Neither
the offer nor sale of the securities represented by this
certificate has been registered under the Securities Act of 1933,
as amended, (the “Act”). The securities may
not be sold, transferred or assigned in the absence of an effective
registration statement for the securities under the Act, or an
opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, that registration
is not required under the Act or unless sold pursuant to Rule 144
or Regulation S under the Act.
18% SUBORDINATED SECURED
PROMISSORY NOTE
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December 10, 2008
New York, New York
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FOR VALUE RECEIVED, the undersigned,
ADVANCED GROWING SYSTEMS, INC., a Nevada corporation, (the
“ Company ”), promises to pay to the
order of CCM PARTNERS FUND, LP , a Cayman Islands Exempted
Limited Partnership, (the “ Holder ”) or
registered assigns, the principal sum of Two Hundred Fifty
Thousand Dollars (US$250,000.00) plus accrued and unpaid
interest, on the earlier (the “ Maturity Date
”) of (i) June 10, 2009 (the “ Final Maturity
Date ”), or (ii) the date that this Note may
otherwise be due, by acceleration or otherwise, pursuant to this
Note or the Note Purchase Agreement dated December 10, 2008 by and
between the Company and the Holder (as from time to time amended,
the “ Note Purchase Agreement
”). Capitalized terms not otherwise defined herein
shall be as defined in the Note Purchase Agreement.
1.
Interest
. The outstanding
principal amount of this Note shall bear simple interest at a rate
of eighteen percent (18%) per annum from the date of this Note
above until the Maturity Date. Such interest will be
based on a 360-day year and calculated for the actual number of
days elapsed in which interest is being calculated.
2.
Interest
Payments . The Company shall pay the Holder
all accrued but unpaid interest on the first Business Day of each
calendar month commencing the month of January 2009 and the
Maturity Date. The Holder shall have no obligation to
deliver to the Company any invoice or other statement setting forth
the amount of principal, interest or any other amounts due on any
payment date, and any absence by the Holder to provide any such
invoice or statement shall not reduce or otherwise impair the
Company’s obligation to pay any amounts payable
hereunder. The Company shall make all interest payments
under this Note to the Holder by 2:00 p.m. on the date when due
unless the date is not a Business Day. If the due date
is not a Business Day, payment is due on, and interest will accrue
to, the next Business Day. The Company shall make all
payments in United States Dollars in immediately available funds
transferred by wire transfer to an account designated by the
Holder.
3.
Default
Interest . If a Default or an Event of
Default, as such terms are defined in the Note Purchase Agreement,
has occurred and is continuing, interest shall accrue, in addition
to interest under Section 1 above, at the Default Rate, as defined
in the Note Purchase Agreement.
4.
Seniori