Document:

Promissory Note for 10/6/05 8-K

    EXHIBIT
      10.27

     

    

     

    SUBJECT
      TO THAT CERTAIN SUBORDINATION AGREEMENT DATED AS OF

     DECEMBER
      19, 2002 FROM BORROWER AND LENDER TO NATIONAL CITY

    BANK
      OF KENTUCKY 

     

    PROMISSORY
      NOTE ($500,000) 

     

    
      	
              $500,000.00

            	
              Louisville,
                Kentucky

            
	 	
              September
                28, 2005

               

            

    

    FOR
      VALUE RECEIVED,
      the
      undersigned, CITIZENS
      FINANCIAL CORPORATION,
      a
      Kentucky corporation, (“Borrower”),
      having an address of Suite 300, The Marketplace, 12910 Shelbyville Road,
      Louisville, Kentucky 40243, hereby promises and agrees to pay to the order
      of
      Darrell R. Wells, (“Lender”),
      having an address of Suite 310, 4310 Brownsboro Road, Louisville, Kentucky
      40207, the aggregate principal sum of FIVE
      HUNDRED THOUSAND DOLLARS
      ($500,000.00), or so much thereof as may be advanced hereunder, together with
      interest hereon as hereinafter provided, in lawful money of the United States
      of
      America, in the manner set forth herein, on or before June 30, 2006 (the
“Final
      Maturity Date”).
      

     

    The
      principal of this Note shall bear interest on the unpaid balance thereof at
      a
      rate per annum equal to the greater
      of [i]
      six percent (6%) or [ii] one percent (1%) in excess of the Prime Rate at the
      opening of business on the date of this Note. The rate per annum shall be reset
      at the opening of business on the first day of each April, July, October and
      January hereafter (each an “Adjustment
      Date”)
      so
      that for the calendar quarter beginning on that day the rate per annum shall
      equal the greater
      of [i]
      six
      percent (6%) or [ii] one percent (1%) in excess of the Prime Rate at the opening
      of business on that day. The “Prime
      Rate,
      as used
      in this Note, shall mean that rate of interest announced from time to time
      by
      National City Bank of Kentucky (the “Bank”)
      to be
      its prime rate at its principal office in Louisville,
      Kentucky, it being understood and agreed that such rate shall not necessarily
      be
      the lowest rate the Bank then offers to its most creditworthy borrowers. As
      of
      the date of this Note, the Prime Rate of the Bank is six and three quarters
      percent (6-3/4%), and accordingly the interest rate per annum on this Note
      until
      the first Adjustment Date shall be seven and three quarters percent (7-3/4%).
      

     

    All
      interest on this Note shall be computed daily on the basis of the actual number
      of days elapsed over a year assumed to consist of three hundred sixty (360)
      days. 

     

    Principal
      of this Note shall be paid in a single payment on the Final Maturity Date.
      All
      accrued and unpaid interest shall be paid on each Adjustment Date for the
      preceding calendar quarter and also on the Final Maturity Date or any other
      date
      on which the principal balance of this Note is paid in full. 

     

    The
      holder of this Note shall have the right to require repayment in full of this
      Note in whole or in part and all accrued and unpaid interest hereon by giving
      written notice to Borrower at the address first set forth above specifying
      a
      date for repayment that shall be not less than ninety (90) days after the date
      Borrower receives such notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Borrower
      reserves the right to repay the principal of this Note in whole or in part
      without penalty or premium at any time; provided, however, that Borrower shall
      have no right to reborrow any amounts so repaid. 

     

    Notwithstanding
      any other provision of this Note, the rights and obligations of Borrower and
      Lender hereunder to demand, pay or receive payments and prepayments of the
      principal hereof, interest hereon, and other sums payable hereunder are subject
      to the terms and conditions of a Subordination Agreement from Borrower and
      Lender to the Bank dated as of December 19, 2002, as it may be amended, modified
      or replaced from time to time. In particular, Borrower’s failure to pay any
      installment of principal of or interest on this Note that it is not permitted
      to
      pay in order to comply with the Subordination Agreement shall not constitute
      a
      default on this Note nor shall it give rise to any obligation to pay any
      increased interest or late payment charges in respect of any such unpaid
      installment until ten (10) days after the Bank notifies Borrower that it may
      pay
      such installment. 

     

    All
      payments of principal and interest and any other sums due under this Note shall
      be made in immediately available funds to Lender at its address set forth above
      in this Note or to such other person or at such other address as may be
      designated in writing by the holder of this Note. All payments on this Note
      shall be applied first to the payment of any expenses or charges payable
      hereunder, and next to accrued interest, and then to the principal balance
      hereof, or in such other order as Lender may elect in its sole discretion.
      

     

    Any
      payment on this Note that is overdue for more than five (5) days from its due
      date shall, if requested by and at the sole option of the holder of this Note,
      in order to compensate the holder for the inconvenience and administrative
      expense incident to such delinquency and not as a penalty, be increased by
      an
      amount equal to five percent (5%) of the overdue payment, unless such increase
      would exceed the maximum increase permitted by law, in which event the overdue
      payment shall be increased by such lesser increment, if any, as would not exceed
      the maximum increase permitted by law. The charging or collection of a late
      charge shall not be deemed a waiver of any of the holder’s other rights and
      remedies hereunder, including, if applicable, the right to exercise the remedies
      of the holder upon a default under this Note as hereinafter provided.

     

    The
      occurrence of any one or more of the following shall constitute a default under
      this Note: [i] Borrower does not pay any installment of principal of, or
      interest on, this Note as and when due or within five (5) days thereafter;
      [ii]
      a proceeding is filed or commenced against Borrower for dissolution or
      liquidation that is not dismissed within sixty (60) days after filing; [iii]
      Borrower becomes insolvent, or a custodian, trustee, liquidator or receiver
      is
      appointed for Borrower or for any of its property, or Borrower makes an
      assignment for the benefit of its creditors, files a petition under bankruptcy,
      insolvency or debtor’s relief law or for any readjustment of indebtedness,
      composition or extension or [iv] any such proceeding is filed against Borrower
      and is not dismissed within sixty (60) days). 

     

    Whenever
      there is a default under this Note, the entire principal balance of and all
      accrued interest on this Note, shall, at the option of Lender, become forthwith
      due and payable, without presentment, notice, protest or demand of any kind
      (all
      of which are expressly waived by 

     

    
      
        -2-

      

      
        
        

        
          

        

      

      
        
        

      

    

    Borrower).
      Upon any such default, the rate of interest applicable to the entire unpaid
      principal balance of this Note shall, at the sole and exclusive option of the
      holder of this Note, be increased by four percent (4%) per annum, unless the
      resulting rate would exceed the maximum rate permitted by law, in which event
      the rate of interest shall be increased to a rate that shall not exceed such
      maximum rate. 

     

    This
      Note
      is hereby expressly limited so that in no event whatsoever, whether by reason
      of
      acceleration of the maturity hereof or otherwise, shall the amount paid or
      agreed to be paid to the holder of this Note for the use, forbearance or
      retention of money loaned hereunder exceed the maximum amount permissible under
      applicable law. If from any circumstance the holder of this Note shall ever
      receive anything of value deemed by applicable law to be interest in any amount
      that would exceed the highest lawful rate payable hereunder, an amount equal
      to
      any excessive interest shall be applied to the reduction of the principal amount
      owing hereunder and not to the payment of the interest, and if the amount that
      would be excessive interest exceeds the principal balance then owing, such
      excess shall be refunded to the party paying the same. 

     

    Failure
      of the holder of this Note to exercise any of its rights and remedies shall
      not
      constitute a waiver of the right to exercise the same at that or any other
      time.
      All rights and remedies of the holder for default under this Note shall be
      cumulative to the greatest extent permitted by law. Time shall be of the essence
      in the payment of all installments of interest and principal on this Note and
      the performance of Borrower’s other obligations under this Note. 

     

    If
      there
      is any default under this Note, and this Note is placed in the hands of an
      attorney for collection or is collected through any court, including any
      bankruptcy court, Borrower promises to pay to the holder hereof its reasonable
      attorneys’ fees and court costs incurred in collecting or attempting to collect
      or securing or attempting to secure this Note or enforcing the holder’s rights
      in any collateral securing this Note, provided the same is legally allowed
      by
      the laws of the Commonwealth of Kentucky or any state where the collateral
      or
      part thereof is situated. 

     

    If
      any
      provision, or portion thereof, of this Note, or the application thereof to
      any
      persons or circumstances shall to any extent be invalid or unenforceable, the
      remainder of this Note, or the application of such provision, or portion
      thereof, to any other person or circumstances shall not be affected thereby,
      and
      each provision of this Note shall be valid and enforceable to the fullest extent
      permitted by law. 

     

    This
      Note, including matters of construction, validity and performance, and the
      obligations arising hereunder, shall be construed in accordance with and
      otherwise governed in all respects by the laws of the Commonwealth of Kentucky
      applicable to contracts made and performed in such state and any applicable
      law
      of the United States of America. 

     

    Borrower
      and any other party who may become primarily or secondarily liable for any
      of
      the obligations of Borrower hereunder hereby jointly and severally waive
      presentment, demand, notice of dishonor, protest, notice of protest, and
      diligence in collection, and further waive all exemptions to which they may
      now
      or hereafter be entitled under the laws of the Commonwealth of Kentucky or
      any
      other state or of the United States, and further agree that the holder of this
      Note shall have the right without notice, to deal in any way, at any time,
      with
      Borrower, or with 

     

    
      
        -3-

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      other
      party who may become primarily or secondarily liable for, or pledge any
      collateral as security for, any of the obligations of Borrower under this Note
      and to grant any extension of time for payment of this Note or any other
      indulgence or forbearance whatsoever, and may release any security for the
      payment of this Note and/or modify the terms of the any other
      documents securing or pertaining to this Note, without in any way affecting
      the
      liability of Borrower, or such other party who may pledge any collateral as
      security for, or become primarily or secondarily liable for, the obligations
      of
      Borrower hereunder and without waiving any rights the holder may have hereunder
      or by virtue of the laws of this state or any other state of the Unites States.
      

     

    Borrower
      hereby consents to the jurisdiction of any state or federal court located within
      the County of Jefferson, Commonwealth of Kentucky, and irrevocably agrees that,
      subject to Lender’s sole and absolute election, any case or proceeding relating
      to Title 11 of the United States Code and any actions relating to the
      indebtedness evidenced hereby shall be litigated in such courts, and Borrower
      waives any objection that it may have based on improper venue or forum non
      conveniens to the conduct of any proceeding in any such court. Nothing contained
      in this paragraph shall affect the right of Lender to bring any action or
      proceeding against Borrower or its property in the courts of any other
      jurisdiction. 

     

    LENDER
      AND BORROWER ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY
      EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY
      AND
      VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
      CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
      COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
      OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
      OTHERWISE IN CONNECTION WITH THIS NOTE OR ANY RELATED DOCUMENTS.

     

    
      	 	
              CITIZENS
                FINANCIAL CORPORATION

               

            
	 	
               

              By: 
                /s/ Len E.
                Schweitzer                               
                 

                       
                Len E. Schweitzer

                       
                Vice President, Accounting, and Chief

                       
                Financial Officer

            

    

    

    
      
        -4-Exhibit 4.1

                   CONVERTIBLE NOTE AGREEMENT

Up to $_______, subject to conditions
Walnut, California

Date:_____________, 2005

     FOR VALUE RECEIVED, the undersigned Digital Lifestyles Group
Inc., a Delaware corporation ("Company"), hereby promises to  pay
to   ___________,   with   an  address  of   ___________________,
("Holder"), at such place as Holder may specify, in lawful  money
of the United States of America, the Initial Principal Amount (as
defined  herein)  of  __________________  ($______)  Dollars   on
________________,  2006  (the  "Initial  Maturity  Date"),   plus
interest  on the principal amount outstanding from time  to  time
hereunder  at  a  rate  equal to seven percent  (7%)  per  annum.
Interest  shall be calculated in arrears on the principal  amount
outstanding through the last day of each month and shall  be  due
and  payable  in  arrears in monthly installments  on  the  first
business  day of each month commencing on ____________, 2005  for
the  Initial Principal Amount and ending on the Initial  Maturity
Date, as may adjusted according to this Agreement.   All interest
due hereunder shall be computed on the basis of a 365 day year.

     In  the event that the Company satisfies the conditions  set
forth  in  Section  5  of this Agreement  and  Holder  funds  the
Conditional Principal Amount (as defined herein), then  the  face
value  of  this  Agreement shall be increased  by  an  additional
____________ ($________) Dollars to __________ ($______)  Dollars
(which such principal amount due hereunder, as may be adjusted or
if not adjusted, shall be referred to hereafter as the "Aggregate
Principal Amount") and the Company promises to pay to Holder such
Conditional  Principal  Amount on or by  ___________,  2006  (the
"Second  Maturity Date") plus interest on the Aggregate Principal
Amount outstanding from time to time hereunder at a rate equal to
seven  percent  (7%) per annum.  In the event of funding  of  the
Conditional  Principal  Amount, then the  Initial  Maturity  Date
shall  be  delayed to correspond to the Second Maturity Date  and
the  Aggregate Principal Amount shall be due and payable  on  the
Second  Maturity Date, which shall now be referred to hereinafter
as  the "Maturity Date".   Interest shall be calculated and  paid
as stated above.

     The  Company  shall  pay  interest  only  on  the  Aggregate
Principal  Amount  outstanding hereunder from the  date  of  this
Agreement  until the day immediately prior to the Maturity  Date.
On  the  Maturity  Date, the Company shall  repay  the  Aggregate
Principal  Amount outstanding plus any otherwise unpaid  interest
in  the  full amount, unless either (i) Holder elects to  convert
this  Agreement  into shares of common stock of  the  Company  in
accordance with Section 4; or (ii) the Company elects  to  prepay
all  of  this Agreement in accordance with Section 3  and  Holder
declines or does not exercise his right to convert this Agreement
into  shares  of  common stock of the Company in accordance  with
Section  4.  In the event that Company elects to prepay  part  of
this  Agreement in accordance with Section 3 and Holder  declines
or  does  not  exercise his right to convert this Agreement  into
shares  of common stock of the Company in accordance with Section
4  (as  may  be adjusted pursuant to Section 7(m),  then  on  the
Maturity  Date,  the Company shall repay the remaining  Aggregate
Principal  Amount  then  outstanding plus  any  otherwise  unpaid
interest in the full amount.

1.     Advances;  Payments.   On  or  before  the  date  of  this
Convertible Note Agreement (the "Agreement"), Holder will deliver
to  Company in immediately available funds the Initial  Principal
Amount specified above (net of any costs and expenses to be  paid
by  Company  to  Holder).   Thereafter,  this  Agreement  may  be
adjusted as set forth in Section 5 and as stated above.

      All payments under this Agreement shall be applied first to
interest  and  then  to  principal.  Any  principal  or  interest
payments  on this Agreement outstanding after the occurrence  and
during  the  continuance of a default under this Agreement  shall
bear  interest  at a rate equal to the lesser of (i)  the  lawful
legal  rate  or  (ii) three percent (3%) above the interest  rate
otherwise applicable under this Agreement.

<PAGE 1>

2.   Representations, Warranties and Covenants of Company.

          (a)   Corporate  Existence and Authority.   Company  is
duly  organized, validly existing and in good standing under  the
laws  of the State of Delaware.  Company has all requisite  power
to  execute  and  deliver  this Agreement,  and  to  perform  the
provisions  of this Agreement and to consummate the  transactions
contemplated  by  this  Agreement. The  execution,  delivery  and
performance  of  this  Agreement, and  the  consummation  of  the
transactions  contemplated  by this  Agreement,  have  been  duly
authorized and approved by Company.

           (b)   Compliance with Law.  Company has complied,  and
will comply, in all material respects, with all provisions of all
applicable  laws and regulations, including, but not limited  to,
those  relating  to  Company's  ownership  of  real  or  personal
property,  the  conduct and licensing of Company's business,  and
all environmental matters.

          (c)  Disclosure.  No representation, other statement or
information  made or provided by Company to Holder  contains  any
untrue  statement of a material fact or omits to state a material
fact  necessary  to  make  any  statements  made  to  Holder  not
misleading.

           (d)   Information.  Company will provide  Holder  with
access  to  or  copies  of  Company's books,  records,  financial
statements and such additional financial and other information as
Holder  may  reasonably  request from  time  to  time;  provided,
however, to the extent such information is not otherwise publicly
available, such information shall be kept confidential by Holder.

3.    Prepayments.  For the first six (6) months from the date of
funding  of  the  Initial  Principal Amount  or  the  Conditional
Principal  Amount, as the case may be, Company may  not,  at  any
time,  prepay  the  loan evidenced hereby.  Thereafter  upon  the
expiration of the respective time periods, upon written notice by
the  Company to the Holder, Company may, at its option, elect  to
prepay  all  or part of the Aggregate Principal Amount  plus  any
unpaid  and  accrued  interest  due  hereunder  without  penalty.
Thereafter, interest will continue to accrue as set forth  herein
on  the  remaining principal amount not prepaid by  the  Company.
Notwithstanding any of the forgoing provisions, upon  receipt  of
the  Company's  notice  to prepay all or part  of  the  Aggregate
Principal  Amount  plus  any  unpaid  and  accrued  interest  due
hereunder,  Holder shall have the right to prevent  Company  from
prepaying  by electing to convert the principal amount  due  into
shares  of  the  common stock of the Company in  accordance  with
Section 4 herein.

4.   Optional Conversion.

          (a)  At Holder's sole and exclusive option, at any time
after  the  effective date of this Agreement or within three  (3)
business days following receipt of notice by the Company that  it
wishes to exercise its prepayment rights set forth in Section  3,
the  outstanding principle balance due under the loan as  of  the
Conversion Date evidenced by this Agreement shall be convertible,
without the payment of any additional consideration by the Holder
and  at the option of the Holder, into shares of common stock  of
the  Company.  In the event the Holder elects to convert, Company
shall  issue  the number of shares of common stock equivalent  to
the  amount  calculated  by converting the outstanding  principle
balance  and all unpaid and accrued interest due under  the  loan
evidenced  by this Agreement as of the Conversion Date into  such
shares  of  common  stock at a price per  share  of  $0.25.   The
outstanding  principal  shall continue to  accrue  interest,  and
Company shall be obligated to pay such interest, according to the
terms and conditions of this Agreement until the Conversion  Date
(as  defined below).  All unpaid and accrued interest  due  under
the  loan  as of the Conversion Date evidenced by this  Agreement
shall  be  paid in cash within three (3) business days  from  the
Conversion Date.

<PAGE 2>

           (b)  In  order for the Holder to convert all Aggregate
Principal  Amounts  owing  under this Agreement  into  shares  of
common  stock  of  the Company, Holder shall  deliver  a  written
notice  to  Company  that  the  Holder  elects  to  convert  this
Agreement.  Any  conversion made at the election  of  the  Holder
shall  be deemed to have been made immediately prior to the close
of  business on the date Company is deemed to have received  such
notice,  and  the Holder or its nominee or nominees  entitled  to
receive  the  shares  of common stock of  the  Company  shall  be
treated for all such purposes as the record holder or holders  of
such shares of common stock on such date (the "Conversion Date").
Company  shall have no obligation to issue any fractional  shares
upon  conversion.  Any fractional shares shall be rounded  up  to
the nearest whole share.

          (c)   The  Company agrees (a) that the shares  issuable
upon   conversion   of  this  Agreement  shall  be   "Registrable
Securities"   under  the  Registration  Rights   Agreement   (the
"Registration Rights Agreement") between the Company and  Holder,
a  copy  of  which is attached hereto and incorporated herein  by
reference  as  Exhibit A and (b) that the Holder shall  have  the
rights  and obligations of a Holder set forth on the Registration
Rights Agreement.

5.    Conditions.   The following conditions  shall  govern  this
Agreement:

      (a)   Holder  shall  hereby  agree  to  pay  ______________
($_______)  Dollars  immediately  upon  the  execution  of   this
Agreement by wire transfer ("Initial Principal Amount");

      (b)  Holder shall be required to pay the remaining ________
($______)  Dollars on or before __________ by  wire  transfer  or
certified check ("Conditional Principal Amount"), subject to  the
Company  receiving  additional funding  of  $________  on  or  by
__________.

      In  the  event  that the Company fails for  any  reason  to
receive  additional funding of $_______ by_________, then  Holder
shall  not be obligated to fund the Conditional Principal Amount.
All other provisions of this Agreement shall remain in full force
and effect with respect to the Initial Principal Amount.

6.    Fees  and Expenses.  Each party to this Agreement shall  be
responsible  for  all  costs and expenses,  including  reasonable
attorneys' fees incurred in the preparation of this Agreement and
the  other  documents executed in connection with this Agreement.
Company shall also have delivered a warrant to purchase stock  to
Holder in form reasonably acceptable to Holder (together with the
Agreement  and  any other documents delivered in connection  with
this  Agreement, the "Loan Documents").  Company  shall  pay  all
reasonable  and  actual costs that Holder incurs in  successfully
enforcing this Agreement, including without limitation reasonable
attorneys' fees and expenses.

7.   Events of Default; Remedies.

          (a)  Events of Default.  If any of the following events
("Events  of  Default") shall occur and be  continuing  (for  any
reason   whatsoever  and  whether  it  shall  be   voluntary   or
involuntary or by operation of law or otherwise):

               (i)  default shall be made in the payment  of  the
          principal of, or interest on, the loan when and as  the
          same  shall become due and payable, whether  at  stated
          maturity,  by acceleration, upon a mandatory prepayment
          due date or otherwise; or

<PAGE 3>

               (ii)  default shall be made in the performance  or
          observance  of  any  covenant, agreement  or  condition
          contained in this Agreement and such default shall have
          continued for a period of five (5) business days; or

               (iii)   Company's  dissolution,   termination   of
          existence or insolvency, the appointment of a  receiver
          of  all  or  any  part of the property of  Company;  an
          assignment for the benefit of creditors by Company;  or
          the commencement of any proceeding under any bankruptcy
          or  insolvency laws by or against Company which results
          in  the  entry of an order for relief or which  remains
          undismissed, undischarged or unbonded for a  period  of
          60 days or more; or

               (iv)    any  representation,  warranty,  financial
          statement or other information statement by Company  to
          Holder,   or   any   other  documents   or   agreements
          contemplated  hereby and thereby or in any  certificate
          or  other  instrument delivered hereunder  or  pursuant
          hereto or in connection with any provision hereof shall
          be  false or incorrect in any material respect  on  the
          date as of which made;

           then  (x) upon the occurrence of any Event of  Default
described  in  (iii), the unpaid principal amount  of  the  loan,
together with the interest accrued thereon and all other  amounts
payable  by  Company  under this Agreement,  shall  automatically
become  immediately due and payable, without presentment, demand,
protest  or  other  requirements of any kind, all  of  which  are
hereby expressly waived by Company or (y) upon the occurrence  of
any  other  Event  of Default, Holder may, by written  notice  to
Company, declare the unpaid principal amount of the loan  to  be,
and  the  same shall forthwith become, due and payable,  together
with  the interest accrued thereon and all other amounts  payable
by Company hereunder.

          (b)   Suits  for Enforcement.  If any Event of  Default
shall  have  occurred and be continuing, Holder  may  proceed  to
protect and enforce its rights against Company, either by suit in
equity  or  by  action at law, or both, whether for the  specific
performance  of  any  covenant  or agreement  contained  in  this
Agreement or in aid of the exercise of any power granted in  this
Agreement,  or  Holder  may proceed to  enforce  the  payment  by
Company  of  all sums due under this Agreement or to enforce  any
other  legal  or  equitable right of Holder.   Company  covenants
that,  if  it  shall  default in the making of  any  payment  due
hereunder  or  in the performance or observance of any  agreement
contained  in this Agreement, it will pay to Holder such  further
amounts, to the extent lawful, to cover any reasonable costs  and
expenses of collection or of otherwise enforcing Holder's rights,
including  without  limitation the reasonable  counsel  fees  and
costs and expenses incurred in connection with any restructuring,
negotiation,  refinancing, workout, bankruptcy or  other  similar
transaction or proceeding.

          (c)   Remedies Cumulative.  No remedy herein  conferred
upon  Holder is intended to be exclusive of any other remedy  and
each  and every such remedy shall be cumulative and shall  be  in
addition  to  every  other  remedy  given  hereunder  or  now  or
hereafter  existing  at  law  or  in  equity  or  by  statute  or
otherwise.

          (d)  Remedies Not Waived.  No course of dealing between
Company  and  any  other  person  and  no  delay  or  failure  in
exercising  any  rights hereunder or under the  loan  in  respect
thereof shall operate as a waiver of Holder's rights.

8.   Miscellaneous.

          (a)  Successors and Assigns.  This Agreement shall bind
and inure to the benefit of and be enforceable by Company, Holder
and  each  of  their respective successors and assigns,  and,  in
addition,  shall  inure to the benefit of and be  enforceable  by
each person who shall from time to time be a holder of the loan.

<PAGE 4>

          (b)   Notices.   All  notices and other  communications
provided  for in this Agreement shall be in writing and delivered
by registered or certified mail, postage prepaid, or delivered by
overnight courier (for next business day delivery) or telecopied,
addressed  as  follows, or at such other address as  any  of  the
parties  hereto may hereafter designate by notice  to  the  other
parties given at the addresses set forth on the signature page:

          If to Company: Digital Lifestyles Group Inc..
                    ATTN: Andy Teng, CEO
                    727 Brea Canyon Road
                    #6
                    Walnut, CA 91789

          If to Holder:  __________________
                         __________________

          Any  such  notice or communication shall be  deemed  to
have  been  duly  given on the fifth (5th)  day  after  being  so
mailed,  the  next  business  day  after  delivery  by  overnight
courier, when received when sent by telecopy or upon receipt when
delivered personally.

          (c)   Counterparts.  This Agreement may be executed  in
two  or  more  counterparts, each of which  shall  be  deemed  an
original but all of which together shall constitute one  and  the
same  instrument.  Signatures may be exchanged by telecopy,  with
original signatures to follow.

          (d)  Amendments.  This Agreement may only be amended by
a writing duly executed by the parties hereto.

          (e)   Severability.  If any term or provision  of  this
Agreement  or any other document executed in connection  herewith
shall  be  determined to be illegal or unenforceable,  all  other
terms and provisions hereof and thereof shall nevertheless remain
effective  and shall be enforced to the fullest extent  permitted
by applicable law.

          (f)   Governing Law.  This Agreement shall be  governed
by  and  construed in accordance with the laws of  the  State  of
California and the United States of America, both substantive and
remedial. Any judicial proceeding brought against either  of  the
parties  to  this agreement or any dispute arising  out  of  this
Agreement  or  any matter related hereto may be  brought  in  the
courts  of  the  State  of California or  in  the  United  States
District  Court  for  the  Central  District  of  the  State   of
California  and, by its execution and delivery of this agreement,
each  party  to this Agreement accepts the jurisdiction  of  such
courts. The foregoing consent to jurisdiction shall not be deemed
to  confer  rights on any person other than the parties  to  this
Agreement.

          (g)   Entire  Agreement.  This Agreement  contains  the
entire  Agreement  of  the parties hereto  with  respect  to  the
transactions contemplated hereby and supersedes all previous oral
and  written, and all previous contemporaneous oral negotiations,
commitments and understandings.

          (h)  Further Assurances.  The parties agree to promptly
to execute and deliver such documents and to take such other acts
as  are  reasonably necessary to effectuate the purposes of  this
Agreement.

<PAGE 5>

          (i)   Headings.  The headings contained herein are  for
reference  purposes  only and shall not affect  in  any  way  the
meaning or interpretation of this Agreement.

           (j)  Assignments and Participations.  Company may  not
assign  its  rights or obligations hereunder or  under  the  loan
without  the prior written consent of Holder.  Holder may  assign
all  or  any  portion of the loan or warrant  without  the  prior
consent of Company.  Holder may sell or agree to sell to  one  or
more  other persons a participation in all or any part of any  of
the  loan or warrant without the prior consent of Company.   Upon
surrender  of  the  loan or warrant, Company  shall  execute  and
deliver   one  or  more  substitute  notes,  warrants  or   other
securities  in such denominations required by Holder's designated
transferee or transferees.  Holder may furnish any information in
the  possession  of  Holder concerning Company,  or  any  of  its
respective  subsidiaries,  from time to  time  to  assignees  and
participants (including prospective assignees and participants).

           (k)   Waivers; Indemnity.  Company waives  presentment
and  demand  for  payment, notice of dishonor,  protest  of  this
Agreement,  and shall pay all costs of collection when  incurred,
including   reasonable  attorneys'  fees,  costs  and   expenses.
Company  shall  indemnify  and  hold  harmless  from  any  claim,
obligation  or liability (including without limitation reasonable
attorneys fees and expenses) arising out of this Agreement.

           (l)  JURY WAIVER.  HOLDER AND COMPANY EACH WAIVES  ANY
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT
OF ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.

          (m)  In the event of any dividend or other distribution
(whether in the form of cash, common stock, other securities,  or
other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-
up,  spin-off, combination, repurchase, liquidation, dissolution,
or  sale,  transfer,  exchange or other  disposition  of  all  or
substantially  all of the assets of the Company, or  exchange  of
common  stock  or  other securities of the Company,  issuance  of
warrants  or  other  rights to purchase  common  stock  or  other
securities of the Company, or other similar corporate transaction
or  event  (an  "Event"), and in the opinion of the  Board,  such
event  affects  the  common  stock such  that  an  adjustment  is
determined  by  the Board to be appropriate in order  to  prevent
dilution or enlargement of the right or potential rights intended
to  be made available under this Agreement, then the Board shall,
in  such  manner  as  it may deem equitable,  including,  without
limitation, adjust any or all of the following: (i)   the  number
and  kind  of  shares  of common stock (or  other  securities  or
property)  which  may be issued pursuant to this Agreement;  (ii)
the   exercise  price  which  may  be  issued  pursuant  to  this
Agreement.  The Board's determination under this section shall be
final, binding and conclusive.

      IN  WITNESS  WHEREOF, the parties hereto have  caused  this
Agreement to be executed as of the day and year set forth above.

COMPANY:                           HOLDER:

By:  _____________________        By:_____________________
     Andy Teng
     Chief Executive Officer

<END>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]