PROMISSORY NOTE AND
DATE: FEBRUARY 28, 2007
MAKER: SIBLING THEATRICALS, INC.
511 West 25th Street, Unit 503
New York, New York 10001
PAYEE: MOTIVATED MINDS LLC
c/o Ira J. Gaines
1819 East Morten Ave.
Phoenix, AZ 85028
AMOUNT SEVEN HUNDRED TWENTY-FIVE THOUSAND DOLLARS & 00/100 DOLLARS
OF NOTE: ($725,000)
FOR VALUE RECEIVED, Makers promise and agree to pay to Payee, or order, at
the mailing address of Payee, or at such other place as Payee or any other
holder hereof ("Holder") may from time-to-time designate, the principal sum of
Seven Hundred Twenty-Five Thousand Dollars and No/100 Dollars ($725,000) with
Interest, as follows:
1. INTEREST RATE PAYMENTS.
a. Commencing on the date of this Note, and so long as no Event of Default
(as defined herein) exists, the unpaid balance of this Note shall accrue
interest ("Interest) at the nominal rate of fifteen percent (15%) per
b. During any Event of Default under this Note, the unpaid balance of this
Note shall accrue Interest at the rate of twenty-five percent (25%) per
annum ("Default Rate"). Interest shall accrue at the Default Rate from the
date of an Event of Default, without notice to Maker.
c. The interest provided herein shall be calculated on the basis of a
360-day year/30 day month.
d.The minimum amount of interest to be paid under the terms of this Note
is Twenty-one Thousand Seven Hundred Fifty Dollar and Zero cents
($21,750), regardless of the timing of the payments. To the extent that
the payments are made under this Note prior to the maturity date of this
Note, then to that extent, the actual interest rate may actually exceed
the rate stated above, and such amount shall be treated as additional or
minimum interest. Makers have agreed to pay a minimum of $21,750 in
interest regardless of when payments on this Note are made.
e.All payments under this Note shall first be credited against costs and
expenses provided for in this Note, second to the payment of any late
charges, third to the payment of accrued and unpaid Interest, if any, and
the remainder shall be credited against principal. All payments due
hereunder shall be payable in legal tender of the United States of
America, and in same day funds delivered to Holder by cashier's check,
certified check, bank wire transfer or any other means of guaranteed funds
to the mailing address provided below, or at such other place as Holder
shall designate in writing for such purpose from time to time. If a
payment under this Note otherwise would become
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due and payable on a Saturday, Sunday or legal holiday (any other day
being a "Business Day"), the due date of the payment shall be extended to
the next succeeding Business Day, and Interest, if any, shall be payable
thereon during such extension.
2. MATURITY DATE. If not sooner paid, all unpaid principal and accrued Interest
shall be due and payable in full on MAY 28, 2007 ("Maturity Date), or on the
date Maker shall receive gross financing proceeds (before deduction of any costs
or expenses of the financing, including commissions or similar expenses) of One
Million Five Hundred Thousand Dollars and 00/100 Dollars ($1,500,000).
3. LATE CHARGE. Makers shall pay to Holder a late charge ("Late Charge") equal
to five percent (5%) of any payment not received by the Holder within ten (10)
days after said payment is due.
4. REASONABLENESS OF CHARGES. Makers acknowledge that upon the occurrence of an
Event of Default, the damages to the Holder would be extremely difficult to
ascertain, including the Holder's lost profit and loss of use of the funds
evidenced hereby and expenses incurred in connection with such default, and that
the accrual of Interest at the Default Rate and the Late Charge are reasonable
estimates of the loss to the Holder incurred by virtue of an Event of Default.
5. LEGAL LIMITS.
a. Makers agree to an effective rate of interest which is the rate
stated herein plus any additional rate of interest resulting from any other
payments in the nature of interest, including without limitation, any late
charges to the extent that such charges may be deemed includable in interest for
any purpose, and the existence of a minimum dollar amount of interest to be
charged regardless of any payments that Makers deliver to Payee before the
Maturity Date of this Note.
b. All agreements between Makers and Payee are hereby expressly
limited so that in no event whatsoever, whether by reason of deferment in
accordance with this Note or under any agreement or by virtue of acceleration or
maturity of the obligation evidenced by this Note, or otherwise, shall the
amount paid or agreed to be paid to Payee for the advance, use, forbearance or
detention of the money represented by this Note or to compensate Payee for
damages to be suffered by reason of a late payment or default under this Note,
exceed the maximum permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Note, or of any provision in
the security for this Note at the time performance of such provision shall be
due, shall involve exceeding the limit of validity prescribed by law, from the
date of this Note, the obligations to be fulfilled shall be reduced to the limit
of such validity. This provision shall never be superseded or waived and shall
control every other provision of all agreements between Makers and Payee. Makers