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CONVERTIBLE PROMISSORY NOTE
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$1,000,000
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Las Vegas, Nevada
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April 11, 2005
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Crystalix Group International, Inc., a Nevada
corporation (“ Borrower
”), promises to pay to the order of Urban
Casavant, as Trustee of the UAJC 2005 Irrevocable Trust
(“ Lender ”), at 30 Princeville Lane, Las Vegas, Nevada 89113, One
Million Dollars ($1,000,000), with interest on the unpaid principal
balance.
By acceptance of this Note, Lender agrees to
disburse the loan evidenced by this Note as provided in the Funding
Schedule attached as Exhibit A to this Note.
(a) Subject to
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) 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 the Required Monthly Payment with all accrued unpaid interest on
the amounts outstanding under this Note. “
Required Monthly Payment ” means the amount of principal advanced by Lender to the
date of each such payment, divided by twenty-two (22).
(b) All
outstanding principal and accrued unpaid interest shall be due and
payable on May 1, 2007 (the “ Maturity Date ”), as such date
may be accelerated pursuant to Section 5.
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3.
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Amounts due hereunder shall be paid by Borrower to
Lender as follows:
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(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
45931.0004\YOKENS\LAS\82314.4
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 $0.05. 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 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 su
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