EXHIBIT 10.4
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND IS A "RESTRICTED SECURITY" AS THAT TERM IS DEFINED IN RULE 144
UNDER THE ACT. THE NOTE MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF
WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF BION ENVIRONMENTAL
TECHNOLOGIES, INC.
SECURED PROMISSORY NOTE
$42,500.00 March 28, 2003
Bion Environmental Technologies, Inc. ("Debtor"), for value received,
hereby promises to pay to the order of Bright Capital Limited ("Lender"), in
lawful money of the United States at the address of Lender set forth below,
the initial principal sum of Forty Two Thousand Five Hundred Dollars
($42,500.00) plus any amounts that may be loaned by Lender to Debtor pursuant
to this Note after the date hereof , together with interest on the unpaid
principal at the simple rate of six percent (6%) per annum. Such principal
and accrued interest shall be payable at Maturity on March 28, 2004.
This Note is secured by a security interest in certain assets of the
Debtor pursuant to that certain Security Agreement of even date herewith
between Debtor and Lender.
This Note may be prepaid, in whole or in part, at any time without
permission or penalty. Interest shall be computed on the basis of a 360-day
year and actual days elapsed.
If a payment on this Note shall become due on a Saturday, Sunday or
public holiday under the laws of the State of New York, such payment shall be
made on the next succeeding business day and such extension of time shall be
included in computing interest in connection with such payment.
Immediately upon the occurrence of an "Event of Default" (as defined
below), Lender may, at its option, declare immediately due and payable the
entire unpaid principal amount of this Note, together with all interest
thereon, plus any other amounts payable at the time of such declaration
pursuant to this Note. An Event of Default shall be defined as each of the
following: (i) failure of Debtor to make any payment of interest and/or
principal within ten (10) days after the due date; (ii) Debtor shall admit in
writing its inability to pay its debts as they become due, shall make a
general assignment for the benefit of creditors or shall file any petition for
action for relief under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law or laws for the relief of, or relating to,
debtors; or (iii) an involuntary petition shall be filed against Debtor under
any bankruptcy, reorganization, insolvency or moratorium law, or any other law
or laws for the relief of, or relating to, debtors unless such petition shall
be dismissed or vacated within thirty (30) days of the date of the filing
thereof.
Debtor hereby waives diligence, presentment, protest and demand and also
notice of protest, demand, dishonor and nonpayment of this Note and expressly
agrees that this Note, or any payment hereunder, may be extended from time to
time, all without in any way affecting the liability of Debtor.
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If Lender should institute collection efforts, of any nature whatsoever,
to attempt to collect any and all amounts due hereunder upon the default of
Debtor, Debtor shall be liable to pay to holder immediately and without demand
all reasonable costs and expenses of collection incurred by Xxxxxx, including,
without limitation, reasonable attorney fees, whether or not suit or other
action or proceeding be instituted and specifically including but not limited
to collection efforts that may be made through a bankruptcy court.
Any notice or other communication, except for payment hereunder, required
or permitted hereunder shall be in writing and shall be deemed to have been
given upon delivery if personally delivered or one day after deposit if
deposited in the United States mail for mailing by certified mail, postage
prepaid, and addressed as follows:
If to Debtor: Bion Environmental Technologies, Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Lender: Bright Capital Limited
00 Xxxxxxx Xxxx Xxxxx
Xxx Xxxxx Xxx Xxxx 00000-0000
Any payment shall be deemed made upon receipt by Xxxxxx. Lender or
Debtor may change its address for purposes of this paragraph by giving to the
other party notice in conformance with this paragraph of such new address.
This Note may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Note as of the
day and year first above written.
"Debtor"
BION ENVIRONMENTAL TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxx
Authorized Officer
ACKNOWLEDGED AND AGREED TO:
"Lender"
BRIGHT CAPITAL LIMITED
By: /s/ Xxxxxxx Xxxxxxx
Authorized Officer
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STATE OF COLORADO
UNIFORM COMMERCIAL CODE-SECURITY AGREEMENT
Debtor:
Name: Bion Environmental Technologies, Inc.
(Exact Legal Name Required)
Address:
Residence: _________________________________________________________
No. Street City State
Business: 00 Xxxx 00xx Xxxxxx - 00xx Xxxxx Xxx Xxxx Xxx Xxxx
No. Street City State
Secured Party:
Name: Bright Capital Limited
Address: 00 Xxxxxxx Xxxx Xxxxx Xxx Xxxxx Xxx Xxxx
Xx. Street City State
Debtor, for consideration, hereby grants to Secured Party a security interest
in the following property and any and all additions, accessions and
substitutions thereto or therefor (hereinafter called the "COLLATERAL"):
All of Debtor's tangible assets of any kind, including, without limitation,
computers, office furniture, file cabinets and all of the equipment and
inventory listed on Exhibit A attached hereto and incorporated herein by
reference.
To secure payment of the indebtedness evidenced by that certain promissory
note of even date herewith, payable to the Secured Party, or order, as set
forth herein.
DEBTOR EXPRESSLY WARRANTS AND COVENANTS:
1. That except for the security interest granted hereby Debtor is, or to
the extent that this agreement states that the Collateral is to be acquired
after the date hereof, will be, the owner of the Collateral free from any
adverse lien, security interest or encumbrances; and that Debtor will defend
the Collateral against all claims and demands of all persons at anytime
claiming the same or any interest therein.
2. The Collateral is used or bought primarily for:
___ Personal, family or household purposes;
___ Use in farming operations;
X Use in business.
3. That Debtor's residence, state of organization or chief executive
office is as stated herein, and the Collateral will be kept at the location
set forth on Exhibit A attached hereto and incorporated herein by reference.
_____________________________________________________________________________
No. and Street City County State
4. If any of the Collateral is oil, gas, or minerals to be extracted or
timber to be cut, or goods which are or are to become fixtures, said
Collateral concerns the following described real estate situate in the
_____________ County of and State of Colorado, to wit: N/A
5. Promptly to notify Secured Party of any change in the location of
the Collateral.
6. To pay all taxes and assessments of every nature which may be levied
or assessed against the Collateral.
7. Not to permnit or allow any adverse lien, security interest or
encumbrance whatsoever upon the Collateral and not to permit the same to be
attached or replevined.
8. That the Collateral is in good condition, and that Debtor will, at
Debtor's own expense, keep the same in good condition and from time to time,
forthwith, replace and repair all such parts of the Collateral as may be
broken, worn out, or damaged without allowing any lien to be created upon the
Collateral on account of such replacement or repairs, and that the Secured
Party may examine and inspect the Collateral at any time, wherever located.
9. That Debtor will not use the Collateral in violation of any
applicable statutes, regulations or ordinances.
10. The Debtor will keep the Collateral at all times insured against
risks of loss or damage by fire (including so-called extended coverage), theft
and such other casualties as the Secured Party may reasonably require,
including collision in the case of any motor vehicle, all in such amounts,
under such forms of policies, upon such terms, for such periods, and written
by such companies or underwriters as the Secured Party may approve, losses in
all cases to be payable to the Secured Party and the Debtor as their interest
may appear. All policies of insurance shall provide for at least ten days'
prior written notice of cancellation to the Secured Party; and the Debtor
shall furnish the Secured Party with certificates of such insurance or other
evidence satisfactory to the Secured Party as to compliance with the
provisions of this paragraph. The Secured Party may act as attorney for the
Debtor in making, adjusting and settling claims under or cancelling such
insurance and endorsing the Debtor's name on any drafts drawn by insurers of
the Collateral.
UNTIL DEFAULT Debtor may have possession of the Collateral and use it in
any lawful manner, and upon default Secured Party shall have the immediate
right to the possession of the Collateral.
DEBTOR SHALL BE IN DEFAULT under this agreement upon the happening of any
of the following events or conditions:
(a) default in the payment or performance of any obligation, covenant or
liability contained or referred to herein or in any note evidencing the same;
(b) the making or furnishing of any warranty, representation or
statement to Secured Party by or on behalf of Debtor which proves to have been
false in any material respect when made or furnished;
(c) loss, theft, damage, destruction, sale or encumbrance to or of any
of the Collateral, or the making of any levy seizure or attachment thereof or
thereon;
(d) death, dissolution, termination of existence, insolvency, business
failure, appointment of a receiver of any part of the property of, assignment
for the benefit of creditors by, or the commencement of any proceeding under
any bankruptcy or insolvency laws of, by or against Debtor or any guarantor or
surety for Debtor.
UPON SUCH DEFAULT and at any time thereafter, or if it deems itself
insecure, Secured Party may declare all Obligations secured hereby immediately
due and payable and shall have the remedies of a secured party under Article 9
of the Colorado Uniform Commercial Code. Secured Party may require Debtor to
assemble the Collateral and deliver or make it available to Secured Party at a
place to be designated by Secured Party which is reasonably convenient to both
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parties. Expenses of retaking, holding, preparing for sale, selling or the
like shall include Secured Party's reasonable attorney's fees and legal
expenses (including the allocated fees and expenses of in-house counsel) and
such portion of the Secured Party's overhead as it may in its reasonable
judgment deem allocable to and includable in such expenses.
No waiver by Secured Party of any default shall operate as a waiver of
any other default or of the same default on a future occasion. The taking of
this Security Agreement shall not waive or impair any other security Secured
Party may have or hereafter acquire for the payment of the above indebtedness,
nor shall the taking of any such additional security waive or impair this
Security Agreement; but Secured Party may resort to any security it may have
in the order it may deem proper, and notwithstanding any collateral security,
Secured Party shall retain its rights of set-off against Debtor.
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all promises and duties of Debtor shall bind
Xxxxxx's heirs, executors or administrators or Xxxxxx's successors or assigns.
If there be more than one Debtor, their liabilities hereunder shall be joint
and several.
Dated: March 28, 2003
Debtor:
Bion Environmental Technologies, Inc. Colorado
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Debtor's state of organization,
or if not a registered organization,
chief executive officer
By: /s/ Xxxx Xxxxx 19871767435
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Authorized Officer Debtor's State Identification No.
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(Exhibits Omitted)
