EXHIBIT
10.10




LOAN
AGREEMENT
 
  THIS LOAN
AGREEMENT ("Agreement") is made and entered into as of October 12,2007 (the "Effective Date") by and
between: SKYE INTERNATIONAL, INC., a Nevada corporation with offices at 7701
East Gray Road, Suite 4, Scottsdale, Arizona 85260 ("Borrower"); and TED MAREK
FAMILY TRUST dated May 28, 1999, Beverly A. Marek and Thaddeus Frank Marek,
Trustees, with offices at 12210 North 76th
Place, Scottsdale, Arizona 85260 ("Lender").
  WHEREAS,
Borrower desires to borrow from Lender, and Lender has agreed upon the terms and
conditions herein to lend to Borrower, from time to time, cash in varying
amounts and at varying times; and in consideration thereof, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged the parties hereby agree as follows:
  1. Loan. Borrower
desires to borrow from Lender, from time to time, varying amounts of funds on an
"as needed" basis (any individual amount of funds loaned, and all such funds
together, being referred to herein as a "Loan"). Lender agrees to consider, upon
Borrower's request the possibility of making any one or more Loans to Borrower.
If Lender lends to Borrower, each resulting Loan shall be subject to this
Agreement and be evidenced by the execution and delivery by Borrower of a
secured convertible promissory note substantially in the form attached hereto as
Exhibit "A" and incorporated herein by this reference (each, a "Note"; and
collectively, "Notes"). The proceeds from each Loan shall be used by Borrower
for general corporate purposes, as directed by Borrower's Board of
Directors.
  2. Mandatory
Issuance to Lender of Shares of RestrictedCommon
Stock of Borrower;Issuance
of Additional Shares Upon Optional Extension of MaturityDate.
As a portion of the consideration to be paid by Borrower to Lender for the
making of any Loan (i.e.. in addition to all of Borrower's additional
obligations under this Agreement and under each Note), Borrower hereby covenants
to issue to Lender one (1) share of the common stock. $.001 par value per share,
of Borrower, for every Two Dollars ($2.00) of principal amount of each Loan
(i.e. each time an additional Note is made by Borrower in favor of Lender.
Borrower concomitantly shall issue common shares to Lender), the parties hereby
acknowledging and agreeing that each and all such newly issued shares shall be:
(i) deemed to be "restricted securities" as defined in applicable federal and
state securities laws; (ii) issued to Lender immediately upon the execution and
delivery of each corresponding Note: and (iii) shall, when issued, be deemed for all purposes to be shares
that are fully paid-up and non-assessable. The parties further acknowledge and
agree that, in accordance with Section 1(c) of each Note, Lender unilaterally
shall have the right to extend the Maturity Date thereof by one (1) year, upon
written notice of such extension given by Lender to Borrower on or prior to the
original Maturity Date, and that, immediately upon the giving of such notice, if
at all, Borrower shall issue to Lender additional shares of Borrower's common
stock, also at the rate of one (1) share of common stock. $.001 par value per
share of Borrower. for every Two Dollars ($2.00) of the original principal
amount of the corresponding Note (i.e., without any increase in the
corresponding Loan amount), such additional shares also to be deemed to be
restricted securities that are fully paid-up and non-assessable immediately upon
their issuance.
   1
  3.           Certain
Prerequisites to Loans. Lender shall have no obligation to make any Loan
or Loans whatsoever to Borrower. If and to the extent that Borrower seeks any
Loan and Lender desires to make a Loan or Loans, from time to time, then
Borrower first shall ensure that the following conditions to the making of any
Loan hereunder shall have been satisfied: (i) this Agreement and each
corresponding Note shall have been duly executed and delivered to Lender, all in
form and substance satisfactory to Lender; (ii) Borrower shall have furnished to
Lender such financial statements and other corporate information
of Borrower, financial and otherwise, as Lender may have requested; (iii) no
Event of Default shall have occurred and be continuing under this Agreement;
(iv) all representations and warranties contained in this Agreement or in any
Note shall be true and correct; (v) Borrower shall have delivered to Lender such
authorizations and other documents as may be requested by Lender to evidence
Borrower’s authority to execute, deliver and perform this Agreement and each
Note, including, without limitation, a Unanimous Consent of the Company’s Board
of Directors approving the Loan, this Agreement and the Notes, all in form and
substance satisfactory to Lender at Lender’s sole discretion; (vi) Borrower
shall have provided to Lender evidence satisfactory to Lender of the existence
of insurance coverage on Borrower’s properties, assets and business in such
amounts and against such risks as Lender may deem appropriate in its sole
discretion, with endorsements to all such insurance policies of Borrower naming
Lender as a loss payee or an additional named insured; and (vii) Borrower shall
have paid all of Lender’s costs and expenses, including reasonable fees of legal
counsel, incurred in the preparation of this Agreement and each Note and any and
all additional instruments and other documents that may be related hereto and
thereto.
  4.Representations
and Warranties, and Certain Covenants, of Borrower. To induce Lender to
enter into this Agreement, Borrower hereby represents and warrants to Lender, at
the commencement of each Loan, during the term of each Loan, and throughout any
and all renewals and extensions thereof, as follows: (i) Borrower is and shall
remain duly incorporated, validly existing and in good standing under the laws
of the State of Nevada, and is and shall remain authorized to conduct business
in all jurisdictions in which Borrower’s ownership of property and transaction
of business legally requires such authorization, except where the failure to be
authorized to conduct business would not result in a material adverse effect
upon Borrower’s business, and Borrower has and shall continue to have full
power, authority and legal right to own its property and to transact business as
presently transacted or proposed to be transacted; (ii) the execution, delivery
and performance of this Agreement and of each Note by Borrower are and shall
remain within the powers of Borrower and have been duly authorized by Borrower’s
Board of Directors, and the same are not in contravention of law or the terms of
Borrower’s organizational documents, or of any indenture, agreement or
undertaking to which Borrower is a party or by which Borrower or any of
Borrower’s assets are bound; (iii) this Agreement and each Note, when duly
executed and delivered, shall constitute legal, valid and binding obligations of
Borrower, and shall be fully enforceable in accordance with their respective
terms; (iv) all financial statements and information that have been or may
hereafter be furnished to Lender in connection herewith do and shall present
fairly the financial condition of Borrower as of the dates thereof, for the
periods for which the same are furnished, and shall be accurate, correct and
complete in every material respect; (v) there is no action, suit, investigation
or proceeding pending or, to Borrower’s knowledge, threatened against Borrower,
as of the Effective Date, and Borrower hereby undertakes to notify Lender
immediately in writing of the initiation of any such action suit, investigation
or proceeding against Borrower; (vi) Borrower has timely filed and shall
continue timely to file all tax returns and all securities law filings that are
required to be filed (subject to permitted extensions), and has paid all taxes
and other fees and charges due in accordance with such returns and other filings
or otherwise due or pursuant to any assessment received by Borrower, and shall
continue to do the same; (vii) Borrower holds and shall continue to hold all
material licenses, permits, certificates, consents and franchises, and all
necessary filings associated therewith have been made, in order for Borrower to
carry on its business as now being conducted and to own or lease and operate its
properties as now owned, leased or operated, and all such material licenses,
permits, certificates, consents and franchises are and shall continue to be
valid and in full force and effect; (viii) there is no material fact that
Borrower has not disclosed to Lender that could have a material adverse effect
on the properties, business, prospects or condition (financial or otherwise) of
Borrower, and Borrower affirmatively undertakes to notify Lender in writing of
the occurrence of any such fact, immediately upon occurrence; (ix) to Borrower’s
knowledge, Borrower is not in violation of any law, rule, regulation, order or
decree applicable to Borrower or its properties, and Borrower affirmatively
undertakes to comply at all times with all applicable laws, rules and
regulations; (x) no Event of Default has
occurred and is continuing; and (xi) Borrower has obtained the advice of
independent counsel, who has reviewed and negotiated this Agreement and the form
of Note on behalf of Borrower prior to the execution and delivery hereof and
thereof. All of the representations and warranties, and the covenants, made by
Borrower herein, shall survive the delivery of this Agreement and of each Note,
and any renewal and extension of any Loan or Loans made hereunder. All
statements made by or on behalf of Borrower under or pursuant to this Agreement
or any Note, or otherwise in connection with the transactions contemplated
hereby, shall constitute representations and warranties made by Borrower
hereunder.
   2
  5.           Certain
Events of Default. Each of the following shall constitute an Event of
Default hereunder and under each Note: (i) any failure to pay when due any
amount of principal or interest in accordance with the terms of this Agreement
or of any Note, and the continuation of such default without cure for a period
of ten (10) calendar days after written notice by Lender of the occurrence of
such default; (ii) any failure to pay when due any other amount payable to
Lender under the terms of this Agreement or of any Note, and the continuation of
such default without cure for a period of ten (10) calendar days after written
notice by Lender of the occurrence of such default; (iii) any default by
Borrower in the performance or observance of any covenant or agreement contained
in this Agreement or in any Note, or in any other agreement made in connection
herewith or therewith, or in any other agreement or instrument delivered to
Lender in connection with this Agreement or any Note, and the continuation of
such default without cure for a period of ten (10) calendar days after written
notice by Lender of the occurrence of such default; (iv) any representation or
warranty made by Borrower to Lender, or any representation, statement,
certificate, schedule or report made or furnished to Lender on behalf of
Borrower, is false or erroneous in any material respect at the time of its
making or otherwise ceases to be accurate in any material respect; (v) Borrower
applies for or consents to the appointment of a receiver, trustee or liquidator
of its properties, or admits in writing its inability to pay debts as they
mature, or makes a general assignment for the benefit of creditors, or any
material part of Borrower’s assets or properties is placed in the charge of a
receiver, trustee or other officer or representative of a court or of creditors;
(vi) Borrower is adjudged a bankrupt, or any voluntary proceeding is instituted
by Borrower in insolvency or bankruptcy or for readjustment, extension or
composition of debts, or for any other relief of debtors; (vii) any involuntary
proceeding is instituted against Borrower in insolvency or for readjustment,
extension, or composition of debts, which proceeding is not dismissed within
ninety (90) days after the filing of the same; (viii) entry by any court of a
final judgment against Borrower, or the institution of any levy, attachment,
garnishment or charging order against Borrower, which has a material adverse
effect, as determined by Lender in Lender’s reasonable judgment, on the
financial condition of Borrower; or (ix) any default, event of default, or
breach occurs with respect to or otherwise on the part of Borrower under or in
connection with any other agreement between Lender and Borrower, including,
without limitation, that certain Loan Agreement and corresponding 15%
Convertible Debenture executed by Lender and Borrower as of September 1, 2007
(the parties also hereby agreeing that any default by Borrower under any Loan
made hereunder shall create an Event of Default with respect to all Loans made
hereunder, and with respect to all other agreements between Borrower and Lender,
including the September 1, 2007 Loan Agreement and Debenture).
  6.           Remedies.
Upon the occurrence of any one or more Events of Default that have not been
timely cured, Lender may, at its sole option, exercise any and all of the
following rights and remedies, at Lender’s sole discretion, each and every one
of which shall be cumulative and in addition to each other and to the additional
rights arising on the part of Lender at law and in equity: (i) declare all sums
owing under this Agreement and the corresponding Note or Notes to be immediately
due and payable, without the need to wait for the occurrence of any deadline or
other passage of time; (ii) terminate any or all of Lender’s obligations
hereunder; (iii) exercise a right of offset against any and all property of
Borrower in Lender’s custody or possession; (iv) without notice of default or
demand, pursue and enforce any and all of Lender’s rights and remedies against
Borrower, including, without limitation, any and all rights of Lender arising
under this Agreement and any and all Notes; (v) exercise all rights of Lender
under that certain
Security Agreement made of even date herewith between Borrower and Lender, under
which Borrower has granted to Lender a security interest in all of Borrower’s
assets to secure performance of Borrower’s obligations to Lender under this
Agreement and under each Note (the “Security Agreement”); and (vi) exercise any
and all additional rights and remedies of Lender at law or in equity. Lender may
waive any Event of Default, but only in a writing executed by Lender. Any Event
of Default waived in a writing executed by Lender shall be deemed under this
Agreement and under each Note to have been cured and not to be continuing; but
no waiver shall waive the effect of any subsequent or different Event of
Default.
   3
  7.General
Provisions. Borrower and Lender further agree as follows:
  7.1Modification;
Construction. No failure to exercise and no delay in exercising any right
of Lender hereunder or under any Note shall operate as a waiver hereof or
thereof, neither shall any single or partial exercise of any such right preclude
any additional or further exercise thereof. The rights of Lender hereunder and
under each Note shall be in addition to all other rights of Lender at law and in
equity and those arising under any other instrument or other agreement,
including the Security Agreement. No modification of any provision of this
Agreement or of any Note or of the Security Agreement shall be effective unless
made in a writing signed by Lender and Borrower. No notice or demand given in
any case shall constitute a waiver of the right to take other action in the
same, similar or other instances without such notice or demand. Initially
capitalized terms used but not defined in this Agreement shall have the meanings
given to them, respectively, in the Note and in the Security
Agreement.
  7.2Notices. Any and all notices
and other communications required or permitted to be given
under this Agreement or under any Note shall be given in writing and personally
delivered or mailed by prepaid mail or overnight courier to the address of such
party as provided at the beginning of this Agreement. Any such notice or other
communication shall be deemed to have been given on the date that is: three (3)
days after it has been mailed by prepaid certified or registered US Mail; one
(1) day after it has been sent by overnight courier; on the same day on which it
personally has been hand delivered; and if sent by other means, when actually
received. Any party may change its address for notice purposes by giving notice
of such change to the other party as provided herein.
  7.3Governing
Law; Jurisdiction; Forum. This Agreement has been executed, delivered
and accepted by Borrower and Lender in the State of Arizona; and the substantive
laws of Arizona and the applicable federal laws of the United States of America
shall govern the validity, construction, enforcement and interpretation of this
Agreement and of each Note. Any suit, action or proceeding against Borrower with
respect to this Agreement or any Note may be brought in the Superior Court of
Arizona located in Maricopa County, Arizona, or in the United States District
Court for the District of Arizona, as Lender, in Lender’s sole discretion, may
elect; and Borrower hereby submits to the non-exclusive jurisdiction of such
courts for the purpose of any such suit, action or proceeding. Borrower hereby
irrevocably waives any objections Borrower may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any Note that may be brought in any such courts, and Borrower
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
forum.
  7.4No Oral
Agreements; Invalid Provisions; Multiple Counterparts. THIS AGREEMENT
AND EACH NOTE ISSUED HEREUNDER REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES AFFECTING THE
SUBJECT MATTER OF THIS AGREEMENT OR OF THE
NOTES OR THE SECURITY AGREEMENT. If any provision of this Agreement or of any
Note is held to be illegal, invalid or unenforceable under present or future
laws, such provision shall be fully severable, and the remaining enforceable
provisions shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part thereof; and the remaining
provisions shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from the
remaining provisions. This Agreement and each Note may be executed in any number
of counterparts, and any of the parties hereto may execute the same by signing
any such counterpart.
   4
  7.5Waiver of Jury Trial;
Enforcement Costs and Expenses to be Borne by Borrower.
Borrower and Lender hereby mutually and irrevocably waive their right to a jury
trial of any dispute that may arise out of or in connection with this Agreement,
the parties instead irrevocably agreeing that any such dispute shall be resolved
by a court of competent jurisdiction sitting without a jury. Borrower agrees to
pay all costs of enforcement of this Agreement, including, without limitation,
attorneys' fees and other costs incurred by Lender in addressing its claims
against Borrower hereunder, regardless of whether a lawsuit is actually filed;
and Borrower agrees to pay all of Lender's costs of preparation for suit, and
proceeding with a suit, plus any and all additional attorney and other fees and
costs Lender may incur in any proceeding under any bankruptcy or other similar
federal or state law in connection with the obligations evidenced hereby. In the
event of any court proceeding, court costs and attorneys' fees shall be set by
the court and not by a jury and shall be included in any judgment obtained by
the Lender.
  7.6Binding
Effect; Assignable by Lender Only.This Agreement and each
Note shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors, assigns and legal representatives: provided, however,
that: (i) Borrower shall not, without the prior written consent of Lender,
assign any rights, powers, duties or obligations hereunder or thereunder; but
(ii) Lender shall he authorized to assign this Agreement and each and every Note
to any other person, at Lender's sole discretion, without the consent of
Borrower.
  IN
WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as
of the Effective Date.
   "BORROWER"
                  SKYE
      INTERNATIONAL, INC.,a
      Nevada corporationBy:
                  /s/  Mark D.
      ChesterMark
      D. Chester, Chairman
 "LENDER"
                TED
      MAREK FAMILY TRUST dated May 28, 1999By:
                /s/  Beverly A.
      MarekBeverly
      A. Marek, TrusteeBy:
                /s/  Thaddeus Frank MarekThaddeus
      Frank Marek, Trustee






5


EXHIBIT
“A”
  TO
LOAN AGREEMENT DATED OCTOBER 12, 2007 BETWEEN
 SKYE
INTERNATIONAL, INC. AND TED MAREK DEFINED BENEFIT PENSION PLAN
  FORM
OF SECURED CONVERTIBLE PROMISSORY NOTE TO BE EXECUTED UPON
 THE
MAKING OF ANY LOAN UNDER THE LOAN AGREEMENT
 
  THE
SALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE, OR OF THE SHARES
OF
 COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF, IS RESTRICTED.
  SKYE
International, Inc.
  15%
CONVERTIBLE SECURED PROMISSORY NOTE
 1-YEAR
MATURITY (OPTIONAL 2-YEAR MATURITY)
    US 
      $__________________
              _____________,
      20__Phoenix, Arizona,
      USA
  FOR VALUE RECEIVED, Skye
International, Inc., a Nevada corporation with offices at 7701 East Gray
Road, Suite 4, Scottsdale, Arizona 85260 (the "Company"), hereby promises
unconditionally, as of ____________ , 20__ (the
“Effective Date”), to pay to the order of Ted Marek Defined Benefit Pension Plan
dated December 23, 1993 and effective January 1, 1994, located at 9977 North
90th
Street, Suite 220, Scottsdale, Arizona 85258 (“Holder”), the principal amount of
_________________ Dollars (US $__________) together with interest on the
principal balance outstanding from time to time under this instrument ("Note"),
from and including the date hereof, until, but excluding, the date of payment,
at a per annum rate equal to the "Stated Interest Rate" specified in Section 1(a), or, to
the extent applicable, at the "Default Interest Rate" specified in Section 1(b), in
accordance with the following terms and conditions:
  1.Contracted For Rate of Interest. The contracted for rate of interest of
the indebtedness evidenced by this Note shall include and consist of the
following, as applicable:
  (a)          Stated Interest Rate. The
"Stated Interest Rate" shall equal Fifteen Percent (15%) per annum, calculated
on the basis of the actual number of days elapsed, assuming a 365-day year,
applied to the outstanding principal balance of this Note from time to time. The
principal balance outstanding hereunder shall bear interest at the Stated
Interest Rate from the date of issuance of this Note through the date that is
one day prior to the first to occur of the following events: (i) the unpaid
principal balance, together with all accrued interest and other amounts payable
hereunder, have been paid in full; (ii) the unpaid principal balance, together
with all accrued interest and other amounts payable hereunder, have been
converted into shares of the Company’s common stock as permitted in accordance
with Section 7;
or (iii) the passage of ten (10) days following the occurrence of one or more
uncured Events of Default as defined in Section
4.
  (b)          Default Interest Rate.The
"Default Interest Rate" shall equal Eighteen Percent (18%) per annum, calculated
on the basis of the actual number of days elapsed, assuming a 365-day year,
applied to the outstanding principal balance of this Note from time to time. The
principal balance outstanding hereunder shall bear interest at the Default
Interest Rate beginning eleven (11) days after the date of occurrence of any
uncured Event of Default, as defined in Section 4, and
continuing until the first to occur of the following events: (i) the unpaid
principal balance, together with all accrued interest and other amounts payable
hereunder, have been paid in full; or (ii) the unpaid principal balance,
together with all accrued interest and other amounts payable hereunder, have
been converted into shares of the Company’s common stock as permitted in
accordance with Section
7.
  A-1
  (c)Monthly Payments of Interest Only; Payment in Full on Maturity Date (or Extended
Maturity Date). Interest accrued on the principal balance of this Note
shall be due and payable to Holder monthly, on the first day of each calendar
month, beginning at the start of the first full calendar month following the
Effective Date and continuing on the first day of each month thereafter until
all obligations of the Company under this Note have been paid in full. The
outstanding principal balance of this Note, together with all accrued but unpaid
interest and all additional amounts payable hereunder, shall be due and payable
in full on the date that is exactly one (1) year after the Effective Date (the
"Maturity Date"); provided, however,
that the Company shall not be required to repay such outstanding
principal, interest or additional amounts if and to the extent that this Note
has been converted by Holder, at Holder’s sole option, into shares of the
Company's Common Stock as permitted under Section 7; and provided further,
that the Holder unilaterally shall have the right to extend the Maturity Date by
one (1) year (the “Extended Maturity Date”), upon written notice of such
extension given by Holder to Company on or prior to the Maturity Date; and in
the event of such extension, the Note shall be deemed for all purposes to have
been issued originally with a two-year period of maturity.
  2.         
Application of Payments.
All payments received by Holder with respect to the indebtedness evidenced
hereby shall be applied: (i) first to Additional Sums (as hereinafter defined)
and to any other non-interest charges and costs provided for in this Note; (ii)
next, to accrued but unpaid interest at the Default Interest Rate, if and to the
extent applicable; (iii) next, to accrued but unpaid interest at the Stated
Interest Rate; and (iv) finally, to the unpaid principal balance outstanding
hereunder from time to time.
  3.          
Prepayments. Payments of
principal hereof may be made at any time, or from time to time, in whole or in
part, prior to the Maturity Date (or the Extended Maturity Date, as applicable),
without penalty, provided that all interest and other charges accrued through
the date of prepayment are also paid in full, in accordance with Section
2. Notwithstanding any prepayment of principal hereof: (i) there shall be
no change to the Maturity Date (or, if applicable, to the Extended Maturity
Date) or to the amount of payments due hereunder unless Holder, in its sole and
absolute discretion, agrees in writing to such change; and (ii) no terms and
conditions of this Note shall be changed or affected in any manner whatsoever;
and (iii) the Company's obligations hereunder shall continue in effect, and this
Note shall remain outstanding, unless and until this Note is converted into
shares of the Company's Common Stock as permitted under Section
7, or until the principal balance outstanding hereunder, together with
all accrued interest and other amounts payable hereunder, are paid in full, upon
which, Holder shall deliver to the Company the original executed copy of this
Note, marked "PAID" in bold lettering in a conspicuous location on the first
page and on the signature page hereof.
  4.          
Events of Default;
Acceleration. The occurrence of any one or more of the following events
shall constitute an "Event of Default" hereunder, and upon any such Event of
Default, the entire principal balance outstanding hereunder, together with all
accrued interest and other amounts payable hereunder, at the election of Holder,
shall become immediately due and payable, without any notice to the Company, and
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Company:
  (a)          Nonpayment
of principal, interest or other amounts when the same become due and payable
hereunder, if the Company does not cure such failure to pay within ten (10) days
after the date such payment is due;
  (b)          The
dissolution, winding-up or termination of the existence of the Company or the
sale or disposition of substantially all of the assets of the Company’s
business;
  (c)          The
making by the Company of an assignment for the benefit of its
creditors;
  (d)          The
appointment of (or application for appointment of) a receiver for the Company,
or the involuntary filing against or voluntary filing by the Company of a
petition or application for relief under federal bankruptcy law or under any
similar federal or state law, which is not stayed or dismissed within 90 days of
filing, or the issuance of any writ of garnishment, execution or attachment for
service with respect to the Company or any property of the Company;
or
  (e)          Any
other material breach by the Company of the terms and conditions of this
Note.
  A-2
  5.         
Additional Sums. The
Company agrees to pay an effective, contracted for rate of interest equal to the
rate of interest resulting from all interest payable as provided in this Note
plus the additional rate of interest resulting from the “Additional Sums” as
defined in the next sentence. All fees, charges, goods, things in action and any
other sums or things of value, other than the interest resulting from the Stated
Interest Rate and the Default Interest Rate, as applicable, paid or payable by
the Company (collectively, the "Additional Sums") pursuant to this Note, that
may be deemed to constitute interest for the purpose of any applicable laws that
may limit the maximum amount of interest to be charged by a lender, shall be
payable by the Company as, and shall be deemed actually to be, additional
interest; and for such purposes only, the agreed upon and "contracted for rate
of interest" payable under this Note shall be deemed increased by the rate of
interest resulting from the imposition of the Additional Sums. The Company
understands and believes that this transaction complies with all applicable laws
of the State of Arizona; however, if any interest or other charges in connection
with this Note are ever held by a court of competent jurisdiction to have
exceeded the maximum amount of interest permitted by law, then the Company
agrees that: (i) the amount of interest or charges payable pursuant under this
Note shall be reduced to the maximum amount permitted by law; and (ii) any
excess amount previously collected from the Company in connection with this Note
that exceeded the maximum amount permitted by law shall be credited against the
principal balance then outstanding hereunder.
  6.         
Waivers. Except as set
forth in this Note, to the extent permitted by applicable law, the Company
waives and agrees not to assert demand, diligence, grace, presentment for
payment, protest, or notice of nonpayment, nonperformance, extension, dishonor,
maturity, protest, acceleration or default. No failure to accelerate the
indebtedness evidenced hereby upon a default hereunder, no acceptance of a
past-due installment, and no other indulgence granted from time to time by
Holder, shall be construed as a novation of this Note or as a waiver of such
right of acceleration or of the right of Holder thereafter to insist upon strict
compliance with the terms of this Note or to prevent the exercise of such right
of acceleration or any other right granted hereunder or by applicable law.
Holder may extend the time for payment of, or renew, this Note; and any such
extension, renewal, release or other indulgence shall not alter or diminish the
liability of the Company or any other person or entity who is or may become
liable on this Note except to the extent expressly set forth in a writing
executed by Holder and evidencing or constituting such extension, renewal,
release or other indulgence. No delay or failure of Holder in exercising any
right hereunder shall affect such right, neither shall any single or partial
exercise of any right preclude further exercise thereof.
  7.         
Optional Conversion of All or Part of the Note into Common Stock of the
Company.
  (a)          Conversion Option of the
Holder. The Holder may, at its option (the “Conversion Option”), convert
all or any lesser amount of the unpaid principal amount of this Note plus all
accrued but unpaid interest and Additional Sums outstanding hereunder into
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), at the conversion price ("Conversion Price") defined below. The right
of conversion described in this Section 7(a) shall be
exercisable by the Holder upon presentation by the Holder of written notice to
the Company, along with the surrender of this Note to the Company, in exchange
for the number of shares of Common Stock into which this Note is exchanged. The
option arising under this Section 7(a) shall
terminate only upon the Maturity Date or, if applicable, the Extended Maturity
Date.
  (b)          Conversion Price. Upon any
exercise by the Holder of the Conversion Option described in Section 7(a), the
outstanding principal amount of this Note, plus accrued and unpaid interest
thereon, plus all unpaid Additional Sums, shall be converted into shares of the
Company's Common Stock at the rate of Thirty-Five Cents (US $0.35) per share
(the "Conversion Price"), subject to adjustment as hereinafter
provided.
  (c)          Adjustment Based Upon Stock
Dividends, Combination of Shares or Recapitalization. In the event that
the Company, at any time prior to the termination of the Conversion Option: (i)
pays a stock dividend; (ii) subdivides its outstanding shares of Common Stock
into a greater number of shares, (iii) combines its outstanding shares of Common
Stock into a smaller number of shares, or (iv) issues by reclassification of its
shares of Common Stock any other special capital stock of the Company, the
Holder, upon surrender of this Note for conversion, shall be entitled to receive
the number of shares of Common Stock or other capital stock of the Company that
the Holder would have owned or would have been entitled to receive after the
occurrence of any of the events described above had this Note been converted
into the Common Stock immediately prior to such event.
  A-3
  (d)          Adjustment Based Upon Merger or
Consolidation. In case of any consolidation or merger to which the
Company is a party (other than a merger in which the Company is the surviving
entity and that does not result in any reclassification of or change in the
outstanding Common Stock of the Company), or in case of any sale or conveyance
to another person of the property of the Company as an entirety or substantially
as an entirety, the Holder shall have the right to convert this Note into the
kind and amount of securities and property receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
into which such Note would have been convertible immediately prior
thereto.
  (e)          Corporate Status of Shares to be
Issued. All shares of the Company's Common Stock that are issued upon the
conversion of this Note shall, upon issuance, be fully paid and
non-assessable.
  (f)           Issuance of Stock Certificate.
Upon any conversion of this Note, the Company promptly shall issue to the Holder
a certificate or certificates representing the number of shares of its Common
Stock to which the conversion relates.
  (g)          Status of Holder of Note. This
Note shall not entitle the Holder to any voting rights or other rights as a
stockholder of the Company or to any rights whatsoever except the rights herein
expressed, and no dividends shall be payable or accrue in respect of this Note
or the shares issuable upon the conversion hereof unless and until this Note is
converted. Upon any conversion of this Note, the Holder shall, to the extent
permitted by law, be deemed to be the holder of record of the shares of Common
Stock issuable upon such conversion, notwithstanding that the stock transfer
books of the Company may be closed or that the certificates representing such
shares of Common Stock may not yet actually have been delivered.
  (h)          Reserve of Shares. The Company
shall reserve at all times out of its authorized shares of Common Stock a number
of shares sufficient to enable it to comply with its obligation to issue shares
of Common Stock upon the conversion of this Note.
  (i)           
Status Under Securities
Laws.
  (i)       
    Restricted Securities. This
Note is, and the shares of Common Stock issuable upon conversion hereof shall
be, "restricted securities" within the meaning of SEC Rule 144 promulgated under
the Securities Act of 1933 (the "1933 Act"). Holder acknowledges and agrees that
it is acquiring this Note and, upon conversion, the shares of Common Stock,
without a view to the public distribution or resale of the Note or such shares
in violation of applicable federal or state securities laws.
  (ii)          
No Registration. This
Note has not been, and the shares of Common Stock issuable upon conversion
hereof will not be, registered under the 1933 Act or under the securities laws
of any other jurisdiction; and therefore, Holder must be able to hold the Note
or the shares indefinitely without any transfer, sale or other disposition,
unless they are subsequently registered under the 1933 Act and under the
securities laws of other applicable jurisdictions or, in the opinion of counsel
to the Company, registration is not required under such Act or laws as the
result of an available exemption from registration.
  (iii)      
   Legend. There shall be
endorsed on the certificates evidencing any shares issued upon the conversion of
this Note a legend substantially to the following effect:
  "THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED; AND AS A RESULT, SUCH SHARES ARE 'RESTRICTED
SECURITIES' AS DEFINED BY SEC RULE 144 PROMULGATED UNDER THAT ACT. THE SHARES
MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT REGISTERING THE SHARES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR, IN LIEU THEREOF, WITHOUT AN OPINION OF COUNSEL FOR THIS
COMPANY TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THAT
ACT.
  A-4
  WITHOUT
LIMITING THE FOREGOING, THE SHARES MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF WITHOUT AN OPINION OF COUNSEL FOR THE COMPANY TO THE EFFECT THAT
SUCH TRANSFER, SALE OR OTHER DISPOSITION DOES NOT VIOLATE THE SECURITIES LAWS OF
ANY JURISDICTION OR THE RULES AND REGULATIONS THEREUNDER."
  8.General Provisions.
  (a)          Severability. If any provision
hereof is invalid or unenforceable, the other provisions hereof shall remain in
full force and effect and shall be construed so as to effectuate the other
provisions hereof.
  (b)          Amendment. This Note may not
be changed, modified or terminated, neither shall any provision of this Note be
waived, except by an agreement in writing signed by the party to be
charged.
  (c)          Binding Nature of Note;
Assignment. The provisions of this Note shall be binding upon the Holder
and the Company, and shall inure to the benefit of and bind the respective
successors and assigns of the Holder and the Company. Neither the Company nor
the Holder may assign or transfer this Note or assign or delegate any of his or
its respective rights or obligations hereunder without the prior written consent
of the other party in each instance.
  (d)          Waiver of Jury Trial; Enforcement
Costs and Expenses to be Borne by the Company. The Company and the Holder
hereby mutually and irrevocably waive their right to a jury trial of any dispute
that may arise out of or in connection with this Note, the parties instead
irrevocably agreeing that any such dispute shall be resolved by a court of
competent jurisdiction sitting without a jury. The Company agrees to pay all
costs of enforcement of this Note, including, without limitation, attorneys’
fees and other costs incurred by Holder in addressing its claims against the
Company hereunder, regardless of whether a lawsuit is actually filed; and the
Company agrees to pay all of Holder’s costs of preparation for suit, and
proceeding with a suit, plus any and all additional attorney and other fees and
costs Holder may incur in any proceeding under any bankruptcy or other similar
federal or state law in connection with the obligations evidenced hereby. In the
event of any court proceeding, court costs and attorneys’ fees shall be set by
the court and not by a jury and shall be included in any judgment obtained by
the Holder.
  (e)    
      Time of Essence. Time is of
the essence of this Note and each and every provision hereof.
  (f)  
       Controlling Law; Jurisdiction;
Venue. This Note and all questions relating to its validity,
interpretation, performance, and enforcement shall be governed by and construed
in accordance with the laws of the State of Arizona, notwithstanding any
conflicts-of-law provisions to the contrary. Any suit, action or proceeding
against the Company with respect to this Note may be brought in the Superior
Court of Arizona located in Maricopa County, Arizona, or in the United States
District Court for the District of Arizona, as Holder, in Holder’s sole
discretion, may elect; and the Company hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action or
proceeding. The Company hereby irrevocably waives any objections the Company may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Note that may be brought in any such courts,
and the Company further irrevocably waives any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
  (g)          Notices. All notices,
requests, demands and other communications required or permitted under this Note
shall be in writing and shall be deemed to have been duly given, made, and
received: (i) when delivered against receipt; (ii) upon receipt of a facsimile
transmission; (iii) one day following the day of deposit thereof, with delivery
charges prepaid, with a national overnight delivery service; or (iv) three
business days following the day of deposit thereof, with the United States
Postal Service, by regular first class, certified or registered mail, return
receipt requested, postage prepaid, in each case addressed as set forth in the
first paragraph of this Note. Either party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 8(g) for the
giving of notice.
  A-5
  (h)          Section Headings. The Section
headings in this Note are for convenience only; they form no part of this Note
and shall not affect its interpretation.
  (i)          
Number of Days. In
computing the number of days for purposes of this Note, all days shall be
counted, including Saturdays, Sundays and holidays; provided, however, that if
the final day of any time period falls on a Saturday, Sunday or holiday, then
the final day shall be deemed to be the next day that is not a Saturday, Sunday
or holiday.
  (j)      
    Loss or
Destruction of Note. Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note, or in the case
of loss, theft or destruction of an indemnity satisfactory to it, and in the
case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver a new Note of like tenor and date.
  (k)          Construction.The Company and
Holder participated in the drafting of this Note, and this Note was reviewed by
the respective legal counsel for the Company and Holder. Any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied to the interpretation of this Note. The
language of this Note shall be construed as a whole according to its fair
meaning. The word “include(s)” means “include(s), without limitation,” and the
word “including” means “including, without limitation.” No inference in favor
of, or against, the Company or Holder shall be drawn from the fact that one
party has drafted any portion hereof.
  (l)        
  First Priority
Security Interest Granted in All the Company’s Assets to SecurePerformance.The performance
of the Company’s obligations under this Note and under the Loan Agreement have
been secured by a first priority security interest granted by the Company to the
Holder, as more particularly specified in that certain Security Agreement
between the Company and Holder, made and delivered of even date with the Loan
Agreement.
  IN WITNESS WHEREOF, the
Company and the Holder have caused this Note to be duly executed, delivered and
accepted as of the Effective Date.
  CompanySKYE INTERNATIONAL, INC., aNevada
      corporation[FORM
      ONLY - NOT FOR EXECUTION]By:Name:
      Mark D. ChesterIts:
      Chairman
  ACCEPTED AND AGREED:[FORM
      ONLY - NOT FOR EXECUTION]By:Holder:
      TED MAREK DEFINED BENEFIT PENSION PLANdated
      December 23 1993 and effective January 1, 1994Name
      of Officer:  _____________________________Its:
      _______________________________________
   A-6