Document:

CONVERTIBLE PROMISSORY NOTE

 

                                          
                                          
                                          
                                Salt Lake City, Utah

	
            $30,000.00
 	
            Date: August 25, 2006
 

 

 

FOR VALUE RECEIVED, the undersigned, BRAIN TREE INTERNATIONAL, INC., (hereinafter "Maker"), promises to pay to the order of LANE CLISSOLD, at 3078 East Silver Hawk Drive, Salt Lake City, UT, 84121 (hereinafter "Payee"), the principal sum of Thirty Thousand Dollars ($30,000.00) in lawful money of the United States of America, together with interest thereon at the rate of six percent (6.0%) per annum until paid in full.  

 

Payment of principal together with all accrued interest shall be due upon demand by the holder hereof.

 

The Maker of this Promissory Note shall have the privilege, without penalty or premium, of paying in advance the entire principal or any portion thereof.  

 

In the event that any portion of principal or interest is not paid when due, it shall thereafter bear interest at the rate of ten percent (10.0%) per annum, both before and after judgment, until paid in full.  In the event of default on any payment herein provided for, then without notice, presentment or demand, the principal sum hereof together with any accrued interest thereon shall, at the option of the holder of this Promissory Note, become due and payable immediately.  Failure to delay in exercising its option shall not constitute a waiver of any such breach or default nor waiver of the holder's right to exercise said option upon any subsequent breach or default.

 

The undersigned hereby expressly waives all statutes of limitation affecting the enforceability of this Promissory Note, and agree to pay all reasonable attorneys fees and costs incurred in collection of payments due or in the enforcement of any right or remedy hereunder.  The Makers, assumers, endorsers, sureties, and guarantors of this Promissory Note consent to all renewals, indulgences, extensions, and all releases of security granted or permitted by the owner or holder without notice. Payee shall have the right, at anytime prior to receiving payment in full of this Promissory Note, to convert any or all of the then outstanding principal or accrued interest owed under this Promissory Note, to shares of $.001 par value common stock of Brain Tree International, Inc. at the conversion price of $0.01 per share.  In the event that the common stock of Brain Tree International, Inc. undergoes a forward
stock split, reverse stock split, stock dividend or other division or combination after the date of this Promissory Note but prior to any conversion by Payee, the conversion price shall be adjusted accordingly.  To exercise this conversion right, Payee shall give Maker written notice of exercise specifying the amount of principal and/or accrued interest being converted.

 

 

 

 

 

 

Payment of this promissory note is unsecured.

 

MAKER:

 

BRAIN TREE INTERNATIONAL, INC.

 

 

	
             
 	
            By: Donna Norman  
 

	
             
 	
            Its: President
 

CORP\0483UNITED STATES PATENT AND TRADEMARK OFFICE

UNITED STATES DEPARTMENT OF COMMERCE

United States Patent and Trademark Office

	
            Address:
 	
            Commissioner For Patents
 

	
             
 	
            P.O. Box 1450
 

	
             
 	
            Alexandria, VA 22313-1450
 

	
             
 	
            www.uspto [dot] gov
 

 

	
            APPL NO.:
 	
            10/620,303
 

	
            FILING OR 371 (c) DATE:
 	
            07/14/2003
 

	
            ART UNIT:
 	
            2613
 

	
            FIL. FEE REC’D:
 	
            0.00
 

	
            ATTY DOCKET NO.:
 	
            2031.2.1
 

	
            DRAWINGS:
 	
            7
 

	
            TOT CLMS:
 	
            84
 

	
            IND CLMS:
 	
            7
 

	
             
 	
            CONFIRMATION NO. 7558
 

	
            36491
 	
            FILING RECEIPT
 

	
            KUNZLER AND ASSOCIATES
 	
            *0C00000001 1070035*
 

10 WEST 100 SOUTH, SUITE 450

SALT LAKE CITY, UT 84101

 

	
             
 	
            Date Mailed: 10/21/2003
 

 

Receipt is acknowledged of this regular Patent Application. It will be considered in its order and you will be notified as to the results of the examination. Be sure to provide the U.S. APPLICATION NUMBER, FILING DATE, NAME OF APPLICANT, and TITLE OF INVENTION when inquiring about this application. Fees transmitted by check or draft are subject to collection. Please verify the accuracy of the data presented on this receipt. If an error is noted on this Filing Receipt, please write to the Office of Initial Patent Examination’s Filing Receipt Corrections, facsimile number 703-746-9195. Please provide a copy of this Filing Receipt with the changes noted thereon. If you received a “Notice to File Missing Parts” for this application, please submit any corrections to this Filing Receipt with your reply to the Notice. When the USPTO processes the reply to the Notice, the USPTO will generate another
Filing Receipt incorporating the requested corrections (if appropriate).

 

Applicant(s):

	
             
 	
            George I. Norman JR., Residence Not Provided:
 

 

Domestic Priority data as claimed by applicant

 

Foreign Applications

 

If Required, Foreign Filing License Granted: 10/20/2003

 

Projected Publication Date: To Be Determined-pending completion of Missing Parts

 

	
            Non-Publication Request:
 	
            No
 

 

	
            Early Publication Request:
 	
            No
 

 

**SMALL ENTITY**

 

TITLE

Apparatus method and system for providing enhanced digital services using an analog broadcast license.

 

Preliminary Class

 

LICENSE FOR FOREIGN FILING UNDER

Title 35, United States Code, Section 184

Title 37, Code of Federal Regulations, 5.11 & 5.15

 

GRANTED

 

The applicant has been granted a license under 35 U.S.C. 184, if the phrase “IF REQUIRED, FOREIGN FILING LICENSE GRANTED” followed by a date appears on this form. Such licenses are issued in all applications where the conditions for issuance of a license have been met, regardless of whether or not a license may be required as set forth in 37 CFR 5.15. The scope and limitations of this license are set forth in 37 CFR 5.15(a) unless an earlier license has been issued under 37 CFR 4.15(b). The license is subject to revocation upon written notification. The date indicated is the effective date of the license, unless an earlier license of similar scope has been granted under 37 CFR 5.13 or 5.14.

 

This license is to be retained by the liscensee and may be used at any time on or after the effective date thereof unless it is revoked. This license is automatically transferred to any related applications(s) filed under 37 CFR 1/53(d). This license is not retroactive.

 

The grant of a license does not in any way lessen the responsibility of a licensee for the security of the subject matter as imposed by any Government contract or the provisions of existing laws relating to espionage and the national security or the export of technical data. Licensees should apprise themselves of current regulations especially with respect to certain countries, of other agencies, particularly the Office of Defense Trade controls, Department of State (with respect to Arms, Munitions and Implements of War (22 CFR 121-128)); the Office of Export Administration, Department of Commerce (15 CFR 3770.10 (j)); the Office of Foreign Assets Control, Department of Treasury (31 CFR Parts 500+) and the Department of Energy.

 

NOT GRANTED

 

No License under 35 U.S.C. 184 has been granted at this time, if the phrase “IF REQUIRED, FOREIGN FILING LICENSE GRANTED” DOES NOT appear on this form. Applicant may still petition for a license under 37 CFR 5.12, if a license is desired before the expiration of 6 months from the filing date of the application. If 6 months has lapsed from the filing date of this application and the licensee has not received any indication of a secrecy order under 35 U.S.C. 181, the licensee may foreign file the application pursuant to 37 CFR 5.15(b).REVOLVING LINE OF CREDIT AGREEMENT

                        

            

             

            
                	
                             

                        	
                            This Revolving Line of Credit Agreement (the "AGREEMENT") is made and entered into

                        

            

            in this 1st day of December, 2006, by and between Lane Clissold ("LENDER"), and Brain Tree International Inc., a Utah corporation ("BORROWER").

             

            
                	
                             

                        	
                            In consideration of the mutual covenants and agreements contained herein, the

                        

            

            parties agree as follows:

             

            
                	
                             

                        	
                            1. 

                        	
                            LINE OF CREDIT. Lender hereby establishes for a period extending to

                        

            

            December 31, 2010 (the "MATURITY DATE") a revolving line of credit (the "CREDIT LINE") for Borrower in the principal amount of fifty thousand Dollars ($50,000.00) (the "CREDIT LIMIT"). In connection herewith, Borrower shall execute and deliver to Lender a Promissory Note in the amount of the Credit Limit and in form and content satisfactory to Lender. All sums advanced on the Credit Line or
            pursuant to the terms of this Agreement (each an "ADVANCE") shall become part of the principal of said Promissory Note.

             

            
                	
                             

                        	
                            2. 

                        	
                            ADVANCES. Any request for an Advance may be made from time to time and

                        

            

            in such amounts as Borrower may choose; provided, however, any requested Advance will not, when added to the outstanding principal balance of all previous Advances, exceed the Credit Limit. Requests for Advances may be made orally or in writing by such officer of Borrower authorized by it to request such Advances. Until such time as Lender may be notified otherwise, Borrower hereby
            authorizes its president or any vice president to request Advances. Lender may deposit or credit the amount of any requested Advance to Borrower's checking account with Lender. Lender may refuse to make any requested Advance if an event of default has occurred and is continuing hereunder either at the time the request is given or the date the Advance is to be made, or if an event has occurred or condition exists which, with the giving of notice or passing of time or both, would
            constitute an event of default hereunder as of such dates.

             

            
                	
                             

                        	
                            The funds from the Advances will be used by the Borrower for operating expenses in

                        

            

            connection with the operations of the Borrower.

             

            
                	
                             

                        	
                            3. 

                        	
                            INTEREST. All sums advanced pursuant to this Agreement shall bear interest

                        

            

            from the date each Advance is made until paid in full at the rate of ten percent (10%) per annum, simple interest (the "EFFECTIVE RATE").

             

            4. REPAYMENT. The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the MATURITY DATE. All payments shall be made to Lender at such place as Lender may, from time to time, designate. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender
            in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal. Borrower may prepay principal at any time without penalty.

             

            
                	
                             

                        	
                            5. 

                        	
                            REPRESENTATIONS AND WARRANTIES. In order to induce Lender to

                        

            

            enter into this Agreement and to make the advances provided for herein, Borrower represents and warrants to Lender as follows:

             

            1

             

            
                

            

             

            
                	
                             

                        	
                            a. 

                        	
                            Borrower is a duly organized, validly existing, and in good standing

                        

            

            under the laws of the State of Utah with the power to own its assets and to transact business in Utah, and in such other states where its business is conducted.

             

            
                	
                             

                        	
                            b. 

                        	
                            Borrower has the authority and power to execute and deliver any

                        

            

            document required hereunder and to perform any condition or obligation imposed under the terms of such documents.

             

            
                	
                             

                        	
                            c. 

                        	
                            The execution, delivery and performance of this Agreement 

                        

            

            and each document incident hereto will not violate any provision of any applicable law, regulation, order, judgment, decree, article of incorporation, by-law, indenture, contract, agreement, or other undertaking to which Borrower is a party, or which purports to be binding on Borrower or its assets and will not result in the creation or imposition of a lien on any of its assets.

             

            
                	
                             

                        	
                            d. 

                        	
                            There is no action, suit, investigation, or proceeding pending or

                        

            

            to the knowledge of Borrower, threatened, against or affecting Borrower or any of its assets which, if adversely determined, would have a material adverse affect on the financial condition of Borrower or the

            operation of its business.

             

            
                	
                             

                        	
                            6. 

                        	
                            EVENTS OF DEFAULT. An event of default will occur if any of the following

                        

            

            events occurs:

             

            
                	
                             

                        	
                            a. 

                        	
                            Failure to pay any principal or interest hereunder within ten (10)

                        

            

            days after the same becomes due.

             

            
                	
                             

                        	
                            b. 

                        	
                            Any representation or warranty made by Borrower in this 

                        

            

            Agreement or in connection with any borrowing or request for an Advance hereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made.

             

            
                	
                             

                        	
                            c. 

                        	
                            Default by Borrower in the observance or performance of any other

                        

            

            covenant or agreement contained in this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 6.

             

            
                	
                             

                        	
                            d. 

                        	
                            Filing by Borrower of a voluntary petition in bankruptcy seeing reorganization

                        

            

            reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing.

             

            e. Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

             

            
                	
                             

                        	
                            7. 

                        	
                            REMEDIES. Upon the occurrence of an event of default as defined above, Lender

                        

            

            may declare the entire unpaid principal balance, together with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind. Lender may suspend or terminate any obligation it may have hereunder to make additional Advances. To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of
            any kind in connection with this Agreement. No failure or delay on the part of Lender in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights

             

            
                

            

            or remedies provided at law or in equity. Borrower agrees to pay all costs of collection incurred by reason of the default, including court costs and reasonable attorney's fees.

             

            
                	
                             

                        	
                            8. 

                        	
                            NOTICE. Any written notice will be deemed effective on the date such notice is placed,

                        

            

            first class, postage prepaid, in the United States mail, addressed to the party to which notice is being given as follows:

             

            
                	
                             

                        	
                            Lender: 

                        	
                            Brain Tree International, Inc.

                        

            

            
                	
                             

                        	
                            358 South 700 East Ste B-526

                        

            

            
                	
                             

                        	
                            Salt Lake City, UT 84102

                        

            

             

            

             

            
                	
                             

                        	
                            Borrower: 

                        	
                            Lane Clissold

                        

            

            
                	
                             

                        	
                            3270 South 1100 West

                        

            

            
                	
                             

                        	
                            South Salt Lake, UT 84119

                        

            

             

            9. GENERAL PROVISIONS. All representations and warranties made in this Agreement and the Promissory Note and in any certificate delivered pursuant thereto shall survive the execution and delivery of this Agreement and the making of any loans hereunder. This Agreement will be binding upon and inure to the benefit of Borrower and Lender, their respective successors and
            assigns, except that Borrower may not assign or transfer its rights or delegate its duties hereunder without the prior written consent of Lender. This Agreement, the Promissory Note, and all documents and instruments associated herewith will be governed by and construed and interpreted in accordance with the laws of the State of Utah. Time is of the essence hereof. This Agreement will be deemed to express, embody, and supersede any previous understanding, agreements, or commitments,
            whether written or oral, between the parties with respect to the general subject matter hereof. This Agreement may not be amended or modified except in writing signed by the parties.

             

            
                	
                             

                        	
                            EXECUTED on the day and year first written above.

                        

            

             

             

            
                	
                             

                        	
                            Borrower: 

                        	
                            Brain Tree International, Inc.

                        

            

             

            
                	
                             

                        	
                            By: Donna Norman

                        

            

            
                	
                             

                        	
                             

                        

            

            
                	
                             

                        	
                            President

                        

            

             

             

            
                	
                             

                        	
                            Lender: 

                        	
                            Lane Clissold

                        

            

            
                	
                             

                        	
                             

                        

            

            
                	
                             

                        	
                            Lane Clissold

                        

            

             

             

             

             

             

             

             

             

             

             

            
                

            

            Promissory Note

             

            
                	
                            $50,000.00 

                        	
                            Salt Lake City, UT

                        

            

            
                	
                             

                        	
                            December 1, 2006

                        

            

             

             

            
                	
                             

                        	
                            This Promissory Note (the "NOTE") is made and executed as of the date referred to 

                        

            

            above, by and between Brain Tree International, Inc., a Utah corporation (the "BORROWER"), and Lane Clissold ("LENDER"). By this Note, the Borrower promises and agrees to pay to the order of Lender, at 3270 South 1100 West, South Salt Lake, UT 84119 at such other place as Lender may designate in writing, the principal sum of fifty thousand and 00/100 Dollars ($50,000.00), or the aggregate
            unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of a Revolving Line of Credit Agreement (the "LOAN AGREEMENT") of even date herewith, whichever is less, together with interest thereon from the date each advance is made until paid in full, both before and after judgment, at the rate of 10 percent (10%) per annum, simple interest.

             

            Borrower shall pay the entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the MATURITY DATE.

             

            
                	
                             

                        	
                            Prepayment in whole or part may occur at any time hereunder without penalty; provided

                        

            

            that the Lender shall be provided with not less than ten (10) days notice of the Borrower's intent to pre-pay; and provided further that any such partial prepayment shall not operate to postpone or suspend the obligation to make, and shall not have the effect of altering the time for payment of the remaining balance of the Note as provided for above, unless and until the entire
            obligation is paid in full. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal.

             

            
                	
                             

                        	
                            An event of default will occur if any of the following events occurs:

                        

            

            (a) failure to pay any principal or interest hereunder within ten (10) days after the same becomes due; (b) if any representation or warranty made by Borrower in the Loan Agreement or in connection with any borrowing or request for an advance thereunder, or in any certificate, financial statement, or other

            statement furnished by Borrower to Lender is untrue in any material respect at the time when made; 

            (c) default by Borrower in the observance or performance of any other covenant or agreement contained in the Loan Agreement, other than a default constituting a separate and distinct event of default under Paragraph 7 of the Loan Agreement; (d) filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the
            Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing; or (e) filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or
            undischarged.

             

            
                	
                             

                        	
                            Any notice or demand to be given to the parties hereunder shall be deemed to have

                        

            

            been given to and received by them and shall be effective when personally delivered or when deposited in the U.S. mail, certified or registered mail, return receipt requested, postage prepaid, and addressed to the party at his or its last known address, or at such other address as the one of the parties may hereafter designate in writing to the other party.

             

             

            
                

            

            The Borrower hereof waives presentment for payment, protest, demand, notice of protest, notice of dishonor, and notice of nonpayment, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time by the Lender without in any way affecting its liability hereunder.

             

            In the event any payment under this Note is not made at the time and in the manner required, the Borrower agrees to pay any and all costs and expenses which may be incurred by the Lender hereof in connection with the enforcement of any of its rights under this Note or under any such other instrument, including court costs and reasonable attorneys' fees.

             

            This Note shall be governed by and construed and enforced in accordance with the laws of Utah.

             

            
                	
                            The Borrower: 

                        	
                            Brain Tree International Inc.,

                        

            

            
                	
                             

                        	
                            a Utah corporation

                        

            

             

             

            
                	
                             

                        	
                            By: /s/ Donna Norman 

                        

            

            
                	
                             

                        	
                             

                        

            

            
                	
                             

                        	
                            President

                        

            

             

             

            
                	
                            Lender: 

                        	
                            /s/ Lane Clissold

                        

            

            
                	
                             

                        	
                             

                        

            

            
                	
                             

                        	
                            Lane Clissold

                        

            

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

             

            
                

            

             

             

            Addendum to the Revolving Line of Credit Agreement

             

             

            
                	
                            $50,000.00 

                        	
                            Salt Lake City, UT

                        

            

            
                	
                             

                        	
                            December 1, 2006

                        

            

             

            
                	
                             

                        	
                            This Addendum to the Revolving Line of Credit Agreement by and between

                        

            

            Brain Tree International, Inc., a Utah Corporation (the "BORROWER") and Lane Clissold ("LENDER") is made and executed as of the date referred to above. “Payee shall have the right, at anytime prior to receiving payment in full of this Promissory Note, to convert any or all of the then outstanding principal or accrued interest owed under this Promissory Note, to shares of $.001 par
            value common stock Brain Tree International, Inc. at the conversion price of $0.____ per share. In the event that the common stock of Brain Tree International, Inc. undergoes a forward stock split, reverse stock split, stock dividend or other division or combination after the date of this Promissory Note but prior to any conversion by Payee, the conversion price shall be adjusted accordingly. To exercise this conversion right, Payee shall give Maker written notice of exercise
            specifying the amount of principal 

             

            
                	
                             

                        	
                            This Addendum shall be governed by and construed and enforced in

                        

            

            accordance with the laws of Utah.

             

            
                	
                            The Borrower: 

                        	
                            Brain Tree International, Inc.,

                        

            

            
                	
                             

                        	
                            a Utah corporation

                        

            

             

             

            
                	
                             

                        	
                            By: Donna Norman

                        

            

            
                	
                             

                        	
                            ---------------------------

                        

            

            
                	
                             

                        	
                            President

                        

            

             

             

            
                	
                            Lender: 

                        	
                            Lane Clissold

                        

            

            
                	
                             

                        	
                            ----------------------------

                        

            

            
                	
                             

                        	
                            Lane Clissold

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