AMENDED AND RESTATED CONVERTIBLE PROMISSORY NOTE
This Amended and Restated Convertible Promissory Note is made as of April 11, 2005, and fully amends and restates the Convertible Promissory Note executed by Crystalix Group International, Inc., a Nevada corporation (“Borrower”) in favor of CMKXTREME, Inc., a Nevada corporation (also known as CMKXTREME.com) (“Lender”) dated September 23, 2004 (the “Original Note”).
Factual Background
A. Borrower executed and delivered the Original Note to Lender on or about September 23, 2004.
B. Borrower failed to make certain payments of principal and interest as provided in the Original Note.
C. Lender and Borrower have agreed to amend and restate the Original Note as set forth below. Among other things, past due interest will be added to principal as set forth below.
Amended and Restated Note
The Original Note is hereby amended and restated to read in full as follows:
$2,000,000 | Las Vegas, Nevada | September 23, 2004 |
Crystalix Group International, Inc., a Nevada corporation (“Borrower”), promises to pay to the order of CMKXTREME, Inc., a Nevada corporation (“Lender”), at 30 Princeville Lane, Las Vegas, Nevada 89113, Two Million Dollars ($2,000,000), with interest on the unpaid principal balance.
(a) Subject to Section 2(a) and Section 6 below, interest on the unpaid principal balance hereunder shall accrue at the rate of ten percent (10%) per annum (the “Interest Rate”) from the date hereof.
(b) The Interest Rate shall be calculated on the basis of the unpaid principal balance hereunder and the actual number of days elapsed over a 365-day year. Notwithstanding anything contained in this Note to the contrary, if collection from Borrower of interest at the Interest Rate would be contrary to applicable laws, then the Interest Rate in effect on any day shall be the highest interest rate which may be collected from Borrower under applicable laws on such day.
(a) Interest payable at the Interest Rate through October 31, 2004, and interest at the Default Rate (as defined below) from November 1, 2004 through May 31, 2005 shall be due and payable on the Maturity Date (as defined below).
(b) Commencing on July 1, 2005, and continuing on the first day of each month thereafter, Borrower shall make a principal payment in the amount of $83,333, with all
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unpaid interest accruing from and after June 1, 2005 to June 30, 2005 at the Default Rate, and thereafter at the Interest Rate (subject to Section 6 below) on the amounts outstanding under this Note.
(c) All outstanding principal and accrued unpaid interest shall be due and payable on October 1, 2007 (the “Maturity Date”), as such date may be accelerated pursuant to Section 5.
3. | Amounts due hereunder shall be paid by Borrower to Lender as follows: |
(a) Except as provided below in Section 3(b), all payments (including payment and prepayments of principal of or other amounts in respect of the Advances or fees or other amounts) required under this Note shall be made by the Borrower to the Lender in lawful money of the United States of America and in immediately available funds.
(b) From time to time, Lender may require Borrower to make any payment of the Convertible Portion (as defined below) of Borrower’s obligations under this Note in shares of Common Stock of Borrower (“Common Shares”) instead of lawful money of the United States of America and thereby convert all or any part of such Convertible Portion into that number of Common Shares, as is obtained by dividing the dollar amount that Lender elects to convert by the applicable Conversion Price (as defined below).
(c) Subject to adjustment as provided in this Section, the “Conversion Price” shall be the lesser of (i) the average closing price of the Common Shares for the five (5) business days immediately prior to Lender’s delivery of notice of conversion, or (ii) $0.08. The “Convertible Portion” means (w) any payment of principal, interest, and any other amounts payable to Lender hereunder when due, (x) any prepayment tendered by Borrower under this Note, (y) all or any portion of the entire amount of Borrower’s obligations under this Note, upon a sale of fifty-one percent (51%) or more of the outstanding Common Stock of Borrower or a sale of all or substantially all of Borrower’s assets, or (z) if an Event of Default (as defined below) occurs, a portion of Borrower’s obligations under this Note not exceeding One Million Dollars ($1,000,000); provided, however, that upon the occurrence of a second Event of Default while the first Event of Default remains uncured, the entire amount of principal, interest and any other amounts payable by Lender hereunder shall be the Convertible Portion.
(d) Within ten (10) days after delivery to Borrower of a notice of conversion with respect to that portion of the outstanding and unpaid principal or interest that Lender wishes to convert, Borrower shall (i) denote in its corporate records the ownership by Lender of the Common Shares so purchased, and (ii) unless this Note has been fully repaid or converted in full, issue to Lender a new Note, in identical form hereto and duly executed by Borrower, representing the portion of the Debt that has not been converted or repaid.
(e) If Borrower shall (i) declare a dividend or make a distribution payable in Common Shares, (ii) subdivide or reclassify its outstanding Common Shares into a greater number of Common Shares, or (iii) combine its outstanding Common Shares into a smaller number of Common Shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination, or reclassification
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shall be proportionately reduced in the case of any increase in the number of Common Shares outstanding, and increased in the case of any reduction in the number of Common Shares outstanding, so that Lender shall be entitled to receive the kind and amount of Common Shares which Lender would have owned or have been entitled to receive had this Note been converted into Common Shares immediately prior to such time and had such Common Shares received such dividend or other distribution or participated in such subdivision, combination, or reclassification. Such adjustment shall be effective as of the record date for such dividend or distribution or the effective date of such combination, subdivision or reclassification and shall be made successively whenever any event listed above shall occur.
(f) Whenever the Conversion Price is adjusted as provided in Section 3(d), Borrower shall promptly deliver to Lender written notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the computation thereof.
(g) In the event of any consolidation or merger of Borrower with or into any other Person (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding Common Shares), or in the event of any sale or transfer of all or substantially all of the assets of Borrower or the reclassification of the Common Shares into another form of capital stock of Borrower, whether in whole or in part, this Note shall thereafter be convertible, in lieu of the Common Shares otherwise purchasable and receivable upon conversion of this Note, into the kind and amount of stock and other securities and property or cash which Lender would have been entitled to receive upon such consolidation, merger, sale, transfer or reclassification if Lender had held the Common Shares issuable upon the conversion of this Note immediately prior to such consolidation, merger, sale, transfer or reclassification. The provisions of this Section 3 shall similarly apply to successive reclassification and changes of Common Shares of capital of Borrower and to successive consolidations, mergers, sales, transfers or reclassifications.
(h) Borrower shall at all times reserve and keep available, free from pre-emptive rights, out of its authorized but unissued shares of common stock, solely for the purpose of issue upon conversion of this Note as herein provided, such number of Common Shares as shall then be issuable upon the conversion of this Note. Borrower covenants that all Common Shares which shall be so issuable shall, upon issuance, be duly and validly issued and fully paid and non-assessable. Borrower shall from time to time, in accordance with applicable law, increase the authorized amount of its Common Shares if at any time the authorized amount of its Common Shares remaining unissued shall not be sufficient to permit the conversion of all Notes at the time outstanding.
(i) The Lender shall not be able to convert any amount due under the Note, if such conversion would result in the Lender and all other affiliates of Urban Casavant holding more than 9.99% of the Borrower’s outstanding shares of common stock, including derivative securities exercisable within sixty (60) days.
4. This Note is secured by a certain Security Agreement by and between Lender and Borrower dated as of April 11, 2005. Lender’s rights under such Security Agreement are subject
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to a certain Intercreditor Agreement by and between Lender and Kevin T. Ryan dated as of April 11, 2005.
5. Upon any Event of Default, as such term is defined in this Section 5, Lender may accelerate the loan evidenced by this Note and declare the entire principal balance of the Note immediately due and payable, and shall have the rights provided herein and by applicable law. The occurrence of any of the following events shall constitute an “Event of Default” under this Note:
(a) Borrower fails to make any payment of interest or principal within five (5) days after the date when due under this Note.
(b) The dissolution of Borrower, whether pursuant to any applicable laws, or otherwise, or the sale, transfer or conveyance by Borrower of fifty percent (50%) or more of the outstanding voting interests of stock of Borrower or the equity interest in Borrower to any person or entity.
(c) Borrower commences a case or other proceeding, or if an involuntary case or other proceeding shall be commenced against Borrower seeking liquidation, reorganization or other relief with respect to its debts under any bankruptcy, insolvency or other similar debtor relief law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and any such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days.
(d) Borrower shall make an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due.
(e) A notice of lien, levy or assessment is filed of record or given to Borrower with respect to all or any of the Borrower’s assets by any federal, state, local department or agency, and such lien, levy or assessment is not released or paid within a reasonable period of time but in no event longer than twenty (20) days from the date such lien, levy or assessment is filed.
(f) Lender, in good faith, believes the prospect of payment or performance by Borrower under this Note is impaired and if Borrower is unable or unwilling to provide adequate written assurances to Lender of its ability to fully perform under this Note within thirty (30) days following delivery of written notice.
(g) Any representation or warranty of Borrower is not materially true, correct and complete, or if any material statement, report or certificate made or delivered by Borrower or its officers, employees or agents is not true, correct and complete when made.
6. If any Event of Default shall occur, the total of the unpaid balance of principal and the accrued unpaid interest (past due interest being compounded) shall then begin accruing interest at the rate stated in the first paragraph above plus eight percent (8.00%) per annum (the “Default Rate”), until such time as all past due payments and accrued interest are paid. Borrower acknowledges that the effect of this Default Rate provision could operate to compound some of
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the interest obligations due, and Borrower hereby expressly assents to such compounding should it occur.
(a) waives demand, diligence, presentment for payment, protest and demand, notice of extension, dishonor, protest, demand and non-payment of this Note; and
(b) agrees that Borrower will pay any collection expenses, court costs and actual attorney’s fees which may be incurred by Lender in the collection or enforcement of this Note.
8. | This Note may be prepaid in whole or in part at any time. | |
9. | This Note shall be construed according to the laws of the State of Nevada. |
10. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers:
If to Borrower: | Crystalix Group International, Inc. |
5275 South Arville Street, Suite B116
Las Vegas, Nevada 89118
Attn: Doug Lee, President
Fax No.: (702) 740-4611
with a copy to: | Snell & Wilmer L.L.P. |
3800 Howard Hughes Parkway, Suite 1000
Las Vegas, Nevada 89109
Attn: Stephen B. Yoken, Esq.
Fax No.: (702) 784-5252
If to Lender: | CMKXTREME, Inc. |
30 Princeville Lane
Las Vegas, Nevada 89113
Attn: Urban Casavant
Fax. No.: (702) 247-1307
[Signatures appear on next page]
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of the date first set forth above.
| BORROWER: Crystalix Group International, Inc. By: ________________________________ Doug Lee, President By: ________________________________ Patty Hill, Secretary |
ACCEPTANCE BY LENDER
The Undersigned, CMKXTREME, Inc., a Nevada corporation, hereby approves and accepts the foregoing Amended and Restated Convertible Promissory Note in place of the Original Note (as defined therein), and also confirms that it was identified as “CMKXTREME.com” in such Original Note and in certain other documents which it executed as of September 23, 2004.
CMKXTREME, Inc.,
a Nevada corporation
By: ______________________________
Urban Casavant, President |
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