVOLVE has unanimously determined that the terms of the Reorganization are fair to and in the best interests of the holders of CANNAVOLVEs HOLDERS, and has recommended that each HOLDER agree to its terms.
(l) Representations of HOLDERS. At the Closing, each of CANNAVOLVEs HOLDERS will sign an investment letter, by which each Investor will represent the following:
Investment Intent. The Holders are acquiring the shares of the Company solely for each of their own accounts, as principals, for investment purposes and not with a view to, or for resale in connection with, any distribution or underwriting of such shares. The Investors understand that the shares of Company stock issued to them under this Agreement have not been registered under either the United States Securities Act of 1933 or any state securities law, that the Investors must hold the such shares unless they are subsequently registered under those laws or transferred in reliance on an opinion of counsel, acceptable to the Company, that registration under those laws is not required, and that the certificates representing such shares will bear a legend to the foregoing effect.
Restrictive Legend. Each share certificate issued to the Holders under this Agreement shall bear the following or similar restrictive legend:
THE SHARES OF COMMON STOCK REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS; NOR HAVE THEY BEEN PASSED UPON BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AUTHORITY. THE SHARES CANNOT BE SOLD, TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
(m) Effect of Warranties and Representations. All of the warranties and representations in this Section 3.02 shall survive the Closing. No investigation by INTB shall affect or limit any of the warranties and representations made by CANNAVOLVE in this Section 3.02.
ARTICLE IV:
ADDITIONAL AGREEMENTS
4.01 Public Announcements . CANNAVOLVE, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement; and neither shall issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process; provided, however, that a Form 8-K shall be filed within four days after this Reorganization Agreement is signed by CANNAVOLVE and INTB; and the
Super 8-K shall be filed within four days after the Closing of the Reorganization The parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
4.02 Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
4.03 Filing of Super 8-K. Within four days after the Closing of the Reorganization, INTB shall file with the SEC the Super 8-K, which shall contain all of the information required by SEC rules and regulations pertaining thereto. Notwithstanding the previous sentence, the Parties agree that no filing containing CANNAVOLVE Financial Statements shall be made with the SEC without the prior written consent of both INTBs and CANNAVOLVEs auditors.
ARTICLE V:
TERMINATION, AMENDMENT AND WAIVER
5.01 Termination . This Agreement may be terminated and abandoned at any time prior to the Closing of the Agreement:
(a) by mutual written consent of CANNAVOLVE and INTB; or
(b) by either CANNAVOLVE or the Company if any governmental entity shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Reorganization and such order, decree, ruling or other action shall have become final and nonappealable; or
(c) by CANNAVOLVE, if a material adverse change shall have occurred relative to the Company, or if a failure of any representation and warranty of the Company shall have occurred; or
(d)
by CANNAVOLVE, if INTB willfully fails to perform in any material respect any of its material obligations under this Agreement; or
(e)
by INTB, if CANNAVOLVE willfully fails to perform in any material respect any of its respective obligations under this Agreement; or
(f)
by INTB, if a material adverse change shall have occurred relative to CANNAVOLVE, or if a failure of any representation and warranty of CANNAVOLVE shall have occurred; or
(g)
by INTB, if HOLDERS owning less than 95% of the shares owned by the HOLDERS approve this Agreement.
5.02 Effect of Termination .
(a) In the event of proper termination of this Agreement by either the Company or CANNAVOLVE as provided in Section 5.01, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of CANNAVOLVE, INTB or the Holders. Nothing contained in this Section shall relieve any party for any breach of the representations, warranties, covenants or agreements set forth in this Agreement.
5.03 Amendment . This Agreement may not be amended except by an instrument in writing signed on behalf INTB and CANNAVOLVE.
ARTICLE VI:
GENERAL PROVISIONS
6.01 Notices . All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given if delivered personally or sent by electronic mail, or overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):
If to CANNAVOLVE or CANNAVOLVE Representative, to:
ERIC SWANEY
Dante Jones
Email: eric@jaguaring.net
dante@janguaring.net
If to INTB, to:
Philip Romanzi, CEO
Email: bagelhole@hotmail.com
-copy to-
John B. Lowy, P.C.
johnl@johnlowylaw.com
6.02 Entire Agreement; No Third-Party Beneficiaries . This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the parties any rights or remedies.
6.03 Governing Law; Jurisdiction . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. In the event of any action being
brought pursuant to this Agreement, the parties irrevocably consent to the jurisdiction and venue of the action as the State of New York, County of New York.
6.04 No Assignment . Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
6.05 Counterparts . This Agreement may be executed in one or more identical counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more such counterparts shall have been executed by each of the parties and delivered to the other parties.
6.06 Legal Counsel . Each of CANNAVOLVE, INTB and HOLDERS have been represented by, consulted with and been advised by legal counsel of their choice.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers to execute this Agreement as of the date first above written.
JAGUARING COMPANY, d/b/a CANNAVOLVE
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/s/ Eric Swaney |
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/s/ Dante Jones |
By: Eric Swaney, COO and Chairman of the Board |
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By: Dante Jones, President |
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INTELLIGENT BUYING, INC. |
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/s/ Philip Romanzi |
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By: Philip Romanzi, CEO |
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EXHIBIT 99.2
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES, UNLESS OTHERWISE PROHIBITED BY FEDERAL OR STATE SECURITIES LAWS.
Original Issue Date: March 15, 2019
$70,757.00
ORIGINAL ISSUE
CONVERTIBLE PROMISSORY NOTE
THIS UNSECURED CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued Unsecured Convertible Promissory Note (this Note ) of INTELLIGENT BUYING, INC., a California corporation, (the Company ), having its principal place of business at 400 Seventh Avenue, Brooklyn, NY 11215.
FOR VALUE RECEIVED , the Company promises to pay to PUREENERGY714, LLC , or its registered assigns (the Holder ), or shall have paid pursuant to the terms hereunder, the maximum principal sum of Seventy Thousand, Seven Hundred Fifty Seven Dollars ($70,757.00 ), on or before August 15, 2022 (which date is eighteen (18) months from the date set forth above the Due Date ), unless converted as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is issued pursuant to the terms of the Note Agreement by and between the Company and the Holder, dated March 15, 2019 (the Note Agreement ).
This Note is subject to the following additional provisions:
Section 1 .
Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, capitalized terms not otherwise defined herein shall have the meanings set forth in the Note Agreement, the terms of which are incorporated by reference herein.
Section 2 .
Interest; Prepayment .
a)
Payment of Interest . The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of four percent (4%) percent per annum, payable on the due date, subject to the terms hereof. At the option of the Company, the interest may be paid by issuing restricted shares of common stock to the Holder, at the
1
same conversion price per share, i.e. $.05 per share as may be adjusted pursuant to Section 4(b) herein. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date set forth above, until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the Note Register ); provided that if this Note is transferred by the original owner to another Holder, interest shall be paid to the new Holder only from the date that the new Holders name is placed in the Note Register. A ll overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the greater of .5% per month or the maximum rate permitted by applicable law (the Late Fees ) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.
b)
Prepayment . At any time upon five (5) days written notice to the Holder, the Company may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. The Holder may continue to convert the Note from the date notice of the prepayment is given until the date of the prepayment.
Section 3.
Registration of Transfers and Exchanges .
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 payable for such registration of transfer or exchange. This Note has been issued subject to certain investment representations of the original Holder set forth in the Note Agreement and may be transferred or exchanged only in compliance with the Note Agreement and applicable federal and state securities laws and regulations. Prior to due presentment for transfer to the Company 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 Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. This Note may be assigned by the Holder without the Companys consent, and may be assigned by the Company only upon the Holders written consent.
Section 4.
Conversion .
a)
Voluntary Conversion . At any time beginning one year after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder (the Conversion Shares ), subject to mechanics of conversion and adjustment provisions set forth herein. The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a Notice of Conversion ), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the Conversion Date ). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain a Note Schedule showing the principal amount(s) converted and the date of such conversion(s), a copy of which shall be certified by the Company and promptly provided to Holder after each amendment thereto. The Company may deliver an objection to any Notice of Conversion within one
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(1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face of this Note.
b)
Conversion Price . Prior to the Maturity Date with respect to any funded amount, the conversion price in effect on any Conversion Date shall be equal to $.05 per share of common stock, subject to adjustment herein (the Conversion Price ). All such determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may, at such Holders option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Note into the number of shares of Common Stock that is a majority of the then issued and outstanding shares of Common Stock of the Company. Nothing herein shall limit a Holders right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief and/or remedies under the guarantee and pledge of securities pursuant to the Note Agreement. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
Section 5 .
Events of Default .
a)
Event of Default means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
i.
any default in the payment of (A) the principal amount of the Note, or (B) interest, liquidated damages and other amounts owed by a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or a Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three Business Days;
ii.
the Company shall fail to observe or perform any other covenant or agreement contained in this Note (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five Business Days after notice of such failure sent by the Holder or by any other Holde r to the Company and (B) ten Business Days after the Company has become or should have become aware of such failure;
iii. any repres entation or warranty made in this Note, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;
iv.
the Company shall be subject to a bankruptcy or similar insolvency;
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v.
if the Company shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing; or
vi.
the Company shall fail to maintain sufficient reserved shares pursuant to enable it to issue shares to the Holder upon conversion.
b)
Remedies Upon Event of Default . If an Event of Default of the Company occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holders election by notice in writing to Company, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the greater of .5% per month (6% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 5(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
Section 6.
Miscellaneous .
a)
Notices . Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth in the Note Agreement or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 6(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder as set forth in the Purchase Agreement, or as appearing on the books of the Company, or such other facsimile number or address as the Holder may specify for such purposes by notice to the Company delivered in accordance with this Section 6(a). Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second
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Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
b)
Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.
c)
Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
d)
Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in New York City, State of New York (the New York Courts ). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver . Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.
f)
Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law
5
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and the Note Agreement at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holders right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Companys compliance with the terms and conditions of this Note.
h)
Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
INTELLIGENT BUYING, INC.
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By: /s/ Philip Romanzi Name: Philip Romanzi, Title: CEO |
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EXHIBIT A
NOTICE OF CONVERSION
The undersigned hereby elects to convert principal under the Unsecured Convertible Promissory Note of Intelligent Buying, Inc., a California corporation (the Company ), into shares of common stock (the Common Stock ), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws, if applicable, in connection with any transfer of the aforesaid shares of Common Stock.
Conversion calculations:
Date to Effect Conversion: _______________, 20__
Principal Amount of Note to be Converted: $________________
Payment of Interest in Common Stock: __ yes __ no ___
If yes, $_______ of Interest Accrued on Account of Conversion.
Conversion Price per Share: $_________
Number of shares of Common Stock to be issued: _______________
Signature: ______________________________
Name: _________________________________
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EXHIBIT 99.3
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
Original Issue Date: March 15, 2019
$235,414.71
ORIGINAL ISSUE
PROMISSORY NOTE
THIS PROMISSORY NOTE is a duly authorized and validly issued Promissory Note (this Note ) of JAGUARING, INC., d/b/a CANNAVOLVE, a Washington corporation, (the Company ), having its principal place of business at 2211 Elliott Ave, Suite 200, Seattle, WAS 98121.
FOR VALUE RECEIVED , the Company promises to pay to BAGEL HOLE, INC., or its registered assigns (the Holder ), or shall have paid pursuant to the terms hereunder, the maximum principal sum of Two Hundred Thirty Five Thousand Four Hundred Fourteen Dollars and 71 cents ($235,414.71 ), on or before July 15th, 2019 (which date is three (3) months from the date set forth above the Due Date ), unless converted as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is issued pursuant to the terms of the Note Agreement by and between the Company and the Holder, dated March 15, 2019 (the Note Agreement ).
This Note is subject to the following additional provisions:
Section 1 .
Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, capitalized terms not otherwise defined herein shall have the meanings set forth in the Note Agreement, the terms of which are incorporated by reference herein.
Section 2 .
Interest; Prepayment .
a)
Payment of Interest . The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of ten percent (10%) percent per annum, payable on the due date, subject to the terms hereof. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date set forth above, until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the person in whose name this Note is registered on the
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records of the Company regarding registration and transfers of this Note (the Note Register ); provided that if this Note is transferred by the original owner to another Holder, interest shall be paid to the new Holder only from the date that the new Holders name is placed in the Note Register. A ll overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the greater of .5% per month or the maximum rate permitted by applicable law (the Late Fees ) which shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full.
b)
Prepayment . At any time upon ten (10) days written notice to the Holder, but only if this Note has not been converted as described in Section 4 herein, the Company may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. The Holder may continue to convert the Note from the date notice of the prepayment is given until the date of the actual prepayment.
Section 3.
Registration of Transfers and Exchanges .
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 payable for such registration of transfer or exchange. This Note has been issued subject to certain investment representations of the original Holder set forth in the Note Agreement and may be transferred or exchanged only in compliance with the Note Agreement and applicable federal and state securities laws and regulations. Prior to due presentment for transfer to the Company 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 Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary. This Note may be assigned by the Holder without the Companys consent, and may be assigned by the Company only upon the Holders written consent.
Section 4.
Conversion .
a)
Automatic Conversion . The Holder of this Note and the Company agree that, at any time beginning after the Original Issue Date until this Note is no longer outstanding, and provided that there has been no Event of Default as described in Section 5 herein, this Note, together with all accrued and unpaid interest, shall automatically convert, without further action by the Holder or the Company, into shares of common stock of Intelligent Buying, Inc.(INTB) that are to be issued to investors in INTBs Rule 506(c) offering (the Offering), in accordance with the conversion price of the Note set forth in Section 4(b) herein. Upon this Note being so converted, the Note shell be surrendered and deemed fully paid, as consideration therefor, the appropriate number of shares of INTB (the Conversion Shares) shall be issued to the Holder. No Notice of Conversion shall be required. To effect conversions hereunder, the Holder shall physically surrender this Note to the Company, and shall include a calculation of the accrued and unpaid interest.
b)
Conversion Price . T he Conversion Price shall be equal to the same price per share as the price per share to be paid by investors in the SEC Rule 506(c) offering being made by Intelligent Buying, Inc., (INTB), a company with which the Company has entered into a Reorganization Agreement. The Conversion Price will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Notwithstanding anything herein to the contrary, at any time after the occurrence of any Event of Default the Holder may, at such Holders option and otherwise in accordance with the provisions for conversion herein, convert all or any part of this Note into the number of shares of Common Stock that is a majority of the then issued and outstanding shares of Common Stock of the Company (the Default Shares). Nothing herein shall limit
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a Holders right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief and/or remedies under the guarantee and pledge of securities pursuant to the Note Agreement. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
Section 5 .
Events of Default .
a)
Event of Default means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
i.
any default in the payment of (A) the principal amount of the Note, or (B) interest, liquidated damages and other amounts owed by a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or a Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three Business Days;
ii.
the Company shall fail to observe or perform any other covenant or agreement contained in this Note (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) five Business Days after notice of such failure sent by the Holder or by any other Holde r to the Company and (B) ten Business Days after the Company has become or should have become aware of such failure;
iii. any repres entation or warranty made in this Note, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;
iv.
the Company shall be subject to a bankruptcy or similar insolvency;
v.
if the Company shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing; or
vi.
the Company shall fail to maintain sufficient reserved shares pursuant to enable it to issue shares to the Holder upon conversion.
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b)
Remedies Upon Event of Default . If an Event of Default of the Company occurs, then, in addition to the other remedies set forth herein, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holders election by notice in writing to Company, immediately due and payable in cash. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an interest rate equal to the greater of .5% per month (6% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of Note in accordance with this Section, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 5(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
Section 6.
Miscellaneous .
a)
Notices . Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth in the Note Agreement or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 6(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder as set forth in the Note Agreement, or as appearing on the books of the Company, or such other facsimile number or address as the Holder may specify for such purposes by notice to the Company delivered in accordance with this Section 6(a). Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 12:00 p.m. (New York City time) on any Trading Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
b)
Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.
c)
Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
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d)
Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in New York City, State of New York (the New York Courts ). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver . Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.
f)
Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.
g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and the Note Agreement at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holders right to pursue
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actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Companys compliance with the terms and conditions of this Note.
h)
Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
JAGUARING, INC. d/b/a CANNAVOLVE
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By: /s/ Dante Jones Name: Dante Jones Title: CEO |
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