PROMISSORY NOTE
This agreement dated for reference this ____ day of ________, 2001
BETWEEN:
UPGRADE INTERNATIONAL CORP., 0000 Xxxxxx Xxx., Xxxxx 000, Xxxxxxx
Xxxxxxxxxx, 00000 (hereinafter called "Borrower")
OF THE FIRST PART
AND
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---------------------- (hereinafter called "Lender")
OF THE SECOND PART
WHEREAS, borrower is desirous of borrowing and Lender is desirous of lending USD
$100,000 for a period of 31 days, subject to the terms and conditions provided
herein.
THEREFORE BE IT AGREED THAT;
1. Interest will be calculated and payable upon maturity of the note
at a rate of 10% per annum, and 10,000 shares will be issued as
compensation for the loan.
2. In the event that the loan is not repaid on the maturity date, a
penalty charge will be due and payable as follows;
- 10% of the unpaid principle and interest at the maturity date
will be issued in common stock to the lender, calculated based
upon the average trading price of the common stock of the
borrower on the loan maturity date.
- Warrants to acquire common stock will be issued equal to 12.5% of
the unpaid principle and interest at the loan maturity date
issued at a strike price being the average trading price of the
borrowers common stock on the maturity date.
- Bonus Warrants to acquire common stock will be issued equal to
20% of the unpaid principle and interest at the loan maturity
date calculated at the current market issued at a strike price of
$6.00.
3. In the event that the loan principle and interest is not repaid,
an additional penalty will become due and payable every 30 days
following the maturity date.
Agreed this ____ day of ________________, 2001.
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Upgrade International Corp.
