8-K
CNBX Pharmaceuticals Inc. (CNBX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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 11, 2022
CANNABICS PHARMACEUTICALS INC.
(Exact name of registrant as specified in its charter)
| Nevada | 000-52403 | 20-3373669 |
|---|---|---|
| (State or other<br> jurisdiction of incorporation) | (Commission File Number) | (IRS Employer<br> Identification No.) |
#3 Bethesda Metro Center
Suite 700
Bethesda, MD 20814
(Address of principal executive offices and Zip Code)
877 424-2429
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
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)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined 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 ☐
If an emerging growth company, indicate by check mark 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 11, 2022, Cannabics Pharmaceuticals Inc. (the “Company”) entered into a forbearance agreement (the “Agreement”) with an institutional investor (the “Investor”) relating to that certain Senior Secured Promissory Note in the original principal amount of $1,375,000 due on December 21, 2021 (the “February Note”). The February Note was issued by the Company to the Investor in connection with that certain Securities Purchase Agreement dated as of December 16, 2020, and amended as of February 22, 2021.
Pursuant to the Agreement, the Investor, through May 7, 2022 (the “Forbearance Period”), agreed to forbear from exercising any rights and remedies against the Company related to the outstanding payments under the February Note and to waive certain other defaults under the February Note and related rights pursuant to the Registration Rights Agreement entered into in December 2020 between the Company and the Investor (the “Registration Rights Agreement”). This description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Forbearance Agreement filed as Exhibit 10.1 to this report and is incorporated herein by reference.
As previously described in a Form 8-K filed with the Securities and Exchange Commission on February 17, 2022, on February 15, 2022 the Company entered into a forbearance agreement with the Investor relating to the February Note pursuant to which the Investor had agreed to forbear, through March 7, 2022, from exercising any rights and remedies against the Company related to the outstanding payments under the February Note and to waive certain other defaults under the February Note and related rights pursuant to the Registration Rights Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligationunder an Off-Balance Sheet Arrangement of a Registrant
On March 16, 2022 the Company issued to the Investor a demand promissory note (the “Demand Note”) in the principal amount of $280,000 (the “Principal”) with an original issue discount of $40,000. The Demand Note is payable on demand at any time after the earlier to occur of (i) May 16, 2022, and (ii) the public or private offering of any securities by the Company (the “Next Subsequent Placement”). Any amount of Principal due under the Demand Note which is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (the “Late Charges”). With the agreement of Holder, the Principal and accrued and unpaid Late Charges under the Demand Note and amounts owed under the February Note may be applied to all, or any part, of the purchase price of securities to be issued upon the consummation of an offering of securities by the Company to the Investor. So long as any amounts remain outstanding under the Demand Note or the February Note, all cash proceeds received by the Company on or after issuance of the Demand Note from the Next Subsequent Placement or any other sales of any securities of the Company shall be used to (x) first, repay the Demand Note and (y) second, repay the February Note.
This description of the Demand Note does not purport to be complete and is qualified in its entirety by reference to the Demand Note, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| Exhibit<br><br> <br>No. | Description |
|---|---|
| 10.1 | Form of Forbearance Agreement |
| 10.2 | Form of Demand Promissory Note |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| 2 |
| --- |
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.
| Cannabics Pharmaceuticals Inc. | ||
|---|---|---|
| Dated: March 16, 2022 | By: | /s/ Eyal Barad |
| Eyal Barad | ||
| Chief Executive Officer |
| 3 |
| --- |
Exhibit 10.1
FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT (this “Agreement”) is entered into as of February __, 2022, by and between Cannabics Pharmaceuticals, Inc., a Nevada corporation, (the “Company”), and __________, a Delaware limited partnership, (“Holder”). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in that certain Securities Purchase Agreement, dated as of December 16, 2020 and amended as of February 22, 2021, by and between the Company and Holder.
RECITALS
A. The Company issued to Holder that certain Senior Secured Convertible Promissory Note, in the original principal amount of $1,375,000, dated April 23, 2021 (the “Note”).
B. The Company is currently in arrears in payments required under the Note, having not paid the principal balance of the note due on December 21, 2021 in the amount equal to $1,375,000.00. Such failures to make the payments required under the Note each constitute an Event of Default (the “Specified Defaults”) under the Transaction Documents.
C. As a result of the Specified Defaults, the indebtedness evidenced by the Transaction Documents is due and payable immediately, and Holder has the right, among other things, pursuant to the terms of the Transaction Documents and applicable law, to collect the indebtedness due to Holder under the Note.
D. The Company has requested that during the Forbearance Period (as hereinafter defined), Holder forbear from exercising its rights and remedies against Company with respect to the Specified Defaults, notwithstanding the existence of the Specified Defaults.
E. Subject to the terms and conditions set forth herein, and without prejudice to anything contained in Section 2(b) below, Holder has agreed to forbear from exercising any default-related rights and remedies against the Company for a limited period of time in accordance with this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Confirmation of Principal and Specified Defaults.
| (a) | The Company acknowledges and agrees that as of the close of business on February 14, 2022, the aggregate<br>principal balance of the outstanding amount under the Note (the “Principal”) was not less than $1,375,000.00. The foregoing<br>amount does not include interest, fees, expenses and other amounts which are chargeable or otherwise reimbursable under the Transaction<br>Documents (together with the Principal, the “Obligations”). |
|---|---|
| (b) | The Company acknowledges and agrees that ((i) the Specified Defaults constitute an Event of Default and<br>that there are no disputes as to the occurrence and continued existence of the Specified Defaults; (ii) the Specified Defaults are not curable;<br>(iii) Holder has the right to payment of the Obligations, to immediately enforce its right to payment of the Obligations, to immediately<br>enforce its security interests in the collateral securing the Note, and to exercise all other rights, powers and remedies provided to<br>Holder under the Transaction Documents; and (iii) the Company has no defenses, offsets and/or counterclaims against Holder and/or its<br>agents in connection with the Note or against the enforcement of the Note. |
| --- | --- |
SECTION 2. Forbearance and Waiver.
| (a) | Effective as of the date hereof, Holder agrees that until the expiration or termination of the Forbearance<br>Period (as hereinafter defined), it will temporarily forbear from exercising any Default- related rights and remedies against the Company,<br>in each case solely with respect to the Specified Defaults; provided, however, that: |
|---|
| 1 |
| --- | | i. | except as otherwise expressly provided herein, the Specified Defaults shall each continue to constitute<br>an actionable Event of Default for the purpose of triggering all limitations, restrictions or prohibitions on certain actions that may<br>be taken or omitted or otherwise acquiesced to by or on behalf of Company pursuant to the Transaction Documents, including, without limitation,<br>any limitations, restrictions or prohibitions with respect to any distribution, advance or other payment directly or indirectly from or<br>for the benefit of Company to any direct or indirect owner of an equity interest in Company; and any actions or inactions taken or omitted<br>or otherwise acquiesced to by or on behalf of Company in violation of such provisions, in each case while any Default or Event of Default<br>(including the Specified Defaults) exists, will constitute additional Events of Default under the Transaction Documents, as well as a<br>Forbearance Default (as hereinafter defined) under this Agreement; and | | --- | --- | | ii. | default and/or other notices and correspondence to Company may be delivered in accordance with the terms<br>of this Agreement. | | --- | --- | | (b) | As used herein, the term “Forbearance Period” shall mean the period beginning on the date<br>hereof and ending on the earliest to occur of: (i) the date on which Holder delivers to the Company a written notice terminating the Forbearance<br>Period, which notice may be delivered at any time upon or after the occurrence of any Forbearance Default (as hereinafter defined), (ii)<br>the date the Company repudiates or asserts any defense to any Obligation or other liability under or in respect of this Agreement or the<br>Transaction Documents or applicable law, or makes or pursues any claim or cause of action against Holder, and (iii) May 7, 2022; (the<br>occurrence of any of the foregoing clauses (i), (ii) and (iii), a “Termination Event”).<br>As used herein, the term “Forbearance Default” shall mean the occurrence of any Default or Event of Default other than the<br>Specified Defaults or the failure of Company to timely comply with any material term, condition, or covenant set forth in this Agreement.<br>Provided however, that failure to keep the Company's registration statements on Form S-1 (File Numbers 333-252454 and 333-255948) effective<br>or failure to register for resale all of the Conversion Shares shall not be considered a Default or Event of Default during the Forbearance<br>Period. Any Forbearance Default will not be effective until five (5) Business Days after receipt by Company of written notice from Holder<br>of such Forbearance Default. Any effective Forbearance Default shall constitute an immediate Event of Default under the Transaction Documents. | | --- | --- | | (c) | Upon the occurrence of a Termination Event, the agreement of Holder hereunder to forbear from exercising<br>any default-related rights and remedies shall immediately terminate without the requirement of any demand, presentment, protest, or notice<br>of any kind, all of which the Company waives. The Company agrees that Holder may at any time thereafter proceed to exercise any and all<br>of its rights and remedies under any or all of the Transaction Document and/or applicable law, including, without limitation, its rights<br>and remedies with respect to any of the Specified Defaults that are continuing at such time. | | --- | --- | | (d) | Any agreement to extend the Forbearance Period, if any, must be set forth in writing and signed by a duly<br>authorized signatory of Holder, and the Company acknowledges that Holder has not made any assurances concerning any possibility of an extension of the Forbearance<br>Period. | | --- | --- | | (e) | Until the expiration of the Forbearance Period, Holder hereby waives any and all registration rights granted<br>to it under the Transaction Documents. | | --- | --- |
SECTION 3. Transaction Documents.
| (a) | Except as expressly modified hereby, all terms, conditions, covenants, representations and warranties<br>contained in the Transaction Documents, and all rights of Holder and all of the Obligations, shall remain in full force and effect. |
|---|---|
| (b) | Except as expressly set forth herein, the execution, delivery and effectiveness of this Agreement shall<br>not directly or indirectly (i) create any obligation to defer any enforcement action after the occurrence and continuance of any Default<br>or Event of Default (including, without limitation, any Forbearance Default), (ii) constitute a consent or waiver of any past, present<br>or future violations of any provisions of the Transaction Documents, or (iii) amend, modify or operate as a waiver of any provision ofthe<br>Transaction Documents or any right, power or remedy of Holder. Except as expressly set forth herein, Holder reserves all of its respective<br>rights, powers, and remedies under the Agreement, the Transaction Documents and applicable law. |
| --- | --- |
| 2 |
| --- | | (c) | From and after the Forbearance Effective Date, the term “Transaction Documents” in the Transaction<br>Documents shall include, without limitation, this Agreement and any agreements, instruments and other documents executed and/or delivered<br>in connection herewith. | | --- | --- | | (d) | This Agreement shall not be deemed or construed to be a satisfaction, reinstatement, novation or release<br>of the Transaction Documents or any obligations arising thereunder. | | --- | --- |
SECTION 5. Construction.
The Company and Holder have participated jointly in the negotiating and drafting of this Agreement and agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
SECTION 6. Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.
SECTION 7. Governing Law.
The law of the State of New York shall govern all matters arising out of, in connection with or relating to this Agreement, including, without limitation, its validity, interpretation, construction, performance and enforcement.
SECTION 8. Severability.
The invalidity, illegality, or unenforceability of any provision in or obligation under this Agreement in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Agreement or of such provision or obligation in any other jurisdiction. If feasible, any such offending provision shall be deemed modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable.
SECTION 9. Final Agreement.
This Agreement, the Transaction Documents, and the other written agreements, instruments, and documents entered into in connection therewith set forth in full the terms of agreement between the parties hereto and thereto and are intended as the full, complete, and exclusive contracts governing the relationship between such parties, superseding all other discussions, promises, representations, warranties, agreements, and understandings between the parties with respect thereto. Holder’s exercise or failure to exercise any rights or remedies in a particular instance shall not operate as a waiver of its right to exercise the same or different rights and remedies in any other instances. No course of dealing between Holder, on one hand, and the Company, on the other hand, is established by virtue of the Company’s non-compliance therewith. The Company understands that Holder’s failure to insist on strict performance as of such date shall not be interposed as a defense to Holder’s exercise of its legal rights, nor shall it constitute a waiver of any thereof.
[Signature Page Follows]
| 3 |
| --- |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| COMPANY: |
|---|
| CANNABICS PHARMACEUTICALS, INC., as |
| Company |
| By: |
| Name: |
| Title: |
| HOLDER: |
| By: |
| Name: |
| Title: |
| 4 |
| --- |
Exhibit 10.2
THE ISSUANCE AND SALE OF THE SECURITY REPRESENTEDBY THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESECURITY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (i) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FORTHE SECURITY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM GENERALLY ACCEPTABLE TO THE COMPANY’SLEGAL COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (ii) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUEDISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), AN ATTORNEY AT SICHENZIA ROSS FERENCE LLP, A REPRESENTATIVEOF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUESTTHE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). SICHENZIA ROSS FERENCE LLP MAY BE REACHED AT TELEPHONE NUMBER(212) 930-9700.
DEMAND PROMISSORY NOTE
| $280,000 | March 16, 2022 |
|---|---|
| New York, New York |
FOR VALUE RECEIVED, Cannabics Pharmaceuticals Inc., a Nevada corporation (the “Maker*”), promises to pay to the order of ______ or its assigns (“Holder”*), the principal amount of Two Hundred and Eighty Thousand Dollars ($280,000) (the “Principal”), which includes $40,000 of OID. No additional interest shall accrue hereunder other than Late Charges (as defined below) upon the failure to pay amounts outstanding hereunder. Capitalized terms not defined herein shall have the meaning as set forth in that certain Securities Purchase Agreement, dated February 22, 2021, by and between the Maker and the investors party thereto, including the Holder (the “February Purchase Agreement”).
1. Payment on Demand. The entire unpaid Principal of this demand promissory note (this “Note”), together with accrued and unpaid Late Charges hereunder, shall be due and payable at any time, or from time to time, from and after the earlier to occur of (I) May 16, 2022, and (II) the initial date after the date hereof of a public or private offering of any securities (other than Excluded Securities (as defined Notes (as defined in the February Purchase Agreement) (the “February Notes”)) by the Maker (the “Next Subsequent Placement”), in each case, upon a demand made by Holder for any reason or no reason. All demands for repayment received by the Maker prior to 4:00 P.M. New York city time on a given date shall be paid to the Holder on such given date. All demands for repayment received by the Maker after 4:00 P.M. New York city time on a given date shall be paid to the Holder on the immediately following business day. The Maker will pay to the Holder of this Note on demand such further amount as shall be sufficient to cover all costs and expenses of such Holder incurred in the drafting and negotiation of this Note and all costs and expenses of any enforcement or collection of this Note, including, without limitation, reasonable attorneys’ fees, expenses and disbursements. Payments shall be credited first to the accrued Late Charges then due and payable and the remainder applied to Principal.
2. Prepayment; Mandatory Prepayment. Prepayment of principal, together with accrued and unpaid Late Charges, may be made at any time without notice, premium or penalty. With the agreement of Holder, the Principal and accrued and unpaid Late Charges under this Note and the February Note of the Holder may be applied to all, or any part, of the purchase price of securities to be issued upon the consummation after the date hereof of an offering of securities by Maker to Holder. So long as any amounts remain outstanding hereunder or under the February Note of the Holder, all cash proceeds received by the Maker on or after the date hereof from the Next Subsequent Placement and, if this Note or the February Note of the Holder remains outstanding thereafter, any other sales of any securities of the Maker (each, a “Subsequent Offering,” and each such cash amount, the “Subsequent Offering Proceeds” thereof), shall be used to (x) first, repay this Note and (y) second, repay the February Note of the Holder (such portion of any given Subsequent Offering Proceeds required to be mandatorily paid to the Holder hereunder, each a “Subsequent Offering Payment”). Any Subsequent Offering Payment received by the Maker prior to 4:00 P.M. New York city time on a given date shall be paid to the Holder on such given date. Any Subsequent Offering received by the Maker after 4:00 P.M. New York city time on a given date shall be paid to the Holder on the immediately following business day. All Subsequent Offering Payments shall be made in U.S. dollars and immediately available funds in accordance with the wire transfer instructions of the Holder delivered to the Maker on or prior to such applicable payment date. The Maker shall deliver written notice of any transactions with respect to the applicable Subsequent Offering as soon as commercially practicable following the close of the Nasdaq Capital Market on such date of determination, but in no event later than 8:00 AM, New York city time, on the calendar day immediately following the date of such transaction.
| 1 |
| --- |
3. Representations and Warranties of Maker. Maker represents and warrants as follows as of the date hereof: (a) it is duly organized, validly existing and in good standing under the laws of its state of Nevada; (b) the execution, delivery and performance by Maker of this Note are within Maker’s powers, have been duly authorized by all necessary actions, and do not contravene its governing agreements, certificates or other organization documents, and do not contravene any law or any contractual restriction binding on or affecting Maker; (c) no authorization or approval or other action by, and no notice to or filing with any governmental authority or regulatory body is required for the due execution, delivery and performance by Maker of this Note; (d) this Note constitutes the legal, valid and binding obligation of Maker party thereto, enforceable against Maker in accordance with its terms, except to the extent enforceability is limited by bankruptcy, insolvency, fraudulent conveyance, moratorium and other laws for the protection of creditors generally and by general equitable principles; and (e) there is no pending or, to Maker’s knowledge, threatened action or proceeding affecting Maker before any governmental agency or arbitrator with respect to the transactions contemplated by this Note or which may materially adversely affect the property, assets or condition (financial or otherwise) of Maker.
4. Late Charges. Any amount of principal or other amounts due under the Loan Documents which is not paid when due (a “Payment Default”) shall result in a late charge being incurred and payable by the Maker in an amount equal to interest on such amount at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (the “Late Charges”).
5. Use of Proceeds. Maker shall immediately on the date hereof pay the proceeds of this Note to fund the general working capital of Maker, but not, directly or indirectly, for (i) the satisfaction of any indebtedness of the Maker or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Maker or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.
6. Disclosure. The Maker shall, on or before 9:30 a.m., New York City time on the first Business Day after the date hereof, file a Current Report on Form 8-K describing this Note and the transactions contemplated hereby in the form required by the Securities Exchange Act of 1934, as amended, and attaching the form of this Note as an exhibit to such filing (including all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the Maker shall have disclosed all material, non-public information (if any) provided up to such time to the Holder by the Maker or any of its Subsidiaries or any of their respective officers, directors, employees or agents. In addition, effective upon the filing of the 8-K Filing, the Maker acknowledges and agrees that any and all confidentiality or similar obligations under any agreement with respect to the transactions contemplated hereby or as otherwise disclosed in the 8-K Filing, whether written or oral, between the Maker, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Holder or any of their affiliates, on the other hand, shall terminate. Neither the Maker, its Subsidiaries nor the Holder shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Maker shall be entitled, without the prior approval of the Holder, to make a press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith or (ii) as is required by applicable law and regulations (provided that in the case of clause (i) the Holder shall be consulted by the Maker in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the Holder (which may be granted or withheld in the Holder’s sole discretion), except as required by applicable law, the Maker shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Holder in any filing, announcement, release or otherwise.
7. Indemnification. Maker hereby indemnifies and holds harmless Holder, each of its affiliates and correspondents and each of their respective directors, officers, employees, agents and advisors (each an “Indemnified Party”) from and against any and all actions, claims, damages, losses, liabilities, fines, penalties, costs and expenses of any kind (including, without limitation, counsel fees and disbursements in connection with any subpoena, investigative, administrative or judicial proceeding, whether or not the Indemnified Party shall be designated a party thereto) which may be incurred by the Indemnified Party or which may be claimed against the Indemnified Party by any person by reason of or in connection with the execution, delivery or performance of this Note, or action taken or omitted to be taken by Holder under, this Note. Nothing in this paragraph is intended to limit Maker’s obligations contained elsewhere in this Note. Without prejudice to the survival of any other obligation of Maker hereunder, the indemnities and obligations of Maker contained in this paragraph shall survive the payment in full of all obligations hereunder.
8. Alternate Payment Upon Extended Payment Default. If a Payment Default hereunder remains outstanding for a period of forty-eight (48) hours, at any time thereafter the Holder may, by delivery of a written notice to the Maker (each, an “Alternate Payment Notice”), require the Maker to redeem all, or any part, of this Note (as set forth in such Alternate Payment Notice) (such aggregate portion of this Note to be redeemed, each, an “Alternate Payment Amount”) at a redemption price equal to 130% of such Alternate Payment Amount as set forth in such Alternate Payment Notice (each, an “Alternate Payment”). Upon the consummation of an Alternate Payment, the corresponding Alternate Payment Amount of this Note shall no longer remain outstanding and shall be deemed satisfied in full.
| 2 |
| --- |
9. Miscellaneous.
(a) All amounts to be paid by hereunder shall be paid when due by wire transfer in United States dollars and immediately available funds in accordance with the wire instructions delivered to such party entitled to receive such payment prior to such date.
(b) If any payment on this Note shall become due on a Saturday, Sunday or a bank or legal holiday, such payment shall be made on the next succeeding business day.
(c) No course of dealing and no delay on the part of the Holder of this Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such Holder’s rights, powers or remedies. No right, power or remedy conferred by this Note upon the Holder hereof shall be exclusive of any other right, power or remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.
(d) Maker hereby waives presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note.
(e) If Late Charges or other amounts payable under this Note is in excess of the maximum permitted by law, the Late Charges or other amounts chargeable hereunder shall be reduced to the maximum amount permitted by law and any excess over the maximum amount permitted by law shall be credited to the principal balance of this Note and applied to the same and not to the payment of Late Charges or such other amounts, as applicable.
(f) Maker hereby (i) irrevocably submits to the jurisdiction of any Illinois State or Federal court sitting in Chicago, Illinois in any action or proceeding arising out of or relating to this Note, (ii) waive any defense based on doctrines of venue or forum non conveniens, or similar rules or doctrines and (iii) irrevocably agree that all claims in respect of such an action or proceeding may be heard and determined in such Illinois State or Federal court. This Note shall be governed by, and construed in accordance with, the laws of the State of Illinois. Maker HEREBY waiveS any right to trial by jury in any action,proceeding or counterclaim arising out of or relating to this Note.
(g) This Note shall be binding upon and inure to the benefit of Maker and Holder and their respective successors, assigns, heirs and legal representations, except that Maker may not assign any rights or obligations hereunder without the prior written consent of Holder. Holder may assign to other affiliated entities all or a portion of its rights under this Note.
(h) Maker acknowledges that the transaction of which this Note is a part is a commercial transaction and hereby waives its right to any notice and hearing as may be allowed by any state or federal law with respect to any prejudgment remedy which any Holder or its successors or assigns may use.
(i) Maker hereby agrees to pay on demand all reasonable costs and expenses (including, without limitation, all reasonable fees, expenses and other client charges of counsel to Holder) incurred by Holder in connection herewith and with the enforcement of Holder’s rights, and the collection of all amounts due, hereunder. The Holder of this Note may proceed to protect and enforce the rights of such Holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
(j) If this Note is lost or destroyed, Maker shall, at Holder’s request, execute and return to Holder a replacement promissory note identical to this Note. No replacement of this Note shall result in a novation of Maker’s obligations under this Note. Maker acknowledges the need to act promptly upon its receipt of the documentation evidencing any request by Holder that the Note be replaced pursuant to this paragraph and agrees that Maker will meet the reasonable deadlines of Holder provided that Maker has received the applicable documents at least ten (10) business days prior to such deadline. Furthermore, Maker agrees to reasonably cooperate with Holder to effectuate the obtainment of such title policy endorsements, or new title evidence and other assurances and documents as Holder shall reasonably require.
[The remainder of the page is intentionally left blank]
| 3 |
| --- |
IN WITNESS WHEREOF, this Note has been executed as of the date first written above.
| CANNABICS PHARMACEUTICALS, INC. |
|---|
| By: _____________________________ |
| Name: |
| Title |
| Agreed and accepted by: |
| --- |
| HOLDER |
| By: _____________________________ |
| Name: |
| Title: |
| 4 |
| --- |