CGAC Code Green Apparel Corp (PK)

Convertible Promissory Note with Power Up Lending Group Ltd.

On May 24, 2017, pursuant to a Securities Purchase Agreement dated May 22, 2017 ,   Code Green Apparel Corp. (“ we ”, “ us ” and the “ Company ”) sold a 9% Convertible Promissory Note dated May 22, 2017, in the principal amount of $32,500, to Power Up Lending Group Ltd. (“ Power Up ” and the “ Power Up Note ”). The principal amount of the note accrues interest at 9% per annum until paid or converted into common stock (22% upon the occurrence of an event of default). The Power Up Note has a maturity date of February 28, 2018. We have the right to prepay the note prior to maturity, provided that we pay a prepayment penalty of between 15% and 40%, depending on the number of days that have elapsed from the date the note was sold, together with accrued interest. After the maturity date we have no right to repay the Power Up Note.

The Power Up Note is convertible into shares of our common stock beginning 180 days after the issuance date, at a conversion price equal to the greater of 65% of the average of the two lowest trading prices during the 20 trading days prior to the applicable conversion and $0.00006 per share.

In the event we fail to deliver the shares of common stock issuable upon conversion of the   note   within three business days of our receipt of a conversion notice, we are required to pay   Power Up   $2,000 per day for each day that we fail to deliver such shares, subject to certain exceptions.

At no time may the   Power Up Note   be converted into shares of our common stock if such conversion would result in   Power Up   and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock.

The   Power Up Note   provides for standard and customary events of default such as failing to timely make payments under the   Power Up Note   when due and the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements. Additionally, upon the occurrence of certain defaults, as described in the   Power Up Note , we are required to pay   Power Up   liquidated damages in addition to the amount owed under the   Power Up Note .

We hope to repay the   Power Up Note   prior to any conversion. In the event that the   Power Up Note   is not repaid in cash in its entirety, Company shareholders may suffer dilution if and to the extent that the balance of the   Power Up Note   is converted into common stock.

The description of the   Power Up Note   and Note Purchase Agreement above is not complete and is qualified in its entirety by the full text of the   Power Up Note and Securities Purchase Agreement, filed herewith as  Exhibits 10.2 and 10.1 , respectively, which are incorporated by reference in this Item 1.01.

Convertible Note with JSJ Investments Inc.

On May 25, 2017, we sold a 10% Convertible Promissory Note to JSJ Investments Inc. (“ JSJ ” and the “ JSJ Convertible Note ”) in the amount of $100,000. The note included a $7,500 original issuance discount and we paid $2,000 of JSJ’s legal fees in connection with our entry into the note. Amounts owed under the JSJ Convertible Note accrue interest at the rate of 10% per annum (18% upon an event of default). The JSJ Convertible Note is payable by us on demand by JSJ at any time after February 25, 2018. We have the right to prepay the JSJ Convertible Note prior to the maturity date in the event we pay a prepayment penalty of between 30% to 45% of the principal then due, together with accrued interest, provided that the note can only be repaid if JSJ consents to such repayment.

The JSJ Convertible Note and all accrued interest is convertible at the option of the holder thereof into the Company’s common stock at any time. The conversion price of the JSJ Convertible Note is 55% (a 45% discount) of the lower of (a) the third lowest intra-day trading prices of the Company’s common stock during the 20 trading days prior to any conversion date of the note, and (b) the lowest intra-day trading price of the Company’s common stock during the 20 trading days prior to the entry into the note. In the event we do not issue the holder the shares due in connection with a conversion within three business days, we are required to pay the holder $2,000 per day until such shares are delivered. In the event certain defaults under the note occur the conversion discount increases by 5%.

The JSJ Convertible Note contains standard and customary events of default, including in the event we fail to timely file any and all reports due with the Securities and Exchange Commission. Upon the occurrence of an event of default, we are required to pay  JSJ  liquidated damages in addition to the amount owed under the  JSJ Convertible Note .

At no time may the JSJ Convertible Note be converted into shares of our common stock if such conversion would result in JSJ and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock, provided such percentage may be increased or decreased by JSJ upon not less than 61 days prior written notice to us.

We hope to repay the JSJ Convertible Note prior to any conversion. In the event that the JSJ Convertible Note is not repaid in cash in its entirety, Company shareholders may suffer dilution if and to the extent that the balance of the JSJ Convertible Note is converted into common stock.

The description of the JSJ Convertible Note above is not complete and is qualified in its entirety by the full text of the JSJ Convertible Note, filed herewith as  Exhibit 10.3 , which is incorporated by reference in this Item 1.01.

Convertible Promissory Note with Auctus Fund, LLC

On June 5, 2017, pursuant to a Securities Purchase Agreement,  we sold a 10% Convertible Promissory Note in the principal amount of $150,000 to Auctus Fund, LLC (“ Auctus ” and the “ Auctus Convertible Note ”). The principal amount of the note accrues at 10% per annum until paid or converted into common stock (24% upon the occurrence of an event of default). The Auctus Convertible Note has a maturity date of March 5, 2018. Auctus paid $100,000 of the purchase price of the note at the closing and agreed to pay $50,000 of the purchase price within forty five (45) days after the closing date, so long as an event of default under the note has not occurred. The note can be repaid at any time prior to the 180 ^th day after the issuance date subject to prepayment penalties of between 35% and 50% of the principal amount of the note, together with accrued interest, depending on what repaid.

At closing, we reimbursed Auctus’ legal expenses in the amount of $2,750 and paid $8,333 to Auctus to cover due diligence, monitoring, and other transaction costs incurred for services rendered by Auctus. An additional $4,167 in due diligence, monitoring, and other transaction costs are due in connection with the payment of the $50,000 portion of the purchase price.

The Auctus Convertible Note is convertible into shares of our common stock at any time, at a conversion price equal to 58% of the lowest trading price during the prior 20 trading days, subject to anti-dilution rights.

If we do not deliver common stock due upon a conversion of the note by DWAC, an additional 10% discount will apply for all future conversions under the note. If our common stock is “ chilled ” for deposit into the DTC system and only eligible for clearing deposit, an additional 15% discount will apply for all future conversions under the note while the “ chill ” is in effect. Additionally, if we cease to be a reporting company or if the note cannot be converted into free trading shares after 181 days from the closing date, an additional 30% discount will apply. Additionally, if we fail to maintain our status as “ DTC Eligible ” for any reason, or, if the conversion price is less than $0.0005 at any time, the principal amount of the note is increased by $10,000. If an event of default under the note occurs after the sixth month anniversary of the closing date, the principal amount of the note increases by $15,000. If the note is not paid at maturity, the principal amount of the note increases by $15,000. If, we do not maintain or replenish the reserve of shares required under the note within three (3) business days of the request of Auctus, the principal amount of the note increases by $5,000 per occurrence.

In the event we fail to deliver the shares of common stock issuable upon conversion of the  note  within three business days of our receipt of a conversion notice, we are required to pay  Auctus  $1,000 per day for each day that we fail to deliver such shares.

At no time may the  Auctus Convertible Note  be converted into shares of our common stock if such conversion would result in  Auctus  and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of our common stock, subject to the right of Auctus to increase such percentage to 9.99% with 61 days prior notice.

The  Auctus Convertible Note  provides for standard and customary events of default such as failing to timely make payments under the  Auctus Convertible Note  when due and the failure of the Company to timely comply with the Securities Exchange Act of 1934, as amended, reporting requirements. Additionally, upon the occurrence of certain defaults, as described in the  Auctus Convertible Note , we are required to pay  Auctus  liquidated damages in addition to the amount owed under the  Auctus Convertible Note .

We also agreed pursuant to the Securities Purchase Agreement that until the sooner of the six month anniversary of the closing date or the payment of the note in full, or full conversion of the note, we would not, directly or indirectly, without Auctus’ prior written consent, which consent shall not be unreasonably, undertake certain transactions, including solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other person or entity in respect of any variable rate debt transactions (i.e., transactions where the conversion or exercise price of the security issued by the Company varies based on the market price of the common stock) above $500,000 (per variable rate debt transaction).

We hope to repay the  Auctus Convertible Note  prior to any conversion. In the event that the  Auctus Convertible Note  is not repaid in cash in its entirety, Company shareholders may suffer dilution if and to the extent that the balance of the  Auctus Convertible Note  is converted into common stock.

The description of the  Auctus Convertible Note  and Securities Purchase Agreement above is not complete and is qualified in its entirety by the full text of the  Auctus Convertible Note and Securities Purchase Agreement, filed herewith as  Exhibits 10.5 and 10.4 , respectively, which are incorporated by reference in this Item 1.01.