Unassociated Document


    September
      24, 2008

     

     

    Advanced
      Voice Recognition Systems, Inc.

    c/o
      Mr.
      Walter Geldenhuys

    112
      E.
      Spruce Street

    Mitchell,
      SD 57301

    


    RE:
      Purchase
      Agreement

    


    Dear
      Mr.
      Geldenhuys:

     

    The
      undersigned, Lion Share Capital, LLC (the “Investor”) hereby confirms and agrees
      with you as follows:

     

    1. This
      Purchase Agreement (the “Agreement”), is made as of the date hereof between
      Advanced Voice Recognition Systems, Inc. a Nevada corporation (the “Company”),
      and the Investor.

     

    2. The
      Company agrees to sell and issue to the Investor, and the Investor agrees to
      purchase and acquire from the Company (the “Offering”), Sixteen
      million (16,000,000)
      restricted shares of the Company’s common stock (the “Offered Shares”), par
      value $.001 per
      share
      (the “Common Stock”). 

     

    3. The
      Company and the Investor agree that the Offering is being made subject to the
      execution and acceptance by the Company of this Agreement and the associated
      Promissory Note (the “Note”) attached hereto as Exhibit
      A
      and
      incorporated herein by reference as if fully set forth herein. The Purchase
      of
      Offered Shares shall follow the following process: 1) the Purchase process
      will
      be initiated upon the execution and acceptance of this Agreement and the
      associated Note; 2) the Offered Shares will be transferred into the name of
      the
      Investor within (10) business days after the execution and acceptance of the
      above referenced documents; 3) the Offered Shares are being purchased at a
      Purchase Price of $.3125
      per
      share; 4) payment for the Offered Shares will be remitted to the Company in
      (3)
      traunches: traunche (a) will be in the amount of Seven
      hundred and fifty thousand dollars (US$750,000)
      and
      shall take place on or before the 45th
      day
      after the execution of this Agreement; traunche (b) will be in the amount of
      Three
      million dollars (US$3,000,000)
      and
      shall be paid over the 90 days immediately following traunche (a), and traunche
      (c) will be in the amount of One
      million two hundred and fifty thousand dollars
      (US$1,250,000) and will take place over the (45) days immediately following
      traunche (b). One year after the Investor’s final payment, the Company shall
      have the option to repurchase any or all of the Offered Shares at a price of
      $.4125
      per
      share. The
      Company shall notify the Investor within (30) days of the one year anniversary
      of the final payment due date, to formally indicate its exercise of the option
      granted herein. All amounts owed by the Investor to the Company pursuant to
      this
      Agreement shall be delivered by wire transfer of immediately available funds
      to
      an account designed in writing by the Company.
      All
      amounts owed by the Investor to the Company pursuant to this Agreement shall
      be
      paid to the Company either by certified or bank cashier’s check at the address
      set forth below, via wire transfer in immediately available funds to an account
      designated by the Company, or in such other manner at such other place in the
      United States of America as the Company shall designate to the Investor in
      writing. If any payment is due on a day which is not a Business Day, such
      payment shall be due on the next succeeding Business Day. “Business Day” means
      any day other than a Saturday, Sunday or legal holiday in the State of Nevada.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4. The
      Investor represents and warrants as of the date of this Agreement as well as
      of
      the date of any payment of tranches (a) through (c) set forth in paragraph
      3
      above:

     

    (a) that
      the
      Investor has the legal capacity and authority to enter into this Agreement.
      This
      Agreement is a valid and legally binding obligation of the Investor and is
      fully
      enforceable against the Investor in accordance with its terms, except as such
      enforceability may be limited by general principles of equity, bankruptcy,
      insolvency, moratorium and similar laws relating to creditors’ rights
      generally;

     

    (b) that
      the
      execution, acknowledgement, delivery and performance of this Agreement by the
      Investor and the consummation of the transactions contemplated by this Agreement
      will not violate or require any registration, qualification, consent, approval,
      or filing under any law, statute, ordinance, rule or regulation (hereinafter
      collectively referred to as “Laws”) of any federal, state or local government in
      the U.S., Canada or elsewhere (hereinafter collectively referred to as
“Governments”) or any agency, bureau, commission or instrumentality of any
      Governments (“hereinafter collectively referred to as “Governmental
      Agencies”);

     

    (c) that
      there is no action, suit, proceeding, claim, or arbitration, or any
      investigation by any person or entity (i) pending against the Investor, or
      (ii)
      to
      the knowledge of the Investor, threatened against the Investor, as the case
      may
      be, that might challenge the Investor’s right to execute, acknowledge, deliver,
      perform under or consummate the transactions contemplated by this
      Agreement;

     

    (d)  that the
      execution, acknowledgement, delivery and performance of this Agreement by the
      Investor and the consummation of the transactions contemplated by this Agreement
      will not violate or require any Laws of any Government or any Governmental
      Agency;

     

    (e) that
      the
      Investor is a sophisticated investor and an “accredited investor” as defined in
      Rule 501 under the U.S. Securities Act of 1933, as amended (the “Securities
      Act”), who can fend for itself, can bear the economic risk of its investment,
      and has such knowledge and experience in financial and business matters that
      it
      is capable of evaluating the merits and risks of the investment in the Offered
      Shares and can bear the economic risk of loss of the investment in the Offered
      Shares; 

     

    (f) that
      the
      Offered Shares have not been registered under the Securities Act and may be
      resold only if registered pursuant to the provisions of the Securities Act
      or if
      an exemption from registration is available. The certificates evidencing the
      Offered Shares will bear a restricted legend. The Offered Shares are purchased
      for the Investor’s own account, not as nominee or agent, and not with any
      agreement for the resale or distribution thereof; 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (g) that
      neither the Investor nor any of its affiliates, officers, directors or principal
      equity holders (owners of 5% of more of the equity securities of the
      undersigned) has held any position or office or has had any other material
      relationship with the Company (or its predecessors or affiliates) during the
      past three years;

     

    (h) that,
      except for the Offered Shares acquired by the Investor pursuant to this
      Agreement, the Investor is not the beneficial or registered owner of any
      securities of the Company; 

     

    (i) that
      the
      Investor is acquiring the Offered Shares in the ordinary course of business,
      and
      the Investor is not a party to any agreement or understanding, directly or
      indirectly, with any person to distribute the Offered Shares; and

     

    (j) that
      there have been no representations, warranties or promises made to the Investor
      regarding the potential that the Offered Shares ever will appreciate in value,
      that the Investor has conducted its due diligence on the Company and the Offered
      Shares and has had the opportunity to ask the Company’s executive officers
      questions regarding the Company and its operations, as well as the Offered
      Shares, and that the only documents provided to the Investor by the Company
      as
      part of the Investor’s due diligence are the Company’s reports filed with the
      U.S. Securities and Exchange Commission. 

     

    5.
      All
      of
      the representations, warranties, covenants promises and agreements of the
      parties contained in this Agreement or any related transaction documents shall
      survive the execution, acknowledgement and delivery of this Agreement and the
      consummation of the transactions contemplated hereby for a period of two years
      following the date hereof. 

     

    6. All
      notices or other communications provided for by this Note shall be made in
      writing and any such notice shall be deemed properly delivered when (a)
      delivered personally, or (b) delivered through an electronic facsimile
      transmission, with transmission confirmed, or (c) deposited in the mail, postage
      prepaid for registered or certified mail, and addressed to the parties at the
      following addresses (or to such other address designated in writing by one
      party
      to the other): 

     

    

      
        	
                To
                  Investor: 

              	
                Lion
                  Share Capital, LLC

              
	 	
                110
                  S. Main Street, Suite 410

              
	 	
                Wichita,
                  Kansas 67202

              
	 	
                Facsimile:
                  (316) 264-5700

              
	 	 
	
                To
                  the Company:

              	
                Advanced
                  Voice Recognition Systems, Inc

              
	 	
                7659
                  E. Wood Drive

              
	 	
                Scottsdale,
                  Arizona 85260

              
	 	
                Facsimile:
                  (480) 626-5378

              


      

    

    


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    7. This
      Agreement constitutes the full, entire and integrated agreement between the
      parties hereto with respect to the subject matter hereof, and supersedes all
      prior negotiations, correspondence, understandings and agreements among the
      parties hereto respecting the subject matter hereof. 

    


    8. This
      Agreement shall not be assignable by any party hereto without the prior written
      consent of the other parties hereto. 

    


    9. This
      Agreement shall inure to the benefit of and be binding upon the parties hereto,
      each other person who is indemnified under any provision of this Agreement,
      and
      their respective heirs, personal and legal representatives, guardians,
      successors and permitted assigns. Nothing in this Agreement, express or implied,
      is intended to confer upon any other person any rights, remedies, obligations,
      or liabilities. 

    


    10. Any
      provision of this Agreement held by a court of competent jurisdiction to be
      prohibited or unenforceable shall be ineffective to the extent of such
      prohibition or unenforceability, without invalidating or rendering unenforceable
      the remaining provisions of this Agreement. 

    


    11.
      No
      provision of this Agreement may be amended, waived, or otherwise modified
      without the prior written consent of the other parties hereto. The waiver by
      any
      party hereto of a breach of any provision or condition contained in this
      Agreement shall not operate or be construed as a waiver of any subsequent breach
      or of any other conditions hereof. 

     

    12.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original and all of which together shall be deemed to be one
      and
      the same instrument. The execution and delivery of this Agreement by delivery
      of
      a copy bearing the facsimile signature of a signatory hereto shall constitute
      a
      valid, binding and enforceable execution and delivery of this Agreement by
      that
      signatory. 

     

    13.
      This
      Agreement is made and entered into, and shall be governed by and construed
      in
      accordance with, the laws of the State of Nevada without regard to conflict
      of
      law principles. Any suits, proceedings and other actions relating to, arising
      out of or in connection with this Agreement shall be submitted to the
      appropriate court having jurisdiction in the State of Nevada, or the United
      States District Court for the District of Nevada. All parties to this Agreement
      hereby waive any claim against or objection to in personam jurisdiction and
      venue in the courts of the State of Nevada, or the United States District Court
      for the District of Nevada. 

     

    14.
      The
      Investor represents that it has had the opportunity to review this Agreement
      with its personal legal counsel and/or other advisors and that it has not relied
      upon the advice of any other party’s legal counsel or advisor. Except as
      specifically otherwise provided in this Agreement, the parties hereto each
      shall
      pay their respective fees and expenses. 

     

    


    [REMAINDER
      OF PAGE LEFT BLANK INTENTIONALLY. SIGNATURE PAGE FOLLOWS.]


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    Please
      confirm that the foregoing correctly sets forth the agreement between us by
      signing in the space provided below for that purpose.

     

    Name
      of
      Investor: LION
      SHARE CAPITAL, LLC

     

    By:/s/
      Sherrilyn
      Frierson                


     

    Name:
      Sherrilynn
      Frierson             

     

    Title:
      Director
      of
      Finance               


     

    AGREED
      AND ACCEPTED:

     

    ADVANCED
      VOICE RECOGNITION SYSTEMS, INC. 

     

    By:/s/
      Walter Geldenhuys         


     

    Name:
      Walter
      Geldenhuys         


     

    Title:
      President,
      CEO and CFO   

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    SCHEDULE
      I

     

    SCHEDULE
      OF BENEFICIAL OWNERSHIP

     

    Please
      provide the number of securities of Advanced
      Voice Recognition Systems, Inc. that
      you
      or your organization will own immediately after the completion of the purchase
      and sale of the Offered Shares (the “Closing”), including those Offered Shares
      purchased by you or your organization pursuant to this Purchase Agreement and
      those securities purchased or acquired by you or your organization through
      other
      transactions and provide the number of securities that you have or your
      organization has the right to acquire within 60 days of the Closing. Please
      also include the full
      legal
      name of Natural Control Person (which means a natural person who directly or
      indirectly alone or with others has power to vote or dispose of the securities
      covered by the questionnaire):

     

    Sixteen
      Million (16,000,000) 

    
      

    

     

    Sherilynn
      Frierson

    
      
 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ANNEX
      I

     

    INVESTOR
      QUESTIONNAIRE

     

    Pursuant
      to Annex
      I
      to the
      Agreement, please provide us with the following information:

     

    
      	
              1.

               

            	 	
              The
                exact name that your Shares are to be registered in. You may use
                a nominee
                name if appropriate:

               

            	 	
              Lion
                Share Capital, LLC

               

            
	 	 	 	 	 
	
              2.

               

            	 	
              The
                relationship between the Investor and the registered holder listed
                in
                response to item 1 above:

               

            	 	
              Non-Affiliate
                Investor

               

            
	 	 	 	 	 
	
              3.

               

            	 	
              The
                mailing address of the registered holder listed in response to item
                1
                above:

               

            	 	
              110
                South Main Street, Suite 410

               

              Wichita,
                KS 67202

               

            
	 	 	 	 	 
	 	 	 	 	 
	
              4.

               

            	 	
              The
                Social Security Number or Tax Identification Number of the registered
                holder listed in the response to item 1 above:

               

            	 	
              26-0303395

               

            
	 	 	 	 	 
	
              5.

               

            	 	
              Name
                of DTC Participant (broker-dealer at which the account or accounts
                to be
                credited with the shares are maintained):

               

            	 	
              N/A

               

            
	 	 	 	 	 
	
              6.

               

            	 	
              DTC
                Participant Number:

               

            	 	
              N/A

               

            
	 	 	 	 	 
	
              7.

               

            	 	
              Name
                of Account at DTC Participant being credited with the Shares:

               

            	 	
              N/A

               

            
	 	 	 	 	 
	
              8.

               

            	 	
              Account
                Number at DTC Participant being credited with the Shares:

               

            	 	
              N/A

               

            


    

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    PROMISSORY
      NOTE


     

    
      	$5,000,000 	
              September
                24,
                2008

            


    

             

    FOR
      VALUE RECEIVED,
      the
      undersigned, Lion Share Capital, LLC, a Kansas Limited Liability Company (“Lion
      Share”), (the “Obligor,”),
      promises to pay to Advanced Voice Recognition Systems, Inc., a Nevada
      corporation (“Payee”),
      in
      lawful money of the United States of America, the principal sum of Five
      Million Dollars ($5,000,000),
      together with interest at an annual rate equal to seven and one-half percent
      (7.5%), in the manner provided below. Capitalized terms used herein but not
      otherwise defined shall have the meanings given them in the Stock Purchase
      Agreement (as defined below).

     

     

    PAYMENT

     

    Principal
      and Interest.
      This
      Note shall accrue interest from the date hereof until the date of full repayment
      at a rate of seven and one-half percent (7.5%) per annum. Notwithstanding the
      foregoing, the accrued interest shall not exceed the maximum interest rate
      allowable under Nevada law. If the interest accrued exceeds the maximum interest
      rate allowed under Nevada law, any excess interest paid by Obligor shall be
      returned to Obligor by Payee. The principal amount of this Note together with
      the interest thereon shall be due and payable in accordance with the following
      schedule: (a) Seven Hundred Fifty Thousand Dollars ($750,000) due an payable
      in
      full on November 8, 2008 (the date that is exactly forty-five (45) days
      following the date hereof); (b) Three Million Dollars ($3,000,000) due and
      payable in full on February 2, 2009 (the date that is exactly one hundred
      thirty-five (135) days following the date hereof); (c) One Million Two Hundred
      Fifty Thousand Dollars ($1,250,000) due and payable in fully on April 23, 2009
      (the date that is exactly one hundred eighty (180) days following the date
      hereof). 

     

    Manner
      of Payment.
      All
      payments on this Note shall be made to Payee either by certified or bank
      cashier’s check at the address set forth hereinbelow, via wire transfer in
      immediately available funds to an account designated by Payee, or in such other
      manner at such other place in the United States of America as Payee shall
      designate to Obligor in writing. If any payment on this Note is due on a day
      which is not a Business Day, such payment shall be due on the next succeeding
      Business Day. “Business Day” means any day other than a Saturday, Sunday or
      legal holiday in the State of Nevada. All sums due hereunder shall be payable
      without offset, demand, abatement or counter-claim of any kind or nature
      whatsoever, all of which are hereby waived by Obligor.

     

    Grant
      of Security Interest.
      As
      collateral security for the prompt, complete, and timely satisfaction of all
      present and future indebtedness, liabilities, duties, and obligations of Obligor
      to Payee evidenced by or arising under this Note or otherwise, and including,
      without limitation, all principal, interest, and fees payable under this Note,
      any future advances added to the principal amount due hereunder, and all
      attorneys’ fees, costs and expenses incurred by Payee in the collection or
      enforcement of the same (collectively, the “Obligations”), Obligor hereby
      pledges, assigns and grants to Payee a continuing first priority security
      interest and lien in all shares of common stock of the Company owned or held
      of
      record or beneficially by Obligor (hereinafter, the “Collateral”) and all
      proceeds thereof and all right, title and interest of Obligor therein. The
      terms
      of this Note with respect to Obligor’s granting of a security interest in the
      Collateral to Payee shall be deemed to be a security agreement under applicable
      provisions of the Uniform Commercial Code in the State of Nevada (the “UCC”),
      with Obligor as the debtor and Payee as the secured party. For so long as any
      obligation under this Note remains outstanding, Obligor shall not sell, assign,
      encumber, pledge, hypothecate, transfer or otherwise dispose of any of the
      Collateral.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Perfection.
      Upon the execution and delivery of this Note, Obligor authorizes Payee to file
      such financing statements and other documents in such offices as shall be
      necessary or as Payee may reasonably deem necessary to perfect and establish
      the
      priority of the liens granted by this Note. Obligor has delivered to Payee
      all
      certificates representing the Collateral registered in the name of Obligor,
      duly
      endorsed in blank or accompanied by a transfer power duly executed by Obligor
      in
      blank, in form and substance satisfactory to Payee, with any and all documentary
      tax stamps and other documents necessary to cause Payee to have a good, valid
      and perfected continuing first priority pledge of and lien on the Collateral
      (free and clear of any other liens). Obligor agrees, upon Payee’s request, to
      take all such actions as shall be necessary or as Payee may reasonably request
      to perfect and establish the priority of the liens granted by this
      Note.

     

    Release
      of Collateral. As of the date hereof, the Collateral is evidenced by three
      stock certificates in the following amounts (which such stock certificates
      represent in the aggregate all shares of common stock of the Company owned
      or
      held of record or beneficially by Obligor as of the date hereof): 2,400,000
      shares of the Company’s common stock; 9,600,000 shares of the Company’s common
      stock; and 4,000,000 shares of the Company’s common stock. Payee’s lien and
      security interest on the Collateral will be partially released in accordance
      with the following schedule: that portion of the Collateral consisting of
      2,400,000 shares of the Company’s common stock will be released upon Obligor’s
      indefeasible payment in full in cash to Payee of the first Seven Hundred Fifty
      Thousand Dollars ($750,000) of principal due under this Note (as set forth
      above); that portion of the Collateral consisting of 9,600,000 shares of the
      Company’s common stock will be released upon Obligor’s indefeasible payment in
      full in cash to Payee of the next Three Million Dollars ($3,000,000) of
      principal due under this Note (as set forth above); and that portion of the
      Collateral consisting of 4,000,000 shares of the Company’s common stock will be
      released upon Obligor’s indefeasible payment in full in cash to Payee of the
      remaining One Million Two Hundred Fifty Thousand Dollars ($1,250,000) of
      principal due under this Note (as set forth above). Payee shall not be deemed
      to
      have made any representation or warranty with respect to any Collateral
      delivered to Obligor in connection herewith, except that such Collateral is
      free
      and clear, on the date of such delivery, of any and all liens arising from
      its
      own acts.

     

    DEFAULTS
      AND REMEDIES

     

    Events
      of Default.
      The
      occurrence of any one or more of the following events with respect to Obligor
      shall constitute an event of default hereunder (“Event of
      Default”):

     

    (a) If
      Obligor shall fail to make any payment due hereunder as and when
      due.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notice
      by Obligor.
      The
      Obligor shall notify Payee in writing within five (5) days after the occurrence
      of any Event of Default of which said Obligor acquires knowledge.

     

    Remedies.
      Upon
      the occurrence of an Event of Default, then, or at any time thereafter, the
      whole of the unpaid principal hereof, together with accrued and outstanding
      interest and all other sums required to be paid under this Note shall, at the
      election of Payee and without notice of such election, become immediately due
      and payable. Payee’s election may be exercised at any time after any such event,
      and the acceptance of one or more payments hereon from any person thereafter
      shall not constitute a waiver of Payee’s election, or of its option to make such
      election. Upon the occurrence and continuation of an Event of Default hereunder,
      the Collateral, or any part thereof, shall be registered in the name of Payee
      and Obligor covenants that Obligor shall affect such registration. Payee may,
      at
      its option, (a) immediately demand that the Collateral be returned within (1)
      business day after the occurrence of an Event of Default. Obligor waives any
      equitable rights that would prevent it from returning the Collateral. In
      addition to the above, upon the occurrence and continuation of an Event of
      Default, Payee shall have all rights, powers, options and remedies provided
      for
      under the UCC or at law or in equity, including, without limitation, to the
      fullest extent permitted by applicable law, the right (in its sole discretion)
      to, which Obligor agrees to be commercially reasonable, (i) apply the Collateral
      to reduce the Obligations, (ii) foreclose the liens created hereunder,
      (iii) realize upon, take possession of and/or sell the Collateral, with or
      without judicial process, at public or private sales or at any broker’s board or
      on any securities exchange or otherwise with or without a disclaimer of
      warranties as to the Collateral sold, (iv) exercise all rights and powers
      with respect to the Collateral as Payee might exercise in its sole discretion,
      including, without limitation, to (1) relinquish or abandon any Collateral
      or
      any lien thereon, (2) vote all or any part of the Collateral and otherwise
      act
      with respect thereto as though it were the outright owner thereof, (3) settle,
      adjust, compromise and arrange all claims and demands whatsoever in relation
      to
      all or any part of the Collateral, (4) execute all such contracts, agreements,
      deeds, documents and instruments, bring, defend and abandon all such actions,
      suits and proceedings, and take all actions in relation to all or any part
      of
      the Collateral, and/or (5) appoint managers, sub-agents and officers for any
      of
      the purposes mentioned in the foregoing provisions of this section and dismiss
      the same, and/or (v) collect and send notices regarding the Collateral,
      with or without judicial process. Payee shall have the right in its sole
      discretion to determine which rights and/or remedies Payee may at any time
      pursue, relinquish, subordinate or modify, and such determination will not
      in
      any way modify or affect any of Payee’s rights, liens or hereunder or under
      applicable law or equity. The enumeration of any rights and remedies in this
      Note is not intended to be exhaustive, and all rights and remedies of Payee
      described herein are cumulative and are not alternative to or exclusive of
      any
      other rights or remedies that Payee otherwise may have. The partial or complete
      exercise of any right or remedy shall not preclude any other further exercise
      of
      such or any other right or remedy.

    


    Upon
      the
      occurrence and continuation of an Event of Default, all rights of Obligor to
      exercise voting and/or consensual rights and powers and/or to receive dividends
      that Obligor is entitled to exercise and/or receive shall cease immediately,
      and
      all such rights thereupon shall become vested solely and exclusively in Payee
      automatically without any action by any Person. Obligor hereby appoints Payee
      its attorney-in-fact, with full power of substitution, which appointment as
      attorney-in-fact is irrevocable and coupled with an interest, to take all such
      actions upon or after the occurrence and continuation of an Event of Default,
      whether in the name of Payee or Obligor, as Payee may consider necessary or
      desirable for the purpose of exercising such rights and receiving such
      dividends. Any dividends, distributions in property, returns of capital and
      other distributions made on or in respect of the Collateral, and any and all
      cash and other property received in exchange therefor and/or redemption of
      any
      Collateral delivered to Obligor, in violation of this Note shall be held in
      trust for the benefit of the Payee and forthwith shall be delivered to Payee.
      Any and all money and other property received by Secured Party pursuant to
      the
      provisions hereof shall be retained by Payee as part of the
      Collateral.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      proceeds of any collection, recovery, receipt, appropriation, realization,
      transfer, exchange, disposition or sale of the Collateral as aforesaid shall
      be
      applied to the Obligations in such order as Payee shall determine in its sole
      discretion.

    


    Obligor
      hereby irrevocably appoints Payee as its attorney-in-fact to take any action
      Payee deems necessary upon the occurrence and continuation of an Event of
      Default to perfect, protect and realize upon its lien and first priority
      security interest in the Collateral including the execution and delivery of
      any
      and all documents or instruments related to the Collateral in Obligor’s name, or
      otherwise to effect fully the purpose, terms and conditions of this Note, and
      said appointment shall create in Payee a power coupled with an
      interest.

    


    Subject
      Headings.
      The
      subject headings of the sections, paragraphs and subparagraphs of this Note
      are
      included solely for purposes of convenience and reference, and shall not be
      deemed to explain, modify, limit, amplify or aid in the meaning, construction
      or
      interpretation of any of the provisions of this Note.

     

    Parties
      in Interest.
      Nothing
      in this Note, whether express or implied, is intended to confer upon any person
      other than the parties hereto and their respective heirs, representatives,
      successors and permitted assigns, any rights or remedies under or by reason
      of
      this Note. This Note shall bind Obligor and their respective successors and
      assigns. This Note shall not be assigned or transferred by Payee without the
      express prior written consent of Obligor, except by will or, in default thereof,
      by operation of law.

     

    Severability.
      Should
      any section, paragraph, subparagraph, part, term or provision of this Note
      be
      declared invalid, void or unenforceable, all remaining paragraphs,
      subparagraphs, parts, terms and provisions hereof shall remain in full force
      and
      effect and shall in no way be invalidated, impaired or affected
      thereby.

     

    Interpretations
      and Definitions.
      Each of
      Obligor and Payee agree that each party and his counsel have reviewed and
      approved this Note and that any rule of construction to the effect that
      ambiguities are to be resolved against the drafting party shall not apply in
      the
      interpretation of this Note. All words used in this Note will be construed
      to be
      of such gender or number as the circumstances require. Unless otherwise
      expressly provided, the words “hereof” and “hereunder” and similar references
      refer to this Note in its entirety and not to any specific section or subsection
      hereof.

     

    Dispute
      Resolution.
      Any
      dispute, controversy or claim arising out of or relating to this Note including,
      without limitation, any issue concerning the obligations, rights, duties, powers
      and remedies under this Note and of the parties hereto, shall be resolved by
      final and binding arbitration as available in the State of Nevada. The
      prevailing party shall be awarded all arbitration, expert and attorney fees,
      costs and expenses.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notices.
      All
      notices or other communications provided for by this Note shall be made in
      writing and any such notice shall be deemed properly delivered when (a)
      delivered personally, or (b) delivered through an electronic facsimile
      transmission, with transmission confirmed, or (c) deposited in the mail, postage
      prepaid for registered or certified mail, and addressed to the parties at the
      following addresses (or to such other address designated in writing by one
      party
      to the other): 

     

    
      

        
          	
                  To
                    Obligor: 

                	
                  Lion
                    Share Capital, LLC

                
	 	
                  110
                    S. Main Street, Suite 410

                
	 	
                  Wichita,
                    Kansas 67202

                
	 	
                  Facsimile:
                    (316) 264-5700

                
	 	 
	
                  To
                    Payee

                	
                  Advanced
                    Voice Recognition Systems, Inc

                
	 	
                  7659
                    E. Wood Drive

                
	 	
                  Scottsdale,
                    Arizona 85260

                
	 	
                  Facsimile:
                    (480) 626-5378

                


        

      

    

     

    Entire
      Agreement.
      This
      Note contains the entire agreement between Obligor and Payee and supersedes
      all
      prior and contemporaneous agreements, arrangements, negotiations and
      understandings between Obligor and Payee relating to the subject matter hereof.
      There are no other understandings, statements, promises or inducements, oral
      or
      otherwise, contrary to the terms of this Note. No representations, warranties,
      covenants or conditions, express or implied, whether by statute or otherwise,
      other than as set forth herein, have been made by any party hereto.

     

    Applicable
      Law.
      This
      Note shall be governed by and construed and enforced in accordance with and
      subject to the substantive laws of the State of Nevada, without regard to
      conflicts-of-laws principles.

     

    Waivers.
      Obligor
      hereby waives diligence, presentment, demand and protest, and notice of demand,
      of protest, of nonpayment, of dishonor and of maturity and agrees that time
      is
      of the essence of every provision hereof. The right, if any, of Obligor, and
      all
      other persons or entities, who are, or may become, liable for this indebtedness,
      to plead any and all statutes of limitation as a defense is expressly waived
      by
      each and all of such parties to the full extent permissible by
      law.


     

    Signatures
      on Following Page

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      Obligor
      has executed and delivered this Note as of the date first stated above.


     

     

    “OBLIGOR”

     

    
      
        	 	 
	
                /s/
                  Sherrilynn Frierson

              	
                September
                  24, 2008

              
	
                Authorized
                  Signer

              	
                Date

              
	 	 


      

    

     

    Name:
      Sherrilynn
      Frierson

    


    On
      Behalf
      of: Lion
      Share Capital, LLC

    


    


    By
      signing below, the
      Payee
      hereby accepts this Promissory Note from the Obligor under the terms and
      conditions stated herein.

     

    


    “PAYEE”

     

    
      
        	 	 
	
                /s/
                  Walter Geldenhuys

              	
                September
                  25, 2008

              
	
                Authorized
                  Signer

              	
                Date

              
	 	 


      

    

    


    Name:
      Walter
      Geldenhuys

    


    On
      Behalf
      of: Advanced
      Voice Recognition Systems, Inc.