Document:

Promissory Installment Note

Promissory Installment Note

	Note#

 2029020                                                      Date:    August 10, 2006

Borrower:       Probe Manufacturing, Inc.

                        3050 Pullman Street

                        Costa Mesa,  CA 92661

Payee:       

William Duncan                                            Amount          $50,000

Interest Rate:  12% per annum

PAYMENT TERMS.  This Note is due and payable as follows, to-wit:  Interest payments of $500 on August 15, 2006 and September 15, 2006.  Eighteen monthly payments of $1660.72 including Principal and interest, commencing October 15, 2006 and each month thereafter on the 15th day of the month,  With a final balloon payment due on April 15, 2008 of $27,505.19.

PRE-PAYMENT. Borrower will allocate 50% of all equity financing raised by the Company to pay off its debt.  The Borrower may prepay all or part of this note at anytime.

DEFAULT AND ACCELERATION CLAUSE.  If Borrower defaults in the payment of this Note or in the performance of any obligation, and the default continues for five (5) days after Payee gives Borrower notice of the default, then Payee may declare the unpaid principal balance and earned interest on this Note immediately due.  Borrower and each surety, endorser, and guarantor waive all demands for payment, presentation for payment, notices of intentions to accelerate maturity, notices of acceleration of maturity, protests, and notices of protest, to the extent permitted by law.

ATTORNEY’S FEES.  If this Note is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Borrower shall pay Payee all costs of collection and enforcement, including reasonable attorney’s fees and court costs in addition to other amounts due.

SEVERABILITY.  If any provision of this Note or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Note nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 

BINDING EFFECT.  The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 

GOVERNING LAW.  This Note shall be governed, construed and interpreted by, through and under the Laws of the State of California.   

EXECUTED as of  August 10, 2006              Effective Date June 30, 2006

	Probe Manufacturing , Inc., 

a Nevada corporation

	William Duncan                                            

	By: _____________________________

	By:______________________________

	Its: ________________ Date: ________

	Its: ________________ Date: _________

                                         

 

P:\notes payable\Template.docPromissory Installment Note

Promissory Installment Note

	Note#

 2029040                                             Date:                August 10, 2006

Borrower:       Probe Manufacturing, Inc.

                        3050 Pullman Street

                        Costa Mesa,  CA 92661

Payee:       

Hoa Mai                                                       Amount          $50,000

Interest Rate:  12% per annum

PAYMENT TERMS.  This Note is due and payable as follows, to-wit:  Interest payments of $500 on August 15, 2006 and September 15, 2006.  Eighteen monthly payments of $1,660.72 including Principal and interest, commencing October 15, 2006 and each month thereafter on the 15th day of the month,  With a final balloon payment due on April 15, 2008 of $27,505.19

PRE-PAYMENT. Borrower will allocate 50% of all equity financing raised by the Company to pay off its debt.  The Borrower may prepay all or part of this note at anytime.

DEFAULT AND ACCELERATION CLAUSE.  If Borrower defaults in the payment of this Note or in the performance of any obligation, and the default continues for five (5) days after Payee gives Borrower notice of the default, then Payee may declare the unpaid principal balance and earned interest on this Note immediately due.  Borrower and each surety, endorser, and guarantor waive all demands for payment, presentation for payment, notices of intentions to accelerate maturity, notices of acceleration of maturity, protests, and notices of protest, to the extent permitted by law.

ATTORNEY’S FEES.  If this Note is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Borrower shall pay Payee all costs of collection and enforcement, including reasonable attorney’s fees and court costs in addition to other amounts due.

SEVERABILITY.  If any provision of this Note or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Note nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 

BINDING EFFECT.  The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 

GOVERNING LAW.  This Note shall be governed, construed and interpreted by, through and under the Laws of the State of California.   

EXECUTED as of  August 10, 2006               Effective Date June 30, 2006

	Probe Manufacturing , Inc., 

a Nevada corporation

	Hoa Mai                                                 

	By: _____________________________

	By:______________________________

	Its: ________________ Date: ________

	Its: ________________ Date: _________

                                         

 

P:\notes payable\Term Notes\hoa 2029040.docPromissory Installment Note

Promissory Installment Note

	Note#

2028000                                            Date:                August 10, 2006

Borrower:       Probe Manufacturing, Inc.

                        3050 Pullman Street

                        Costa Mesa,  CA 92661

Payee:       

Ashford Capital Transition Fund               Amount          $100,000

Interest Rate:  12% per annum

PAYMENT TERMS.  This Note is due and payable as follows, to-wit:  Interest payments of $1,000 on August 15, 2006 and September 15, 2006.  Eighteen monthly payments of $3,321.43 including Principal and interest, commencing October 15, 2006 and each month thereafter on the 15th day of the month,  With a final balloon payment due on April 15, 2008 of $55,010.37.

PRE-PAYMENT. Borrower will allocate 50% of all equity financing raised by the Company to pay off its debt.  The Borrower may prepay all or part of this note at anytime.

DEFAULT AND ACCELERATION CLAUSE.  If Borrower defaults in the payment of this Note or in the performance of any obligation, and the default continues for five (5) days after Payee gives Borrower notice of the default, then Payee may declare the unpaid principal balance and earned interest on this Note immediately due.  Borrower and each surety, endorser, and guarantor waive all demands for payment, presentation for payment, notices of intentions to accelerate maturity, notices of acceleration of maturity, protests, and notices of protest, to the extent permitted by law.

ATTORNEY’S FEES.  If this Note is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Borrower shall pay Payee all costs of collection and enforcement, including reasonable attorney’s fees and court costs in addition to other amounts due.

SEVERABILITY.  If any provision of this Note or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Note nor the application of the provision to other persons, entities or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 

BINDING EFFECT.  The covenants, obligations and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 

GOVERNING LAW.  This Note shall be governed, construed and interpreted by, through and under the Laws of the State of California.   

EXECUTED as of  August 10, 2006                Effective Date June 30, 2006

	Probe Manufacturing , Inc., 

a Nevada corporation

	Ashford Capital Transition Fund

	By: _____________________________

	By:______________________________

	Its: ________________ Date: ________

	Its: ________________ Date: _________

                                         

 

P:\notes payable\Template.docPolicy/Procedure

Probe Profit Sharing

Policy/Procedure

Name: Profit Sharing Plan

Manual Section: Fringe Benefits 

Effective Date: 1/1/2006 

New: [X] Revised: [_] 

1. Background or Issue 

The annual profit sharing program was established to compensate employees for their contributions to the organization’s success. Profit sharing is based on the company’s annual profitability. 

2. Determination of Profit Sharing Pool 

At the end of each quarter, the profit sharing pool is calculated, accrued and funds are set aside based on the Company's (Quarterly Net Profit before Tax) times 10%.  The Profit sharing pool will be paid out in 2 payments; 1) 40% of the accrued pool is paid on December 15th of the current year, 2) The Balance will be paid on March 31 of the following year, after the final year end audit adjustments are completed.  

Voluntary deductions are normally not taken from sharing checks. However, mandatory deductions, such as child support and garnishments are deducted. When applicable; if an employee wishes, he/she may request that a percentage of their profit sharing be deducted for contribution to his/her 401(k) account. In order to make this deduction request, the employee must complete a request form each year.

3. Profit Sharing Payment 

Profit sharing is calculated for all active employees and employees who are on approved leave as of the date of each payment for that payment. The Profit Sharing pool will be paid evenly to all eligible employees on a prorate basis, based on the number of regular hours worked during the year after their probationary period. However, profit sharing is not paid to employees who have been terminated for cause or who have voluntarily left the Company prior to the payment date of the bonus. Those employees who are on approved leave will receive their checks in the mail. 

Profit Sharing checks are always live. Federal withholding is always calculated at the flat IRS bonus rate of 27%.

4. Eligibility for Temporary Employees 

Temporary employee’s are not eligible for participating in the profit sharing plan.

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