ex10-5.htm


    Exhibit 10.5

     

    THIS
      NOTE, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE
      “SECURITIES”) HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
      TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
      1933,
      AS AMENDED (THE “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii)
      RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
      THE
      COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN
      CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE
      STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN
      EXCHANGE FOR THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS
      NOTE
      (EXCEPT AS OTHERWISE PROVIDED BELOW).

    


    CONVERTIBLE
      PROMISSORY NOTE

    


    US
      $10,000

                                                                                    September
      28,
      2007,

                                                                                    with
      an effective
      date

                                                                                    of
      September 7,
      2007

    


    FOR
      VALUE RECEIVED, the undersigned, Michael Lambert, Inc., which has a
      business address of 121 Interpark Blvd., Suite 1204, San Antonio, Texas, 78216
      ("Maker"), hereby promises to pay to the order of The Loev Law Firm, PC, ,
      whose
      address is 6300 West Loop South, Suite 280, Bellaire, Texas 77401 ("Payee"),
      the
      principal sum of Ten Thousand Dollars ($10,000), in lawful money in United
      States of America, which shall be legal tender, bearing interest and payable
      as
      provided herein.  This Convertible Promissory Note (this “Note” or
“Promissory Note”) has an effective date of September 8, 2007, the date of the
      parties’ entry into a revised engagement agreement (the “Engagement
      Agreement”).

    


    This
      Note amends, replaces and
      supersedes a promissory note entered into between the parties on or around
      February 20, 2006.

    


    The
      Engagement Agreement requires the
      Maker to pay the Payee $32,500  in total, along with 550,000 shares of
      common stock and 350,000 warrants to purchase shares of the Maker’s common
      stock, which shares and warrants have previously been issued, for legal services
      rendered and to be rendered in connection with Maker’s Form SB-2 Registration
      Statement.  That amount includes $5,000 upon the receipt of the
      Maker’s first round of comments on its Form SB-2 Registration Statement, $7,500
      upon the Form SB-2 Registration Statement being declared effective with the
      Commission and $10,000 previously paid to Payee.  This Promissory Note
      evidences the remaining $10,000 owed to Payee pursuant to the Engagement
      Agreement.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    1.    Interest
      on
      the unpaid balance of this Note shall bear interest at the rate of five percent
      (5%) per annum, which interest shall accrue from the effective date until the
      Maturity Date (as defined below), unless prepaid prior to such Maturity
      Date. All past-due principal and interest (which failure to pay such amounts
      shall be defined herein as an “Event of Default”) shall bear interest at the
      rate of fifteen percent (15%) per annum until paid in full.  Interest
      will be computed on the basis of a 360-day year.

    


    2.    The
      principal amount of this Note shall be due and payable on August 31, 2008 (the
      “Maturity Date”).

    


    3.    This
      Note
      may be prepaid in whole or in part, at any time and from time to time, without
      premium or penalty.

    


    4.    This
      Note
      (and any accrued an unpaid interest hereon) shall be convertible into shares
      of
      Maker’s common stock from time to time if not paid on or before the Maturity
      Date, at the sole option of the Payee, upon five (5) days written notice from
      the Payee to the Maker of the Payee’s desire to convert such Note into shares of
      common stock at the rate of one share of the Maker’s common stock for each $0.10
      owed to Payee pursuant to this Note (the “Conversion Price”), which conversion
      shall be evidenced by the receipt of the Maker of a Conversion Notice attached
      hereto as Exhibit A.  The Maker shall have five (5) business
      days after the receipt by the Payee of a Conversion Notice to deliver the shares
      of common stock converted to Payee (the “Conversion Shares”).  If such
      shares are not delivered prior the sixth (6th) day following
      the
      Maker’s receipt of the Conversion Notice, such failure to deliver the shares
      shall constitute an Event of Default of this Note, which shall not discharge
      the
      Maker’s requirement to deliver the Conversion Shares.

    


    5.    If
      the
      Maker at any time or from time to time on or after the effective date of
      the  issuance of this Note (the “Original Issuance Date”) effects a
      subdivision of its outstanding common stock, the Conversion Price then in effect
      immediately before that subdivision shall be proportionately decreased, and
      conversely, if the Maker at any time or from time to time on or after the
      Original Issuance Date combines its outstanding shares of common stock into
      a
      smaller number of shares, the Conversion Price then in effect immediately before
      the combination shall be proportionately increased.

    


    6.    Conversion
      Shares may not be sold or transferred unless  (i) such shares are sold
      pursuant to an effective registration statement under the Securities Act of
      1933, as amended (the “Act”) or (ii) the Maker or its transfer agent shall have
      been furnished with an opinion of  counsel (which opinion shall be in
      form, substance and scope customary for opinions of counsel in comparable
      transactions) to the effect that the shares to be sold or transferred may be
      sold or transferred pursuant to an exemption from such registration or (iii) such
      shares are sold or transferred pursuant to Rule 144 under the Act (or a
      successor rule) (“Rule 144”) or (iv) such shares are transferred to an
“affiliate” (as defined in Rule 144) of the Holder who agrees to sell or
      otherwise transfer the shares only in accordance with this Note and who is
      an
      accredited investor.  Until such time as the Conversion Shares have
      been registered under the Act or otherwise may be sold pursuant to Rule 144
      without any restriction as to the number of securities as of a particular date
      that can then be immediately sold, each certificate for Conversion Shares that
      has not been so included in an effective registration statement or an exemption
      that permits removal of the legend, shall bear a legend substantially in the
      following form, as appropriate:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    


    “THESE
      SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.”

     

    The
      legend set forth above shall be removed and the Maker shall issue to the Payee
      a
      new certificate therefor free of any transfer legend if (i) the Maker or its
      transfer agent shall have received an opinion of counsel, in form, substance
      and
      scope customary for opinions of counsel in comparable transactions, to the
      effect that a public sale or transfer of such common stock may be made without
      registration under the Act and the shares are so sold or transferred, (ii)
      such
      Payee provides the Maker or its transfer agent with reasonable assurances that
      the Conversion Shares can be sold pursuant to Rule 144 or Rule 144(k) or (iii)
      if the Conversion Shares  are registered for resale under an effective
      registration statement filed under the Act.

     

    
      	
              7.

            	
              All
                shares of common stock which may be issued upon conversion of this
                Note
                will, upon issuance by the Maker in accordance with the terms of
                this
                Note, be validly issued, free from all taxes and liens with respect
                to the
                issuance thereof (other than those created by the holders), free
                from all
                pre-emptive or similar rights and fully paid and
                non-assessable.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      	
              8.

            	
              If
                any payment of principal or interest on this Note shall become due
                on a
                Saturday, Sunday or any other day on which national banks are not
                open for
                business, such payment shall be made on the next succeeding business
                day.

            


    

    


    
      	
              9.

            	
              This
                Note shall be binding upon and inure to the benefit of the Payee
                named
                herein and Payee’s respective successors and assigns.  Each
                holder of this Note, by accepting the same, agrees to and shall be
                bound
                by all of the provisions of this Note.  Payee may assign this
                Note or any of its rights, interests or obligations to this Note
                without
                the prior written approval of
                Maker.

            


    

    


    
      	
              10.

            	
              No
                provision of this Note shall alter or impair the obligation of Maker
                to
                pay the principal of and interest on this Note at the times, places
                and
                rates, and in the coin or currency, herein
                prescribed.

            


    

    


    
      	
              11.

            	
              The
                Maker will do or cause to be done all things reasonably necessary
                to
                preserve and keep in full force and effect its corporate existence,
                rights
                and franchises and comply with all laws applicable to the Maker,
                except
                where the failure to comply could not reasonably be expected to have
                a
                material adverse effect on the Maker. Failure to comply with this
                provision shall constitute an Event of
                Default.

            


    

    


    
      	
              12.

            	
              Notwithstanding
                anything to the contrary in this Note or any other agreement entered
                into
                in connection herewith, whether now existing or hereafter arising
                and
                whether written or oral, it is agreed that the aggregate of all interest
                and any other charges constituting interest, or adjudicated as
                constituting interest, and contracted for, chargeable or receivable
                under
                this Note or otherwise in connection with this loan transaction,
                shall
                under no circumstances exceed the Maximum
                Rate.

            


    

    


    
      	
              13.

            	
              The
                Maker agrees to keep reserved such number of shares of common stock
                as
                will permit full conversion of the Note at any time or from time
                to time
                at the Conversion Price (as defined
                herein);

            


    

    


    
      	
              14.

            	
              In
                the event the maturity of this Note is accelerated by reason of an
                Event
                of Default under this Note, any other agreement entered into in connection
                herewith or therewith, or by voluntary prepayment by Maker or otherwise,
                then earned interest may never include more than the Maximum Rate
                allowable by law, computed from the dates of each advance of the
                loan
                proceeds outstanding until payment.  If from any circumstance
                any holder of this Note shall ever receive interest or any other
                charges
                constituting interest, or adjudicated as constituting interest, the
                amount, if any, which would exceed the Maximum Rate shall be applied to
                the reduction of the principal amount owing on this Note, and not
                to the
                payment of interest; or if such excessive
                interest exceeds the unpaid balance of principal hereof, the amount
                of
                such excessive interest that exceeds the unpaid balance of principal
                hereof shall be refunded to Maker.  In determining whether or
                not the interest paid or payable exceeds the Maximum Rate, to the
                extent
                permitted by applicable law (i) any nonprincipal payment shall be
                characterized as an expense, fee or premium rather than as interest;
                and
                (ii) all interest at any time contracted for, charged, received or
                preserved in connection herewith shall be amortized, prorated, allocated
                and spread in equal parts during the period of the full stated term
                of
                this Note.  The term "Maximum Rate" shall mean the maximum rate
                of interest allowed by applicable federal or state
                law.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


     

    


    
      	
              15.

            	
              Except
                as provided herein, Maker and any sureties, guarantors and endorsers
                of
                this Note jointly and severally waive demand, presentment, notice
                of
                nonpayment or dishonor, notice of intent to accelerate, notice of
                acceleration, diligence in collecting, grace, notice and protest,
                and
                consent to all extensions without notice for any period or periods
                of time
                and partial payments, before or after maturity, without prejudice
                to the
                holder.  The holder shall similarly have the right to deal in
                any way, at any time, with one or more of the foregoing parties without
                notice to any other party, and to grant any such party any extensions
                of
                time for payment of any of said indebtedness, or to grant any other
                indulgences or forbearance whatsoever, without notice to any other
                party
                and without in any way affecting the personal liability of any party
                hereunder.  If any efforts are made to collect or enforce this
                Note or any installment due hereunder, the undersigned agrees to
                pay all
                collection costs and fees, including reasonable attorney's
                fees.

            


    

    


    
      	
              16.

            	
              A
                copy of this Promissory Note signed by one party and faxed to another
                party shall be deemed to have been executed and delivered by the
                signing
                party as though an original.  A photocopy of this Promissory
                Note shall be effective as an original for all
                purposes.

            


    

    


    
      	
              17.

            	
              This
                Note shall be construed and enforced under and in accordance with
                the laws
                of the State of Texas.

            


    

    


    


    


    


    


    [Remainder
      of page left intentionally blank. Signature page follows.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Maker has duly executed this Note as of the day and year first
      above written, with an effective date of September 7, 2007.

    


    


    Michael
      Lambert,
      Inc.

    


    


                                                                                    /S/
      Robert Kremer

    Robert
      Kremer

    Chief
      Executive Officer and
      President


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    Conversion
      Election Form

    


    


    ____________,
      200_

    


    Michael
      Lambert, Inc.

    121
      Interpark Blvd., Suite 1204

    San
      Antonio, Texas, 78216

    


    Re:           Conversion
      of Promissory Note

    


    Gentlemen:

    


    You
      are hereby notified that, pursuant
      to, and upon the terms and conditions of that certain Convertible Promissory
      Note of Michael Lambert, Inc. (the “Company”), in the principal amount of
      $10,000 (the “Note”), held by me, I hereby elect to exercise my right of
      Conversion (as such term in defined in the Note), in connection with $__________
      of the amount currently owed under the Note, effective as of the date of this
      writing.

    


    Please
      provide me with all applicable
      instructions for the Conversion of the Note, and issue certificate(s) for the
      applicable shares of the Company’s Common Stock issuable upon the Conversion, in
      the name of the person provided below.

    


    


    Very
      truly yours,

    


    


    ___________________________

    Name:

    


    


    Please
      issue certificate(s) for Common Stock as follows:

    


    ______________________________________________

    Name

    


    ______________________________________________

    Address

    


    ______________________________________________

    Social
      Security No. of
      Shareholder