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October 3, 2016 at 6:44 pm #18138
Entry into a Material Definitive Agreement, Creation of a Direct F
Item 1.01. Entry into a Material Definitive Agreement.
Convertible Promissory Note
On September 22, 2016 (the “Effective Date”), High Performance Beverages Company, a Nevada corporation (the “Company”), sold an Original a 12% Convertible Promissory Note in the principal amount of $110,000 (the “Note”) for cash consideration of $10,000 with $1,000 being retained by the purchase of the Note through an original issue discount for due diligence and legal fees related to the Note purchase.
The Note may be converted into common stock of the Company at any time at a price equal to 60% of the lowest trading price of the Company’s common stock during the 10 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. However, If the Company is placed on “chilled” status with the Depository Trust Company (“DTC”), the discount shall be increased by 10%, i.e., from 40% to 50%, until such chill is remedied. If the Company is not Deposits and Withdrawal at Custodian (“DWAC”) eligible through their Transfer Agent and DTC’s Fast Automated Securities Transfer (“FAST”) system, the discount will be increased by 5%, i.e., from 40% to 45%. In the case of both, the discount shall be a cumulative increase of 15%, i.e., from 40% to 55%.
Any default of the Note (as set forth in the Note) not remedied within the applicable cure period will result in a permanent additional 10% increase, i.e., from 40% to 50%, in addition to any other discount, to the Conversion Price discount. Additionally, if an event of default occurs (as defined in the Note), the outstanding principal amount of the Note shall become at the holder’s electing immediately due an amount equal to 150% of the outstanding principal amount of the Note. Commencing 5 days after the occurrence of any event of default that results in the eventual acceleration of the Note, the Note will accrue an additional interest, in addition to the Note’s guaranteed interest at a rate equal to the lesser of 22% per annum or the maximum rate permitted by applicable law.
The Note matures September 22, 2017 (“Maturity Date”). The Company may prepay the Note as follows:
Days Since Effective Date Prepayment Amount Under 30 100% of Principal Amount 31-60 110% of Principal Amount 61-90 120% of Principal Amount 91-120 130% of Principal Amount 121-150 140% of Principal Amount 151-180 150% of Principal Amount
After 180 days from the Effective Date the Note may not be prepaid without written consent from holder.
The Note shall not be converted to the extent that such conversion would result in beneficial ownership by the holder and its affiliates to own more than 9.99% of the issued and outstanding shares of the Company’s common stock.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 with respect to the Note, the Exchange Agreement and the Exchange Note is hereby incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 with respect to the Note and the Exchange Agreement and the Exchange Note is hereby incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description
4.1 Original Issue 12% Convertible Promissory Note
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