Promissory Note with JMJ Financial

TFER			Interest free if paid in full within 3 months
		$275,000 PROMISSORY NOTE

 

 

The Principal Sum of the Note is up to $275,000 (two hundred seventy five thousand dollars) plus accrued and unpaid interest and any other fees. The total Consideration payable to Borrower hereunder is up to $247,500 (two hundred forty seven thousand five hundred dollars) payable by wire (there exists a $27,500 original issue discount (the "OID")). The Lender shall pay $75,000 of initial Consideration on the Wednesday after execution and delivery of this Note. The Lender may pay up to an additional $172,500 of Consideration to the Borrower in such amounts and at such times as both the Borrower and the Lender may mutually agree. THE PRINCIPAL SUM DUE TO LENDER SHALL BE PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY LENDER (PLUS AN APPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATED BASED ON THE CONSIDERATION ACTUALLY PAID BY THE LENDER AS WELL AS ANY OTHER INTEREST OR FEES) SUCH THAT THE BORROWER IS ONLY REQUIRED TO REPAY THE AMOUNT FUNDED AND THE BORROWER IS NOT REQUIRED TO REPAY ANY UNFUNDED PORTION OF THIS NOTE. See the attached Exhibit for an example. The Maturity Date is one year from the Effective Date of each payment (the "Maturity Date") and is the date upon which the Principal Sum of each separate funding under 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 average of the two lowest closing prices in the 20 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 Lender convert any amount of the Note into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding.

 

1.      ZERO Percent Interest for the First Three Months. The Borrower may repay any fundings made by Lender under this Note at any time on or before 90 days from the date of any such funding , after which the Borrower may not make further payments on such fundings prior to the Maturity Date of each funding without written approval from Lender. If the Borrower repays a funding under the Note on or before 90 days from the date of such funding, the Interest Rate on such funding shall be ZERO PERCENT (0%). If Borrower does not repay a funding under this Note on or before 90 days from the date of such funding, a one-time Interest charge of 12% shall be applied to that funding. Any interest payable is in addition to the OTD, and that 011) (or prorated OID, if applicable) remains payable regardless of time and manner of payment by Borrower.

 

2.      Conversion. The Lender has the right, at any time after 180 days from the date of any funding, 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 Borrower 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 Borrower by method of Lender'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 Lender. If no objection is delivered from Borrower to Lender regarding any variable or calculation of the conversion notice within 24 hours of receipt by Borrower of the conversion notice, the Borrower shall have been thereafter deemed to have irrevocably confirmed and irrevocably ratified such notice of conversion and waived any objection thereto. The Borrower shall deliver the shares from any conversion to Lender in any name directed by Lender) within 3 (three) business days of conversion notice delivery. In lieu of delivering physical certificates representing the common stock issuable upon conversion, provided the Borrower's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Lender and its compliance with the provisions herein, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Lender by crediting the account of Lender's Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The shares of common stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Securities Act of 1933 or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel at Lender's sole cost and expense (which opinion shall be reasonably acceptable to Borrower from counsel reasonably acceptable to Borrower) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144"). Until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144, each certificate for shares of common stock issuable upon conversion of this Note shall bear a restrictive legend.

 

3.      Conversion Delays. If Borrower intentionally fails to deliver shares in accordance with the timeframe stated in Section 2, Lender, 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 Borrower (under Lender's and Borrower'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 intentionally 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 Lender's and Borrower's expectations that any penalty amounts will tack back to the original date of the Note).

 

 

14.       Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the right to have any such opinion provided by its counsel at its sole cost and expense. Lender also has the right to have any such opinion provided by Borrower's counsel, again at the sole cost and expense of Lender.

 

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. The physical and email addresses and telephone and facsimile numbers for such communications will be,

 

in the case of the Lender:

 

TO BE PROVIDED PRIVATELY AT THE TIME OF CLOSING

 

 

Titan Iron Ore Corp.

1735 E. Ft. Lowell Road, Suite 9

Tucson, AZ 85719

Attention: Andrew Brodkey ( ***@***)           Telephone: 520 ###-###-#### ext: 101

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to $275,000 Promissory Note]

 

 

 

 

 

The following is an example of the Principal Sum calculation: