Document:

exhibit_10-6.htm

    EXHIBIT
      10.6

    

    THIS
      NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER
      ANY STATE SECURITIES LAWS AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE
      TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAW HAS BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) RECEIPT
      BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
      REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT
      REQUIRED.

    

    CONVERTIBLE
      SECURED PROMISSORY NOTE

    

     

    $675,000.00                                                                                             March
      31,
      2006

     

    FOR
      VALUE
      RECEIVED, AccountAbilities, Inc., a Delaware corporation (the "Company"),
      promises to pay to the order of the Bernard Freedman and Alice Freedman Living
      Trust dated April 28, 1992 or its successor or assignee ("Holder"), at 12663
      Promentory Road, Los Angeles, California 90049, the principal sum of Six Hundred
      Seventy-Five Thousand and 00/100 Dollars ($675,000) together with interest
      at
      the rate of three percent (3%) per annum, amortized over a seventy-two (72)
      month period and payable in installments of Ten Thousand Two Hundred Fifty-five
      and 73/100 Dollars ($10,255.73) per month, commencing on May 15, 2006 and on
      the
      fifteenth (15th) day of
      each month
      thereafter, with a final payment of all remaining outstanding principal and
      accrued interest due and payable on the earlier of (i) April 15, 2012 or
      (ii) the closing of the sale or other disposition of all or substantially
      all of the assets of the Company.

     

    1.           Asset
      Purchase.  This Note is being issued pursuant to an Asset Purchase
      Agreement dated March 31, 2006, having an Effective Date of April 3, 2006,
      between the Company and U.S. Temp Services, Inc., a Nevada corporation (“U.S.
      Temp”).  Pursuant to the Asset Purchase Agreement, the Company is
      acquiring the assets relating to the business of U.S. Temp conducted at its
      offices located in Glendale, Montebello and Stockton, California, and Las Vegas,
      Nevada (each such office and its related business and assets, wherever located
      and as they exist from time to time, is referred to herein as an “Acquired
      Office.”)  Pursuant to the Asset Purchase Agreement the Company has
      assumed certain indebtedness of U.S. Temp to Holder and its affiliate, Elite
      Personnel Services, Inc., and is issuing this Note in substitution for such
      indebtedness.

     

    2.           Payments.  All
      payments on this Note, including any prepayments, shall be applied first to
      accrued, unpaid interest and thereafter to reduce the outstanding principal
      amount.  Principal of and interest on this Note shall be payable in
      lawful money of the United States of America.  If a payment hereunder
      becomes due and payable on a Saturday, Sunday or legal holiday, the due date
      thereof shall be extended to the next succeeding business day.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    3.           Prepayment.  This
      Note may be prepaid at any time in whole or in part without penalty, provided
      that all interest accrued on the outstanding principal to the date of the
      pre-payment is paid.   In addition, the Company shall be
      obligated to make a prepayment (the “Mandatory Prepayment”) upon the closing of
      the sale or other disposition of all or substantially all of the assets of
      any
      Acquired Office (the “Sold Office”).  The amount of the Mandatory
      Prepayment shall be an amount determined by multiplying the total purchase
      price
      or other consideration for the Sold Office times a fraction, the numerator
      of
      which is the total revenues of the Sold Office for the full twelve (12) calendar
      month period immediately preceding the closing and the denominator of which
      is
      the total revenues of all Acquired Offices (including the Sold Office) for
      the
      full twelve (12) calendar month period immediately preceding the
      closing.

     

    4.    Events
      of
      Default.  Upon
      the occurrence of any Event of Default (as defined below), in addition to any
      other remedies provided herein or in the Security Agreement (defined below),
      the
      entire unpaid principal balance of this Note and all accrued and unpaid interest
      shall become or may be declared to be immediately due and payable and interest
      will accrue on the unpaid principal and interest at an annual rate equal to
      the
      lesser of eighteen percent (18%) or the maximum rate of interest permitted
      by
      applicable law.  Any one or more of the following shall constitute an
      Event of Default:

     

    (a)    The
      Company
      shall fail to make any payment or Mandatory Prepayment on this Note within
      twenty (20) days of the day it is due; or

     

    (b)    The
      Company
      shall fail to comply with or perform any other provision of this Note or that
      certain Security Agreement between the Company and Holder of even date herewith
      (the “Security Agreement”) which failure is not cured within thirty (30) days
      after such failure occurs; or

     

    (c)    The
      dissolution, termina­tion of existence, or insolvency of the Company; or
      appointment of a receiver, trustee or custo­dian for all or any material
      part of the property of, assignment for the benefit of creditors by, or the
      commencement of any proceeding by or against, the Company under any
      reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
      dissolution or liquidation law or statute of any juris­diction, now or in
      the future in effect (except that, in the case of a proceeding commenced against
      the Company, the Company shall have 30 days after the date such proceeding
      was
      commenced to have it dismissed).

     

    5.           Conversion.

     

    (a)    Right
      to
      Convert.  The entire outstanding principal amount and accrued
      interest of this Note (the “Conversion Amount”), or any portion thereof, shall
      be convertible, at the option of the Holder, at any time until the Note is
      paid
      in full into a number of fully paid and nonassessable shares of the Company’s
      Common Stock determined by dividing the Conversion Amount which Holder desires
      to convert by $1.50 per share (as adjusted for stock splits,
      combinations, stock dividends and the like, except that there shall be no
      adjustment for the five-for-one reverse stock split that is currently
      contemplated by the Company as this conversion price is intended to reflect
      such
      five-for-one reverse stock split).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (b)    Mechanics
      of Conversion.  No fractional shares of Common Stock shall be
      issued upon conversion of this Note.  In lieu of any fractional share
      to which the Holder would otherwise be entitled, the Company shall issue a
      number of shares rounded to the nearest full share.  To exercise the
      conversion privilege, Holder shall give written notice to the Company of the
      Conversion Amount and such conversion shall be deemed to have been made
      immediately prior to the close of business on the date such notice is received
      by the Company.  If the entire outstanding principal amount of the
      Note is being converted the Company shall not be obligated to issue certificates
      evidencing the shares of Common Stock issuable upon such conversion unless
      the
      Note is either delivered to the Company or the Holder notifies the Company
      that
      the Note has been lost, stolen or destroyed and executes an agreement
      satisfactory to the Company to indemnify the Company from any loss incurred
      by
      it in connection with such Note.  The Company shall, as soon as
      practicable, issue and deliver to such address as the Holder may direct, a
      certificate or certificates for the number of shares of Common Stock to which
      Holder shall be entitled.

     

    (c)    Adjustments
      for
      Reorganizations, Mergers, Reclassifications or Similar Events.  If
      the Company’s Common Stock shall be changed into the same or a different number
      of shares of any other class or classes of stock or other securities or
      property, whether by capital reorganization, merger, reclassification or
      otherwise, then the Note shall thereafter be convertible into the number of
      shares of stock or other securities or property to which a holder of the number
      of shares of Common Stock of the Company deliverable upon conversion of the
      Note
      shall have been entitled upon such reorganization, merger, reclassification
      or
      other event, as adjusted for any subsequent similar events and stock splits,
      combinations, stock dividends, and the like.

     

    (d)    Reservation
      of Securities. The Company shall reserve, so long as this Note is
      outstanding, such securities as the Holder is entitled to receive upon
      conversion of this Note.  Prior to the issuance of any equity
      securities and whenever otherwise required, the Company shall amend its
      Certificate of Incorporation to ensure that there is a sufficient quantity
      of
      such equity securities into which the Note is entitled to be converted
      hereunder.

     

    6.           No
      Impairment.  The Company will not, by amendment of its Certificate
      of Incorporation or through any reorganization, transfer of assets,
      consolidation, merger, dissolution, issue or sale of securities or any other
      voluntary action, avoid or seek to avoid the observance or performance of any
      of
      the terms to be observed or performed hereunder by the Company, but will at
      all
      times in good faith assist in the carrying out of all the provisions of this
      Note and in the taking of all such action as may be necessary or appropriate
      in
      order to protect the conversion rights of the Holder set forth
      herein.

     

    7.           General.

     

    (a)           The
      Company agrees to pay all costs and expenses (including without limitation
      reasonable attorney's fees) incurred by Holder in connection with the
      enforcement of this Note, including in appellate, bankruptcy or post-judgment
      proceedings.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)           The
      Company and all guarantors or persons liable on this Note hereby waive
      present­ment, demand for payment, notice of dishonor, notice of nonpayment,
      protest, notice of protest, and any and all other notices and demands in
      connection with the delivery, acceptance, perfor­mance, default, or
      enforcement of this Note.

     

    (c)           The
      Company’s obligations hereunder are secured pursuant to the Security
      Agreement.  Nothing herein shall be deemed to limit any of the terms
      or provisions of any other present or future document, instrument or agreement
      between the Company and Holder and all of Holder's rights and remedies hereunder
      and thereunder are cumulative.  The failure of Holder to assert any
      right hereunder shall not be deemed to be a waiver thereof.  No course
      of dealing by the Holder and no failure or delay by the Holder in exercising
      any
      right, remedy or power hereunder shall operate as a waiver thereof; nor shall
      any single or partial exercise of any such right, remedy or power preclude
      any
      other or further exercise thereof or exercise of any other right, remedy or
      power hereunder.

     

    (d)           In
      the event any one or more of the provisions of this Note shall for any reason
      be
      held to be invalid, illegal or unenforceable, the same shall not affect any
      other provision of this Note and the remaining provisions of this Note shall
      remain in full force and effect.

     

    (e)           This
      Note is payable in, and shall be governed by the laws of, the State of
      California without regard to its conflicts of laws principles.  The
      Company agrees to submit to the jurisdiction of any court which Holder may
      select in Los Angeles County, California to enforce this Note.  This
      Note may not be changed orally, but only by an agreement in writing, signed
      by
      the party against whom enforcement of any waiver, change, modification or
      discharge is sought.  This Note, and the obligations of the Company
      hereunder, shall be binding upon the Company, and shall inure to the benefit
      of
      the Holder, and their respective heirs, executors, administrators, successors
      and assigns.

     

    (f)    Any
      notices
      or other communications required or permitted hereunder shall be in writing
      and
      shall be sufficiently given if delivered personally or sent by facsimile (with
      transmission confirmed), recognized overnight courier, or registered or
      certified mail, return receipt requested, postage prepaid, addressed as follows
      or to such other address or facsimile number of which the parties may have
      given
      notice:

     

    To
      the
      Holder:

    Mr.
      Bernard Freedman, Trustee

    12663
      Promentory Rd.

    Los
      Angeles, CA 90049

    Fax:
      (310) 476-2784

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    To
      the
      Company:

     

    AccountAbilities,
      Inc.

    500
      Craig
      Road

    Suite
      201

    Manalapan,
      New Jersey 07726

    Attn:
      Allan Hartley, President

    Fax:  732-294-1133

    

    Unless
      otherwise specified herein, such notices or other communications shall be deemed
      received (i) on the date delivered, if delivered personally, by facsimile or
      by
      recognized overnight courier; or (ii) three business days after sent by
      registered or certified mail.  Notwithstanding the foregoing, any and
      all payments hereunder shall be deemed made when actually received by Holder,
      regardless of method of delivery or date of dispatch.

     

    
      	 	Accountabilities,
              Inc.
	 	 	 
	
              Date

            	
              By:
                

            	/s/ Allan
              Hartley
	 	 	Name: 
Allan
              Hartley 
	 	 	Title: 
              President 
	 	 	 

    

     

    5exhibit_10-7.htm

    Exhibit
      10.7

    

    DEMAND
      PROMISSORY NOTE

    

    

    This
      Note
      made on the 31st day of
      March, 2006
      between Accountabilities, Inc. (“Borrower”), a Delaware
      corporation whose principal place of business is 500 Craig Road, Suite 201,
      Manalapan, New Jersey 07726 and Washington Capital, LLC
      (“Lender”), whose address is P. O. Box 110, Marlboro, New Jersey
      07746.  Borrower hereby agrees to Pay To The Order of Lender One
      Hundred Fifty Thousand Dollars ($150,000.00), pursuant to the following
      terms:

    

    Terms
      and Conditions:

    

    
      	
              1.  

            	
              Amount
                of Loan:     $150,000.00 US hereunder (the
                “Loan Amount”).

            

    

    

    
      	
              2.  

            	
              Term:   This
                is a Demand Note.  The Note and all amounts due hereunder shall
                be due and payable in full on the date Lender demands payment in
                full or
                the date the Borrower pays all amounts due under the Loan in
                full.

            

    

    

    
      	
              3.  

            	
              Interest
                Rate:  Interest shall accrue on the Loan Amount and the
                amounts due under this Note at the lesser of eight percent (8%) per
                annum
                or the maximum interest rate permitted by applicable law.  Any
                payment not received within ten (10) days of its due date shall be
                subject
                to a five percent (5%) late charge in addition to any other interest,
                costs or fees that may be due.

            

    

    

    
      	
              4.  

            	
              Prepayment:   The
                Note may be prepaid in whole or in part at any time prior to the
                expiration of the Term.

            

    

    

    
      	
              5.  

            	
              Default:  It
                shall be an Event of Default under this Note if Borrower fails to
                make any
                payment due within ten (10) days of its due date or if Borrower fails
                to
                comply with any other term of this Note and such default shall continue
                for a period of thirty (30) days after written notice to the Borrower
                of
                such default  In addition it shall be an Event of Default if any
                of the following occur (a) application for, or the appointment of,
                a
                receiver in bankruptcy; (b) filing of any petition, or the commencement
                of
                any action or any proceeding against Borrower for relief under any
                bankruptcy or insolvency laws or any laws relating to the relief
                of
                debtors, readjustment of indebtedness or reorganizations; or (c)
                violation
                of any of the foregoing provisions regarding repayment or the payment
                of
                interest or penalties, the waiver of which does not constitute a
                waiver of
                default.

            

    

    

    
      	
              6.  

            	
              Remedies:  Upon
                the occurrence of an Event of Default under this Note unpaid
                principal shall, at the option of the Lender, become immediately
                due and
                payable and interest will accrue at an annual rate equal to the lesser
                of
                eight percent (8%) or the maximum rate of interest permitted by applicable
                law.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
              7.  

            	
              Waivers:   As
                to this Note and any other instruments securing the indebtedness,
                the
                Borrower waives all notice of acceleration, presentment, protest
                and
                demand, dishonor and non-payment of this
                Note.

            

    

     

     

    
      	 BORROWER:	ACCOUNTABILITIES,
              INC.	 
	 	 	 	 
	
              Date:

            	
              By:
                

            	/s/ Allan
              Hartley	 
	 	 	Name: 
Allan
              Hartley 	 
	 	 	Title: 
              President 	 
	 	 	 	 

    

     

    
      	 LENDER:	WASHINGTON
              CAPITAL, LLC	 
	 	 	 	 
	
              Date:

            	
              By:
                

            	/s/ Kathy
              Dietz	 
	 	 	Name: 
              Kathy Dietz 	 
	 	 	Title: 
              President 	 
	 	 	 	 

    

     

    2

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