Exhibit 10.11
Convertible Note Agreement
This Convertible Note Agreement is entered into by Schimatic Cash Transactions
Xxxxxxx.xxx Inc. (the "Borrower") and ____________________. (the "Lender") as of
January 01, 2001, for good and valuable mutual consideration.
A Representations.
1 Lender desires to invest funds in Borrower in exchange for
Borrower's promise to repay the principal amount of such
investment together with Borrower's obligation to issue its
common stock in lieu of interest on said funds.
2 Lender is an accredited investor as that term is defined and
understood for purposes of the Securities and Exchange acts of
1933 and 1934 (the "Acts").
3 Borrower is incorporated under the laws of the state of
Florida, maintains its principal place of business at 000 Xxxx
0000 Xxxxx, Xxxx Xxxx Xxxx Xxxx 00000 and is a corporation in
good standing as of the date of this agreement.
4 Borrower is subject to reporting requirements pursuant to the
Securities Acts and its common stock trades publicly in the
"pink sheets" as that term is commonly used.
5 The Borrower and Lender mutually and individually represent
that this agreement is valid, binding and enforceable on its
terms and that all necessary approvals for entering into this
agreement have been obtained.
6 Borrower represents that all shares of its common stock will
be fully paid and non-assessable when issued pursuant to this
agreement.
B Agreements.
1 Principal Amount. Lender has agreed to lend to Borrower, and
Borrower agrees to repay to Lender ______________on the terms
and conditions further described below.
2 Date of Investment. It is intended that Lender will make the
investment in increments over a period not to exceed ninety
days from the date of this agreement. On the date Lender
provides funds to Borrower pursuant to this agreement, those
funds will constitute principal outstanding.
3 Collateral for Loan.
a On or before January 29, 2001, Borrower will instruct
the Transfer Agent for its common stock to issue
_____________shares of its common stock to Lender
(the "Collateral Shares"). Such shares will be held
by Lender in trust as collateral for repayment of
principal or interest (paid in shares) pursuant to
this agreement.
b At such times as interest (paid in shares) is due and
payable to Lender or Lender elects by written notice
to convert principal into common shares, the
equivalent number of Collateral Shares held by Lender
will be released from shares held by Lender in trust
as collateral. At such time as all principal amount
of the note has been paid or converted into common
stock, any remaining Collateral Shares will be
returned to Borrower and cancelled.
c In the event Borrower shall in any material respect
not perform its obligations under this agreement, the
Collateral Shares as determined by (a) above which
are held or issuable to Lender may be converted into
shares owned by Lender, and Lender will then be free
to sell, hypothecate or otherwise obtain value from
such shares to offset the principal amount
outstanding under this agreement.
4 Compensation to Lender. As compensation for the loan, Borrower
agrees that Lender will earn SCTN Rule 144 Stock on the first
business day of each subsequent month during which the Loan
remains unpaid for any portion of the month computed to be a
number of shares equal to ___% of the principal amount, which
remained unpaid at the end of the previous month, divided by a
price equal to the lesser of (i) the then market price per
share or (ii) $_____.
5 Notice of Repayment and Conversion Provisions.
a Borrower will notify Lender in writing, not later
than 10 days prior to the intended repayment date
(the intended repayment date is referred to as the
"Redemption Date"), of its intention to repay all or
any portion of the Principal Amount of the Note.
b If Borrower issues a notice regarding repayment of
Principal pursuant to (a) above and Lender notifies
of his intention to convert such portion of the
Principal Amount into common stock prior to the
Redemption Date, the Principal Amount noticed for
repayment will be converted into Rule 144 Stock based
on the Conversion Price (see below). The maximum
number of shares which can be converted from
principal shall be called ( the "Conversion Shares").
c In the event Lender does not elect conversion of
principal into common stock, the Borrower will have
the right to repay in full the amount of principal
noticed for redemption provided such payment has been
made on or prior to the Redemption Date.
d The Conversion Price. The conversion of principal
into common stock will be computed on the basis of
$.366 per share. Shares so computed will be rounded
to the nearest whole share.
6 Reports and Notices. Borrower has provided to Lender and
Lender acknowledges receipt of copies of all reports filed
with the Securities and Exchange Commission (the "SEC") or
circulated generally to its shareholders, in addition to:
a A copy of Borrower's business plan summary dated
______________.
b Borrower will provide Lender all future reports filed
with the SEC on a timely basis.
7 Declaration of Accredited Investor Status. Lender will sign
certificates in the form attached stating his declaration and
his awareness of the materials and information described
therein as set forth in item (4) above.
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C Signatures. The parties hereto by the signatures below indicate their
acceptance of and agreement to the terms of this agreement.
SCTN Lender
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by by
Its
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