**Exhibit 10.1**

 

**PROMISSORY NOTE**

 
| $7,500 |   | Dated: November 12, 2003 |
|--------|--------|-------------------------------|

 

1.                                       Principal.  FOR VALUE RECEIVED, Nucotec, Inc., a Nevadacorporation (“*Maker*”), promises to pay to the order of Earl T. Shannon(“*Holder*”),at the address of Holder known to Maker or at such other place as Holder mayfrom time to time designate in writing, the principal sum of seven thousandfive hundred dollars ($7,500) (the “*Obligation*”), which represents theprincipal amount to be advanced by Holder to Maker.

 

2.                                       Interest.  Interest on the unpaid principal amount ofthe Obligation outstanding from time to time shall accrue at the annualizedrate of ten percent (10%).  Computationsof interest shall be made on the basis of a 365 day year, and the actual numberof days elapsed.

 

3.                                       Payments.  Maker shall pay to Holder the Obligation inthe following manner:

 

(a)                                  One paymentconsisting of principal and interest on the Maturity Date (as defined below).

 

(b)                                 “*MaturityDate*” shall mean the date which is one year from the date ofthis Note.

 

4.                                       Transaction.  This Note is the promissory note issued byMaker to Holder to evidence a loan.

 

5.                                       Prepayment.  Maker shall be entitled to prepay this Noteprior to the Maturity Date without premium or penalty.

 

6.                                       Applications ofPayments.  Payments received by Holderpursuant to the terms hereof shall be applied in the following manner:  first, to the payment of all expenses,charges, late payment fees, costs and fees incurred by or payable to Holder andfor which Maker is obligated pursuant to the terms of this Note, second, to thepayment of all interest accrued to the date of such payment; and third, to thepayment of principal.

 

7.                                       Events of Default.  The occurrence of any of the followingevents shall constitute an Event of Default hereunder

 

(a)                                  Failure of Makerto pay the principal and interest upon the Maturity Date;

 

(b)                                 Failure of Makerto pay any amount or perform any other obligation under the Agreement;

 

(c)                                  Maker shall admitin writing its inability to, or be generally unable to, pay its undisputeddebts as such undisputed debts become due;

 

(d)                                 Maker shall: (i)apply for or consent to the appointment of, or the taking of possession by, areceiver, custodian, trustee, examiner or liquidator of all or a substantialpart of its property, (ii) make a general assignment for the benefit of itscreditors, (iii) commence a voluntary case under the United States Bankruptcy 

 

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Code, (iv) file a petition seeking to takeadvantage of any other law relating to bankruptcy, insolvency, reorganization,liquidation, dissolution, arrangement or winding-up, or composition orreadjustment of debts; (v) fail to controvert in a timely and appropriatemanner, or acquiesce in writing to, any petition filed against him in aninvoluntary case under the United States Bankruptcy Code; or (vi)take anyaction for the purpose of effecting any of the foregoing;

 

(e)                                  A proceeding orcase shall be commenced, without the application or consent of Maker, in anycourt of competent jurisdiction, seeking: (i) its financial reorganization,liquidation or arrangement, or the composition or readjustment of its debts;(ii) the appointment of a receiver, custodian, trustee, examiner, liquidator orthe like of Maker or of all or any substantial part of its property; or (iii)similar relief in respect of Maker under any law relating to bankruptcy,insolvency, reorganization or composition or adjustment of debts, and suchproceeding or case shall continue undismissed, or an order, judgment or decreeapproving or ordering any of the foregoing shall be entered and continueunstayed and in effect, for a period of 30 or more days; or an order for reliefagainst Maker shall be entered in an involuntary case under the United StatesBankruptcy Code; or

 

(f)                                    A final judgmentor judgments issued by a court of competent jurisdiction for the payment ofmoney in excess of $25,000 in the aggregate (exclusive of judgment amountsfully covered by insurance where the insurer has admitted liability in respectof such judgment) or in excess of $50,000 in the aggregate (regardless ofinsurance coverage) shall be rendered by a one or more governmental personshaving jurisdiction against Maker and the same shall not be discharged (orprovision shall not be made for such discharge), or a stay of execution of therelevant judgment shall not be procured, within 30 days from the date of entryof such judgment and Maker shall not, within that 30-day period, or such longerperiod during which execution of the same shall have been stayed, appeal fromand cause the execution of such judgment to be stayed during such appeal.

 

8.                                       Remedies; LatePayment Penalty.  Upon the occurrence of anEvent of Default and without demand or notice, Holder may declare the principalamount then outstanding of, and the accrued interest on, the Obligation ofMaker to be forthwith due and payable, whereupon such amounts shall beimmediately due and payable without presentment, demand, protest or otherformalities of any kind, all of which are hereby expressly waived by Maker andMaker may exercise all rights and remedies available to it under the Agreementor any succeeding agreement).

 

9.                                       Waiver.  Maker hereby waives diligence, presentment,protest and demand, notice of protest, dishonor and nonpayment of this Note andexpressly agrees that, without in any way affecting the liability of Makerhereunder, Holder may extend any maturity date or the time for payment of anyinstallment due hereunder, accept security, release any party liable hereunderand release any security now or hereafter securing this Note.  Maker further waives, to the full extentpermitted by law, the right to plead any and all statutes of limitations as adefense to any demand on this Note, or on any deed of trust, security agreement,lease assignment, guaranty or other agreement now or hereafter securing thisNote.

 

10.                                 Attorneys’ Fees;Costs.  Maker agrees to pay to Holderall costs and expenses including attorneys’ fees and costs, incurred by Holderin connection with the negotiation, preparation or execution of the loan andthis Note.  If this Note is not paidwhen due or if any 

 

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Event of Defaultoccurs, Maker promises to pay all costs of enforcement and collection,including but not limited to, Holder’s attorneys’ fees, whether or not anyaction or proceeding is brought to enforce the provisions hereof.

 

11.                                 Severability.  Every provision of this Note is intended tobe severable.  In the event any term orprovision hereof is declared by a court of competent jurisdiction, to beillegal or invalid for any reason whatsoever, such illegality or invalidityshall not affect the balance of the terms and provisions hereof, which termsand provisions shall remain binding and enforceable.

 

12.                                 Interest RateLimitation.  Holder and Maker stipulate andagree that none of the terms and provisions contained herein or in theAgreement shall ever be construed to create a contract for use, forbearance ordetention of money requiring payment of interest at a rate in excess of themaximum interest rate permitted to be charged by the laws of the State ofCalifornia.  In such event, if anyHolder of this Note shall collect monies which are deemed to constitute interestwhich would otherwise increase the effective interest rate on this Note to arate in excess of the maximum rate permitted to be charged by the laws of theState of Nevada, all such sums deemed to constitute interest in excess of suchmaximum rate shall, at the option of Holder, be credited to the payment of thesums due hereunder or returned to Maker.

 

13.                                 Number and Gender.  In this Note the singular shall include theplural and the masculine shall include the feminine and neuter gender, and viceversa, if the context so requires.

 

14.                                 Headings.  Headings at the beginning of each numberedparagraph of this Note are intended solely for convenience and are not to bedeemed or construed to be a part of this Note.

 

15.                                 Choice of Law.  This Note shall be governed by and construedin accordance with the laws of the State of California.  Any action to enforce this Note shall bebrought in state or federal courts located in Orange County, California.

 

16.                                 Miscellaneous.

 

(a)                                  All notices andother communications provided for hereunder shall be in writing and shall bedelivered by United States mail, certified or registered, return receiptrequested to the respective party at the address provided in the Agreement orotherwise provided for such purpose.

 

(b)                                 No failure ordelay on the part of Holder or any other holder of this Note to exercise anyright, power or privilege under this Note and no course of dealing betweenMaker and Holder shall impair such right, power or privilege or operate as awaiver of any default or an acquiescence therein, nor shall any single orpartial exercise of any such right, power or privilege preclude any other orfurther exercise thereof or the exercise of any other right, power orprivilege.  The rights and remediesherein expressly provided are cumulative to, and not exclusive of, any rightsor remedies, which Holder would otherwise have.  No notice to or demand on Maker in any case shall entitle Makerto any other or further notice or demand in similar or other circumstances orconstitute a waiver of the right of Holder to any other or further action inany circumstances without notice or demand.

 

(c)                                  Maker and anyendorser of this Note hereby consent to renewals and extensions of time at orafter the maturity hereof, without notice, and hereby waive diligence,presentment, protest, demand and notice of every kind.

 

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(d)                                 Maker may notassign its rights or obligations hereunder without prior written consent ofHolder.  Subject to compliance withapplicable federal and state securities laws, Holder may (i) assign all or anyportion of this Note without the prior consent of Maker or (ii) sell or agreeto sell to one or more other persons a participation in all or any part of theNote without the prior consent of Maker. Upon surrender of the Note, Maker shall execute and deliver one or moresubstitute notes in such denominations and of a like aggregate unpaid principalamount or other amount issued to Holder and/or to Holder’s designatedtransferee or transferees.  Holder may furnishany information in the possession of Holder concerning Maker, or any of itsrespective subsidiaries, from time to time to assignees and participants(including Prospective assignees and participants).

 

IN WITNESS WHEREOF, Maker has caused this Note tobe duly executed and delivered as of the day and year and at the place firstabove written.

 
|   | **MAKER:**                                                            |
|--------|-----------------------------------------------------------------------|
|   |                                                                  |
|   | Nucotec, Inc.,                                                        |
|   | a Nevada corporation                                                  |
|   |                                                                  |
|   |                                                                  |
|   | /s/ Earl T. Shannon                                                   |   |
|   | BY: Earl T. Shannon                                                   |
|   | ITS: President                                                        |
|   |                                                                  |
|   | **CERTIFIED AS AUTHORIZED BY BOARD  OF  DIRECTORS OF NUCOTEC, INC.:** |
|   |                                                                  |
|   |                                                                  |
|   | /s/ Steven W. Hudson                                                  |   |
|   | BY: Steven W. Hudson                                                  |
|   | ITS: Secretary                                                        |
|   |                                                                  |
|   | **HOLDER:**                                                           |
|   |                                                                  |
|   | Earl T. Shannon                                                       |
|   |                                                                  |
|   |                                                                  |
|   | /s/ Earl T. Shannon                                                   |   |
|   | Earl T. Shannon, an individual                                        |

 

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