Attached files
Exhibit 10.1
$500,000 CONVERTIBLE NOTE
MDDD Interest free if paid
in full within 3 months
FOR VALUE RECEIVED, MAKISM 3D CORP., a Nevada corporation (the "Issuer" of this
Security) with at least 60,000,000 common shares issued and outstanding, issues
this Security and promises to pay to JMJ Financial, a Nevada sole
proprietorship, or its Assignees (the "Investor") the Principal Sum along with
the Interest Rate and any other fees according to the terms herein. This Note
will become effective only upon execution by both parties and delivery of the
first payment of Consideration by the Investor (the "Effective Date").
The Principal Sum is $500,000 (five hundred thousand) plus accrued and unpaid
interest and any other fees. The Consideration is $450,000 (four hundred fifty
thousand) payable by wire (there exists a $50,000 original issue discount (the
"OID")). The Investor shall pay $75,000 of Consideration upon closing of this
Note. The Investor may pay additional Consideration to the Issuer in such
amounts and at such dates as the Investor may choose in its sole discretion. THE
PRINCIPAL SUM DUE TO THE INVESTOR SHALL BE PRORATED BASED ON THE CONSIDERATION
ACTUALLY PAID BY INVESTOR (PLUS AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT
IS PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY THE INVESTOR AS WELL AS
ANY OTHER INTEREST OR FEES) SUCH THAT THE ISSUER IS ONLY REQUIRED TO REPAY THE
AMOUNT FUNDED AND THE ISSUER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF
THIS NOTE. The Maturity Date is two years from the Effective Date of each
payment (the "Maturity Date") and is the date upon which the Principal Sum of
this Note, as well as any unpaid interest and other fees, shall be due and
payable. The Conversion Price is the lesser of $0.07 or 60% of the lowest trade
price in the 25 trading days previous to the conversion (In the case that
conversion shares are not deliverable by DWAC an additional 10% discount will
apply; and if the shares are ineligible for deposit into the DTC system and only
eligible for Xclearing deposit an additional 5% discount shall apply; in the
case of both an additional cumulative 15% discount shall apply). Unless
otherwise agreed in writing by both parties, at no time will the Investor
convert any amount of the Note into common stock that would result in the
Investor owning more than 4.99% of the common stock outstanding.
1. ZERO PERCENT INTEREST for the First Three Months. The Issuer may repay this
Note at any time on or before 90 days from the Effective Date, after which the
Issuer may not make further payments on this Note prior to the Maturity Date
without written approval from the Investor. IF THE ISSUER REPAYS A PAYMENT OF
CONSIDERATION ON OR BEFORE 90 DAYS FROM THE EFFECTIVE DATE OF THAT PAYMENT, THE
INTEREST RATE ON THAT PAYMENT OF CONSIDERATION SHALL BE ZERO PERCENT (0%). If
the Issuer does not repay a payment of Consideration on or before 90 days from
its Effective Date, a one-time Interest charge of 12% shall be applied to the
Principal Sum. Any interest payable is in addition to the OID, and that OID (or
prorated OID, if applicable) remains payable regardless of time and manner of
payment by the Issuer.
2. Conversion. The Investor has the right, at any time after the Effective Date,
at its election, to convert all or part of the outstanding and unpaid Principal
Sum and accrued interest (and any other fees) into shares of fully paid and
non-assessable shares of common stock of the Issuer as per this conversion
formula: Number of shares receivable upon conversion equals the dollar
conversion amount divided by the Conversion Price. Conversions may be delivered
to the Issuer by method of the Investor's choice (including but not limited to
email, facsimile, mail, overnight courier, or personal delivery), and all
conversions shall be cashless and not require further payment from the Investor.
If no objection is delivered from the Issuer to the Investor regarding any
variable or calculation of the conversion notice within 24 hours of delivery of
the conversion notice, the Issuer shall have been thereafter deemed to have
irrevocably confirmed and irrevocably ratified such notice of conversion and
waived any objection thereto. The Issuer shall deliver the shares from any
conversion to the Investor (in any name directed by the Investor) within 3
(three) business days of conversion notice delivery.
3. Conversion Delays. If the Issuer fails to deliver shares in accordance with
the timeframe stated in Section 2, the Investor, at any time prior to selling
all of those shares, may rescind any portion, in whole or in part, of that
particular conversion attributable to the unsold shares and have the rescinded
conversion amount returned to the Principal Sum with the rescinded conversion
shares returned to the Issuer (under the Investor's and the Issuer's
expectations that any returned conversion amounts will tack back to the original
date of the Note). In addition, for each conversion, in the event that shares
are not delivered by the fourth business day (inclusive of the day of
conversion), a penalty of $2,000 per day will be assessed for each day after the
third business day (inclusive of the day of the conversion) until share delivery
is made; and such penalty will be added to the Principal Sum of the Note (under
the Investor's and the Issuer's expectations that any penalty amounts will tack
back to the original date of the Note).
4. Reservation of Shares. At all times during which this Note is convertible,
the Issuer will reserve from its authorized and unissued Common Stock to provide
for the issuance of Common Stock upon the full conversion of this Note. The
Issuer will at all times reserve at least 22,000,000 shares of Common Stock for
conversion.
5. Piggyback Registration Rights. The Issuer shall include on the next
registration statement the Issuer files with SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note. Failure to do so will result in
liquidated damages of 25% of the outstanding principal balance of this Note, but
not less than $25,000, being immediately due and payable to the Investor at its
election in the form of cash payment or addition to the balance of this Note.
6. Terms of Future Financings. So long as this Note is outstanding, upon any
issuance by the Issuer or any of its subsidiaries of any security with any term
more favorable to the holder of such security or with a term in favor of the
holder of such security that was not similarly provided to the Investor in this
Note, then the Issuer shall notify the Investor of such additional or more
favorable term and such term, at the Investor's option, shall become a part of
the transaction documents with the Investor. The types of terms contained in
another security that may be more favorable to the holder of such security
include, but are not limited to, terms addressing conversion discounts,
conversion lookback periods, interest rates, original issue discounts, stock
sale price, private placement price per share, and warrant coverage.
7. Default. The following are events of default under this Note: (i) the Issuer
shall fail to pay any principal under the Note when due and payable (or payable
by conversion) thereunder; or (ii) the Issuer shall fail to pay any interest or
any other amount under the Note when due and payable (or payable by conversion)
thereunder; or (iii) a receiver, trustee or other similar official shall be
appointed over the Issuer or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or
discharged within sixty (60) days; or (iv) the Issuer shall become insolvent or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any; or (v) the Issuer
shall make a general assignment for the benefit of creditors; or (vi) the Issuer
shall file a petition for relief under any bankruptcy, insolvency or similar law
(domestic or foreign); or (vii) an involuntary proceeding shall be commenced or
filed against the Issuer; or (viii) the Issuer shall lose its status as "DTC
Eligible" or the Issuer's shareholders shall lose the ability to deposit (either
electronically or by physical certificates, or otherwise) shares into the DTC
System; or (ix) the Issuer shall become delinquent in its filing requirements as
a fully-reporting issuer registered with the SEC; or (x) the Issuer shall fail
to meet all requirements to satisfy the availability of Rule 144 to the Investor
or its assigns including but not limited to timely fulfillment of its filing
requirements as a fully-reporting issuer registered with the SEC, requirements
for XBRL filings, and requirements for disclosure of financial statements on its
website.
8. Remedies. In the event of any default, the outstanding principal amount of
this Note, plus accrued but unpaid interest, liquidated damages, fees and other
amounts owing in respect thereof through the date of acceleration, shall become,
at the Investor's election, immediately due and payable in cash at the Mandatory
Default Amount. The Mandatory Default Amount means the greater of (i) the
outstanding principal amount of this Note, plus all accrued and unpaid interest,
liquidated damages, fees and other amounts hereon, divided by the Conversion
Price on the date the Mandatory Default Amount is either demanded or paid in
full, whichever has a lower Conversion Price, multiplied by the VWAP on the date
the Mandatory Default Amount is either demanded or paid in full, whichever has a
higher VWAP, or (ii) 150% of the outstanding principal amount of this Note, plus
100% of accrued and unpaid interest, liquidated damages, fees and other amounts
hereon. Commencing five (5) days after the occurrence of any event of default
that results in the eventual acceleration of this Note, the interest rate on
this Note shall accrue at an interest rate equal to the lesser of 18% per annum
or the maximum rate permitted under applicable law. In connection with such
acceleration described herein, the Investor need not provide, and the Issuer
hereby waives, any presentment, demand, protest or other notice of any kind, and
the Investor may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such acceleration may be rescinded and
annulled by the Investor at any time prior to payment hereunder and the Investor
shall have all rights as a holder of the note until such time, if any, as the
Investor receives full payment pursuant to this Section 8. No such rescission or
annulment shall affect any subsequent event of default or impair any right
consequent thereon. Nothing herein shall limit the Investor's right to pursue
any other remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Issuer's failure to timely deliver certificates representing
shares of Common Stock upon conversion of the Note as required pursuant to the
terms hereof.
9. No Shorting. The Investor agrees that so long as this Note from the Issuer to
the Investor remains outstanding, the Investor will not enter into or effect
"short sales" of the Common Stock or hedging transaction which establishes a net
short position with respect to the Common Stock of the Issuer. The Issuer
acknowledges and agrees that upon delivery of a conversion notice by the
Investor, the Investor immediately owns the shares of Common Stock described in
the conversion notice and any sale of those shares issuable under such
conversion notice would not be considered short sales.
10. Assignability. The Issuer may not assign this Note. This Note will be
binding upon the Issuer and its successors and will inure to the benefit of the
Investor and its successors and assigns and may be assigned by the Investor to
anyone without the Issuer's approval.
11. Governing Law. This Note will be governed by, and construed and enforced in
accordance with, the laws of the State of Nevada, without regard to the conflict
of laws principles thereof. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of Florida or in the federal courts located in Miami-Dade
County, in the State of Florida. Both parties and the individuals signing this
Agreement agree to submit to the jurisdiction of such courts.
12. Delivery of Process by the Investor to the Issuer. In the event of any
action or proceeding by the Investor against the Issuer, and only by the
Investor against the Issuer, service of copies of summons and/or complaint
and/or any other process which may be served in any such action or proceeding
may be made by the Investor via U.S. Mail, overnight delivery service such as
FedEx or UPS, email, fax, or process server, or by mailing or otherwise
delivering a copy of such process to the Issuer at its last known attorney as
set forth in its most recent SEC filing.
13. Attorney Fees. If any attorney is employed by either party with regard to
any legal or equitable action, arbitration or other proceeding brought by such
party for enforcement of this Note or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Note, the prevailing party will be entitled to recover from the other party
reasonable attorneys' fees and other costs and expenses incurred, in addition to
any other relief to which the prevailing party may be entitled.
14. Opinion of Counsel. In the event that an opinion of counsel is needed for
any matter related to this Note, the Investor has the right to have any such
opinion provided by its counsel. Investor also has the right to have any such
opinion provided by Issuer's counsel.
15. Notices. Any notice required or permitted hereunder (including Conversion
Notices) must be in writing and either personally served, sent by facsimile or
email transmission, or sent by overnight courier. Notices will be deemed
effectively delivered at the time of transmission if by facsimile or email, and
if by overnight courier the business day after such notice is deposited with the
courier service for delivery.
Issuer: Investor:
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Luke Ruffell JMJ Financial
Makism 3D Corp. Its Principal
Chief Executive Officer
Date: Date:
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[Signature Page to $500,000Promissory Note
