Promissory Notes

6 Months Ended

Aug. 31, 2012

5.	Promissory Notes

		August 31,		February 29,
		2012		2012
Issued on June 15, 2009, this unsecured promissory note, bearing simple interest at five percent ( 5%) per annum on the principal balance of $50,000, was originally due on June 15, 2011. This promissory note was amended effective on May 18, 2011, April 19, 2012 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty.	$	50,000	$	50,000
Issued on July 26, 2010, this unsecured promissory note, bearing simple interest at five percent ( 5%) per annum on the principal balance of $200,000, was originally due on July 26, 2011. This promissory note was amended effective May 23, 2011 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.		200,000		200,000
Issued on May 6, 2011 this unsecured promissory note, bearing simple interest at five percent ( 5%) per annum on the principal balance of $250,000, was originally due on May 6, 2012. Effective April 19, 2012 this promissory note was amended on April 19, 2012 and again on July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.		250,000		250,000
Total Promissory Notes	$	500,000	$	500,000

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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