Document:

Unassociated Document

    TGH
      NOVEMBER 2007 AGREEMENT

     

    Agreement
      as of this 30th day of November, 2007, by and between Capital
      Growth Systems, Inc.
      (“Company”) and Thomas
      G.
      Hudson
      (“TGH”).

     

    RECITALS:

     

    A.  TGH
      presently holds 2,248,037 shares of Common Stock of the Company and TGH also
      holds the following warrants and options issued by Company exercisable for
      the
      purchase of Common Stock:

     

    
      	
               

              Class
                of Warrant/Option

            	 	
              Number

              of
                shares

            	 
	
              Employee
                Option (at $0.70/Share)

            	 	
              1,800,000

            	 
	
              Performance
                Option (at $0.70/Share)

            	 	
              1,000,000

            	 
	
              20/20
                Bridge Loan Warrants (at $0.45/Share)

            	 	
              37,557

            	 
	
              CentrePath
                Inc. (“CP”) Bridge Loan Warrant (at $0.45/Share)

            	 	
              1,500,000

            	 
	
              Unit
                Warrants from Conversion of CP Loan to equity from
                11/24/06

            	 	
              1,124,749

            	
              (1)

            
	
              Unit
                Warrants from Conversion of CP Loan to equity from
                11/30/06

            	 	
              1,123,288

            	
              (2)

            
	
              Global
                Capacity (“GC”) Bridge Loan Warrants (at $0.45/Share)

            	 	
              500,000

            	
              (3)

            
	
              2-Year
                Short-Term Bridge Loan Warrants (at $0.45/Share)

            	 	
              756,411

            	
              (4)

            
	
              Total:

            	 	
              7,842,005

            	 

    

     

    
      
        

      

      
        	
                (1)

              	
                From
                  November 24, 2006 advance (“CP 11/24 Warrants” - allocable 562,375 shares
                  at $0.45 per share - the “CP 11/24 $0.45 Warrants;” and 562,374 Shares at
                  $0.65 per share - the “CP 11/24 $0.65
                  Warrants”).

              

      

      
        	
                (2)

              	
                From
                  November 30, 2006 advance (“CP 11/30 Warrants” - allocable 561,644 Shares
                  at $0.45 per share - the “CP 11/30 $0.45 Warrants;” and 561,644 Shares at
                  $0.65 per share - the “CP 11/30 $0.65
                  Warrants”).

              

      

      
        	
                (3)

              	
                For
                  funding of $500,000 bridge loan to acquire GC (the “GC
                  Warrants”).

              

      

      
        	
                (4)

              	
                For
                  funding of $500,000 plus accrued interest ($4,273.95) in connection
                  with
                  2-Year Short-Term Bridge Loan (“2-Year
                  Warrants”).

              

      

    

    

      B.    
        TGH
        terminated his employment with Company in May, 2007, has alleged certain
        injuries associated with such termination, and Company is desirous of providing
        for mutual releases between the parties. The parties acknowledge that the
        Company is presently issuing Common Stock at a price of $0.15 per share pursuant
        to an offer to Warrant holders to exercise their Warrants at this reduced
        price
        and also pursuant to a private offering of Common Stock to a limited number
        of
        investors at $0.15 per share, both presently scheduled to expire on November
        30,
        2007.

       

      NOW,
        THEREFORE, in consideration of the premises and covenants contained herein
        and
        other good and valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, the parties agree as follows:

       

    

    1.  Recitals.
      The
      recitals set forth above are incorporated by reference herein and made a part
      hereof as if fully rewritten.

    

      2.     
         Issuance
        of Stock.
        For and
        in consideration of delivery of the release provided by TGH set forth in
        Section 4
        below
        (the “TGH Release”), Company hereby agrees to issue to TGH a total of 2,000,000
        shares of Common Stock (the “Shares”) on January 15, 2008 (which amount of
        shares shall be equitably adjusted to account for any forward or reverse
        splits
        of Common Stock between the date hereof and the date of issuance of the Common
        Stock). TGH acknowledges that:

    

     

    (a)  all
      Shares of Common Stock to be issued to TGH in connection with the Release are
      for investment purposes only, without a view toward resale;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)  TGH
      is an
“accredited investor” as that term is defined under Rule 501 promulgated under
      the Securities act of 1933, as amended;

     

    (c)  TGH
      acknowledges that the Shares to be issued for the Release hereunder are subject
      to a high degree of risk and TGH has been afforded and opportunity to ask
      questions of Company and receive answers to his satisfaction;

    

            
        (d)       all
        Shares to be issued to TGH hereunder shall be unregistered and subject to
        restrictions on resale under the Securities Act, as well as a restrictive
        legend
        shall appear on the certificates for such Shares prohibiting transfer absent
        registration or resale pursuant to an appropriate exemption from
        registration;

    

     

    (e)  None
      of
      the Shares shall be issued to TGH prior to January 15, 2008 and TGH shall have
      no rights as a shareholder with respect to the Shares before they are issued
      to
      him.

     

    Company
      acknowledges that the Board of Directors of Company has authorized its CEO
      to
      finalize and execute this Agreement and no consent of any person or governmental
      authority is required for the execution, delivery and performance of this
      Agreement, and all shares of Common Stock issued pursuant to this Agreement
      when
      issued will be duly and validly issued, fully paid and
      nonassessable.

     

    3.  Warrant
      Cancellation and Cashless Rights.
      Simultaneous with the execution hereof, TGH and Company hereby
      agree:

     

    (a)  that
      562,375 shares of Common Stock subject to the CP 11/24 $0.45 Warrants and
      437,625 shares of Common Stock subject to the CP 11/30 $0.45 Warrants are hereby
      cancelled (leaving 124,019 shares exercisable thereunder; and

     

    
      (b)      
        effective as of the date first set forth above, 1,000,000 of the 1,500,000
        shares of Common Stock issuable with respect to the outstanding warrant
        designated as the CP Bridge Loan Warrant set forth below shall be subject
        to
        cashless exercise rights in accordance with the alternative cashless exercise
        rights set forth in said warrant, and the Company agrees to exchange the
        warrant
        designated as the CP Bridge Loan Warrant below for a new warrant that will
        be
        substantially identical to the old warrant except for the granting of the
        cashless exercise rights so referenced. The cashless rights may be exercised
        before any payment of cash is required. TGH and Company agree that no
        consideration was paid for these cashless exercise rights other than surrender
        of securities of the Company as set forth in Section 3(a) and that the holding
        period for the new warrant may be tacked from the date of the original warrant
        for the purposes of Rule 144.

       

    

    As
      a
      result of the foregoing, the ownership of TGH following the execution of this
      Agreement (the “TGH Ownership”) shall be as follows.

     

    
      	
              Class
                of Warrant

            	 	
              Amount
                Exercised

            	 	
              Amount
                Cancelled

            	 	
              Amount
                Remaining

            	 
	
              CP
                11/24 @ $0.45(1)

            	 	
              0

            	 	 	
              562,375

            	 	 	
              0

            	 
	
              CP
                11/30 @ $0.45(1)

            	 	
              0

            	 	 	
              437,625

            	 	 	
              124,019

            	 
	
              CP
                11/24 @ $0.65(1)

            	 	
              0

            	 	 	
              0

            	 	 	
              562,374

            	 
	
              CP
                11/30 @ $0.65(1)

            	 	
              0

            	 	 	
              0

            	 	 	
              561,644

            	 
	
              CP
                Bridge Loan Warrants(2)

            	 	
              0

            	 	 	
              0

            	 	 	
              1,500,000

            	 
	
              GC
                Warrants

            	 	
              0

            	 	 	
              0

            	 	 	
              500,000

            	 
	
              2-Year
                Warrants

            	 	
              0

            	 	 	
              0

            	 	 	
              756,411

            	 
	
              20/20
                Warrants

            	 	
              0

            	 	 	
              0

            	 	 	
              37,557

            	 
	
              Employee
                Option (at $0.70/share)(3) 

            	 	
              0

            	 	 	
              0

            	 	 	
              1,800,000

            	 
	
              Performance
                Option (at $0.70/share)(3) 

            	 	
              0

            	 	 	
              0

            	 	 	
              1,000,000

            	 
	
              Common
                Stock presently owned

            	 	
              N/A

            	 	 	
              N/A

            	 	 	
              2,248,037

            	 
	
              Common
                Stock to be issued under this Agreement

            	 	
              N/A

            	 	 	
              N/A

            	 	 	
              2,000,000

            	 

    

     

    
      
        

      

      
        	
                (1)

              	
                Concurrent
                  with the execution hereof, TGH agrees to tender either the original
                  Warrant with respect to the Warrant in question or a Lost Warrant
                  Affidavit.

              

      

      
        	
                (2)

              	
                A
                  counterpart copy of this Agreement shall serve as evidence that
                  the
                  referenced Warrant contains cashless exercise rights as to 1,000,000
                  of
                  the 1,500,000 shares subject to the
                  Warrant..

              

      

      
        	
                (3)

              	
                As
                  a result of the letter agreement dated May 17, 2007, all of these
                  options
                  are 100% vested and have an exercisable term of June 28,
                  2016.

              

      

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

      

        4.    
          Release
          by TGH.
          TGH, on
          behalf of himself, his heirs, Affiliates, successors and assigns (collectively,
          the “TGH Releasors”), jointly and severally, for and in consideration of the
          undertakings in Section 2
          and the
          following Section 5
          and
          other valuable consideration in hand paid, the receipt and sufficiency
          of which
          is hereby acknowledged, does hereby and by these presents, for anyone claiming
          by or through or under any TGH Releasor, fully remise, release, acquit
          and
          forever discharge each of the Company Releasors (as defined in Section 5
          hereinafter) and each of the Company Releasors’ respective agents,
          attorneys-in-fact, heirs, estates, successors, assigns, members, trustees,
          employees, directors, officers and personal representatives, as well as
          any
          predecessor, successor, subsidiary or affiliated corporation or other entity,
          jointly and severally, individually and collectively, the “Company Releasees”)
          from and against (except as expressly noted in Section 6
          below),
          any and all liability, claims, costs and damages of any manner or nature
          whatsoever from the beginning of time to the date hereof, including but
          not
          limited to any obligation with respect to physical or mental injuries or
          damage,
          any obligation to reimburse expenses, or any obligation under TGH’s employment
          agreement or May 17, 2007 severance letter with the Company or entitlement
          to
          any severance payments of any nature whatsoever, all of which are hereby
          deemed
          terminated in all respects with no further obligations or liabilities thereunder
          from any of the Company Releasees to any of the TGH Releasors provided
          that
          the
          following are not released: (i) obligations under this Agreement, (ii)
          stock,
          warrants and options with respect to TGH Ownership and other attributes
          of
          ownership (iii) amounts currently outstanding under a convertible promissory
          note (the “Promissory Note”) dated January 19, 2007 with a principal balance of
          $504,273.95 plus accrued interest to date and through maturity and rights
          of
          conversion thereunder and (iv) any right to coverage under any insurance
          policy,
          directors and officers insurance policies, rights to indemnification and
          advancement of expenses under any agreement, law, by-law, certificate or
          articles or certificate of incorporation or similar document of the Company
          or
          any subsidiary. 

         

        5.    
          Release
          by Company.
          Company
          on behalf of itself, and its respective agents, subsidiaries, estates,
          executors, assigns, directors and officers (collectively, the “Company
          Releasors”) jointly and severally, for and in consideration of the undertakings
          of Section 4
          and
          other valuable consideration in hand paid, the receipt and sufficiency
          of which
          are hereby acknowledged, does hereby and by these presents, for anyone
          claiming
          by or through or under any Company Releasor, fully remise, release and
          forever
          discharge each of the TGH Releasors and each of the TGH Releasors’ respective
          agents, attorneys-in-fact, heirs, estates, successors, assigns, members,
          trustees, employees, directors, officers and personal representatives,
          as well
          as any predecessor, successor, subsidiary or affiliated corporation or
          other
          entity, jointly and severally (individually and collectively, the “TGH
          Releasees”) from and against any and all liabilities, claims, costs and damages
          of any manner or nature whatsoever from the beginning of time to the date
          hereof
          (except as noted in Section 6
          below),
          including but not limited to any obligations under the Merger
          Agreement.

         

        6.    
          Ongoing
          Obligations.
          Notwithstanding anything to the contrary contained in this Release, the
          obligations of the respective parties with respect to this Agreement (including,
          but not limited to, the Company’s obligation to effect the actions set forth in
Sections 2
          and 3
          and
          TGH’s obligation to effect the cancellations set forth in Section 3)
          shall
          remain in full force and effect and nothing contained herein shall be deemed
          to
          reduce, diminish or release any of the obligations contained in this Agreement.
          In addition, TGH acknowledges that all obligations if any for the payment
          of
          income taxes or other taxes with respect to the issuance of Shares called
          for in
          Section 2 of this Agreement (the “Share Issuance”) shall be his obligation and
          he agrees to indemnify and hold harmless the Company from and against any
          taxes,
          loss, costs, interest, penalties or other liability associated with the
          Share
          Issuance, including but not limited to the obligation to withhold any funds
          associated with the Share Issuance or to pay any taxes, penalties or interest
          associated with the issuance of the Shares (collectively, the “TGH Indemnity
          Obligations”); the Company shall have the right to set off the amounts evidenced
          by the TGH Indemnity Obligations against any monies that may be owing from
          the
          Company to TGH from time to time. The parties acknowledge that in 2008
          the
          Company will issue a Form 1099 to TGH for the 2,000,000 Shares showing
          a value
          of $0.15 per share for the Share Issuance, which price per share is the
          same as
          the price per share pursuant to the private offering it has made for Common
          Stock ending at or about the time of this Agreement.

         

      

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

      7.    
        Share
        Transfers and Registration Rights; Promissory Note.
        In the
        event Company grants any investor registration rights or registers the shares
        of
        any investor following the date hereof Company shall also grant TGH “Pro Rata”
registration rights with respect to such registration. For purposes hereof,
        the
“Pro Rata” rights of registration shall be the same proportionate number of
        shares to be registered as to each “tranche” of securities representing the TGH
        Ownership, to the extent that registration is effected on behalf of the holders
        of that tranche of securities, and whereby TGH shall be permitted to register
        that percentage of the tranche of securities as the amount of TGH Ownership
        bears to the other holders of that tranche of securities with the registration
        rights, subject to the understanding that the number of shares eligible for
        registration will most likely be subject to limitations imposed by the SEC
        under
        Rule 415. Each “tranche” of securities of TGH Ownership would be the aggregate
        number of outstanding securities from each tranche of issuance of securities
        comprising the TGH Ownership (for instance there is presently approximately
        $7,315,000 of outstanding convertible notes, of which TGH holds $504,273.95
        of
        original principal amount, or about 6.893% and which would be one tranche
        of the
        securities, and if 100,000 shares allocable to the convertible notes was
        registered, then TGH’s share would be 6893 of those shares). The Company shall
        promptly facilitate any share transfers, option exercises or warrant exercises.
        The Company represents and warrants the Promissory Note is the legal, valid
        and
        binding obligation of the Company and is not subject to any defenses, set-off
        or
        counterclaim, except per the terms of Section 6 of this Agreement.

       

    

    8.  Miscellaneous.

     

    (a)  Survival.
      All
      representations, warranties and covenants of the parties contained in this
      Agreement or made pursuant hereto, shall survive the date of execution of this
      Agreement and remain in full force and effect, and shall survive the termination
      or expiration of this Agreement.

     

    (b)  Counsel.
      All
      parties hereto have been represented by counsel, and no inference shall be
      drawn
      in favor of or against any party by virtue of the fact that such party’s counsel
      was or was not the principal draftsman of this Agreement.

    

                     
        (c)      Notices.
        All
        notices or other communications required or permitted under this Agreement
        shall
        be in writing and shall be deemed to have been duly given if delivered
        personally or sent by registered or certified mail, postage prepaid or via
        national courier, addressed as to the party entitled to notice at the address
        set forth below:

    

     

    
      	
              If
                to Company, to:

            	
              Capital
                Growth Systems, Inc.

              Attention: Patrick
                C. Shutt

              500
                W. Madison - Suite 2060

              Chicago,
                IL 60661

              Facsimile: (312)
                673-2422

              E-Mail: PShutt@globalcapacity.com

            
	 	 
	
              If
                to TGH, to:

            	
              Mr.
                Thomas G. Hudson

              60
                Gideons Point Road

              Tonka
                Bay, MN 55331

              E-Mail: thomasghudson@gmail.com

            

    

    

    
      	
               

            	
              or
                such other address as is subsequently provided by written notice
                from such
                party to the other parties.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (d)  No
      Assignment.
      Except
      as expressly noted below, this Agreement and the rights of the parties under
      this Agreement may not be sold, assigned or otherwise transferred without the
      prior written consent of the other party.

     

    (e)  Entire
      Agreement.
      This
      Agreement, sets forth the entire agreement and understanding of the parties
      hereto in respect of the subject matter contemplated hereby, and supersedes
      all
      prior agreements, arrangements and understandings relating to the subject matter
      hereof.

    

                      (f)     
        Applicable
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Illinois. Should any dispute arise under this Agreement, it shall
        be
        litigated in the state or federal courts situated in Cook County, Illinois,
        to
        which jurisdiction and venue all parties consent.

    

    (g)  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which, whether
      photocopy, facsimile, e-mail in PDF format or ink, shall be deemed an original,
      but all of which together shall constitute one instrument.

     

    (h)  Approval.
      This
      Agreement shall be binding upon the parties, their respective heirs, successors
      and assigns, and each entity party represents and warrants that this Agreement
      has been duly approved by proper corporate action.

     

    (i)  Remedies.
      No
      party hereunder shall be entitled to consequential damages as a result of the
      breach by any other party of its obligations hereunder. Each party’s damages
      shall be limited to actual damages as a result of the breach of any obligation
      hereunder.

    

                      (j)      
        Specific
        Performance.
        In the
        event of any breach or threatened breach of this Agreement in which the
        aggrieved party desires to protect and enforce its rights by suit in equity
        for
        the specific performance of any term contained in this Agreement or for an
        injunction against any breach of any such term or in aid of the exercise
        of any
        power to enforce such performance or to enforce any other legal or equitable
        right of the enforcing party, that party may take any one or more of such
        actions, and shall be paid all costs and expenses, including attorneys’ fees
        incurred in connection with any such action or actions should it prevail
        in such
        action. Any suit to specifically enforce the terms of this Agreement shall
        be
        litigated in the state or federal courts located in Cook County,
        Illinois.

    

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
      first set forth above.

     

    
      	
              COMPANY:

            	 	
              TGH:

            
	 	 	 
	
              Capital
                Growth Systems, Inc.

            	 	 
	 	 	 
	 	 	
              Thomas
                G. Hudson

            
	
              By:

            	 	 	 
	 	
              Patrick
                C. Shutt

            	 	 
	 	
              Chief
                Executive Officer

            	 	
               

            

    

    

    
      
        
        

      

      
        6THE
      SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND
      MAY
      NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
      REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS
      THE
      ISSUER HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
      SATISFACTORY TO THE ISSUER AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
      REQUIRED. 

     

    SURFECT
      HOLDINGS, INC.

     

    PROMISSORY
      NOTE

    (non-negotiable)

     

    
      	
              $__________

            	
              _______________,
                2007

            

    

    

    FOR
      VALUE
      RECEIVED Surfect Holdings, Inc., a Delaware corporation (the “Company”),
      promises to pay to ______________ (the “Holder”),
      the
      principal amount of _____________________ ($__________), together with interest
      in arrears on then unpaid principal balance from the date hereof at a rate
      equal
      to twelve percent (12%) per annum. Interest shall be calculated on the basis
      of
      a year of 365 days. 

     

    1. Maturity.
      Unless
      earlier converted pursuant to Section 4 hereof, all unpaid principal, together
      with any then accrued but unpaid interest and any other amounts payable
      hereunder, shall be due and payable on January 28, 2008.

     

    The
      following is a statement of the rights of the Holder of this Note and the
      conditions to which this Note is subject, and to which the Holder, by the
      acceptance of this Note, agrees:

     

    2. Event
      of Default.

     

    (a) For
      purposes of this Note, an “Event
      of Default”
      means:

     

    (i) the
      Company shall default in the payment of interest and/or principal on this Note
      and such default shall continue for ten (10) business days after the due date
      thereof; or

     

    (ii) the
      Company shall (1) become insolvent; (2) admit in writing its inability to pay
      its debts generally as they mature; (3) make an assignment for the benefit
      of
      creditors or commence proceedings for its dissolution; or (4) apply for or
      consent to the appointment of a trustee, liquidator or receiver for it or for
      a
      substantial part of its property or business; or

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii) a
      trustee, liquidator or receiver shall be appointed for the Company or for a
      substantial part of its property or business without its consent and shall
      not
      be discharged within thirty (30) days after such appointment; or

     

    (iv) any
      governmental agency or any court of competent jurisdiction at the insistence
      of
      any governmental agency shall assume custody or control of the whole or any
      substantial portion of the properties or assets of the Company and shall not
      be
      dismissed within thirty (30) days thereafter; or

     

    (v) bankruptcy,
      reorganization, insolvency or liquidation proceedings or other proceedings,
      or
      relief under any bankruptcy law or any law for the relief of debt shall be
      instituted by or against the Company and, if instituted against the Company
      shall not be dismissed within thirty (30) days after such institution, or the
      Company shall by any action or answer approve of, consent to, or acquiesce
      in
      any such proceedings or admit to any material allegations of, or default in
      answering a petition filed in any such proceeding; or

     

    (b) Upon
      the
      occurrence of an Event of Default, the entire indebtedness with accrued interest
      thereon due under this Note shall, at the option of the Holder, be immediately
      due and payable without notice. Failure to exercise such option shall not
      constitute a waiver of the right to exercise the same in the event of any
      subsequent Event of Default.

     

    3. Prepayment.
      The
      Company may, without premium or penalty, at any time from time to time, prepay
      all or any portion of the outstanding principal balance due under this Note,
      provided that each such prepayment is accompanied by accrued interest on the
      amount of principal prepaid calculated to the date of such prepayment, provided
      the Holder consents in writing to such prepayment.

     

    4. Mandatory
      Conversion.
      Upon
      the closing of any future equity financing of the Company of at least $1,500,000
      (a “Financing”)
      all
      unpaid principal and accrued but unpaid interest hereunder shall automatically
      convert into the same securities offered in the Financing; provided that the
      holder shall purchase such securities at a 50% discount to the offering price
      in
      the Financing.

     

    5. Miscellaneous.

     

    (a) Loss,
      Theft, Destruction or Mutilation of Note.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Note and, in the case of loss, theft or
      destruction, delivery of an indemnity agreement reasonably satisfactory in
      form
      and substance to the Company or, in the case of mutilation, on surrender and
      cancellation of this Note, the Company shall execute and deliver, in lieu of
      this Note, a new note executed in the same manner as this Note, in the same
      principal amount as the unpaid principal amount of this Note and dated the
      date
      to which interest shall have been paid on this Note or, if no interest shall
      have yet been so paid, dated the date of this Note.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b) Payment.
      All
      payments under this Note shall be made in lawful tender of the United
      States.

     

    (c) Waivers.
      The
      Company hereby waives notice of default, presentment or demand for payment,
      protest or notice of nonpayment or dishonor and all other notices or demands
      relative to this instrument.

     

    (d) Usury.
      In the
      event that any interest paid on this Note is deemed to be in excess of the
      then
      legal maximum rate, then that portion of the interest payment representing
      an
      amount in excess of the then legal maximum rate shall be deemed a payment of
      principal and applied against the principal of this Note.

     

    (e) Waiver
      and Amendment.
      Any
      provision of this Note may be amended, waived or modified only by an instrument
      in writing signed by the party against which enforcement of the same is
      sought.

     

    (f) Expenses;
      Attorneys’ Fees.
      If
      action is instituted to enforce or collect this Note, the Company promises
      to
      pay all reasonable costs and expenses, including, without limitation, reasonable
      attorneys’ fees and costs, incurred by the Holder in connection with such
      action.

     

    (g) Successors
      and Assigns.
      This
      Note may be assigned or transferred by the Holder. Subject to the preceding
      sentence, the rights and obligations of the Company and the Holder of this
      Note
      shall be binding upon and benefit the successors, permitted assigns, heirs,
      administrators and permitted transferees of the parties.

     

    (h) Governing
      Law; Jurisdiction.
      THIS
      NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
      OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
      EACH PARTY HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
      OR STATE COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY CLAIM OR
      CONTROVERSY RELATED TO THE ENFORCEMENT OR INTERPRETATION OF THIS
      NOTE.

     

    [SIGNATURE
      PAGE FOLLOWS]

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be executed as of the
      date
      first above written by its duly authorized officer.

     

    
      	
              SURFECT
                HOLDINGS, INC.

            
	 
	
              By:

            	 
	 	
              Name:  
                Steven Anderson

            
	 	
              Title:    
                President and CEO

            

    

    
      
         

      

      
        4

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