exhibit_10-5.htm


    
      

    

    EXHIBIT
      10.5

     

    $
      40,000 Promissory Note

    


    October
      1, 2007

    


    Secured
      Financial Network, Inc.  (“Borrower”), located at 101 NE 3rd Avenue.,
      Suite
      1500, Ft. Lauderdale, FL 33301, in consideration of $40,000, hereby promises
      to
      pay to the order of HEB, LLC (“Lender”), at its primary place of business at 777
      Main Street, Suite 3100, Ft. Worth, TX 76102 or at such other address given
      to
      Borrower by Lender, in immediately available funds and in lawful money of the
      United States of America, the principal sum of Forty Thousand Dollars
      ($40,000.00), or such lesser sum as may be advanced and outstanding hereunder,
      when demanded by Lender, together with interest on the unpaid principal balance
      of this Note equal to ten percent (10%) per annum.

     

    Based
      on
      such calculations interest shall be paid quarterly on the first day of the
      month, beginning January 1, 2008.

     

    Borrower
      shall repay this Note on or before September 30, 2009.

     

    As
      additional consideration for entering into this note, Lender shall be issued
      200,000 warrants to purchase 200,000 shares of SFNL common stock at the price
      of
      $.05 per share. Warrants shall be exercisable for a term of 3-years. Warrant
      agreement is attached.

     

    All
      payments made on this Note as scheduled shall be applied, to the extent thereof,
      first to accrued but unpaid interest and the balance to unpaid
      principal.  Except to the extent specific provisions are set forth in
      this Note with respect to application of payments, all payments received by
      the
      holder hereof shall be applied, to the extent thereof, to the indebtedness
      owing
      by Borrower to Lender in such order and manner as Lender or any other holder
      hereof shall deem appropriate, any instructions from Borrower or anyone else
      to
      the contrary notwithstanding.

     

    Borrower
      shall be entitled to prepay this Note in whole or in part at any
      time.  Any prepayments of this Note shall be applied first to accrued
      but unpaid interest, and then to the principal balance hereof in the inverse
      order of maturity.

     

    All
      agreements between Borrower and Lender, or any subsequent holder of this Note,
      whether now existing or hereafter arising and whether written or oral, are
      expressly limited so that in no contingency or event whatsoever, whether by
      reason of acceleration of the maturity of this Note or otherwise, shall the
      amount paid or agreed to be paid to the holder of this Note for the use,
      forbearance, or detention of the funds advanced pursuant to this Note or for
      the
      performance or payment of any covenant or obligation contained herein or in
      any
      other document evidencing, securing or pertaining to this Note, exceed the
      maximum amount permissible under applicable law (the “Highest Lawful
      Rate”).  If from any circumstance whatsoever fulfillment of any
      provision hereof or of any such other document, at the time performance of
      such
      provision shall be due, shall involve transcending the limit of validity
      prescribed by applicable law, then ipso facto, the obligation to be fulfilled
      shall be reduced to the limit of such validity, and if from any circumstance
      the
      holder hereof shall ever receive anything of value deemed excess interest by
      applicable law, an amount equal to any such excess interest shall be applied
      to
      the reduction of the principal amount owing under this Note, and not to the
      payment of interest, or if such excess interest exceeds the unpaid principal
      balance of this Note, such excess interest shall be refunded to
      Borrower.  All sums paid or agreed to be paid to any holder of this
      Note for the use, forbearance or detention of any funds advanced pursuant to
      this Note shall, to the extent permitted by applicable law, be amortized,
      prorated, allocated and spread throughout the full term of this Note until
      payment in full so that the rate of interest on account of the indebtedness
      evidenced by this Note is uniform throughout the term hereof.  The
      terms and provisions of this paragraph shall control and supersede every other
      provision of all agreements between Borrower and any holder of this
      Note.

     

    If
      this
      Note is placed in the hands of an attorney for collection after default, or
      if
      all or any part of the indebtedness represented hereby is proved, established
      or
      collected in any court or in any bankruptcy, receivership, debtor relief,
      probate or other court proceedings, Borrower and all endorsers, sureties and
      guarantors of this Note jointly and severally agree to pay reasonable attorneys’
fees and collection costs to the holder hereof in addition to the principal
      and
      interest payable hereunder.

     

     

     

     


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    HEB LLC Note & Warrant Agreement -
      continued


     

    Borrower
      and all endorsers, sureties and guarantors of this Note hereby severally waive
      demand, presentment for payment, protest, notice of protest, notice of
      acceleration of and notice of intention to accelerate the maturity of this
      Note,
      diligence in collecting, the bringing of any suit against any party and any
      notice of or defense on account of any extensions, renewals, partial payments
      or
      changes in any manner of or in this Note or in any of its terms, provisions
      and
      covenants, or any releases or substitutions of any security, or any delay,
      indulgence or other act of any trustee or any holder hereof, whether before
      or
      after maturity.

     

    Neither
      the failure by the holder hereof to exercise, nor delay by the holder hereof
      in
      exercising, the right to accelerate the maturity of this Note or any other
      right, power or remedy upon any default or event of default shall be construed
      as a waiver of such default or event of default or as a waiver of the right
      to
      exercise any such right, power or remedy at any time.  No single or
      partial exercise by the holder hereof of any right, power or remedy shall
      exhaust the same or shall preclude any other or further exercise thereof, and
      every such right, power or remedy may be exercised at any time and from time
      to
      time.  All rights and remedies provided for in this Note are
      cumulative of each other and of any and all other rights and remedies existing
      at law or in equity, and the holder hereof shall, in addition to the rights
      and
      remedies provided herein, be entitled to avail itself of all such other rights
      and remedies as may now or hereafter exist at law or in equity for the
      collection of the indebtedness owing hereunder, and the resort to any right
      or
      remedy provided for hereunder or provided for by law or in equity shall not
      prevent the concurrent or subsequent employment of any other appropriate rights
      or remedies.  Without limiting the generality of the foregoing
      provisions, the acceptance by the holder hereof from time to time of any payment
      under this Note which is past due or which is less than the payment in full
      of
      all amounts due and payable at the time of such payment, shall not (i)
      constitute a waiver of or impair or extinguish the rights of the holder hereof
      to accelerate the maturity of this Note or to exercise any other right, power
      or
      remedy at the time or at any subsequent time, or nullify any prior exercise
      of
      any such right, power or remedy, or (ii) constitute a waiver of the requirement
      of punctual payment and performance, or a novation in any respect.

     

    This
      Note
      may not be changed, amended or modified except in a writing expressly intended
      for such purpose and executed by the party against whom enforcement of the
      change, amendment or modification is sought.

     

    The
      Loan
      is made solely for business purposes and is not for personal, family, household
      or agricultural purposes.

     

    Time
      shall be of the essence in this Note with respect to all of Borrower’s
      obligations hereunder.

     

    THIS
      NOTE
      AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY THE
      LAWS
      OF THE STATE OF FLORIDA, EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY THE
      FEDERAL LAWS OF THE UNITED STATES OF AMERICA.  THE BOOKS AND RECORDS
      OF LENDER SHALL CONSTITUTE PRIMA FACIE EVIDENCE OF ALL SUMS DUE LENDER
      HEREUNDER.

     

    THIS
      NOTE
      REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
      BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
      PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
      PARTIES.

     

    Executed
      as of the date first written above.

     

     

    
      	 	 	 BORROWER:

              /s/
                Jeffrey L.
                Schultz                
                

              Secured
                Financial Network, Inc.

              By:
                Jeffrey L.
                Schultz  -  President

            


    

    


    


    THE
      WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES TO BE ISSUED UPON
      ITS
      EXERCISE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
      1933
      (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”)
      AND SHALL NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER HAS BEEN
      REGISTERED UNDER THE SECURITIES ACT AND STATE ACTS, OR AN EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
      ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

     

    
 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      HEB LLC Note & Warrant Agreement -
        continued


    

     

    CLASS
      A STOCK PURCHASE WARRANT

     

     

    
      	 Warrant
              No.    HEB -1  	
               Number
                of
                Shares:       200,000

            


    

    


                                                              

    SECURED
      FINANCIAL NETWORK, INC.

    COMMON
      STOCK, NO PAR VALUE PER SHARE

    VOID
      AFTER 5:00 P.M. EASTERN STANDARD TIME

    ON
      SEPTEMBER 30, 2010

    


    This
      Warrant is issued to HEB, LLC by SECURED FINANCIAL NETWORK, INC., a Nevada
      Corporation, (hereinafter with its successors called the
“Company”).

    


    For
      value
      received and subject to the terms and conditions hereinafter set out, Holder
      is
      entitled to purchase from the Company at a purchase price of $0.05 per share,
      fully paid and non-assessable shares of common stock, no par value per share
      (“Common Shares”) of the Company.  Such purchase price per Common
      Share, as provided herein, is referred to as the “Purchase Price.

    


    The
      Holder may exercise this Warrant, in whole or in part, upon surrender of this
      Warrant, with the exercise form annexed hereto duly executed, at the office
      of
      the Company, or such other office as the Company shall notify the Holder in
      writing, together with a certified or bank cashier’s check payable to the order
      of the Company in the amount of the Purchase Price times the number of Common
      Shares being purchased.

    


    1.           The
      person or persons in whose name or names any certificate representing Common
      Shares is issued hereunder shall be deemed to have become the holder of record
      of the Common Shares represented thereby as of the close of business on the
      date
      on which this Warrant is exercised with respect to such shares, whether or
      not
      the transfer books of the Company shall be closed.  Until such time as
      this Warrant is exercised or terminates, the Purchase Price payable and the
      number and character of securities issuable upon exercise of this Warrant are
      subject to adjustment as hereinafter provided.

    


    2.           Unless
      previously exercised, this Warrant shall expire at 5:00 p.m. Eastern Standard
      Time, on September 30, 2010 and shall be void thereafter
      or can be extended at the Company’s discretion (“Expiration Date”).

    


    3.           The
      Company covenants that it will at all times reserve and keep available a number
      of its authorized Common Shares, free from all preemptive rights, which will
      be
      sufficient to permit the exercise of this Warrant.  The Company
      further covenants that such shares as may be issued pursuant to the exercise
      of
      this Warrant will, upon issuance, be duly and validly issued, fully paid and
      non-assessable and free from all taxes, liens, and charges.

     

     

     

     


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    HEB
      LLC
      Note & Warrant Agreement - continued

    
 

    4.          If
      the Company subdivides its outstanding Common Shares, by split-up or otherwise,
      or combines its outstanding Common Shares, the Purchase Price then applicable
      to
      shares covered by this Warrant shall forthwith be proportionately decreased
      in
      the case of a subdivision, or proportionately increased in the case of a
      combination.

    


    5.           If
      (a) the Company reorganizes its capital, reclassifies its capital stock,
      consolidates or merges with or into another corporation (but only if the Company
      is not the surviving corporation and no longer has more than a single
      shareholder) or sells, transfers or otherwise disposes of all or substantially
      all its property, assets, or business to another corporation, and (b) pursuant
      to the terms of such reorganization, reclassification, merger, consolidation,
      or
      disposition of assets, shares of common stock of the successor or acquiring
      corporation, or any cash, shares of stock, or other securities or property
      of
      any nature whatsoever (including warrants or other subscription or purchase
      rights) in addition to or in lieu of common stock of the successor or acquiring
      corporation (“Other Property”), are to be received by or distributed to the
      holders of Common Shares, then (c) Holder shall have the right thereafter to
      receive, upon exercise of this Warrant, the same number of shares of common
      stock of the successor or acquiring corporation and Other Property receivable
      upon such reorganization, reclassification, merger, consolidation, or
      disposition of assets as a holder of the number of Common Shares for which
      this
      Warrant is exercisable immediately prior to such event. At the time of such
      reorganization, reclassification, merger, consolidation or disposition of
      assets, the successor or acquiring corporation shall expressly assume the due
      and punctual observance and performance of each and every covenant and condition
      of this Warrant to be performed and observed by the Company and all the
      obligations and liabilities hereunder, subject to such modifications as may
      be
      deemed appropriate (as determined by resolution of the Board of Directors of
      the
      Company) in order to adjust the number of shares of the common stock of the
      successor or acquiring corporation for which this Warrant is exercisable. For
      purposes of this section, “common stock of the successor or acquiring
      corporation” shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
      corporation and which is not subject to redemption and shall also include any
      evidences of indebtedness, shares of stock, or other securities which are
      convertible into or exchangeable for any such stock, either immediately or
      upon
      the arrival of a specified date or the happening of a specified event and any
      warrants or other rights to subscribe for or purchase any such stock. The
      foregoing provisions of this section shall similarly apply to successive
      reorganizations, reclassifications, mergers, consolidations, or disposition
      of
      assets.

    


    6.           If
      a voluntary or involuntary dissolution, liquidation or winding up of the Company
      (other than in connection with a merger or consolidation of the Company) is
      at
      any time proposed during the term of this Warrant, the Company shall give
      written notice to the Holder at least thirty days prior to the record date
      of
      the proposed transaction.  The notice shall contain: (1) the date on
      which the transaction is to take place; (2) the record date (which must be
      at
      least thirty days after the giving of the notice) as of which holders of the
      Common Shares entitled to receive distributions as a result of the transaction
      shall be determined; (3) a brief description of the transaction; (4) a brief
      description of the distributions, if any, to be made to holders of the Common
      Shares as a result of the transaction; and (5) an estimate of the fair market
      value of the distributions.  On the date of the transaction, if it
      actually occurs, this Warrant and all rights existing under this Warrant shall
      terminate.

    


    7.           In
      no event shall any fractional Common Share of the Company be issued upon any
      exercise of this Warrant.  If, upon exercise of this Warrant as an
      entirety, the Holder would, except as provided in this Section 7, be entitled
      to
      receive a fractional Common Share, then the Company shall issue the next higher
      number of full Common Shares, issuing a full share with respect to such
      fractional share.  If this Warrant is exercised at one time for less
      than the maximum number of Common Shares purchasable upon the exercise hereof,
      the Company shall issue to the Holder a new warrant of like tenor and date
      representing the number of Common Shares equal to the difference between the
      number of shares purchasable upon full exercise of this Warrant and the number
      of shares that were purchased upon the exercise of this Warrant.

    


    8.           Whenever
      the Purchase Price is adjusted, as herein provided, the Company shall promptly
      deliver to the Holder a certificate setting forth the Purchase Price after
      such
      adjustment and setting forth a brief statement of the facts requiring such
      adjustment.

     

     

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    HEB LLC Note & Warrant Agreement -
      continued

    
 

    9.           If
      at any time prior to the expiration or exercise of this Warrant, the Company
      shall pay any dividend or make any distribution upon its Common Shares or shall
      make any subdivision or combination of, or other change in its Common Shares,
      the Company shall cause notice thereof to be mailed, first class, postage
      prepaid, to Holder at least thirty full business days prior to the record date
      set for determining the holders of Common Shares who shall participate in such
      dividend, distribution, subdivision, combination or other
      change.  Such notice shall also specify the record date as of which
      holders of Common Shares who shall participate in such dividend or distribution
      is to be determined.  Failure to give such notice, or any defect
      therein, shall not affect the legality or validity of any dividend or
      distribution.

    


    10.           The
      Company will maintain a register containing the names and addresses of the
      Holder and any assignees of this Warrant.  Holder may change its
      address as shown on the warrant register by written notice to the Company
      requesting such change.  Any notice or written communication required
      or permitted to be given to the Holder may be delivered by confirmed facsimile
      or telecopy or by a recognized overnight courier, addressed to Holder at the
      address shown on the warrant register.

    


    11.           This
      Warrant has not been registered under the Securities Act of 1933, as amended
      (the “Securities Act”), or any state securities laws (“State Acts”) or
      regulations in reliance upon exemptions under the Securities Act, and exemptions
      under the State Acts. Subject to compliance with the Securities Act and State
      Acts, this Warrant and all rights hereunder are transferable in whole or in
      part, at the office of the Company at which this Warrant is exercisable, upon
      surrender of this Warrant together with the assignment hereof properly endorsed.
      The Common Stock into which the Warrants are exercisable will have piggyback
      registration rights, and the Warrants will be transferable.

    


    12.           In
      case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company
      may issue a new warrant of like tenor and denomination and deliver the same
      (a)
      in exchange and substitution for and upon surrender and cancellation of any
      mutilated Warrant, or (b) in lieu of any Warrant lost, stolen, or destroyed,
      upon receipt of evidence satisfactory to the Company of the loss, theft or
      destruction of such Warrant (including a reasonably detailed affidavit with
      respect to the circumstances of any loss, theft, or destruction) and of
      indemnity with sufficient surety satisfactory to the Company.

    


    13.           Unless
      a current registration statement under the Securities Act, shall be in effect
      with respect to the securities to be issued upon exercise of this Warrant,
      the
      Holder, by accepting this Warrant, covenants and agrees that, at the time of
      exercise hereof, and at the time of any proposed transfer of securities acquired
      upon exercise hereof, the Company may require Holder to make such
      representations, and may place such legends on certificates representing the
      Common Shares issuable upon exercise of this Warrant, as may be reasonably
      required in the opinion of counsel to the Company to permit such Common Shares
      to be issued without such registration.

    


    14.           
      This Warrant does not entitle Holder to any of the rights of a stockholder
      of
      the Company.

    


    15.           Nothing
      expressed in this Agreement and nothing that may be implied from any of the
      provisions hereof is intended, or shall be construed, to confer upon, or give
      to, any person or corporation other than the parties to this Agreement any
      covenant, condition, stipulation, promise, or agreement contained herein, and
      all covenants, conditions, stipulations, promises and agreements contained
      herein shall be for the sole and exclusive benefit of the parties hereto and
      their respective successors and assigns.

    


    16.           The
      provisions and terms of this Warrant shall be construed in accordance with
      the
      laws of the State of Nevada.

    


    IN
      WITNESS WHEREOF, the Company as of October 1, 2007 has duly executed this
      Warrant.

    


     

    
      	 	
              SECURED
                FINANCIAL NETWORK, INC.

               

               

               

               

               

               

               

              By:
                /s/ Jeffrey L.
                Schultz                            
                

              
                Jeffrey
                  L. Schultz - President

              

            




    



    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    HEB LLC Note & Warrant Agreement -
      continued


    FORM
      OF EXERCISE

    


    


     Date:
      ____________________

    


    


    To:           SECURED
      FINANCIAL NETWORK, INC.

    100
      NE
      3rd Ave., Suite 1500,

    Ft.
      Lauderdale, FL 33301

    Telecopy
      No. 954.337.2835

    


    


    The
      undersigned hereby subscribes for 200,000 shares of common stock of SECURED
      FINANCIAL NETWORK, INC. covered by this Warrant and hereby delivers $ 10,000
      in
      full payment of the purchase price thereof. The certificate(s) for such shares
      should be issued in the name of the undersigned or as otherwise indicated
      below:

    


     

    
 

    
      	 	
               ____________________________

              Signature:

               

               

               

              ____________________________

              Printed
                Name

               

               

               

              ____________________________

              Name
                for Registration, if different

              


               

               

              ____________________________

              Street
                Address

               

               

               

              ____________________________

              City,
                State and Zip Code

               

               

               

              ____________________________

              Social
                Security Number

            


    

     


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    HEB LLC Note & Warrant Agreement -
      continued

    


    ASSIGNMENT

    


    


    For
      Value
      Received, the undersigned hereby sells, assigns and transfers unto the
      assignee(s) set forth below the within Warrant certificate, together with all
      right, title and interest therein, and hereby irrevocably constitutes and
      appoints ___________________________________ attorney, to transfer the said
      Warrant on the books of the within-named Company with respect to the number
      of
      Common Shares set forth below, with full power of substitution in the
      premises.

     

     

    
 

    
      	
              Name(s)
                of

               Assignee(s)  

            	
               Social
                Security or

              other
                Identifying

              
                Number(s)
                  of

                Assignee(s)  

              

            	
               Address 

            	 
              
              No.
                of

              Shares

            


    

     

     

     

    


    Dated:
      ______________________________

    


    


    
      	 	
               _________________________________________

              Signature

               

              NOTICE:
                THE SIGNATURE TO THIS
                ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE
                OF THE
                WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR
                ANY
                CHANGE WHATSOEVER.

               

               

              _________________________________________

              Print
                Name and Title

               

            


    

    


     

     7