Exhibit 10.31

 

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NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Principal Amount: $50,000 Issue Date: October 8, 2018 Purchase Price: $50,000
CONVERTIBLE PROMISSORY NOTE FOR VALUE RECEIVED, PURA NATURALS, INC., a Colorado
corporation (hereinafter called the "Bon wer"), hereby promises to pay to the
order of Joseph W & Patricia G Abrams Family Trus d d 3/15/95, or registered
assigns (the "Holder") the principal sum of $50,000 (the "Principal A o t"),
together with interest at the rate of eight percent (%) per annum, at maturity
or upon acce ra ion or otherwise, as set forth herein (the "Note"). The
Consideration to the Borrower for this Note is $50,000 (the "Consideration").
The maturity date shall be six (6) months from the Issu Date (the "Maturity
Date"), and is the date upon which the principal sum, as well as any accrued d
unpaid interest and other fees, shall be due and payable. This Note may not be
prepaid in w ole or in part except as otherwise explicitly set forth herein. Any
amount of principal or interest on this Note, which is not paid by the Maturity
Date, shall bear interest at the rate of eighteen perc nt (18%) per annum from
the due date thereof until the same is paid ("Default Interest"), or such amount
that is the highest interest allowed in the state under which this Note shall be
governed. Interest shall commence accruing on the date that the Note is fully
paid and shall be computed on the basis of a 365-day year and the actual number
of days elapsed. All payments due hereunder (to the extent not converted into
common stock, $0.001 par value per share (the "Common Stock") in accordance with
the terms hereof) shall be made in lawful money of theUnited States of America.
All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this
Note. Whenever any amount expressed to be due by the terms of this Note is due
on any day which is not a business day, the same shall instead be due on the
next succeeding day which is a business day and, in the case of any interest
payment date which is not the date on which this Note is paid in full, the
extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date. As used in this Note,
the term "business day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in the city of New York, New York are authorized
or required by law or executive order to remain closed.

 

 

   

 

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This Note is free from all taxes, liens, claims and encumbrances with respect to
the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Borrower and will not impose personal liability
upon the holder thereof. The following additional terms shall apply to this
Note: ARTICLE 1. CONVERSION RIGHTS Conversion Right. The Holder shall have the
right at any time on or after the Maturity Date to convert all or any part of
the outstanding and unpaid principal amount and accrued and unpaid interest of
this Note into fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital stock or other
securities of the Borrower into which such Common Stock shall hereafter be
changed or reclassified at the conversion price (the "Conversion Price")
determined as provided herein (a "Conversion"); provided, however, that in no
event shall the Holder be entitled to convert any portion of this Note in excess
of that portion of this Note upon conversion of which the sum of (1) the number
of shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of the Notes or the unexercised
or unconverted portion of any other security of the Borrower subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the determination
of this proviso is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 4.99% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such
proviso, provided, further, however, that the limitations on conversion may be
increased to a maximum of 9.99% of the outstanding common shares of the Borrower
by the Holder upon, at the election of the Holder, not less than 61 days' prior
notice to the Borrower, and the provisions of the conversion limitation shall
continue to apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). The number of shares of
Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of
conversion, in the form attached hereto as Exhibit A (the "Notice of
Conversion"), delivered to the Borrower by the Holder in accordance with Section
1.4 below; provided that the Notice of Conversion is submitted by facsimile or
e-mail (or by other means resulting in, or reasonably expected to result in,
notice) to the Borrower before 6:00 p.m., New York, New York time on such
conversion date (the "Conversion Date"). The term "Conversion Amount" means,
with respect to any conversion of this Note, the sum of (1) the principal amount
of this Note to be converted in such conversion plus (2) at the Holder's option,
accrued and unpaid interest, if any, on such principal amount at the interest
rates provided in this Note to the Conversion Date, plus (3) at the Holder's
option, Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2) plus (4) at the Holder's option, any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

 

   

 

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 1.1 Conversion Price. (a) Calculation of Conversion Price. The Conversion Price
shall equal the Variable Conversion Price (as defined herein) (subject, in each
case, to equitable adjustments for stock splits, stock dividends or rights
offerings by the Borrower relating to the Borrower's securities or the
securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar events) (also subject
to adjustment as further described herein). The "Variable Conversion Price"
shall mean the lesser of (i) 80% multiplied by the Market Price (as defined
herein), or (ii) $0.0065. "Market Price" means the lowest Trading Price (as
defined below) for the Common Stock during the five (5) Trading Day period
ending on the last complete Trading Day prior to the Conversion Date. "Trading
Price" means, for any security as of any date, the trading price of the Common
Stock on the OTC Pink Marketplace, or applicable trading market (the "OTC") as
reported by a reliable reporting service ("Reporting Service") designated by the
Holder (i.e. Bloomberg) or, if the OTC PINK is not the principal trading market
for such security, on the principal securities exchange or trading market where
such security is listed or traded or, if the lowest intraday trading price of
such security is not available in any of the foregoing manners, the lowest
intraday price of any market makers for such security that are quoted on the OTC
Markets. If the Trading Prices cannot be calculated for such security on such
date in the manner provided above, the Trading Prices shall be the fair market
value as mutually determined by the Borrower and the holders of a majority in
interest of the Notes being converted for which the calculation of the Trading
Prices are required in order to determine the Conversion Price of such Notes.
"Trading Day" shall mean any day on which the Common Stock is tradable for any
period on the OTC PINK, or on the principal securities exchange or other
securities market on which the Common Stock is then being traded. Each time,
while this Note is outstanding, the Borrower enters into a Section 3(a)(9)
transaction (including but not limited to the issuance of new promissory notes
or of a replacement promissory note), or Section 3(a)(10) transaction, in which
any 3rd party has the right to convert monies owed to that 3rd party (or receive
shares pursuant to a settlement or otherwise) at a discount to market greater
than the Variable Conversion Price in effect at that time (prior to all other
applicable adjustments in the Note), then the .Variable Conversion Price shall
be automatically adjusted to such greater discount percentage (prior to all
applicable adjustments in this Note) until this Note is no longer outstanding.
Each time, while this Note is outstanding, the Borrower enters into a Section
3(a)(9) transaction (including but not limited to the issuance of new promissory
notes or of a replacement promissory note), or Section 3(a)(10) transaction, in
which any 3rd party has a look back period greater than the look back period in
effect under the Note at that time (currently a thirty (30) Trading Day look
back period as described in this Section 1.2(a) applies), then the Holder's look
back period shall automatically be adjusted to such greater number of days until
this Note is no longer outstanding. The Borrower shall give written notice to
the Holder, with the adjusted Variable Conversion Price and/or adjusted look
back period (each adjustment that is applicable due to the triggering event),
within one (1) business day of an event that requires any adjustment described
in the two immediately preceding sentences. Authorized Shares. The Borrower
covenants that during the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note. The Borrower is required at all times to
have authorized and reserved two times the number of shares that is actually
issuable upon full conversion of the Note (based on the 3

 

 

   

 

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Conversion Price of the Notes in effect from time to time) (the "Reserved
Amount"). It is agreed by the Borrower, that the Borrower shall reserve the
Reserved Amount within 90 days of the date of this Note. The Reserved Amount
shall be increased from time to time in accordance with the Borrower's
obligations hereunder. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-assessable. In addition, if
the Borrower shall issue any securities or make any change to its capital
structure which would change the number of shares of Common Stock into which the
Notes shall be convertible at the then current Conversion Price, the Borrower
shall at the same time make proper provision so that thereafter there shall be a
sufficient number of shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Notes. The Borrower (i)
acknowledges that it will, within 90 days from the date of this Note irrevocably
instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Note, and (ii) agrees that its issuance of this
Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and
conditions of this Note. If, at any time after 90 days from the date of this
Note the Borrower does not maintain the Reserved Amount it will be considered an
Event of Default under Section 3.2 of the Note. 12 Method of Conversion. (a)
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by
the Holder in whole or in part at any time from time to time after the Issue
Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile,
e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section
1.4(b), surrendering this Note at the principal office of the Borrower.
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set
forth herein, upon conversion of this Note in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Note to the
Borrower unless the entire unpaid principal amount of this Note is so converted.
The Holder and the Borrower shall maintain records showing the principal amount
so converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event of any
dispute or discrepancy, such records of the Borrower shall, prima facie, be
controlling and determinative in the absence of manifest error. Notwithstanding
the foregoing, if any portion of this Note is converted as aforesaid, the Holder
may not transfer this Note unless the Holder firstphysically surrenders this
Note to the Borrower, whereupon the Borrower will forthwith issue and deliver
upon the order of the Holder a new Note of like tenor, registered as the Holder
(upon payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this
Note. 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 represented by this Note may be less than the amount stated on the face
hereof. (b) Payment of Taxes. The Borrower shall not be required to pay any tax
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 which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock or other securities or property on conversion
of this Note in a name other than that of the Holder (or in street name), and
the Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid. (c) Delivery of Common
Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a
facsimile transmission or e-mail (or other reasonable means of communication) of
a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and
delivered to or upon the order of the Holder certificates for the Common Stock
issuable upon such conversion within two (2) business days after such receipt
(the "Deadline") (and, solely in the case of conversion of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with the terms
hereof. (d) Obligation of Borrower to Deliver Common Stock. Upon receipt by the
Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder
of record of the Common Stock issuable upon such conversion; the outstanding
principal amount and the amount of accrued and unpaid interest on this Note
shall be reduced to reflect such conversion, and, unless the Borrower defaults
on its obligations under this Article I, all rights with respect to the portion
of this Note being so converted shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets, as herein
provided, on such conversion. If the Holder shall have given a Notice of
Conversion as provided herein, the Borrower's obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date. (e) Delivery of Common Stock by
Electronic Transfer. In lieu of delivering physical certificates representing
the Common Stock issuable upon conversion, provided the Borrower is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of the Holder and its compliance with
the provisions contained in Section 1.1 and in this Section 1.4, the Borrower
shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the Holder by crediting
the account of Holder's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system. (f) Failure to Deliver Common Stock Prior to
Deadline. Without in any way limiting the Holder's right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree
that if delivery of the Common Stock issuable upon conversion of this Note 5

 

 

 

 

   

 

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is not delivered by the Deadline, the Borrower shall pay to the Holder $1,000
per day in cash, for each day beyond the Deadline that the Borrower fails to
deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth
day of the month following the month in which it has accrued or, at the option
of the Holder (by written notice to the Borrower by the first day of the month
following the month in which it has accrued), shall be added to the principal
amount of this Note, in which event interest shall accrue thereon in accordance
with the terms of this Note and such additional principal amount shall be
convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert is a valuable right to the Holder. The
damages resulting from a failure, attempt to frustrate, interference with such
conversion right are difficult if not impossible to qualify. Accordingly the
parties acknowledge that the liquidated damages provision contained in this
Section 1.4(g) are justified. Concerning the Shares. The shares of Common Stock
issuable upon conversion of this Note may not be sold or transferred unless (i)
such shares are sold pursuant to an effective registration statement under the
Act or (ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor. Except as otherwise
provided (and subject to the removal provisions set forth below), until such
time as the shares of Common Stock issuable upon conversion of this Note have
been registered under the Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, each certificate for shares of Common Stock
issuable upon conversion of this Note that has not been so included in an
effective registration statement or that has not been sold pursuant to an
effective registration statement or an exemption that permits removal of the
legend, shall bear a legend substantially in the following form, as appropriate:
"NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES." The
legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefore free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for 6

 

 

   

 

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opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Common Stock may be made without registration under the Act,
which opinion shall be accepted by the Borrower so that the sale or transfer is
effected or (ii) in the case of the Common Stock issuable upon conversion of
this Note, such security is registered for sale by the Holder under an effective
registration statement filed under the Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold. In the event that the
Borrower does not accept the opinion of counsel provided by the Holder with
respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, at the Deadline, it will be
considered an Event of Default pursuant to Section 3.2 of the Note. Trading
Market Limitations. Unless permitted by the applicable rules and regulations of
the principal securities market on which the Common Stock is then listed or
traded, in no event shall the Borrower issue upon conversion of or otherwise
pursuant to this Note more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common Stock is then traded (the "Maximum Share
Amount"), which shall be 4.99% of the total shares currently outstanding,
subject to equitable adjustment from time to time for stock splits, stock
dividends, combinations, capital reorganizations and similar events relating to
the Common Stock occurring after the date hereof. Once the Maximum Share Amount
has been issued, if the Borrower fails to eliminate any prohibitions under
applicable law or the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Borrower or any of its securities on the Borrower's ability to issue shares
of Common Stock in excess of the Maximum Share Amount, in lieu of any thither
right to convert this Note, this will be considered an Event of Default under
Section 3.3 of the Note. 13 Status as Shareholder. Upon submission of a Notice
of Conversion by a Holder, (i) the shares covered thereby (other than the
shares, if any, which cannot be issued because their issuance would exceed such
Holder's allocated portion of the Reserved Amount or Maximum Share Amount) shall
be deemed converted into shares of Common Stock and (ii) the Holder's rights as
a Holder of such converted portion of this Note shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder because of a failure by the Borrower to comply with the terms of
this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Note for any reason, then (unless the Holder otherwise elects to
retain its status as a holder of Common Stock by so notifying the Borrower) the
Holder shall regain the rights of a Holder of this Note with respect to such
unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not
been surrendered, adjust its records to reflect that such portion of this Note
has not been converted. In all cases, the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such
Conversion Default and any subsequent Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent conversions determined in
accordance with Section 1.3) for the Borrower's failure to convert this Note

 

 

   

 

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 ARTICLE II. CERTAIN COVENANTS 2.1 Distributions on Capital Stock. So long as
the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder's written consent (a) pay, declare or set apart for such
payment, any dividend or other distribution (whether in cash, property or other
securities) on shares of capital stock other than dividends on shares of Common
Stock solely in the form of additional shares of Common Stock or (b) directly or
indirectly or through any subsidiary make any other payment or distribution in
respect of its capital stock except for distributions pursuant to any
shareholders' rights plan which is approved by a majority of the Borrower's
disinterested directors. 2.2 Restriction on Stock Repurchases. So long as the
Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder's written consent redeem, repurchase or otherwise acquire
(whether for cash or in exchange for property or other securities or otherwise)
in any one transaction or series of related transactions any shares of capital
stock of the Borrower or any warrants, rights or options to purchase or acquire
any such shares. ARTICLE III. EVENTS OF DEFAULT If any of the following events
of default (each, an "Event of Default") shall occur: 3.1 Failure to Pay
Principal or Interest. The Borrower fails to pay the principal hereof or
interest thereon when due on this Note, whether at maturity, upon acceleration
or otherwise, and such breach continues for a period of five (5) days. 3.2
Conversion and the Shares. The Borrower fails to reserve a sufficient amount of
shares of common stock as required under the terms of this Note (including
Section 1.3 of this Note)(and such breach continues for a period of five (5)
days), fails to issue shares of Common Stock to the Holder (or announces or
threatens in writing that it will not honor its obligation to do so) upon
exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, fails to transfer or cause its transfer agent to
transfer (issue) (electronically or in certificated form) any certificate for
shares of Common Stock issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, the Borrower directs
its transfer agent not to transfer or delays, impairs, and/or hinders its
transfer agent in transferring (or issuing) (electronically or in certificated
form) any certificate for shares of Common Stock to be issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this
Note, or fails to remove (or directs its transfer agent not to remove or
impairs, delays, and/or hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by
this Note (or makes any written announcement, statement or threat that it does
not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any written announcement, statement or threat
not to honor its obligations shall not be rescinded in writing) for three (3)
business days after the Holder shall have delivered a Notice of Conversion. It
is an obligation of the Borrower to remain current in its obligations to its
transfer agent. It shall be an event of default of this Note, if a conversion of
this Note is delayed, hindered or frustrated due to a balance owed by the
Borrower to its transfer agent. If at the option of the 8

 

   

 

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 Holder, the Holder advances any funds to the Borrower's transfer agent in order
to process a conversion, such advanced funds shall be paid by the Borrower to
the Holder within five (5) business days of a demand from the Holder, either in
cash or as an addition to the balance of the Note, and such choice of payment
method is at the discretion of the Borrower. 3.3 Breach of Covenants. The
Borrower breaches any material covenant or other material term or condition
contained in this Note and any collateral documents and such breach continues
for a period of ten (10) days after written notice thereof to the Borrower from
the Holder. 3.4 Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith, shall be
false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Note. 3.5 Receiver or Trustee. The
Borrower or any subsidiary of the Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall otherwise be appointed. 3.6 Judgments. Any money
judgment, writ or similar process shall be entered or filed against the Borrower
or any subsidiary of the Borrower or any of its property or other assets for
more than $150,000, and shall remain unvacated, unbonded or unstayed for a
period of thirty (30) days unless otherwise consented to by the Holder, which
consent will not be unreasonably withheld. 3.7 Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings,
voluntary or involuntary, for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower. 3.8 Delisting of Common Stock. The Borrower shall
fail to maintain the listing or quotation of the Common Stock on the OTC Markets
platforms or an equivalent replacement exchange, the Nasdaq Global Market, the
Nasdaq Capital Market, the New York Stock Exchange, or the NYSE MKT. 3.9 Failure
to Comply with the Exchange Act. The Borrower shall fail to comply with the
reporting requirements of the Exchange Act, and/or the Borrower shall cease to
be subject to the reporting requirements of the Exchange Act. 3.10 Liquidation.
Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business. 3.11 Cessation of Operations. Any cessation of
operations by Borrower or Borrower admits it is otherwise generally unable to
pay its debts as such debts become due, provided, however, that any disclosure
of the Borrower's ability to continue as a "going concern" shall not be an
admission that the Borrower cannot pay its debts as they become due. 9

 

 

   

 

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3.12 Financial Statement Restatement. The Borrower replaces its auditor, or any
restatement of any financial statements filed by the Borrower with the SEC for
any date or period from two years prior to the Issue Date of this Note and until
this Note is no longer outstanding, if the result of such restatement would, by
comparison to the unrestated financial statement, have constituted a material
dverse effect on the rights of the Holder with respect to this Note. 3.13 Re
erse S lits. The Borrower effectuates a reverse split of its Common Stock
without twenty (20) ys prior written notice to the Holder. 3.14 Replacement of
Transfer A ent. In the event that the Borrower replaces its transfer agent, and
the B i rrower fails to provide prior to the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions (including but not
limited to the provision to irrevocably resery shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Bo ower and the
Borrower. 3.15 Cr contained in this Note or the other r Borrower of any covenant
or other to securities of the Borrower, including issued, or hereafter issued,
by the B Agreements"), after the passage of al option of the Holder, be
considered a entitled to apply all rights and remedi default under said. Other
Agreement o 3.16 In officers, directors, and/or affiliates conveyance, or
disclosure by the Bo non-public information concerning which is not immediately
cured by B that same date. 3.17 lowest Trading Prices on the OTC or Stock is
equal to or less than $0.0001. 3.18 fails to immediately prepay this Note i
closing of any financing of $1,500,00 s-Default. Notwithstanding anything to the
contrary lated or companion documents, a breach or default by the or condition
contained in any of the other equity or debt ut not limited to all convertible
promissory notes, currently rrower, to the Holder or any other 3'd party (the
"Other applicable notice and cure or grace periods, shall, at the default under
this Note, in which event the Holder shall be s of the Holder under the terms of
this Note by reason of a hereunder. ide Information. Any attempt by the Borrower
or its o transmit, convey, disclose, or any actual transmittal, ower or its
officers, directors, and/or affiliates of, material e Borrower, to the Holder or
its successors and assigns, ower's filing of a Form 8-K pursuant to Regulation
FD on o bid. At any time while this Note is outstanding, the other applicable
principal trading market for the Common allure to re a u on • ualified Financin
. If the Borrower its entirety within three (3) business days of the Borrower's
or more. 10

 

 

   

 

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  Upon the occurrence and during the continuation of any Event of Default
specified in Section 3, the Note shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to 150% multiplied by the then outstanding entire
balance of the Note (including principal and accrued and unpaid interest) plus
Default Interest, if any, plus any amounts owed to the Holder pursuant to
Sections 1.4(g) hereof (collectively, in the aggregate of all of the above, the
"Default Sum"), and all other amounts payable hereunder shall immediately become
due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation,
legal fees and expenses, of collection, and the Holder shall be entitled to
exercise all other rights and remedies available at law or in equity. If the
Borrower fails to pay the Default Amount within five (5) business days of
written notice that such amount is due and payable, then the Holder shall have
the right at any time, so long as the Borrower remains in default (and so long
and to the extent that there are sufficient authorized shares), to require the
Borrower, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal to the
Default Amount divided by the Conversion Price then in effect, subject to
issuance in tranches due to the beneficial ownership limitations contained in
this Note. ARTICLE IV. MISCELLANEOUS 4.1 Failure or Indulgence Not Waiver. No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privileges. All rights
and remedies existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available. 42 Notices. All, notices, demands,
requests, consents, approvals, and other communications required or permitted
hereunder shall be in writing and, unless otherwise specified herein, shall be
(i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air
courier service with charges prepaid, or (iv) transmitted by hand delivery,
telegram, facsimile, or electronic mail addressed as set forth below or to such
other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery, upon electronic mail
delivery, or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: 11

 

 

   

 

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 If to the Borrower, to: PURA NATURALS, INC. 23101 Lake Center Drive Suite 100
Lake Forest, CA 92630 43 Amendments. This Note and any provision hereof may only
be amended by an instrument in writing signed by the Borrower and the Holder.
The term "Note" and all reference thereto, as used throughout this instrument,
shall mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented. 4.4 Assignability. This Note
may not be assigned by the Borrower, and shall be binding upon the Borrower and
its successors, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an "accredited
investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement. 43 Cost
of Collection. If default is made in the payment of this Note, the Borrower
shall pay the Holder hereof costs of collection, including reasonable attorneys'
fees. 4.6 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Note shall be brought only in
the state and/or federal courts of New York, NY. The parties to this Note hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. The Borrower and
Holder waive trial by jury. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs. In the event that
any provision of this Note or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of any agreement. Each party hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document 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 Agreement 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 law. 4.7 Certain Amounts. Whenever pursuant to this Note the
Borrower is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time)• plus accrued
and unpaid interest plus Default Interest on such interest, the Borrower and the
Holder agree that the actual damages to the Holder 12

 

   

 

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from the receipt of cash payment on this Note may be difficult to determine and
the amount to be so paid by the Borrower represents stipulated damages and not a
penalty and is intended to compensate the Holder in part for loss of the
opportunity to convert this Note and to earn a return from the sale of shares of
Common Stock acquired upon conversion of this Note at a price in excess of the
price paid for such shares pursuant to this Note. The Borrower and the Holder
hereby agree that such amount of stipulated damages is not plainly
disproportionate to the possible loss to the Holder from the receipt of a cash
payment without the opportunity to convert this Note into shares of Common
Stock. 4.8 Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Note, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Note and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required. 4.9
Prepayment. Notwithstanding anything to the contrary contained in this Note, the
Borrower may prepay any amount outstanding under this Note, on or before the
Maturity Date of this Note, by making a payment to the Holder of an amount in
cash equal to 125% multiplied the amount that the Borrower is prepaying.
Notwithstanding anything to the contrary contained in this Note, the Borrower
may prepay any amount outstanding under this Note, after the Maturity Date of
this Note, by making a payment to the Holder of an amount in cash equal to 140%
multiplied the amount that the Borrower is prepaying. In order to prepay this
Note, the Borrower shall provide notice to the Holder five (5) business days
prior to such respective prepayment date, and the Holder must receive such
prepayment on or before the 10th business day after the Holder's receipt of the
respective prepayment notice (the "Prepayment Period"). The Holder may not
convert the Note in whole or in part at any time during the Prepayment Period.
If the Borrower fails to pay the applicable prepayment amount within any
applicable Prepayment Period, then it shall automatically be deemed an Event of
Default under Sections 3.3 and 3.4 of this Note. 4.10 Section 3(a)(10)
Transactions. If at any time while this Note is outstanding, the Borrower enters
into a transaction structured in accordance with, based upon, or related or
pursuant to, in whole or in part, Section 3(a)(10) of the Securities Act (a
"3(a)(10) Transaction"), then a liquidated damages charge of 25% of the
outstanding principal balance of this Note at that time, will be assessed and
will become immediately due and payable to the Holder, either in the form of
cash payment or as an addition to the balance of the Note, as determined by
mutual agreement of the Borrower and Holder. [Signature Page Follows] 13

 

 

   

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by
its duly authorized officer this October 8, 2018.

 

PURA NATURALS, INC.

 

 

 

By: /s/ Robert Doherty

Name: Robert Doherty

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

14

 

 

   

 

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EXHIBIT A — NOTICE OF CONVERSION The undersigned hereby elects to convert $
principal amount an d in interest of the Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the conversion of the Note
("Common Stock") as set forth below, of PURA NATURALS, INC., a Colorado
corporation (the "Borrower") according to the conditions of the convertible note
of the Borrower dated as of October 8, 2018 (the "Note"), as of the date written
below. No fee will be charged to the Holder for any conversion, except for
transfer taxes, if any. Box Checked as to applicable instructions: [ ] The
Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").
Name of DTC Prime Broker: Account Number: [ ] The undersigned hereby requests
that the Borrower issue a certificate or certificates for the number of shares
of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto INSERT INVESTOR NAME Date
of Conversion: Applicable Conversion Price: Number of Shares of Common Stock to
be Issued Pursuant to Conversion of the Notes: Amount of Principal Balance Due
remaining Under the Note after this conversion: By: Name: Title: Date:

 

 

   

 

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 OFFICER'S CERTIFICATE The undersigned, Robert Doherty, CEO of Pura Naturals,
Inc., a Colorado corporation (the "Company"), in connection with the
authorization and issuance of a Convertible Promissory Note in the aggregate
principal amount of $50,000 dated October 8, 2018 by and among the Company and
Joseph W & Patricia G Abrams Family Trust dtd 3/15/95 set forth in the
Convertible Promissory Note (the "Convertible Note"), hereby certifies that: 1.
I am the duly appointed CEO of the Company. 2. The representations and
warranties made by the Company in the Convertible Note are true and correct in
all material respects as of the date of this Officer's Certificate. 3. As of the
date hereof, the Company has satisfied and duly performed all of the conditions
and obligations specified in the Convertible Note or such conditions and
obligations have been waived expressly in writing signed by the purchaser. 4.
The Company has complied with or, if compliance prior to the date of the
Convertible Note is not required, promptly following the execution of the
Convertible Note, the Company will comply with, the filing requirements in
respect of this transaction under (a) Regulation D under the Securities Act of
1933, as amended (the "1933 Act") (and applicable Blue Sky regulations) and (b)
the Securities Exchange Act of 1934, as amended. 5. There has been no adverse
change in the business, affairs, prospects, operations, properties, assets or
condition of the Company since June 30, 2018, the date of the Company's most
recent reviewed financial statements delivered to the Buyers, other than losses
and matters which would not, individually or in the aggregate, have a Material
Adverse Effect. 6. The Company a corporation organized under the laws of the
state of its incorporation and is in good standing therein. 7. The Company is
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and is in compliance with all applicable
filing requirements, and has filed all required reports during the previous
twelve months. 8. To the best of my knowledge and belief, no officer or director
of the Company or owner of more than ten percent (10%) or more of the Company's
Common Stock has been convicted within the previous ten (10) years of any felony
in connection with the purchase or sale of any security, nor has any such
officer, director or owner of securities been subject to a United States Postal
Service false representation order within the past five (5) years. 9. The
Company is an operating company, and is not a shell company. If the company is a
previous shell company, it has filed Form 10 Information for at least twelve
consecutive months that does not resemble a shell company, and has therefore
complied with Rule 144(i)(2).

 

 

   

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as
of October 8, 2018.

 

 

 

Signed: /s/ Robert Doherty

By: Robert Doherty

Title: CEO

 

 

 

 

 

 

 

DISBURSEMENT AUTHORIZATION

 

 

 

TO: Joseph W & Patricia G Abrams Family Trust dtd 3/15/95

FROM : Robert Doherty, Chief Executive Officer

DATE: October 8, 2018

RE: Disbursement of Funds

 

In connection with the funding of an aggregate of $50,000.00 pursuant to that
certain Securities Purchase Agreement dated as of October 8, 2018 (the
"Agreement"), you are hereby directed to disburse such funds as follows:

 

1.        $49,000 to Pura Naturals, Inc. in accordance with the wire transfer
instructions as follows:

 

Beneficiary: Pura Naturals, Inc.

Account Number: xxxxxxxxxx

SWIFT Code:

Wire Routing: xxxxxxxxxxxxxx

 Bank Name/Address: xxxxxxxxxxx

 

Beneficiary Address: xxxxxxxxxxxxxxxxxxxxx

 

1. $1,000 to Bart and Associates, LLC, in accordance with the wire transfer
instructions as follows:

Beneficiary: Bart and Associates, LLC

Account Number:xxxxxxxxxxxxxxx
SWIFT Code: xxxxxxxxxxxxxxxxx
Wire Routing: xxxxxxxxxxxxxxx

Bank: Wells Fargo, xxxxxxxxxxxxxxxxxxx

Beneficiary Address: xxxxxxxxxxxxxxxxxxxx

 

Upon receipt of such funds, you may release the Note, the Purchase Agreement and
the instructions to Transfer Agent (each as defined in the Agreement).

 

By: /s/ Robert Doherty

Name: Robert Doherty

Title: Chief Executive Officer