NOTE AND
SECURITY AGREEMENT
$15,000.00- Houston, Texas - January 23, 2002
On January 23, 2002, Crescent Communications, Inc., of 000 X. Xxxx Xxx
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, hereinafter referred to as "Debtor" in
this note and security agreement, promises to pay to the order of Xxxxxxx
Xxxxxxxx hereinafter referred to as "Secured Party," at its principal office at
000 X. Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, the principal amount of
$15,000.00 or so much as may be outstanding, together with interest on the
unpaid principal balance. Interest shall be calculated from the date of this
note until paid.
Debtor will pay this note on demand, which can be made at any time. Payment
in full is due immediately upon Secured Party's demand on or before January 1,
2010.
Interest is computed on a 365/365 simple interest basis.
FIXED INTEREST RATE
The interest rate on this note is 8% per annum. Interest only payments
shall be made beginning February 15, 2002.
CONVERTIBLE INTO STOCK
The parties agree that Secured Party has the right and option at any time
from date, while this agreement is in effect, to convert the unpaid principal or
any portion of the unpaid principal into fully paid and nonassessable shares of
common stock of Debtor at the conversion price of $.05 per share upon the
surrender of this agreement or a proper notation made upon it to Debtor at its
offices located at 000 X. Xxxx Xxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000. No
fractional shares will be issued upon any conversion, but an adjustment in cash
shall be made in respect to any fraction of a share that would otherwise be
issuable upon the surrender of this agreement or portion of it for conversion.
GRANT OF SECURITY INTEREST
Debtor grants to Secured Party in this agreement, a security interest in
its property, tangible and intangible, including but not limited to: all
accounts, now existing or subsequently arising; all contract rights of Debtor,
now existing or subsequently arising; all claims and causes of action, now
existing or subsequently arising; all accounts receivable, now existing or
subsequently arising; all chattel paper, documents, and instruments related to
accounts; all inventory, furniture, fixtures, equipment, and supplies now owned
or subsequently acquired; and the proceeds, products, and accessions of and to
any and all of the foregoing (the "Collateral").
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This security interest is granted to secure the debt evidenced by this note
and agreement and all costs and expenses incurred by Secured Party in the
collection of the debt.
PERFORMANCE
Debtor agrees:
1. To pay all obligations when due and perform fully all of the Debtor's
duties under and in connection with this note and security agreement.
2. To keep the Collateral in good order and repair, to maintain it at
Debtor's premises, to use the Collateral for its intended purposes only, and to
refrain from encumbering, selling, or leasing any of the Collateral, or
permitting it to be encumbered, seized, or transferred.
DEFAULT AND REMEDIES OF SECURED PARTY
Default in payment or performance of any of the obligations or default
under any agreement evidencing any of the obligations is a default under this
agreement. On default, the Secured Party may declare all obligations immediately
due and payable and will have the remedies of a secured party under the Texas
Business and Commerce Code, as well as any other remedies existing under
applicable law or by agreement between the parties.
Upon default, including failure to pay upon final maturity, the total sum
due under this note will bear interest from the date of acceleration or maturity
at the highest legal interest rate.
GENERAL PROVISIONS
This agreement contains the entire understanding of Debtor and Secured
Party. Its provisions are to be governed by and interpreted in accordance with
Texas law.
EXECUTED by the Debtor on .
-----------------------------
DEBTOR
CRESCENT COMMUNICATIONS, INC.
BY: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
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