Blueprint






Exhibit 10.1


 






SENIOR
SECURED PROMISSORY NOTE

 


	

U.S.
$2,000,000

	

December
4, 2018


	
 

	

Charlotte,
North Carolina







 


FOR
VALUE RECEIVED, the undersigned, CURE BASED DEVELOPMENT, LLC, a North Carolina limited liability
company (the “Company”),
hereby unconditionally promises to pay LEVEL BRANDS, INC., a North Carolina
corporation (the “Holder”),
on the Maturity Date (as defined in Section 1 hereof) to the order
of the Holder, in lawful money of the United States of America and
in immediately available funds, the principal amount of Two Million
Dollars ($2,000,000) (the “Principal
Amount”). Interest shall be at the rate of 6% per
annum (“Interest”)
based on a 360 day year, shall be payable on the Maturity Date (as
defined below). This Note is being entered into in accordance with
the terms and conditions of that certain Agreement and Plan of
Merger dated December 3, 2018 by and among the Holder, AcqCo LLC, a
North Carolina limited liability company and a wholly owned
subsidiary of the Holder, cbdMD LLC, a North Carolina limited
liability company and wholly owned subsidiary of the Holder, and
the Company (the “Merger
Agreement”). All terms not otherwise defined herein
shall have the same meaning as in the Merger
Agreement.

 

1. Maturity; Acceleration. This
Note shall mature one (1) year from the date of this Note (such
date the “Maturity
Date”). On the Maturity Date any and all outstanding
Principal Amount and accrued and unpaid Interest due and owing
under the Note shall be immediately paid by the Company.

 

2. Seniority; Security
Interest.

 

(a) The indebtedness
evidenced by this Note and the payment of the Principal Amount and
Interest shall be Senior (as hereinafter defined) to, and have
priority in right of payment over, all indebtedness of Company now
outstanding or hereinafter incurred. “Senior,”
as used herein, shall be deemed to mean that, in the event of any
default in the payment of the obligations represented by this Note
(after giving effect to “cure” provisions, if any) or
of any liquidation, insolvency, bankruptcy, reorganization or
similar proceedings relating to the Company, all sums payable on
this Note shall first be paid in full, with Interest, if any,
before any payment is made upon any other indebtedness, now
outstanding or hereinafter incurred, and, in any such event, any
payment or distribution of any character which shall be made in
respect of any other indebtedness of Company shall be paid over to
Holder for application to the payment hereof, unless and until the
obligations under this Note (which shall mean the Principal Amount
and Interest shall have been paid and satisfied in
full.

 

(b) This Note, subject
to the provisions of (a) above, is secured by a first lien and
security interest in all of the assets of the Company pursuant to
the terms of a certain Security Agreement dated as of December 4,
2018 (the “Security
Agreement”), by the Company in favor of the
Holder.

 

(c) In the event of the
Closing of the Mergers, this Note shall automatically be deemed an
unsecured intercompany advance.

 

3. Prepayment. The Company shall
have the right to prepay all or a portion of the Note at any time
without notice to the Holder and without penalty.

 

4. Events of Default. The term
“Event of
Default” shall mean any of the events set forth in
this Section 4:

 

(a) the Company shall
default in the performance of, or violate any material covenants
and agreements contained in this Note or the Security Agreement,
including without limitation, the failure to pay amounts due under
this Note on its Maturity Date, or Interest when due;

 




 

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(b) any representation,
warranty or certification made by or on behalf of the Company in
this Note shall have been incorrect in any material respect when
made;

 

(c) there shall be a
dissolution, termination of existence, suspension or discontinuance
of the Company’s business for a continuous period of
forty-five (45) days or it ceases to operate as going
concern;

 

(d) if the Parent shall
have terminated the Merger Agreement in accordance with Sections
9.01(d) or 9.01(e) thereof;

 

(e) if the Company
shall:

 

(i) admit in writing
its inability to pay its debts generally as they become
due;

 

(ii) file
a voluntary petition in bankruptcy or a petition to take advantage
of any insolvency act;

 

(iii) convey
any material portion of the assets of the Company to a trustee,
mortgage or liquidating agent or make an assignment for the benefit
of creditors;

 

(iv) consent
to the appointment of a receiver, trustee, custodian or similar
official, for the Company or any material portion of the property
or assets of the Company;

 

(v) on a petition in
bankruptcy filed against it, be adjudicated a
bankrupt;

 

(vi) file
a petition or answer seeking reorganization or arrangement under
the federal bankruptcy laws or any other applicable law or statute
of the United States of America or any State, district or territory
thereof; or

 

(vii) if
a court of competent jurisdiction shall enter an order, judgment,
or decree appointing, without the consent of the Company, a
receiver of the whole or any substantial part of the
Company’s assets, and such order, judgment or decree shall
not be vacated or set aside or stayed within 60 days from the date
of entry thereof.

 


If any
Event of Default described in clause (e) of Section 4 shall occur,
the Principal Amount of this Note, together with all accrued and
unpaid Interest shall automatically be and become immediately due
and payable, without notice or demand. If any Event of Default
(other than any Event of Default described in clause (e) of Section
4) shall occur for any reason, whether voluntary or involuntary,
the Holder, may, upon written notice to the Company, declare all or
any portion of the outstanding Principal Amount, together with all
accrued and unpaid Interest, to be due and payable, whereupon the
full unpaid Principal Amount hereof, together with all accrued and
unpaid Interest shall be so declared due and payable shall be and
become immediately due and payable if the default is not cured by
the Company within twenty (20) days of receipt of written notice,
without further notice, demand, or presentment.

 

5. Remedies. Subject to the terms
of the Security Agreement, in case any one or more of the Events of
Default specified in Section 4 hereof shall have occurred and be
continuing, the Holder may proceed to protect and enforce the
Holder’s rights either by suit in equity and/or by action at
law, whether for the specific performance of any covenant or
agreement contained in this Note or in aid of the exercise of any
power granted in this Note or may proceed to enforce the payment of
all sums due upon this Note or to enforce any other legal or
equitable right of the Holder.

 




 

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6. Amendments and Waivers. The
terms of this Note may be amended and the observance of any term of
this Note may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the
written consent of the Company and the Holder.

 

7. Notices.

 

(a) Any notice, request
or other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Merger Agreement.

 

(b) Any party may give
any notice, request, consent or other communication under this Note
using any other means (including personal delivery, messenger
service, telecopy, first class mail or electronic mail), but no
such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually
received by the party for whom it is intended. Any party may change
the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other
parties notice in the manner set forth in this Section
7.

 

8. Severability. The
unenforceability or invalidity of any provision or provisions of
this Note as to any persons or circumstances shall not render that
provision or those provisions unenforceable or invalid as to any
other provisions or circumstances, and all provisions hereof, in
all other respects, shall remain valid and
enforceable.

 

9. Governing Law. This Note shall
be governed by and construed under the laws of the State of North
Carolina applicable to agreements made and to be performed entirely
within such jurisdiction. Any suit, action or proceeding arising
out of or relating to this Note shall be brought in any state or
federal courts sitting in Charlotte, North Carolina.

 

10. Waivers. The non-exercise by
either party of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any
subsequent instance.

 

11. Attorneys’ Fees; Costs.
If any Event of Default occurs, the Company promises to pay all
costs of enforcement and collection, including but not limited to,
Holder’s reasonable attorneys’ fees, whether or not any
action or proceeding is brought to enforce the provisions
hereof.

 

12. Successor
and Assigns. This Note shall be binding upon the Company and
its successors and permitted assigns and shall inure to the benefit
of the Holder and its successors and assigns. The Company may not
assign or delegate any of its duties or obligations under this Note
without the written consent of the Holder.

 


IN WITNESS WHEREOF, the Company has
caused its duly authorized officers to execute this Note as of the
date first written above.

 


COMPANY:


 


CURE
BASED DEVELOPMENT, LLC


 


 


By:
/s/ R. Scott
Coffman


       R.
Scott Coffman, Manager



 




 

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