Senior Secured Promissory Note dated May 29, 2012

---

---

                                                                                      May 29, 2012

Newport Beach, California

FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby acknowledged, the undersigned, Sur Ventures, Inc., a Nevada corporation (“Maker”), hereby promises to pay to Linda Fischer (“Payee”) the principal amount of One Hundred Sixty Nine Thousand Dollars ($169,000), in lawful money of the United States of America, together with interest on the terms and conditions set forth in this Senior Secured Promissory Note (the “Promissory Note”). The performance of the obligations of the Maker hereunder are secured in accordance with the terms of the Security Agreement dated May 9, 2012 and all other present and future security agreements between the Maker and Payee.

1.1 Principal and Interest. There shall be annual interest of ten percent (10%) on the Principal evidenced by this Promissory Note. Such interest shall accrue as of the date that those funds were received by the Maker. The Principal evidenced by this Promissory Note together with any accrued interest shall be due and payable on July 16, 2012 (“Maturity Date”). All payments shall be made in lawful money of the United States of America.

1.2 Manner of Payment. Payment of the indebtedness evidenced by this Promissory Note shall be paid by check at such place as Payee shall designate to Maker in writing. If payment of the indebtedness evidenced by this Promissory Note is due on a day which is not a Business Day, such payment shall be due on the next succeeding Business Day. “Business Day” means any day other than a Saturday, Sunday or legal holiday in the State of Nevada.

1.3 Prepayment. Maker may prepay this Note in whole or in part on any date without premium or penalty.

2.1 Events of Default. The occurrence of any one or more of the following events with respect to Maker shall constitute an event of default (“Event of Default”):

(a)           In the event, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a “Bankruptcy Law”), Maker shall (i) commence a voluntary proceeding; (ii) consent to the entry of an order for relief against Maker in an involuntary proceeding; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing Maker’s inability to pay its debts as those debts become due.

(b)           In the event, a court of competent jurisdiction enters an order or decree pursuant to any Bankruptcy Law that (i) is for relief against Maker in an involuntary proceeding; (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Maker or substantially all of Maker’s properties; or (iii) orders the liquidation of Maker, and in each event the order or decree is not dismissed within one hundred twenty (120) days.

(c)           In the event Maker fails to pay the Principal and any accrued interest (and any additional amounts provided for under Article I, Section 1.1 of this Agreement) evidenced by this Promissory Note on the Maturity Date.

(d)           If a judgment or judgments or order for the payment of money in excess of $50,000 in the aggregate shall be rendered against the Maker and the same shall not, within thirty (30) days after the entry thereof, have been discharged or execution thereof stayed or bonded pending appeal (even if not fully covered by insurance) or unless such judgment is fully covered by collectible insurance and such insurer has within such period acknowledged such coverage in writing; or

 

(e)           Any material breach of the Security Agreement between the parties of even date herewith that remains uncured after notice of breach and failure to timely cure such breach.

2.2 Notice by Maker. Maker shall notify Payee in writing within ten (10) days after the occurrence of any Event of Default of which Maker acquires knowledge.

2.3 Remedies. Upon the occurrence of an Event of Default (unless all Events of Default have been cured or waived by Payee), Payee may, at its option, (i) by written notice to Maker, declare the entire unpaid principal balance evidenced by this Promissory Note immediately due and payable regardless of any prior forbearance, and (ii) exercise any and all rights and remedies available to Payee pursuant to applicable law, including, without limitation, the right to collect from Maker the amount due pursuant to this Promissory Note. Maker shall pay all reasonable costs and expenses incurred by or on behalf of Payee in connection with Payee’s exercise of any or all of its rights and remedies pursuant to this Promissory Note, including, without limitation, reasonable attorneys’ fees.

3.1 Severability. If any provision in this Promissory Note is determined by a court of competent jurisdiction to be invalid or unenforceable, the other provisions of this Promissory Note will remain in full force and effect. Any provision of this Promissory Note determined by a court of competent jurisdiction invalid or unenforceable only in part will remain in full force and effect to the extent not determined to invalid or unenforceable.

3.2 Governing Law. This Promissory Note will be governed by the laws of the State of California, without regard to conflicts of laws principles.

3.3 Parties in Interest. This Promissory Note shall not be assigned or transferred by Payee without the express prior written consent of Maker, except by operation of law.

3.4 Section Headings, Construction. The headings of sections in this Promissory Note are provided for convenience only and will not affect the construction or interpretation of the provisions of this Promissory Note. All references to “section” or “sections” refer to the corresponding section or sections of this Promissory Note unless otherwise specified. All words used in this Promissory Note will be construed to be of such gender or number as the circumstances require.

3.5 Entire Agreement.  The Maker and Payee acknowledge and agree that this Promissory Note is the complete and exclusive statement of the mutual understanding of the parties and that it supersedes and cancels all previous written and oral agreements and communications relating to the subject matter of this Promissory Note.

 

IN WITNESS WHEREOF, Maker has executed and delivered this Promissory Note as of the date first specified above.

Sur Ventures, Inc.,

a Nevada corporation,

located at 500 Newport Center Drive, Suite 800

Newport Beach, CA 92660

 

By:	/s/ Linda Fischer
	Linda Fischer
Its:	President