PROMISSORY NOTE
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$59,000.00
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Dated: February 6,
2009
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FOR VALUE RECEIVED, INFINITE GROUP, INC.,
a corporation with offices at 60 Office Park Way, Pittsford, NY
14534 (the "Borrower"), hereby promises to pay to DAVID N.
SLAVNY AND LEAH A. SLAVNY, individuals residing at 20 Cobble
Creek Road, Victor NY 14564 (collectively, the "Lender"), the
principal sum of Fifty Nine Thousand Dollars ($59,000.00), plus
interest at the annual rate of eleven percent (11%), in lawful
money of the United States of America.
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Interest
payments shall be payable on the first day of each month during the
term of this Promissory Note ("Note") commencing March 1, 2009, and
all principal and unpaid interest shall be due and payable on July
1, 2010.
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Borrower shall
have the right, at its option and without prior notice to Lender,
and without penalty, to prepay all or any part of the outstanding
principal amount of this Note at any time.
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The Lender
shall have the right in their sole discretion upon written notice
to the Borrower, to convert all or part of the principal amount of
the Note, together with accrued and unpaid interest, for common
stock of the Borrower at the conversion rate of $.16 per share, as
adjusted to reflect stock splits, distributions, recapitalizations,
etc.
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The conversion
of the Note and accrued interest thereon to common stock shall be
limited such that the Borrower incurs no limitation of the use of
its net operating loss carryforwards, which may be triggered by a
change of control involving one or more 5%
shareholders. The Borrower shall provide Lender with
sufficient information, including the opinion of an accountant or
attorney reasonably acceptable to Lender, prior to completing the
conversion to document that a change of control will not occur as a
result of Lender's request to convert all of part of the Notes
and/or accrued interest.
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If one or more
holders of convertible promissory notes exist with conversion
rights that may result in ownership of 5% or more of the common
stock of Borrower, then Borrower shall provide timely notification
to all other such promissory note holders of Lender's request for
conversion of promissory notes and/or accrued interest to common
stock. Such notice shall provide the
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