EXHIBIT "A"
TO LOAN AGREEMENT DATED OCTOBER
12, 2007 BETWEEN
SKYE INTERNATIONAL, INC, AND TED
MAREK FAMILY TRUST
THE SALE, TRANSFER OR OTHER
DISPOSITION OF THIS NOTE, OR OF THE SIIARES OF
COMMON STOCK 1SSUABLE UPON
CONVERSION HEREOF, IS RESTRICTED.
SKYE
International, Inc.
15% CONVERTIBLE SECURED
PROMISSORY NOTE
1-YEAR MATURITY (OPTIONAL 2-YEAR
MATURITY)
|
US
$100,000.00
|
October 12, 2007
|
|
Phoenix,
Arizona, USA
|
|
FOR VALUE RECEIVED, Skye International,
Inc.. a Nevada
corporation with offices at 7701 East Gray Road, Suite 4,
Scottsdale, Arizona 85260 (the "Company"), hereby promises
unconditionally, as of October 12, 2007 (the "Effective Date"), to
pay to the order of Ted Marek Family Trust dated May 28 ,
1999, Beverly A. Marek and Thaddeus Frank Marek, Trustees, with
offices at 12210 North 76 th Place, Scottsdale, Arizona 85260 ("Holder"), the
principal amount of One Hundred Thousand Dollars (US $100,000.00)
together with interest on the principal balance outstanding from
time to time under this instrument ("Note"), from and including the
date hereof, until, but excluding, the date of payment, at a per
annum rate equal to the "Stated Interest Rate" specified in
Section 1(a) or, to the extent applicable, at the "Default
Interest Rate" specified in Section 1(b), in accordance with
the following terms and conditions:
1.
Contracted For Rate of Interest. The contracted for rate of
interest of the indebtedness evidenced by this Note shall include
and consist of the following, as applicable:
(a)
Stated Interest Rate. The "Stated Interest Rate" shall equal
Fifteen Percent (15%) per annum. calculated on the basis of the
actual number of days elapsed. assuming a 365-day year, applied to
the outstanding principal balance of this Note from time to time.
The principal balance outstanding hereunder shall bear interest at
the Stated Interest Rate from the date of issuance of this Note
through the date that is one day prior to the first to occur of the
following events: (i) the unpaid principal balance, together with
all accrued interest and other amounts payable hereunder, have been
paid in full; (ii) the unpaid principal balance, together with all
accrued interest and other amounts payable hereunder. have been
converted into shares of the Company's common stock as permitted in
accordance with Section 7: or (iii) the passage of ten (10)
days following the occurrence of one or more uncured Events of
Default as defined in Section 4.
(b)
Default Interest Rate. The "Default Interest Rate" shall
equal Eighteen Percent (18%) per annum, calculated on the basis of
the actual number of days elapsed, assuming a 365-day year, applied
to the outstanding principal balance of this Note from time to
time. The principal balance outstanding hereunder shall hear
interest at the Default Interest Rate beginning eleven (11) days
after the date of occurrence of any uncured Event of Default, as
defined in Section 4, and continuing until the first to
occur of the following events: (i) the unpaid principal balance,
together with all accrued interest and other amounts payable
hereunder. have been paid in full: or (ii) the unpaid principal
balance, together with all accrued interest and other amounts
payable hereunder, have been converted into shares of the Company's
common stock as permitted in accordance with Section
7.
(c)
Monthly Payments of Interest Only; Payment in Full on Maturity
Date (or Extended Maturity Date). Interest accrued on the
principal balance of this Note shall be due and payable to Holder
monthly, on the first day of each calendar month, beginning at the
start of the first full calendar month following the Effective Date
and continuing on the first day of each month thereafter until all
obligations of the Company under this Note have been paid in full.
The outstanding principal balance of this Note, together with all
accrued but unpaid interest and all additional amounts payable
hereunder, shall be due and payable in full on the date that is
exactly one (1) year after the Effective Date (the "Maturity
Date"); provided, however, that the Company shall not be
required to repay such outstanding principal, interest or
additional amounts if and to the extent that this Note has been
converted by Holder, at Holder’s sole option, into shares of
the Company's Common Stock as permitted under Section 7; and
provided further, that the Holder unilaterally shall have
the right to extend the Maturity Date by one (1) year (the
“Extended Maturity Date”), upon written notice of such
extension given by Holder to Company on or prior to the Maturity
Date; and in the event of such extension, the Note shall be deemed
for all purposes to have been issued originally with a two-year
period of maturity.
2.
Application of Payments. All payments received by Holder
with respect to the indebtedness evidenced hereby shall be applied:
(i) first to Additional Sums (as hereinafter defined) and to any
other non-interest charges and costs provided for in this Note;
(ii) next, to accrued but unpaid interest at the Default Interest
Rate, if and to the extent applicable; (iii) next, to accrued but
unpaid interest at the Stated Interest Rate; and (iv) finally, to
the unpaid principal balance outstanding hereunder from time to
time.
3.
Prepayments. Payments of principal hereof may be made at any
time, or from time to time, in whole or in part, prior to the
Maturity Date (or the Extended Maturity Date, as applicable),
without penalty, provided that all interest and other charges
accrued through the date of prepayment are also paid in full, in
accordance with Section 2. Notwithstanding any prepayment of
principal hereof: (i) there shall be no change to the Maturity Date
(or, if applicable, to the Extended Maturity Date) or to the amount
of payments due hereunder unless Holder, in its sole and absolute
discretion, agrees in writing to such change; and (ii) no terms and
conditions of this Note shall be changed or affected in any manner
whatsoever; and (iii) the Company's obligations hereunder shall
continue in effect, and this Note shall remain outstanding, unless
and until this Note is converted into shares of the Company's
Common Stock as permitted under Section 7, or until the
principal balance outstanding hereunder, together with all accrued
interest and other amounts payable hereunder, are paid in full,
upon which, Holder shall deliver to the Company the original
executed copy of this Note, marked "PAID" in bold lettering in a
conspicuous location on the first page and on the signature page
hereof.
4. Events
of Default; Acceleration. The occurrence of any one or more of
the following events shall constitute an "Event of Default"
hereunder, and upon any such Event of Default, the entire principal
balance outstanding hereunder, together with all accrued interest
and other amounts payable hereunder, at the election of Holder,
shall become immediately due and payable, without any notice to the
Company, and without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the
Company:
(a) Nonpayment
of principal, interest or other amounts when the same become due
and payable hereunder, if the Company does not cure such failure to
pay within ten (10) days after the date such payment is
due;
(b) The
dissolution, winding-up or termination of the existence of the
Company or the sale or disposition of substantially all of the
assets of the Company’s business;
(c) The
making by the Company of an assignment for the benefit of its
creditors;
(d) The
appointment of (or application for appointment of) a receiver for
the Company, or the involuntary filing against or voluntary filing
by the Company of a petition or application for relief under
federal bankruptcy law or under any similar federal or state law,
which is not stayed or dismissed within 90 days of filing, or the
issuance of any writ of garnishment, execution or attachment for
service with respect to the Company or any property of the Company;
or
(e) Any
other material breach by the Company of the terms and conditions of
this Note.
5.
Additional Sums. The Company agrees to pay an effective,
contracted for rate of interest equal to the rate of interest
resulting from all interest payable as provided in this Note plus
the additional rate of interest resulting from the
“Additional Sums” as defined in the next sentence. All
fees, charges, goods, things in action and any other sums or things
of value, other than the interest resulting from the Stated
Interest Rate and the Default Interest Rate, as applicable, paid or
payable by the Company (collectively, the "Additional Sums")
pursuant to this Note, that may be deemed to constitute interest
for the purpose of any applicable laws that may limit the maximum
amount of interest to be charged by a lender, shall be payable by
the Company as, and shall be deemed actually to be, additional
interest; and for such purposes only, the agreed upon and
"contracted for rate of interest" payable under this Note shall be
deemed increased by the rate of interest resulting from the
imposition of the Additional Sums. The Company understands and
believes that this transaction complies with all applicable laws of
the State of Arizona; however, if any interest or other charges in
connection with this Note are ever held by a court of competent
jurisdiction to have exceeded the maximum amount of interest
permitted by law, then the Company agrees that: (i) the amount of
interest or charges payable pursuant under this Note shall be
reduced to the maximum amount permitted by law; and (
