Contract
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), NOR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND HAS BEEN TAKEN
FOR INVESTMENT PURPOSES ONLY. IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES UNDER THE ACT AND QUALIFICATION UNDER APPLICABLE STATE LAW WITHOUT
AN
OPINION OF COUNSEL SATISFACTORY TO BORROWER THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED.
Xxxxxxx
Xxxxxxx
NOTE
$60,000 September
5, 2006
Dallas,
TX
FOR
VALUE RECEIVED,
IElement
Corporation (“Maker”) promises to pay to the order of Xxxxxxx Xxxxxxx (the
“Lender”), at the offices located at 00000 Xxxxxxx Xxxx Xxx 000, XXX 000 xx
Xxxxxx, XX, the principal sum of Sixty Thousand Dollars ($60,000), together
with
all accrued interest thereon, upon the terms and conditions specified
below.
1.
Interest.
Interest
shall accrue and be payable monthly on the balance outstanding under this Note
at the rate of 10.0% per annum, compounded monthly, or at the maximum rate
allowed by law, whichever is lower.
2.
Maturity.
The full
principle balance and interest will become due and payable six (6) months from
the date funds are received.
3.
Payment.
Payment
shall be made in lawful tender of the United States and shall be applied first
to the payment of principal and then to all accrued and unpaid interest.
Prepayment of the principal balance of this Note, together with all accrued
and
unpaid interest on the portion of principal so prepaid, may be made in whole
or
in part at any time without penalty.
4.
Conversion.
Lender
shall have the right to convert the balance of this note to shares of Maker’s
common stock at any time prior to maturity and at a rate equal to the lowest
rate offered to any note holder within 6 (six) months after the date of this
note.
5.
Collateral. Lender
shall have the right to file a UCC lien against Maker’s assets for the duration
of the term.
6.
Events
of Acceleration.
The
entire unpaid principal balance of this Note, together with all accrued and
unpaid interest, shall become immediately due and payable prior to the specified
due date of this Note upon the occurrence of one or more of the following
events:
A.
the expiration of the thirty (30)-day period following the date the Maker
ceases for any reason to pay its monthly obligations to the Lender;
or
| B. |
the
insolvency of the Maker, the commission of any act of bankruptcy
by the
Maker, the execution by the Maker of a general assignment for the
benefit
of creditors, the filing by or against the Maker of any petition
in
bankruptcy or any petition for relief under the provisions of the
Federal
bankruptcy act or any other state or Federal law for the relief of
debtors
and the continuation of such petition without dismissal for a period
of
thirty (30) days or more, the appointment of a receiver or trustee
to take
possession of any property or assets of the Maker or the attachment
of or
execution against any property or assets of the Maker; or
|
| C. |
an
acquisition of the Company (whether by merger, sale of all or
substantially all of the Company’s assets or sale of more than fifty
percent (50%) of the Company’s outstanding voting securities) for
consideration payable in cash or freely-tradable securities; provided,
however, that if the Pooling of Interest Method, as described in
Accounting Principles Board Opinion No. 16, is used to account for
the
acquisition for financial accounting purposes, then acceleration
of this
Note shall not occur until the end of the sixty (60)-day period
immediately following the close of the applicable transfer restriction
period required under Accounting Series Release Numbers 130 and
135.
|
7.
Collection.
If
action
is instituted to collect this Note, the Maker promises to pay all costs and
expenses (including reasonable attorney fees) incurred in connection with such
action.
8.
Waiver.
A waiver
of any term of this Note or of any of the obligations secured thereby must
be
made in writing and signed by a duly-authorized officer of the Corporation
and
any such waiver shall be limited to its express terms.
No
delay
by the Corporation in acting with respect to the terms of this Note shall
constitute a waiver of any breach, default, or failure of a condition under
this
Note or the obligations secured thereby.
| a. |
Construction.
Each party acknowledges that it had the opportunity to have its legal
counsel review this Note and, therefore, stipulates that the rule
of
construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to
favor any
party against the other.
|
| b. |
Conflicting
Agreements.
In
the event of any inconsistencies between the terms of this Note and
the
terms of any other document related to the loan evidenced by the
Note, the
terms of this Note shall prevail.
|
| c. |
Governing
Law.
This Note shall be construed in accordance with the laws of the State
of
Texas without resort to that State’s conflict-of-laws
rules.
|
| d. |
Wire
Transfer Instructions.
|
Swift
Code:
BOFA
AUS
3N
Bank
ABA/Routing #:
026
00
9593
Account
Number:
0047
8238
4943
Name
on
Bank
Account:
IElement
Bank
Name:
Bank
of
America
Bank
Address:
000
Xxxx
Xxxxxx 00xx
Xxxxx
Dallas,
TX 75202
Bank
Contact:
Xxxxx
Xxxxxxx
Bank
Telephone
Number:
(000)
000-0000
13.
Signatures.
September
5, 2006
/s/
Xxxx
Xxxxx
-----------------------
Xxxx
Xxxxx,
Director
& Chief Executive Officer
IElement
Corporation
/s/
Xxxxxxx Xxxxxxx
-----------------------
Xxxxxxx
Xxxxxxx,
