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Title: |
Convertible Promissory Note |
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Date: |
2006 |
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$35 |
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ID: |
#2540236 |
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CONVERTIBLE PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND IT MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS IT HAS BEEN SO REGISTERED OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
AdZone Research, Inc.
CONVERTIBLE NOTE DUE Sept. 22, 2008
$700,000
ADZONE RESEARCH, INC. (the "Company"), for value received, hereby promises
to pay to The Burns Family Trust, or permitted assigns (the "Holder"), on Sept.
22, 2008 (the "Maturity Date"), the principal sum of ($700,000). With pre-paid
interest of 14% per annum. Interest shall be prepaid out of principle with the
company receiving a net of $504,000 upon investment.
1. Prepayment
The Company shall have the right to prepay all or any part of the
principal amount of this Note, together with accrued interest thereon through
the date of prepayment (except as provided in the following sentence), without
penalty, either (x) in cash or (y) by delivery to the Holder of the number of
shares of capital stock of the Company into which the principal amount of this
Note to be so prepaid would then be convertible as provided Section 3 below. In
the event that the Company determines to prepay this Note in cash, it shall
provide the Holder with at least 10 days advance notice of such prepayment in
order to afford the Holder the opportunity, prior to such prepayment, to convert
this Note into capital stock of the Company pursuant to Section 3 below.
2. Events of Default
Any of the following shall constitute an Event of Default hereunder
("Event of Default"):
(a) the Company shall fail to make any payment of principal or
interest when due hereunder;
(b) the Company shall become insolvent or admits its inability to
pay its debts as they become due, or any proceeding shall be instituted by the
Company seeking relief on its behalf as debtor, or to adjudicate it to be
bankrupt or insolvent, or seeking liquidation, reorganization, arrangement,
adjustment or composition or other relief with respect to it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or any similar law now or hereafter in effect, or seeking appointment of
a receiver, trustee, liquidator, custodian or other similar official for it or
for any part of its property, or the Company shall consent by answer or
otherwise to any such relief or to the institution of any such proceeding
against it;
{PAGE}
(c) any proceeding is instituted against the Company seeking to have
an order for relief entered against it as debtor or to adjudicate it to be
bankrupt or insolvent, or seeking liquidation, reorganization, arrangement,
adjustment or composition or other relief with respect to it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or any similar law now or hereafter in effect, or seeking appointment of
a receiver, trustee, custodian, liquidator or other similar official for it or
for any part of its property which either (i) results in any such entry of an
order for relief, adjudication of bankruptcy or insolvency or issuance or entry
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