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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): July 10, 2023
PUREBASE
CORPORATION
(Exact
name of registrant as specified in its charter)
| Nevada |
|
000-55517 |
|
27-2060863 |
(State
or other jurisdiction of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
8631
State Hwy, 124
Ione,
CA 95640
(Address
of principal executive offices)
(209)
274-9143
(Registrant’s
telephone number, including area code)
N/A
(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 (see General Instruction A.2. below):
| ☐ |
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 |
| None
|
|
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 (17 CFR §230.405)
or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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
July 10, 2023 (the “Effective Date”), Purebase Corporation, a Nevada corporation (the “Company”), entered into
a line of credit agreement (the “Line of Credit Agreement”) with U.S. Mine Corp., a Nevada corporation and affiliate of the
Company (“USMC”), pursuant to which USMC will make a line of credit available to the Company, in the maximum principal amount
of $1,000,000, for a period of one year (the “Line of Credit”). Subject to the terms of the Line of Credit Agreement, each
loan advance will be made by USMC upon three business days’ prior written request by the Company. The Company will use the proceeds
from the Line of Credit for working capital and other general corporate purposes.
On
the Effective Date, the Company issued USMC an unsecured convertible grid promissory note (the “Grid Note”) to evidence the
amounts loaned by USMC under the Line of Credit. The Grid Note has a stated maturity date of July 10, 2024 (the “Maturity Date”).
The principal amount of the Grid Note will be adjusted from time to time to reflect the amounts of any loans made to the Company by USMC
and/or any payments made to USMC by the Company prior to the Maturity Date. Interest is payable on the unpaid principal amount of the
Grid Note at a rate of 8% per annum; provided, however, that any amount of principal not paid when due will bear interest at a
default interest rate equal of 13% per annum. The Company may prepay the principal amount of the Grid Note, together with any accrued
but unpaid interest thereon, at any time without penalty. On the Maturity Date, USMC may, in its sole discretion, choose to convert all
or part of the outstanding principal amount of the Grid Note, together with accrued and unpaid interest due thereon, into shares of the
Company’s common stock (the “Conversion Shares”) at a conversion price of $0.10 per share. The conversion price and
number of shares of the Company’s common stock issuable upon conversion are subject to adjustment from time to time for any subdivision
or consolidation of the Company’s shares and standard dilutive events. Upon the Company’s voluntary or involuntary bankruptcy,
the full principal amount of the Grid Note, together with any other amounts owing in respect thereof, will automatically become immediately
due and payable. Upon the occurrence of any other event of default, as specified in the Grid Note, the full principal amount of the Grid
Note, together with any other amounts owing in respect thereof, may become immediately due and payable at USMC’s election.
A. Scott Dockter, the principal executive officer and a director of the Company, and John Bremer, a director of the Company, are also
officers, directors and principal shareholders of USMC.
The
foregoing descriptions of the Line of Credit Agreement and Grid Note are qualified in their entirety by reference to the full text of
such documents, copies of which are attached to this report as Exhibits 10.1 and 4.1, respectively, and are incorporated herein by reference.
| Item
2.03 |
Creation
of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Reference
is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
| Item
3.02 |
Unregistered
Sales of Equity Securities. |
Reference
is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
The
issuance of any Conversion Shares upon the conversion of any amounts due under the Grid Note will be exempt from registration under Section
4(a)(2) and/or Rule 506(b) of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933,
as amended, as transactions by an issuer not involving any public offering.
| Item
9.01 |
Financial
Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
| |
PUREBASE
CORPORATION |
| |
|
|
| Dated:
July 13, 2023 |
By:
|
/s/
A. Scott Dockter |
| |
|
A.
Scott Dockter |
| |
|
Chief
Executive Officer |
Exhibit
4.1
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE,
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION
THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH
SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
8%
UNSECURED CONVERTIBLE GRID PROMISSORY NOTE
PUREBASE
CORPORATION
ISSUANCE
DATE: July 10, 2023
MATURITY
DATE: July 10, 2024
This
Unsecured Convertible Grid Promissory Note (the “Note”) is a duly authorized and issued convertible promissory note
(the “Note”) of PUREBASE CORPORATION, a Nevada corporation (the “Company”). The Note has been issued
in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to a Line of Credit Agreement, dated as of even date herewith (the “Line of Credit Agreement”), between the
Company and the Holder (as defined below). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in
the Line of Credit Agreement.
Article
I.
Section
1.01 Principal. FOR VALUE RECEIVED, the Company hereby promises to pay to the order of U.S. MINE CORP., a Nevada corporation (together
with its permitted assigns, the “Holder”), in lawful money of the United States of America and in immediately available
funds, the principal sum of the lesser of (a) One Million and 00/100 Dollars ($1,000,000.00), or (b) the aggregate unpaid principal amount
of all loans made by the Holder in its sole discretion to the Company pursuant to the Line of Credit Agreement and this Note, on July
10, 2024 (the “Maturity Date”), together with all interest accrued thereon in accordance with the terms of this Note.
Section
1.02 Interest. Interest shall be payable on the unpaid principal amount of this Note at a rate equal to eight percent (8%) per annum
(the “Interest Rate”), commencing to accrue on the date hereof and payable on the Maturity Date or earlier prepayment
date as provided for herein. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of
days elapsed. In addition, the Company shall pay interest on any amount of principal not paid when due from the date on which payment
was due to the date of payment, on demand, at a rate equal to five percent (5%) per annum above the Interest Rate (the “Default
Interest Rate”).
Section
1.03 Payments. All payments made hereunder shall be credited, regardless of their designation by the Company, first to
outstanding late charges, then to accrued and unpaid interest, and the remainder, if any, to principal. In no event shall the amount
of interest payable under this Note exceed the maximum rate permitted by law and, notwithstanding any other provision of this Note, any
interest payment that would, for any reason, be deemed unlawful shall be applied to the payment of principal. If any payment of principal
or interest becomes due on a day other than a Business Day, such payment shall be made not later than the next succeeding Business Day,
and such extension shall be included in computing interest in connection with such payment. All payments by the Company hereunder shall
be made in lawful money of the United States of America, in immediately available funds. For purposes of this Note, the term “Business
Day” means a day (other than a Saturday or Sunday) on which commercial banks are permitted or required to be open for the conduct
of commercial banking business in New York, New York.
Section
1.04 Prepayment. At its option, the Company may prepay the principal amount of this Note, in whole or in part, at any time without
penalty or premium provided that on the date of prepayment the Company also pays all interest then accrued and unpaid on the principal
amount of this Note.
Section
1.05 Requests for Loans. The Company may request that the Holder extend a loan under this Note by giving three (3) days’ advance
written notice to the Holder of such request specifying the amount and timing of the requested borrowing. Each notice of borrowing hereunder
shall be delivered by email or facsimile transmission as provided in the Notices section of this Note and shall be irrevocable and binding
on the Company.
Section
1.06 Use of Grid. The Holder is hereby authorized by the Company to enter and record on the Schedule attached hereto any loans made
to the Company and the date of each loan made under this Note and each payment of principal thereon without any further authorization
on the part of the Company or any endorser or guarantor of this Note. The entry of a loan advance or principal payment on said Schedule
shall be prima facie and presumptive evidence of the amount and date thereof. The Holder shall be entitled (but not required) to deliver
a copy of the Schedule to Company after making any entry thereon and Company hereby waives any defect in or objection to any Schedule
a copy of which has been delivered to it by Holder unless written notice of such defect or objection is given to Holder within fifteen
(15) Business Days after such copy of the Schedule is delivered to Company. Notwithstanding the foregoing, Holder’s failure to
make an entry in the Schedule or to deliver a copy of the Schedule to Company shall not limit or otherwise affect the obligations of
Company or any endorser or guarantor of this Note.
Section
1.07 No Obligation to Extend Loans. Notwithstanding any term in this Note to the contrary, the Holder shall have no obligation to
extend loans to the Company under this Note and the enumeration in this Note of specific obligations of the Company to the Holder and/or
conditions to the availability of funds under this Note shall not be construed to qualify, define, or otherwise limit the Holder’s
right, power, or ability, at any time, under applicable law, to decline to extend loans to the Company under this Note. The Company agrees
that its breach of or default under any of such obligations or conditions is not the only basis upon which the Holder may decline to
extend loans under this Note and that the Holder may decline to extend loans for any reason or no reason in its sole and absolute discretion.
Section
1.08 Conversion. On the Maturity Date, the Holder may, in its sole discretion, determine to convert (each, a “Conversion”)
all or part of the outstanding principal amount of this Note, together with accrued and unpaid interest due thereon, into shares of common
stock (“Common Stock”) of the Company, par value $0.001 per share (the “Conversion Shares”) at
a conversion price of $0.10 per share (the “Conversion Price”). The Company shall not issue any fraction of a Conversion
Share upon any such conversion. If the issuance would result in the issuance of a fraction of a Conversion Share, the Company shall round
such fraction of a Conversion Share up to the nearest whole Conversion Share. The number of Conversion Shares issuable upon a Conversion
shall be determined by the quotient obtained by dividing (i) the outstanding principal amount of this Note being converted plus accrued
but unpaid interest thereon on the conversion date for the Conversion by (ii) the Conversion Price. The calculation by the Company of
the number of Conversion Shares to be received by the Holder upon conversion hereof, shall be conclusive absent manifest error. To convert
any portion of the unpaid principal of this Note into Conversion Shares on any date (an “Conversion Date”), the Holder
shall (i) transmit by facsimile (or otherwise deliver), for receipt on or prior to 12:00 noon., New York time, on such date, a copy of
an executed notice of conversion in the form attached hereto as Exhibit A (the “ Conversion Notice”) to the
Company and (ii) return this Note to the Company via a nationally recognized overnight delivery service (or provide an indemnification
undertaking with respect to this Note in the case of its loss, theft or destruction). On or before the fifth trading day for the Company’s
Common Stock following the date of receipt of an Conversion Notice, the Company shall cause the Company’s transfer agent to issue
and deliver to the Holder at the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder,
for the number of Conversion Shares to which the Holder shall be entitled. If the outstanding principal amount of this Note is greater
than the principal portion being converted, then the Company shall as soon as practicable after receipt of this Note, at its own expense,
issue and deliver to the Holder a new Note representing the outstanding principal amount not converted. Such new Note (i) shall be of
like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the principal amount remaining outstanding,
(iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the date of this Note, and (iv) shall
have the same rights and conditions as this Note.
Section
1.09 Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time,
place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.
Section
1.10 Reliance on Note Register. Prior to due presentment to the Company for permitted transfer or conversion of this Note, the Company
and any agent of the Company may treat the name in which this Note is duly registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
Section
1.11 Paying Agent and Registrar. Initially, the Company will act as paying agent and registrar. The Company may change any paying
agent, registrar, or Company-registrar by giving the Holder not less than five (5) business days’ written notice of its election
to do so, specifying the name, address, telephone number and facsimile number of the paying agent or registrar. The Company may act in
any such capacity.
Section
1.12 Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set
forth in the Line of Credit Agreement and may be transferred or exchanged only in compliance with the Line of Credit Agreement and applicable
federal and state securities laws and regulations.
Section
1.13 Security; Other Rights. The obligations of the Company to the Holder under this Note are unsecured. However, in addition to
the rights and remedies given to it by this Note and the Line of Credit Agreement, the Holder shall have all those rights and remedies
allowed by applicable law.
Section
1.14 Reservation of Common Stock. The Company shall reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of conversion of this Note, that number of shares of Common Stock equal to the number of Conversion Shares
into which the Note is convertible based upon the Conversion Price.
Article
II.
Section
2.01 Events of Default. Each of the following events shall constitute a default under this Note (each an “Event of Default”):
| |
(a)
|
failure
by the Company to pay any principal amount or interest due hereunder within ten (10) business days of the date such payment is due; |
| |
|
|
| |
(b)
|
the
Company or any subsidiary of the Company shall: (i) make a general assignment for the benefit of its creditors; (ii) apply for or
consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or
any of its assets and properties; (iii) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code;
(iv) file with or otherwise submit to any governmental authority any petition, answer or other document seeking: (A) reorganization,
(B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization,
insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (v) file or otherwise submit any answer or other
document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against
it in any proceeding under any such applicable law, or (vi) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction; |
| |
|
|
| |
(c)
|
any
case, proceeding or other action shall be commenced against the Company or any subsidiary of the Company for the purpose of effecting,
or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything
specified in Section 2.01(b) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall
be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or
a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for
any period of sixty (60) days; |
| |
|
|
| |
(d)
|
any
material breach by the Company of any of its representations or warranties contained in this Note or the Line of Credit Agreement,
which is not cured after twenty (20) Business Days’ written notice from Holder; or |
| |
|
|
| |
(e)
|
any
default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms
or provisions to be performed by the Company under this Note which is not cured within ten (10) business days after receipt of written
notice thereof. |
Section
2.02 If any Event of Default specified in Section 2.01(b) or Section 2.01(c) occurs, then the full principal amount of this Note,
together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable
without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together
with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately
due and payable in cash. All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be
surrendered to or as directed by the Company.
Article
III.
Section
3.01 Covenants. So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all
other expenses or amounts payable under this Note have been paid in full, unless the Holder shall otherwise consent in writing (such
consent not to be unreasonably withheld), the Company shall:
| |
(a) |
Notice
of Default. Promptly advise the Holder in writing of the occurrence of any Event of Default of which the Company is aware. |
| |
|
|
| |
(b)
|
Entry
into Certain Transactions. Not, directly or in directly, (i) liquidate, dissolve or wind up the Company; or (ii) amend, alter
or repeal any provision of the Company’s Articles of Incorporation or Bylaws. |
Article
IV.
Section
4.01 Representations of the Company. The Company hereby represents and warrants to the Holder that:
| |
(a) |
The
Company has the requisite corporate power and authority to enter into and perform its obligations under this Note, (ii) the execution
and delivery of this Note by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized
by the Company’s Board of Directors, and no further consent or authorization is required by the Company, its Board of Directors
or its stockholders, (iii) this Note has been duly executed and delivered by the Company, (iv) this Note constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may
be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. |
| |
|
|
| |
(b) |
The
execution, delivery and performance of this Note by the Company, and the consummation by the Company of the transactions contemplated
hereby, will not (i) result in a violation of the Articles of Incorporation or Bylaws (or equivalent constitutive document) of the
Company or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the
Company or by which any property or asset of the Company is bound or affected, except for those which could not reasonably be expected
to have a material adverse effect on the assets, business, condition (financial or otherwise), or results of operations of the Company. |
| |
|
|
| |
(c)
|
There
is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending against or affecting the Company or any subsidiary, wherein an unfavorable decision, ruling or finding
would materially adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations
under, this Note. |
Article
V.
5.01 Registration Rights. Neither the Note, nor the Conversion Shares that may be acquired upon conversion of the Note, have been registered
under the Securities Act, or any state securities laws, and the Company has no obligation to register the Note and Conversion Shares.
Article
VI.
Section
6.01 Conversion Price Adjustments.
(a)
General. The conversion price and the number of Conversion Shares issuable upon the conversion of this Note shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section 6.01.
(i)
Subdivision or Combination of Stock. In case the Company shall at any time subdivide (whether by way of stock dividend, stock
split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the conversion price in effect immediately
prior to such subdivision shall be proportionately reduced and the number of Conversion Shares shall be proportionately increased, and
conversely, in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse
stock split or otherwise) into a smaller number of shares, the conversion price in effect immediately prior to such combination shall
be proportionately increased and the number of Conversion Shares shall be proportionately decreased. The conversion price and the number
of Conversion Shares issuable upon conversion, as so adjusted, shall be readjusted in the same manner upon the happening of any successive
event or events described in this Section 6.01(a)(i).
(ii) Dividends in Stock, Property, Reclassification. If at any time, or from time to time, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the conversion of this Note) shall have received or become entitled to receive, without payment therefor:
(A)
any shares of stock or other securities that are at any time directly or indirectly convertible into or exchangeable for Common Stock,
or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution,
or
(B)
additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares
or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall
be covered by the terms of Section 6.01(a)(i) above),
then
and in each such case, the conversion price and the number of Conversion Shares to be issued upon conversion of this Note shall be adjusted
proportionately, and the Holder hereof shall, upon the conversion of this Note, be entitled to receive, in addition to the number of
Conversion Shares receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities
and property (including cash in the cases referred to above) that such Holder would hold on the date of such exercise had such Holder
been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive
such shares or all other additional stock and other securities and property. The conversion price and the Conversion Shares, as so adjusted,
shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 6.01(a)(ii).
(iii)
Reorganization, Reclassification, Consolidation, Merger or Sale. If any recapitalization, reclassification or reorganization of
the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially
all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock,
securities or other assets or property (an “Organic Change”), then lawful and adequate provisions shall be made by
the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the Conversion Shares of the
Company immediately theretofore purchasable and receivable upon the conversion of this Note) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock
equal to the number of shares of such stock immediately theretofore purchasable by reason of the Conversion Shares and receivable assuming
the full conversion of this Note. In the event of any Organic Change, appropriate provision shall be made by the Company with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustments of the conversion price and of the number of Conversion Shares purchasable and receivable upon the exercise of this Note)
shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.
To the extent necessary to effect the foregoing provisions, the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume by written instrument reasonably satisfactory in form
and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing
on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase. In any event, the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver
to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the
extent such assumption occurs by operation of law.
Article
VII.
Section
7.01 Notice. Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other
parties, in writing, of a change of address:
| |
If
to the Company: |
Purebase
Corporation |
| |
|
8625
State Hwy, 124 |
| |
|
Ione,
CA 95640 |
| |
|
Attention:
A. Scott Dockter, CEO |
| |
|
Telephone:
(888) 791-9474 |
| |
|
Email:
sdockter@purebase.com |
| |
|
|
| |
With
a copy to: |
The
Crone Law Group, P.C. |
| |
|
500
Fifth Avenue, Suite 938 |
| |
|
New
York, New York 10110 |
| |
|
Attn:
Eric Mendelson, Esq. |
| |
|
Telephone:
(917) 398-5082 |
| |
|
Email:
emendelson@cronelawgroup.com |
| |
|
|
| |
If
to the Holder: |
U.S.
Mine Corp. |
| |
|
8625
State Hwy, 124 |
| |
|
Ione,
CA 95640 |
| |
|
Attention:
John Bremer, CEO |
| |
|
Telephone:
(209) 790-4535 |
| |
|
Email:
john.bremer@usminecorp.com |
Section
7.02 Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Note
shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in Sacramento County, California
(the “California Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the California
Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such California Courts are
improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding 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 Note 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 manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions
contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or proceeding.
Section
7.03 Severability. The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other
provisions of this Note, which shall remain in full force and effect.
Section
7.04 Entire Agreement and Amendments. This Note together with the Line of Credit Agreement represents the entire agreement between
the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set
forth herein. This Note may be amended only by an instrument in writing executed by the Company and the Holder.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.
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PUREBASE
CORPORATION |
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By: |
/s/
A. Scott Dockter |
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Name:
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A.
Scott Dockter |
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Title:
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Chief
Executive Officer |
SCHEDULE
TO NOTE
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Purebase Corporation |
Date
of Note: July __,2023 |
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Making Notation |
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EXHIBIT
A
NOTICE
OF CONVERSION
(To
be executed by the Holder in order to convert the Note)
The
undersigned hereby irrevocably elects to convert the unpaid principal amount and accrued interest amount indicated below of the 8% Unsecured
Convertible Grid Promissory Note due June __, 2024 (the “Note”) into Conversion Shares of Purebase Corporation, according
to the conditions stated therein, as of the Conversion Date written below.
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Date: |
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Conversion Price (per Conversion Shares): |
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amount of Note to be converted: |
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amount of Note unconverted: |
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amount to be converted |
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of Conversion Shares to be issued: |
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the Conversion Shares in the following name and to the following address: |
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to the following account of the Holder: |
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Exhibit 10.1
LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT
(the “Agreement”) is made and entered into as of July 10, 2023 (“Effective Date”), by and between
PUREBASE CORPORATION, a Nevada corporation (“Borrower”), and U.S. MINE CORP., a Nevada corporation (“Lender”),
and an affiliate of the Borrower.
RECITALS:
A. Borrower has requested Lender
to provide the Loan to Borrower, subject to the compliance by Borrower with all the terms and conditions hereof; and
B. Lender agrees to provide such
Loan on the terms and conditions forth herein.
NOW, THEREFORE, in consideration
of the mutual promises, conditions, representations, and warranties hereinafter set forth, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties hereto have mutually agreed as follows:
1. Defined Terms. As
used in this Agreement, the following terms shall have the following meanings:
“Agreement”
shall mean this Line of Credit Agreement.
“Borrower”
shall have the meaning set forth above.
“Business
Day” shall mean any day except a Saturday, a Sunday, or any other day on which commercial banks are required or authorized
to close in New York, New York.
“Contractual
Obligation” shall mean any provision of any agreement, instrument, or undertaking to which such Person is a party or by
which it or any of its property is bound.
“Conversion
Price” shall have the meaning set forth in Section 2.5 hereof.
“Default
Interest Rate” shall have the meaning set forth in Section 2.7(b) hereof.
“Event of
Default” shall have the meaning set forth in Article 8 hereof.
“Governmental
Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions pertaining to government.
“Interest
Rate” shall have the meaning set forth in Section 2.2 hereof.
“Lender”
shall have the meaning set forth above.
“Lien”
shall mean any interest in property (real, personal, or mixed, and tangible or intangible) securing an obligation owed to, or a claim
by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including
a security interest, security title or Lien arising from a security agreement, mortgage, deed of trust, deed to secure debt, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall
include covenants, conditions, restrictions, leases, and other encumbrances affecting any property. For the purpose of this Agreement,
Borrower shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.
“Loan”
shall mean that unsecured line of credit in the maximum principal amount of One Million and 00/100 Dollars ($1,000,000.00) advanced by
Lender to Borrower from time-to-time evidenced by the Note, as further described in Article 2 hereof.
“Loan Advance”
shall have the meaning set forth in Section 2.1 hereof.
“Loan Documents”
refers to this Agreement, the Note, and any other instrument executed and delivered to evidence the Loan, and any and all other agreements,
instruments, and documents heretofore, now or hereafter, executed by Borrower and delivered to Lender in respect to the transactions contemplated
by the Agreement.
“Maturity
Date” shall have the meaning set forth in Section 2.1 hereof.
“Note”
shall have the meaning set forth in Section 2.1 hereof.
“Person”
shall mean an individual, partnership, corporation, joint stock company, firm, land trust, business trust, unincorporated organization,
limited liability company, or other business entity, or a government or agency or political subdivision thereof.
“Requirement
of Law” shall mean as to any Person, the articles of incorporation and bylaws or other organizational or governing documents
of the Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding on the Person or any of its property or to which the Person or any of its property is subject.
2. The Loan.
2.1 Loan Terms. Subject
to the terms and conditions hereof, Lender agrees to make the Loan available to Borrower. The Loan shall be repaid or converted as set
forth below on or before the date that is one year from the Effective Date (the “Maturity Date”). From time-to-time
until the Maturity Date, Lender shall provide Borrower advances of funds in accordance with the terms and conditions hereof (each, a “Loan
Advance” and collectively, the “Loan Advances”). Until the Maturity Date, Borrower may borrow under this
Section 2.1; provided, that the amount of any Loan Advance to be made at any time shall not exceed the availability under the Loan at
such time and no Event of Default has occurred or is continuing at such time. Each Loan Advance shall be made on written notice by Borrower
to Lender by email or facsimile transmission. Any such notice must be given not less than three (3) Business Days prior to the proposed
Loan Advance. Each such notice must be given in writing by Borrower. The date of disbursement of each Loan Advance shall be referred to
herein as an “Advance Date.” On the Effective Date, Borrower shall execute and deliver to Lender an unsecured convertible
grid promissory note to evidence the Loan, substantially in the form attached hereto as Exhibit A (the “Note”).
2.2 Interest. Interest
on the Loan shall accrue on the Loan Advances outstanding from time to time at the rate of eight percent (8%) per annum (the “Interest
Rate”) and is payable on the Maturity Date. Interest will be calculated on the Loan Advances on the basis of a 360-day year
consisting of twelve 30-day months. On the Maturity Date, all accrued but unpaid interest and outstanding principal may be converted by
Lender in accordance with Section 2.5 below. The Borrower shall pay interest on any amount of principal not paid when due from the date
on which payment was due to the date of payment at a rate equal to five percent (5%) per annum above the Interest Rate (the “Default
Interest Rate”).
2.3 Prepayment. At
Borrower’s option, prepayments of outstanding principal may be made without penalty at any time prior to the Maturity Date; provided,
that any prepayment shall be accompanied by accrued but unpaid interest on the amount of such principal prepayment.
2.4 Term of Agreement.
This Agreement shall remain in force and effect until the Maturity Date, or any extension thereof.
2.5 Conversion of the Loan.
Subject to Section 1.08 of the Note, on the Maturity Date, the then outstanding principal balance and accrued but unpaid interest under
the Note may be converted, at the option of Lender, into shares of Borrower’s common stock (“Conversion Shares”)
at the conversion rate of $0.10 per share, as may be adjusted for any share splits, share dividends, reclassifications and other similar
events which have occurred before such conversion (the “Conversion Price”). Any remaining amount of the outstanding
principal balance and accrued but unpaid interest under the Note not so converted, if any, shall be settled in cash pursuant to Section
1.03 of the Note.
2.6 Use of Proceeds. Borrower
shall use the proceeds of the Loan for working capital and other general corporate purposes.
2.7 Payments.
(a) All payments made under the
Note shall be without setoff or counterclaim, and in currency of the United States of America that at the time of payment is legal tender
for the payment of public and private debt.
(b) Any payments not made as and
when due with respect to the Loan (whether at stated maturity, by acceleration, or otherwise) shall bear interest at the interest at a
rate equal to five percent (5%) per annum above the Interest Rate (the “Default Interest Rate”) from the date due until
paid, payable on demand.
(c) All sums paid to Lender by
Borrower hereunder shall be paid directly to Lender in immediately available funds.
2.9 Limitation on Interest
Charges. Lender and Borrower intend to comply strictly with applicable law regulating the maximum allowable rate or amount of
interest that Lender may charge and collect on the Loans to Borrower pursuant to this Agreement. Accordingly, and notwithstanding anything
in any Note or in this Agreement to the contrary, the maximum, aggregate amount of interest and other charges constituting interest under
applicable law that are payable, chargeable, or receivable under any Note and this Agreement shall not exceed the maximum amount of interest
now allowed by applicable law or any greater amount of interest allowed because of a future amendment to existing law. Borrower is not
liable for any interest in excess of the maximum lawful amount, and any excess interest charged or collected by Lender will constitute
an inadvertent mistake and, if charged but not paid, will be cancelled automatically, or, if paid, will be either refunded to Borrower
or credited against the outstanding principal balance of the applicable Note, at the election of Lender.
2.10 Registration Rights.
Lender understands that neither the Note, nor the Conversion Shares that may be acquired upon conversion of the Note (the Conversion Shares
together with the Note, the “Securities”), have been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or any state securities laws, and Borrower has no obligation to register the Securities.
2.11 Security. The
obligations of the Borrower to the Lender under this Agreement and the Note are unsecured.
3. Conditions of Lending.
In addition to any other requirements set forth in this Agreement, Lender shall not be obligated to make any Loan Advance unless, at the
time thereof, the following conditions shall have been met:
3.1 Company Proceedings.
All proper company proceedings shall have been taken by Borrower to authorize this Agreement and the transactions contemplated hereby.
3.2 Loan Documents.
Lender shall have received executed copies of this Agreement and the Note.
3.3 Default.
No event shall have occurred or be continuing which constitutes an Event of Default.
3.4 Availability
Under Loan. With respect to a Loan Advance, there must be sufficient availability of credit under the Loan for such Loan Advance
to be made.
3.5 Additional Documents.
Lender shall have received such additional legal certificates, proceedings, instruments, and other documents as Lender, or its counsel,
may reasonably request.
4. Representations and Warranties
of Borrower. Borrower hereby represents, warrants, and covenants to Lender that:
4.1 Organization and Qualification
of Borrower. Borrower is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation
or formation; has the power to own its properties and to carry on its business as now being conducted; and is duly qualified to do business
and is in good standing in every jurisdiction in which the character of the properties owned by it or in which the transaction of its
business makes its qualification necessary.
4.2 Corporate Power and Authorization;
Compliance with Law. Borrower has full power and authority to enter into this Agreement, to borrow hereunder, to execute and deliver
the Note and any other Loan Documents, and to incur the obligations provided for herein, all of which have been authorized by all proper
and necessary corporate action. Borrower is in material compliance with all Requirements of Law applicable to it and possesses all governmental
franchises, licenses, and permits that are necessary to own or lease its assets and to carry on its business as now conducted.
4.3 Enforceability; No Legal
Bar. This Agreement has been, and each other Loan Document to which it is a party will be, duly executed and delivered to Lender
on behalf of Borrower. This Agreement and each of the other Loan Documents constitute, and the Note when executed and delivered for value
received will constitute, a valid and legally binding obligation of Borrower enforceable in accordance with their respective terms. The
execution, delivery, and performance by Borrower of this Agreement and the other Loan Documents to which it is a party, Borrower’s
borrowings pursuant to this Agreement, and use of the loan proceeds, will not violate any Requirement of Law applicable to Borrower or
constitute a breach or violation of, a default under, or require any consent under, any of its Contractual Obligations, and will not result
in a breach or violation of, or require the creation or imposition of any Lien on any of its properties or revenues pursuant to any Requirement
of Law or Contractual Obligation.
4.4 Taxes. Borrower
has filed all federal, state, and local tax returns which are required to be filed and has paid, or made adequate provision for the payment
of, all taxes which have or may become due pursuant to said returns. Borrower has paid all withholding, FICA and other payments required
by federal, state or local governments with respect to any wages paid to employees.
4.5 Full Disclosure.
All information furnished by Borrower to Lender concerning Borrower, its financial condition, or otherwise for the purpose of obtaining
credit or an extension of credit, including information in filings the Borrower makes with the Securities and Exchange Commission (“SEC”),
is, or will be at the time the same is furnished, accurate and correct in all material respects and complete insofar as completeness may
be necessary to give Lender a true and accurate knowledge of the subject matter. The books of account, minute books, and stock record
books of Borrower are complete and correct and have been maintained in accordance with good business practices, and there have been no
transactions adversely affecting the business of Borrower that should have been set forth therein and have not been so set forth.
4.6 Compliance with Loan Documents.
Borrower acknowledges and agrees that its timely and complete compliance with all of the terms and conditions contained in the documents
evidencing and securing the loan obligation is material consideration for the Loan.
5. Representations of the
Lender. The Lender hereby represents and warrants to Borrower that:
5.1 Investment Purpose.
Lender is acquiring the Securities for its own account for investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, that by making
the representations herein, Lender reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective
registration statement covering such Securities, or an available exemption under the Securities Act. Lender agrees not to sell, hypothecate
or otherwise transfer the Securities unless such Securities are registered under the federal and applicable state securities laws or unless,
in the opinion of counsel satisfactory to Borrower, an exemption from such law is available.
5.2 Accredited Investor Status.
Lender meets the requirements of at least one of the suitability standards for an “Accredited Investor” as that term is defined
in Rule 501(a)(3) of Regulation D under the Securities Act.
5.3 Investor Qualifications.
Lender was not formed for the specific purpose of acquiring the Securities, is duly organized, validly existing and in good standing under
the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result
in a violation of state law or its charter or other organizational documents, has full power and authority carry out the provisions hereof
and thereof and to purchase and hold this Note.
5.4 Solicitation.
Lender is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any
form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale
of the Securities and is not acquiring the Securities, and did not become aware of the offering of the Securities, through or as a result
of any seminar or meeting to which Lender was invited by, or any solicitation of a subscription by, a person not previously known to Lender
in connection with investments in securities generally.
5.5 Brokerage Fees.
Lender has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like
relating to the Securities or the transaction contemplated hereby.
5.6 Knowledge and Experience.
Lender has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as
to enable it to utilize the information made available to it in connection with the Securities to evaluate the merits and risks of an
investment in the Securities and the Borrower and to make an informed investment decision with respect thereto.
5.7 Liquidity. Lender
has adequate means of providing for Lender’s current financial needs and foreseeable contingencies and has no need for liquidity
of its investment in the Securities for an indefinite period of time, and after acquiring the Securities, Lender will be able to provide
for any foreseeable current needs and possible personal contingencies. Lender must bear, and acknowledges the substantial economic risks
of, the investment in the Securities including the risk of illiquidity and the risk of a complete loss of this investment.
5.8 High Risk Investment.
Lender is aware that an investment in the Securities involves a number of very significant risks and has carefully researched and reviewed
and understands the risks of, and other considerations relating to, acquiring the Securities.
5.9 Reliance on Exemptions.
Lender understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that Borrower is relying in part upon the truth and accuracy of, and such Lender’s
compliance with, the representations, warranties, agreements, acknowledgments and understandings of Lender set forth herein in order to
determine the availability of such exemptions and the eligibility of Lender to acquire the Securities.
5.10 Information.
Lender has been furnished with all documents and materials relating to the business, finances and operations of Borrower and information
that Lender requested and deemed material to making an informed investment decision regarding its acquisition of the Securities. Lender
has been afforded the opportunity to review such documents and materials and the information contained therein. Lender has been afforded
the opportunity to ask questions of Borrower and its management. Lender understands that such discussions, as well as any written information
provided by Borrower, were intended to describe the aspects of Borrower’s business and prospects which Borrower believes to be material,
but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Agreement and the Note, Borrower
makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any
kind with respect to any information provided by any entity other than Borrower. Some of such information may include projections as to
the future performance of Borrower, which projections may not be realized, may be based on assumptions which may not be correct and may
be subject to numerous factors beyond the Borrower’s control. Additionally, Lender understands and represents that it is acquiring
the Securities notwithstanding the fact that Borrower may disclose in the future certain material information Lender has not received,
including the financial results of Borrower for the current fiscal quarter. Neither such inquiries nor any other due diligence investigations
conducted by Lender shall modify, amend or affect Lender’s right to rely on Borrower’s representations and warranties contained
herein. Lender has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision
with respect to its investment in the Securities.
5.11 No Other Representations
or Information. In evaluating the suitability of an investment in the Securities, Lender has not relied upon any representation
or information (oral or written) with respect to Borrower, or otherwise, other than as stated in this Agreement or the Note.
5.12 No Governmental Review.
Lender understands that no United States federal or state agency or any other government or governmental agency has passed on or will
pass on, or has made or will make, any recommendation or endorsement of the Securities, or the fairness or suitability of the investment
in the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
5.13 Transfer or Resale.
Lender understands that: (i) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) Lender shall
have delivered to Borrower an opinion of counsel, in a generally acceptable form, to the effect that such securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such
securities made in reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and
(iii) except as otherwise provided in this Agreement or the Note, neither Borrower nor any other person is under any obligation to register
such securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.
There can be no assurance that there will be any market for the Securities, nor can there be any assurance that the Securities will be
freely transferable at any time in the foreseeable future.
5.14 Legends. Lender
understands that the certificates representing the Securities shall bear a restrictive legend in substantially the following form (and
a stop transfer order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES
ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR
OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
5.15 Confidentiality.
Lender acknowledges and agrees that certain of the information received by it in connection with the transactions contemplated by this
Agreement is of a confidential nature and may be regarded as material non-public information under Regulation FD promulgated by the SEC
and that such information has been furnished to Lender for the sole purpose of enabling Lender to consider and evaluate an investment
in the Securities. Lender agrees that it will treat such information in a confidential manner, will not use such information for any purpose
other than evaluating an investment in the Securities, will not, directly or indirectly, trade or permit Lender’s agents, representatives
or affiliates to trade in any securities of Borrower while in possession of such information and will not, directly or indirectly, disclose
or permit Lender’s agents, representatives or affiliates to disclose any of such information without Borrower’s prior written
consent. Lender shall make its agents, affiliates and representatives aware of the confidential nature of the information contained herein
and the terms of this section including Lender’s agreement to not disclose such information, to not trade in Borrower’s securities
while in the possession of such information and to be responsible for any disclosure or other improper use of such information by such
agents, affiliates or representatives. Likewise, without Borrower’s prior written consent, Lender will not, directly or indirectly,
make any statements, public announcements or other release or provision of information in any form to any trade publication, to the press
or to any other person or entity whose primary business is or includes the publication or dissemination of information related to the
transactions contemplated by this Agreement.
5.16 No Legal Advice from
Borrower. Lender acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated hereby
with its own legal counsel and investment and tax advisors. Lender is relying solely on such advisors and not on any statements or representations
of Borrower or any of its employees, representatives or agents for legal, tax, economic and related considerations or investment advice
with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
5.17 No Group Participation.
Lender is not a member of any group, nor is Lender acting in concert with any other person with respect to its acquisition of the Securities.
6. Affirmative Covenants.
Borrower agrees and covenants that until the Maturity Date, Borrower shall:
6.1 Insurance. Maintain
insurance, including but not limited to casualty and business interruption in such amounts and against such risks as is customarily maintained
in similar businesses operating in the same vicinity.
6.2 Company Existence;
Qualification. Maintain its company existence and, in each jurisdiction in which the character of the property owned by it
or in which the transaction of its business makes its qualification necessary, maintain good standing.
6.3 Taxes. During
its fiscal year, accrue all current tax liabilities of all kinds, all required withholding of income taxes of employees and all required
payments to employee benefit plans, and pay the same when they become due.
6.4 Compliance with Laws.
Comply in all material respects with all Requirements of Law, and pay all taxes, assessments, charges, claims for labor, supplies, rent,
and other obligations which, if unpaid, might give rise to a Lien against property of Borrower, except claims being contested in good
faith by appropriate proceedings. Specifically, Borrower shall pay when due all taxes and assessments upon this Agreement, the Note, or
any Loan Document, including, without limitation, any stamp taxes or intangibles taxes imposed by virtue of the transactions outlined
herein.
6.5 Conduct of Business.
Conduct its business as now conducted and do all things necessary to preserve, renew, and keep in full force and effect its rights, patents,
permits, licenses, franchises, and trade names necessary to continue its business.
6.6 Maintenance of Properties.
Keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needed
and proper repairs, renewals, replacements, additions, and improvements thereto and comply with the provisions of all leases to which
it is a party or under which it occupies property so as to prevent any loss or forfeiture thereof or thereunder.
7. Negative Covenants.
Until the Maturity Date, without the prior written consent of Lender, Borrower shall not:
7.1 Liquidation, Merger or
Consolidation. Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), or enter into any merger or
consolidation, or acquire all or substantially all of the assets of any Person without the prior written consent of Lender; or sell, lease,
transfer or otherwise dispose of any of its assets, except sales in the ordinary course of its business.
7.2 Change in Business, Management
or Ownership. Enter into any business which is substantially different from the business or businesses in which it is presently
engaged or substantially change its executive management or majority ownership without the prior written consent of the Lender.
8. Events of Default.
The occurrence of any one or more of the following events shall constitute an Event of Default (unless and except to the extent that the
same is cured within the applicable cure period, if any, or, at the sole discretion of Lender, at any time thereafter):
8.1 Payment Default.
If Borrower shall fail to pay any principal amount or interest due hereunder within ten (10) business days of the date such payment is
due.
8.2 Bankruptcy.
(a) Borrower shall: (i) make a
general assignment for the benefit of its creditors; (ii) apply for or consent to the appointment of a receiver, trustee, assignee, custodian,
sequestrator, liquidator or similar official for itself or any of its assets and properties; (iii) commence a voluntary case for relief
as a debtor under the United States Bankruptcy Code; (iv) file with or otherwise submit to any governmental authority any petition, answer
or other document seeking: (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future
applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation;
(v) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other
document filed or otherwise submitted against it in any proceeding under any such applicable law, or (vi) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction; or
(b) Any case, proceeding or other
action shall be commenced against Borrower for the purpose of effecting, or an order, judgment or decree shall be entered by any court
of competent jurisdiction approving (in whole or in part) anything specified in Section 8.2(a) hereof, or any receiver, trustee, assignee,
custodian, sequestrator, liquidator or other official shall be appointed with respect to Borrower, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the assets and properties of Borrower, and any of the foregoing
shall continue unstayed and in effect for any period of sixty (60) days.
8.3 Breach of Representations
or Warranties. Any material breach by Borrower of any of its representations or warranties contained in this Agreement or the
Note, which is not cured after twenty (20) Business Days’ written notice from Lender.
8.4 Breach of Covenants.
Any default, whether in whole or in part, in any material respect, shall occur in the due observance or performance of any obligations
or other covenants, terms or provisions to be performed by Borrower under this Agreement or the Note which is not cured within ten (10)
business days after receipt of written notice thereof.
If any Event of Default specified
in Section 8.2 occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date
of the Event of Default, shall become immediately due and payable without any action on the part of Borrower, and if any other Event of
Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration
shall become, at Borrower’s election, immediately due and payable in cash.
9. Miscellaneous.
9.1 Actions Not Constituting
a Waiver. Neither (i) the failure at any time or times hereafter to require strict performance by Borrower of any of its provisions,
warranties, terms and conditions contained in this Agreement or any other agreement, document or instrument now or hereafter executed
by Borrower, and delivered to Lender, nor (ii) the failure of Lender to take action or to exercise its remedies with respect to any default
or Event of Default hereunder, nor (iii) any delay or omission of Lender to exercise any right, remedy, power, or privilege hereunder
after the occurrence of a default or Event of Default, shall act to waive, affect, or diminish any right of Lender to demand strict compliance
with the terms of this Agreement or to exercise remedies with respect to any default or Event of Default.
9.2 Headings; Exhibits.
Except for the definitions set forth in this Agreement, the headings of the articles, sections, paragraphs and subdivisions of this
Agreement are for convenience of reference only, are not to be considered a pan hereof, and shall not limit or otherwise affect any of
the terms hereof. Unless otherwise expressly indicated, all references in this Agreement to a section or an exhibit are to a section or
an exhibit of this Agreement. All exhibits referred to in this Agreement are an integral part of it and are incorporated by reference
in it.
9.3 Notices. Any notice
or demand which by any provision of this Agreement is required or provided to be given shall be deemed to have been sufficiently given
or served for all purposes by being delivered in person or by electronic transmission to the party to whom the notice or demand is directed
or by being sent by overnight courier or first class mail, postage prepaid, to the following address:
If to the Borrower:
Purebase Corporation
8625 State Hwy, 124
Ione, CA 95640
Attention: A. Scott Dockter, CEO
Telephone: (888) 791-9474
Email: sdockter@purebase.com
With a copy to:
The Crone Law Group,
P.C.
500 Fifth Avenue, Suite 938
New York, New York 10110
Attn: Eric Mendelson, Esq.
Telephone: (917) 398-5082
Email: emendelson@cronelawgroup.com
If to the Lender:
U.S. Mine Corp.
8625 State Hwy, 124
Ione, CA 95640
Attention: John Bremer, CEO
Telephone: (209) 790-4535
Email: john.bremer@usminecorp.com
9.4 Benefits. All
of the terms and provisions of this Agreement shall bind and inure to the benefit of the parties hereto and their respective successors
and assigns. No right or obligation hereunder shall be assigned by any party without the express prior written consent of the other party,
which consent will not be unreasonably withheld. Neither this Agreement nor any term hereof shall be amended, modified, waived or varied
except by an instrument in writing signed by the Lender and Borrower.
9.5 Governing Law and Venue.
This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without regard to the principles
of conflict of laws. The parties further agree that any action between them shall be heard exclusively in federal or state court sitting
in Sacramento County, California, and expressly consent to the jurisdiction and venue of the Superior Court of California, sitting in
Sacramento County and the United States District Court for the Eastern District of California for the adjudication of any civil action
asserted pursuant to this paragraph.
9.6 Counterparts; Severability.
This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, but such
counterparts shall together constitute one and the same instrument. Any provision in this Agreement which may be unenforceable or invalid
under any law shall be ineffective to the extent of such unenforceability or invalidity without affecting the enforceability or validity
of any other provisions hereof.
9.7 Limitation of Grant.
Nothing in this Agreement, whether express or implied, is intended or should be construed to confer upon, or to grant to, any Person,
except Lender and Borrower, any right, remedy, or claim under or because of either this Agreement or any provision of it.
9.8 Confidentiality. Lender
shall maintain the confidentiality of trade secret information furnished to Lender regarding Borrower’s business operations, except
to the extent that disclosure of this information is required by law or by a court of competent jurisdiction.
9.9 Waiver of Trial By Jury.
The Borrower and the Lender knowingly, voluntarily and intentionally waive the right any of them may have to a trial by jury in respect
of any litigation based hereon, or arising out of, under or in connection with the Loan Documents and any agreement contemplated to be
executed in conjunction therewith, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any
party. This provision is a material inducement for the Lender entering into the loan evidenced by the Loan Documents.
9.10 Currency. All
references to “$” or dollars in this Note shall refer to the currency of the United States.
9.11 NOTICE OF FINAL AGREEMENT.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, each
of Borrower and Lender has caused this Agreement to be executed by its duly authorized officer.
| |
BORROWER: |
| |
|
| |
PUREBASE CORPORATION |
| |
|
|
| |
By: |
/s/ A. Scott Dockter |
| |
Name: |
A. Scott Dockter |
| |
Title: |
CEO |
| |
|
|
| |
LENDER: |
| |
|
| |
U.S. MINE CORP. |
| |
|
|
| |
By: |
/s/ John Bremer |
| |
Name: |
John Bremer |
| |
Title: |
CEO |
EXHIBIT A
UNSECURED CONVERTIBLE GRID PROMISSORY NOTE
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