exh10-1_note.htm


    


    
      

      

    

     

     

     

     

     

    EXHIBIT
      10.1

     

    PROMISSORY
      NOTE AND SECURITY AGREEMENT

    DATED
      JANUARY 28, 2008

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    


    PROMISSORY
      NOTE AND SECURITY AGREEMENT

    


    Lakewood,
      Colorado

    January
      28, 2008

    


               
      FOR VALUE RECEIVED, V2K Window Fashions, Inc., a Colorado corporation (“Borrower”), hereby
      promises to pay to the order of Gordon E. Beckstead, Victor
      J. Yosha
      and R. J. Wittenbrink (the “Lenders”),
      at the
      address of Lenders set forth herein, the principal amount of ONE HUNDRED AND FIFTY THOUSAND
      DOLLARS ($150,000.00), with FIFTY THOUSAND DOLLARS ($50,000) payable to
      each Lender (the “Loan”), together
      with
      interest.  This Promissory Note (“Note”) has been
      executed by Borrower on the date set forth above (the “Effective
      Date”).

    


    1.           
      Collateral.  As
      security for the obligations of the Note, the Borrower pledges and grants to
      Lenders a subordinate security position in Borrower’s accounts
      receivable.

    


    2.           
      Interest.  The
      Loan shall bear interest from the Effective Date at the rate of two percent
      (2%)
      over the prime rate of interest as published in the Money Rate Table of the
      Western Edition of The Wall Street Journal and continuing until payment in
      full
      of the Loan. Interest is payable by the Borrower on a quarterly basis in arrears
      on the first business day of the month beginning April 1, 2008. Upon the
      occurrence of an Event of Default and for so long as such Event of Default
      continues, interest shall accrue on the outstanding Loan amount at the Default
      Interest Rate of sixteen percent (16%).

    


    3.           
      Repayment.

    


    3.1           
      Repayment of this Note shall commence upon the earlier of (a) Borrower or its
      parent company, V2K International, Inc., having obtained of debt or equity
      financing of at least $500,000.00; or (b) October 1, 2008.

    


    3.2           
      If repayment commences pursuant to Section 3.1(a) above, the entire amount
      of
      the Note, shall be repaid from the proceeds of the financing within five (5)
      business days of receipt of financing proceeds.

    


    3.3           
      If repayment commences pursuant to Section 3.1(b) above, then the interest
      rate
      shall be fixed at twelve percent (12%) per annum and the Borrower shall set
      aside and pay to Lenders collectively, three thousand dollars ($3,000.00) from
      the sale of each franchise, which payments shall be applied as set forth in
      Section 4 below. Borrower shall remit payments to Lenders pro rata in accordance
      with the outstanding principal amount owed to each Lender at least monthly,
      together with a statement identifying the franchises which have been sold.
      Within three (3) months after the end of Borrower’s fiscal year, Borrower shall
      provide each Lender with an accounting of all payments made 

     

     

    
      
         

      

      
         

        
          

        

      

      
         
during
        the completed fiscal year and a copy of Borrower’s audited financial statements
        for the most recently completed fiscal year.

    

    


    4.           
      Application of
      Payments.

    


    4.1           
      Except as otherwise expressly provided herein, payments under this Note shall
      be
      applied (i) first to the repayment of any sums incurred by Lenders for the
      payment of any expenses in enforcing the terms of this Note if an Event of
      Default shall have occurred, (ii) then to the payment of the Default Interest
      Rate, if applicable, (iii) then to the payment of the accrued and unpaid
      interest, and (iv) then to the reduction of the Loan.

    


    4.2           
      Upon payment in full of the Loan and applicable accrued and unpaid interest
      thereon, this Note shall be marked “Paid in Full” and returned to
      Borrower.

    


    5.           
      Waiver of
      Notice.  Borrower hereby waives diligence, notice, presentment,
      protest and notice of dishonor.

    


    6.           
      Transfer.  This
      Note may be transferred by Lenders at any time, provided that such transfer
      complies with applicable securities laws.

    


    7.           
      Events of
      Default.  The occurrence of any of following events (each an
“Event of
      Default”), not cured in any applicable cure period, shall constitute an
      Event of Default of Borrower:

    


    7.1           
      The failure to make when due any payment described in this Note whether on
      or
      after the Maturity Date, by acceleration or otherwise; and

    


    7.2           
      A breach of any representation, warranty, covenant or other provision of this
      Note which, if capable of being cured, is not cured within ten (10) business
      days following notice thereof to the Borrower;

     

    7.3           
      (i) The application for the appointment of a receiver or custodian for Borrower
      or the property of Borrower, (ii) the entry of an order for relief or the filing
      of a petition by or against Borrower under the provisions of any bankruptcy
      or
      insolvency law, (iii) any assignment for the benefit of creditors by or against
      Borrower, or (iv) the insolvency of Borrower.

    


               
      7.4            Upon the
      occurrence of any Event of Default that is not cured within any applicable
      cure
      period, if any, Lenders may elect, by written notice delivered to Borrower,
      to
      take at any time any or all of the following actions: (i) declare this Note
      to
      be forthwith due and payable, whereupon the entire unpaid Loan, together with
      all accrued and unpaid interest thereon (including the Default Interest Rate),
      and all other cash obligations hereunder, shall become forthwith due and
      payable, without presentment, demand, protest or any other notice of any kind,
      all of which are hereby expressly waived by Borrower, anything contained herein
      to the contrary 

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    notwithstanding,
      and (ii) exercise any and all other remedies provided hereunder or available
      at
      law or in equity.

    


    8.           
      Miscellaneous.

    


    8.1           
      Successors and
      Assigns.  Subject to the exceptions specifically set forth in
      this Note and the Loan Agreement, the terms and conditions of this Note shall
      inure to the benefit of and be binding upon the respective executors,
      administrators, heirs, successors and permitted assigns of the parties. This
      Note (or a portion hereof) may be assigned by Lenders without the consent of
      Borrower.

     

    8.2           
      Loss or Mutilation
      of
      Note.  Upon receipt by Borrower of evidence satisfactory to
      Borrower of the loss, theft, destruction or mutilation of this Note, together
      with indemnity reasonably satisfactory to Borrower, Borrower shall execute
      and
      deliver to Lenders a new promissory note of like tenor and denomination as
      this
      Note.

     

    8.3           
      Notices.  Any
      notice, demand, offer, request or other communication required or permitted
      to
      be given pursuant to the terms of this Note shall be in writing and shall be
      deemed effectively given the earlier of (i) when received, (ii) when delivered
      personally, (iii) one business day after being delivered by facsimile (with
      receipt of appropriate confirmation), or (iv) one business day after being
      deposited with an overnight courier service, and addressed to the recipient
      at
      the addresses set forth below unless another address is provided to the other
      party in writing.

     

    If
      to Borrower,
      to:

    V2K
      Window Fashions, Inc.

    13949
      West Colfax Avenue, Suite 250

    Lakewood,
      CO 80401

    Attn:                      
      Jerry Kukuchka

    Fax:                      
      (303) 202-5201

     

    if
      to Lenders,
      to:

    


    
      	
              Gordon
                E. Beckstead

              6635
                East Sage Lane

              Parker,
                CO 80138

            	
              Victor
                J. Yosha

              7276
                Orion Street

              Arvada,
                CO 80007

            	
              R.
                J. Wittenbrink

              178
                East 11th
                Avenue

              Broomfield,
                CO 80020

            


    

    


    8.4           
      Governing
      Law.  This Note shall be governed in all respects by the laws
      of the State of Colorado as applied to agreements entered into and performed
      entirely within the State of Colorado by residents thereof, without regard
      to
      any provisions thereof relating to conflicts of laws among different
      jurisdictions.

    


    8.5           
      Waiver and
      Amendment.  Any term of this Note may be amended, waived or
      modified only with the written consent of Borrower and Lenders.

    


    8.6           
      Remedies; Costs
      of
      Collection; Attorneys’ Fees.  No delay or omission by Lenders
      in exercising any of its rights, remedies, powers or privileges hereunder or
      at
      law 

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

      or
        in
        equity and no course of dealing between Lender and the undersigned or any
        other
        person shall be deemed a waiver by Lenders of any such rights, remedies,
        powers
        or privileges, even if such delay or omission is continuous or repeated,
        nor
        shall any single or partial exercise of any right, remedy, power or privilege
        preclude any other or further exercise thereof by Lenders or the exercise
        of any
        other right, remedy, power or privilege by Lenders. The rights and remedies
        of
        Lenders described herein shall be cumulative and not restrictive of any other
        rights or remedies available under any other instrument, at law or in equity.
        If
        an Event of Default occurs, Borrower agrees to pay, in addition to the Loan
        and
        interest payable thereon, reasonable attorneys’ fees and any other reasonable
        costs incurred by Lenders in connection with its pursuit of its remedies
        under
        this Note.

    

    


    


    IN
      WITNESS WHEREOF, Borrower has caused this Note to be signed on the Effective
      Date.

    


    
      
        	 	BORROWER:	 
	 	 	 
	 	V2K
                WINDOW FASHIONS, INC.	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Jerry
                Kukuchka	 
	 	 	Jerry
                Kukuchka, Chief Financial Officer 	 
	 	 	 	 
	 	 	 	 


      

    

    


    
 

     

     

     

     

     

     

     

     

    4