PROMISSORY NOTE

$

Syosset, New York

(Maximum of $200,000)

XXXXXXX

Terms of the Promissory Note.

 

1.1.

Interest Rate.  The rate of interest hereunder (“Interest Rate”) shall be 0 percent (0%) per annum computed on the basis of a 360 day year for the actual number of days elapsed. Interest is paid upon Note being repaid or at maturity.

 

1.2.

Payment at Maturity Date. The Principal together with accrued interest thereon shall be due and payable on the earliest to occur of (i) 180 days from the date hereof, or (ii) an Event of Default (the “Maturity Date”).

 

1.3.

Conversion Feature. The Buyer shall have the right to convert the Note (s) represented in this transaction into free trading Shares of Common Stock at any time after the maturity and or the effective date of a registration, which ever is sooner. Upon written notice of such conversion, the conversion price shall be equal to seventy (70%) percent of the five (5) day VWAP prior to the date of conversion or maturity with a maximum conversion price of $.12 (the “Conversion Price”).

 

1.4.

Prepayment. This Note may be prepaid by the Company in whole or in part at anytime, by providing at least ten (10) days prior written notice to the Holder.  Any such prepayment by the Company shall be equal to 120% of the amount of the Note (s).

2.

Events of Default.  The occurrence of any one or more of the following events (regardless of the reason therefor) shall constitute an "Event of Default" hereunder:

3.

 

3.1

Transfer of Note.  This Note shall not be transferable or assignable in any manner, except to affiliates of the Holder.

 

3.2

Titles and Subtitles.  The titles and subtitles used in this Note are for convenience only and are not to be considered in construing or interpreting this Note.

 

3.3

Notices.  Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon Holder or Company in connection with this Agreement, or whenever Holder or Company desires to give or serve upon the other any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing, and shall be deemed to be properly given (a) when personally delivered, (b) three Business Days after deposit in the mail, if mailed by United States first class, certified or registered mail, postage prepaid, (c) one day after deposit with a public telegraph company for transmittal, charges prepaid, or (d) if given by facsimile, when the appropriate confirmation is received:

 

4.4.

Attorneys’ Fees. In the event that Holder institutes legal proceedings to enforce the Loan Documents, the Company agrees to pay to Holder, in addition to any indebtedness due and unpaid, all costs and expenses of such proceedings, including reasonable attorneys' fees. Company further agrees to pay any and all fees to remove the restrictive legend at the maturity of the Note.

 

4.5.

Amendments and Waivers.  This Note is issued by the Company pursuant to the Agreement. This Note may be amended and the observance of any other term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder.  Any amendment or waiver effected in accordance with this Section 4.5 shall be binding upon the Holder of this Note, each future holder of all such securities and the Company.

 

4.6.

Beneficiaries.  This Note and all the provisions, conditions, promises and covenants hereof shall inure to the benefit of Holder, its successors, heirs, and assigns, and shall be binding in accordance with the terms hereof upon the Company, its successors, heirs, and assigns, provided nothing herein shall be deemed consent to any assignment restricted or prohibited by the terms of this Note.

 

4.7.

Governing Law; Severability.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York. If any provision of this Note is prohibited by, or is unlawful or unenforceable under, any applicable law of any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining provisions hereof; provided that where the provisions of any such applicable law may be waived, they hereby are waived by the Company to the full extent permitted by law in order that this Note shall be deemed to be a valid and binding promissory note in accordance with its terms.

 

4.8.

Independent Counsel. Holder acknowledges and agrees that Holder has been provided the opportunity and encouraged to consult with counsel of Holder’s own choosing with respect to this Note.

 

4.9.

Usury.  Notwithstanding any provision to the contrary contained in this Note, or any and all other instruments or documents executed in connection herewith, Holder and the Company intend that the obligations evidenced by this Note conform strictly to the applicable usury laws from time to time in force.  All agreements between the Company and Holder, whether now existing or hereafter arising and whether oral or written, hereby are expressly limited so that in no case, contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid to Holder, or collected by Holder, by or on behalf of the Company for the use, forbearance or detention of the money to be loaned to the Company hereunder or otherwise, or for the payment or performance of any covenant or obligation contained herein of the Company to Holder, or in any other document evidencing, securing or pertaining to such indebtedness evidenced hereby, exceed the maximum amount permissible under applicable usury law.  If, under any circumstances whatsoever, fulfillment of any provisions thereof or any other document, at the time performance of such provisions shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity; and if under any circumstances Holder ever shall receive from or on behalf of the Company an amount deemed interest, by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the Company's unpaid Principal owing hereunder and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and such other indebtedness, the excess shall be deemed to have been a payment as a result of an error on the part of Holder and the Company and the party receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the party making such payment, refund to the Company or to any other person making such payment on the Company's behalf, and this Note shall be automatically deemed reformed so as to permit only the collection of the maximum non-usurious rate and amount of interest allowed by applicable law.  All sums paid or agreed to be paid to Holder or any other holders hereof for the use, forbearance or detention of the indebtedness evidenced hereby shall, to the full extent permitted by applicable law, be amortized, prorated, allocated and spread through the full term of this Note.

4.10.

Waiver of Jury Trial.  THE COMPANY AND HOLDER EACH WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE OR ANY DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS NOTE AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE COMPANY AGREES THAT THE COMPANY WILL NOT ASSERT ANY CLAIM AGAINST HOLDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.