PROMISSORY NOTE
PROMISSORY NOTE
Principal Amount: US$825,000.00 | Issued as of November 15, 2021 |
FOR VALUE RECEIVED, and in conjunction with the Membership Interest Purchase Agreement dated November 15, 2021 (the "Purchase Agreement"), FERNHILL CORP., a Nevada corporation (the "Company"), hereby promises to pay to the order of XXXX XXXXXX, XXXX XXXXXX, XXXXX XXXXXX, XXXX XXXXXXX, and the minority shareholders identified in Section 2.04 of the Disclosure Schedules of the Purchase Agreement (Individually and collectively the "Holder"), the principal sum of US$825,000.00 (the "Principal Amount") in accordance with Xxxxxx’s pro rata share as set forth in Schedule A attached hereto and incorporated herein by this reference, together with interest thereon from the date of issuance of this promissory note (this "Note"). Interest will accrue at a rate of 5% per annum. The principal and accrued interest of this Note will be due and payable by the Company on the earlier of i) the Company's receipt of sufficient funding from its pending registered and private offerings; or ii) November 15, 2022 (the "Maturity Date"). After maturity, any unpaid principal shall accrue interest at the rate of 8% per annum (the "Default Interest Rate"). Any capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Purchase Agreement.
0.Xxxxxxxx. This Note is a general unsecured obligation of the Company.
3.Representations and Warranties of the Company. In connection with the transactions contemplated by this Note, the Company hereby represents and warrants to the Holder as follows:
3.1Due Organization; Qualification and Good Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify or to be in good standing would have a material adverse effect on the Company.
3.2Authorization and Enforceability. All corporate action has been taken on the part of the Company and its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note. Except as may be limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights, the Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Note valid and enforceable in accordance with its terms.
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4.Representations and Warranties of the Holder. In connection with the transactions contemplated by this Note, the Holder hereby represents and warrants to the Company as follows:
4.1Purchase Entirely for Own Account. The Holder acknowledges that this Note is made with the Holder in reliance upon the Holder's representation to the Company, which the Holder hereby confirms by executing this Note, that this Note will be acquired for investment for the Holder's own account, not as a nominee or agent (unless otherwise specified on the Holder's signature page hereto), and not with a view to the resale or distribution of any part thereof, and that the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Note, the Holder further represents that the Holder does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Note. If other than an individual, the Holder also represents it has not been organized solely for the purpose of acquiring the Note.
4.2Disclosure of Information; Non-Reliance. The Holder acknowledges that it has received all the information it considers necessary or appropriate to enable it to make an informed decision concerning an investment in the Note. The Holder further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Note. The Holder confirms that the Company has not given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Note. In deciding to purchase the Note, the Holder is not relying on the advice or recommendations of the Company and has made its own independent decision that the investment in the Note is suitable and appropriate for the Holder. The Holder understands that no federal or state agency has passed upon the merits or risks of an investment in the Note or made any finding or determination concerning the fairness or advisability of this investment.
4.3Investment Experience. The Holder is an investor in companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Note.
5.1Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Note will inure to the benefit of, and be binding upon, the respective successors and assigns of the parties; provided, however, that the Company may not assign its obligations under this Note without the written consent of the Holder. This Note is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Note.
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5.2Choice of Law. This Note, and all matters arising out of or relating to this Note, whether sounding in contract, tort, or statute, will be governed by and construed in accordance with the internal laws of the State of Nevada.
5.3Counterparts. This Note may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., xxx.xxxxxxxx.xxx) or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5.4Titles and Subtitles. The titles and subtitles used in this Note are included for convenience only and are not to be considered in construing or interpreting this Note.
5.5Notices. All notices and other communications given or made pursuant hereto will be in writing and will be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by email or confirmed facsimile; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one
(1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications will be sent to the respective parties at the addresses shown on the signature pages hereto (or to such email address, facsimile number or other address as subsequently modified by written notice given in accordance with this Section 7.5).
5.6Expenses. Each party will pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Note.
5.7Attorneys' Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party will be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
5.8Entire Agreement; Amendments and Waivers. This Note constitutes the full and entire understanding and agreement between the parties with regard to the subject hereof.
5.9Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions will be excluded from this Note and the balance of the Note will be interpreted as if such provisions were so excluded and this Note will be enforceable in accordance with its terms.
5.10Further Assurances. From time to time, the parties will execute and deliver such additional documents and will provide such additional information as may reasonably be required to carry out the terms of this Note and any agreements executed in connection herewith.
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5.11Limitation on Interest. In no event will any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable law, and if any payment made by the Company under this Note exceeds such maximum rate, then such excess sum will be credited by the Holder as a payment of principal.
5.12Officers and Directors not Liable. In no event will any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.
5.13Approval. The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved the Company's execution of this Note based upon a reasonable belief that the principal provided hereunder is appropriate for the Company after reasonable inquiry concerning the Company's financing objectives and financial situation. In addition, the Company hereby represents that it intends to use the principal of this Note primarily for the operations of its business, and not for any personal, family or household purpose.
5.14Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER REPRESENTS AND WARRANTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
[SIGNATURE PAGES FOLLOW]
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| By |
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| Name: Xxxx Xxxxx | |
| Title: CEO | |
| Date: | |
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SCHEDULE A
Principal Note Amount |
| $825,000.00 |
Name | % Equity | Pro Rata Share |
Xxxx Xxxxxx | 31.00% | $255,750.00 |
Xxxx Xxxxxxx | 31.00% | $255,750.00 |
Xxxxx Xxxxxx | 20.00% | $165,000.00 |
Xxxx Xxxxxxx | 5.00% | $41,250.00 |
Xxxxx Xxxxxxx | 2.00% | $16,500.00 |
Xxxxxxx Xxxx | 2.00% | $16,500.00 |
Xxxxxx Xxxxxxx | 1.00% | $8,250.00 |
Xxxxxxx Xxxxxx | 1.00% | $8,250.00 |
Xxxx Xxxxx | 1.67% | $13,777.50 |
Xxxxxx Xxxxxxxxx | 1.00% | $8,250.00 |
Xxxxxx Xxxxxxx | 1.00% | $8,250.00 |
Xxx Xxxxx | 1.00% | $8,250.00 |
Xxxxxxx Xxxxxxxx | 1.00% | $8,250.00 |
Xxxx Xxxxxxx | 0.50% | $4,125.00 |
Xxxx Xxxx | 0.50% | $4,125.00 |
Xxxxxxxxxxx Xxxxxxx | 0.33% | $2,722.50 |
| 100% | $825,000.00 |
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