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.
Kramerica
$8,200
August
21, 2006
Dallas,
TX
FOR
VALUE RECEIVED,
IElement
Corporation (“Maker”) promises to pay to the order of Kramerica (the “Lender”),
at the offices located at 00000 Xxxxxxx Xxxx Xxx 000, XXX 000 xx Xxxxxx,
XX, the
principal sum of Eight Thousand Two Hundred Dollars ($8,200), 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
B. 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.
9.
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.
10.
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.
11.
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.
12.
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.
Date: August
21, 2006
/s/
Xxxx
Xxxxx
-----------------------
Xxxx
Xxxxx,
Director
& Chief Executive Officer
IElement
Corporation
/s/
Xxxx
Xxxxx
-----------------------
Xxxx
Xxxxx,
CEO
Kramerica
Kramerica
