EXHIBIT 10.59
8%
CONVERTIBLE TERM NOTE
|
$200,000
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February 18,
2005
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ELECTROPURE, INC.,
a California corporation, (the “Company” ), for the
value received, hereby unconditionally and absolutely promises to
pay to the order of ANTHONY M.
FRANK, or holder (collectively, the “Holder” ), upon
presentation and surrender of this Note at its office at 23456
South Pointe Drive, Laguna Hills, California 92653, or such other
place as the Company may, from time to time, designate, the sum of
Two Hundred Thousand ($200,000)
Dollars , in lawful money of the United States, on or
before August 18, 2005 (the “Maturity Date”).
1.
CONVERSION .
The Holder of this
Note shall have the right, at its option, at any time up until 5:00
P.M. Los Angeles time on the fifth (5th) day immediately before the
Maturity Date (except that, with respect to any portion of this
Note which shall be called for prepayment, such right shall as to
such portion terminate at 5:00 P.M. Los Angeles time on the fifth
(5th) day immediately prior to the Prepayment Date (as defined in
Section 2 hereof)), to convert all or any portion of the principal
amount of this Note, including interest accrued thereon, subject to
the terms and provisions of this Section 1, into common stock of
Electropure, Inc. at the then fair market value (closing bid price)
on the date of such conversion.
2.
PAYMENTS AND PREPAYMENTS .
(a)
All payments and prepayments of principal and interest shall be
made in immediately available funds on or before the Maturity Date
to the Holder at 1 Maritime Plaza, Suite 825, San Francisco,
California 94111.
(b)
The unpaid principal amount of the Note from time to time
outstanding shall bear interest from the date of this Note at the
rate of Eight Percent (8%) per annum until paid. Interest
shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days.
(c)
The Company may prepay at any time in advance of the Maturity Date
all or any part of this Note, plus accrued interest on the portion
of the principal being prepaid. Interest on the portion of
the Note prepaid shall cease to accrue on and after the date of
such prepayment.
3.
NOTICES TO NOTEHOLDER .
So long as this
Note shall be outstanding, if the Company (i) shall pay any
dividend or make any distribution upon the Company Stock or (ii)
shall effect a capital reorganization, reclassification of capital
stock, consolidation or merger with or into another corporation,
sale, lease or transfer of all or substantially all of the property
and assets of the
1
Company to another
corporation, or voluntary or involuntary dissolution, liquidation
or winding up of the Company, then in any such case, the Company
shall cause to be mailed by certified mail to the Holder, at least
fifteen days prior to the date specified in (x) or (y) below, as
the case may be, a notice containing a brief description of the
proposed action and stating the date on which (x) a record is to be
taken for the purpose of such dividend or distribution, or (y) such
reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to
take place and the date, if any is to be fixed, as of which the
holders of Common Stock or other securities shall receive cash or
other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution,
liquidation or winding up.
4.
EVENTS OF DEFAULT . If one or more of the
following described events shall occur (each an “Event of
Default”):
(a)
The Company shall fail to pay the principal of, or interest on,
this Note within five (5) days after the Holder has given written
notice to the Company that the same has become due; or
(b)
The Company shall fail to perform or observe any of the provisions
contained in any Section of this Note and such failure shall
continue for more than thirty (30) days after the Holder has given
written notice to the Company; or
(c)
Any material representation or warranty made in writing by or on
behalf of the Company in this Note shall prove to have been false
or incorrect in any material respect, or omits to state a material
fact required to be stated therein in order to make the statements
contained therein, in the light of the circumstances under which
made, not misleadin
