**Exhibit 10.2**

 

**PROMISSORY NOTE**

 
| $15,000 |   | Dated: August 8, 2003 |
|---------|--------|----------------------------|

 

1.                                       Principal.  FOR VALUE RECEIVED, Nucotec, Inc., a Nevadacorporation (“*Maker*”), promises to pay to the order of Steven W.Hudson (“*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 fifteen thousanddollars ($15,000) (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 Holder pursuantto 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 Maker topay the principal and interest upon the Maturity Date;

 

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

 

Maker shall admit in writing its inability to, orbe generally unable to, pay its undisputed debts as such undisputed debtsbecome due;

 

Maker shall: (i) apply for or consent to theappointment of, or the taking of possession by, a receiver, custodian, trustee,examiner or liquidator of all or a substantial part of its property, (ii) makea general assignment for the benefit of its creditors, (iii) commence avoluntary case 

 

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under the United States Bankruptcy Code, (iv) filea petition seeking to take advantage of any other law relating to bankruptcy,insolvency, reorganization, liquidation, dissolution, arrangement orwinding-up, or composition or readjustment of debts; (v) fail to controvert ina timely and appropriate manner, or acquiesce in writing to, any petition filedagainst him in an involuntary case under the United States Bankruptcy Code; or(vi)take any action for the purpose of effecting any of the foregoing;

 

A proceeding or case shall be commenced, withoutthe application or consent of Maker, in any court of competent jurisdiction,seeking: (i) its financial reorganization, liquidation or arrangement, or thecomposition or readjustment of its debts; (ii) the appointment of a receiver,custodian, trustee, examiner, liquidator or the like of Maker or of all or anysubstantial part of its property; or (iii) similar relief in respect of Makerunder any law relating to bankruptcy, insolvency, reorganization or compositionor adjustment of debts, and such proceeding or case shall continue undismissed,or an order, judgment or decree approving or ordering any of the foregoingshall be entered and continue unstayed and in effect, for a period of 30 ormore days; or an order for relief against Maker shall be entered in aninvoluntary case under the United States Bankruptcy Code; or

 

A final judgment or judgments issued by a court ofcompetent jurisdiction for the payment of money in excess of $25,000 in theaggregate (exclusive of judgment amounts fully covered by insurance where theinsurer has admitted liability in respect of such judgment) or in excess of$50,000 in the aggregate (regardless of insurance coverage) shall be renderedby a one or more governmental persons having jurisdiction against Maker and thesame shall not be discharged (or provision shall not be made for suchdischarge), or a stay of execution of the relevant judgment shall not beprocured, within 30 days from the date of entry of such judgment and Makershall not, within that 30-day period, or such longer period during whichexecution of the same shall have been stayed, appeal from and cause theexecution 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 and Makermay exercise all rights and remedies available to it under the Agreement or anysucceeding 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, securityagreement, lease assignment, guaranty or other agreement now or hereaftersecuring this Note.

 

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 Event of Default occurs, Maker promises to pay all costs ofenforcement and collection, 

 

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including but notlimited to, Holder’s attorneys’ fees, whether or not any action or proceedingis 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 constituteinterest which would otherwise increase the effective interest rate on thisNote to a rate in excess of the maximum rate permitted to be charged by thelaws of the State of Nevada, all such sums deemed to constitute interest inexcess of such maximum rate shall, at the option of Holder, be credited to thepayment of the sums 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 mayfurnish any information in the possession of Holder concerning Maker, or any ofits respective 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:**                                                           |
|   |                                                                  |
|   | Steven W. Hudson                                                      |
|   |                                                                  |
|   |                                                                  |
|   |  /s/  Steven W. Hudson                                           |   |
|   | Steven W. Hudson, an individual                                       |

 

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