EXHIBIT 10.21
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933,
AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT
HAS
BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1)
REGISTRATION
UNDER APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED, AND (2)
AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED
TO
THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT
IS
NOT REQUIRED.
ORGANIC FARM MARKETING, LLC
CONVERTIBLE NOTE
| |
December
18, 2007
|
|
$800,000.00
|
Thorp,
Wisconsin
|
ORGANIC
FARM MARKETING, LLC, a Wisconsin limited liability company
(the “Company”),
for value received, hereby promises to pay to the order of
ADVANCED BIOTHERAPY, INC. a Delaware corporation
(“Advanced Biotherapy,” together with its
successors and permitted assigns, collectively, the
“Holder”), the maximum
principal sum of Eight Hundred Thousand Dollars ($800,000.00)
(or such lesser amount as
may have been advanced hereunder), and to pay interest
(computed on the basis of actual days elapsed
in a 365-day year) on the unpaid principal balance of each
advance from the date of such advance
at a rate per annum equal to ten percent (10%) (such principal
and accrued interest together
shall be known as the “Principal Sum”). Interest
shall be payable quarterly in arrears commencing on
January 17, 2008, and continuing on each April 17, July
17, October 17 and January
17 thereafter until the maturity date set forth below;
provided, however, that the Company
may, at its option, in lieu of making any cash payment of
interest as contemplated herein, by written notice to the
Holder given not less than three (3) days prior to the
interest payment date, elect to add the interest installment
to the outstanding principal balance of this
Note.
If any interest installment is not paid hereunder when due,
the Holder may, at its option, elect
to add such interest installment to the outstanding principal
balance of the Note or treat such
failure as an Event of Default.
The
Principal Sum shall be payable in full on May 17, 2009.
Amounts advanced under this Note and repaid may not
be
redrawn.
If
the Principal Sum is not paid in full on the due date thereof
(whether by maturity or acceleration), and upon and during the
continuance of any Event of Default (as defined
herein), the
Principal Sum (to the extent permitted by applicable law)
shall bear interest thereafter at a rate
per annum equal to thirteen percent (13%) until such payment
is paid in full or such Event of Default
is cured or waived.
Notwithstanding
any provision of this Note to the contrary: (i) in no event
shall the interest
rate on this Note be a rate per annum in excess of the maximum
interest rate permissible under
applicable law, and (ii) to the extent that interest (or other
amounts paid pursuant to this Note
that are deemed to be interest under applicable law) results
in interest payments in excess of those
permitted under applicable law, such excess payments shall be
applied first to the payment of
the unpaid Principal Sum, second to the payment of any other
amounts due from the Company to
the Holder, and third, if no other obligations are owing to
the Holder, then refunded to the Company.
The Company agrees that if such excess payments are applied in
the manner provided for
in this paragraph, then to the fullest extent permitted by
applicable law, the Holder shall not be
subject to any
penalty provided for by any applicable law relating to
charging or collecting interest
in excess of that permitted by applicable
law.
The
unpaid principal balance of this Note together with all
interest accrued thereon shall, at
the option of the Holder, become immediately due and payable
upon any of the following events
(each, an “Event of Default”):
(i)
The
Company shall default in the payment of interest or
principal hereunder
and such default shall continue for a period of five (5)
days;
(ii)
(ii)
Any representation or warranty made by the Company in this
Note, the Investment
Agreement dated as of December 18, 2007 (“Investment
Agreement”) between the Company and Advanced Biotherapy,
or any other document executed in connection therewith,
including, without limitation, the secured promissory note
issued by the Company in favor of Advanced Biotherapy
(collectively, the “Related
Documents”) proves to have been untrue, incomplete or
misleading in any material respect when made or when deemed to
have been made (including, but not limited
to, upon any advance hereunder);
(iii)
The
Company fails to observe or perform any covenant or agreement
set forth
in this Note, the Investment Agreement or the Related
Documents and, if such failure is capable of being cured and
is not otherwise subject to a cure period under the applicable
document, shall continue for a period of thirty (30)
days;
(iv)
(I)
The Company shall commence any case, proceeding or other
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to
bankruptcy,
insolvency, reorganization or relief of debtors
,
seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking
arrangement, adjustment, composition or other relief with
respect to its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it
or for
all or any substantial part of its assets, or the Company
shall make a general assignment
for the benefit of its creditors; (II) there shall be
commenced against the Company
any case, proceeding or other action of the nature referred to
in clause (I), above,
which (A) results in the order of an order for relief or any
such adjudication or appointment,
or (B) remains undismissed, undischarged or unbonded for a
period of sixty (60)
days; (III) there shall be commenced against the Company any
case, proceeding or other action seeking issuance of a
warranty of attachment, execution, distraint or similar
process
against all or any substantial part of its assets which
results in the entry of an order
for any such relief which shall not have been vacated,
discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof;
(IV) the Company shall
take any action or furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth
in clauses (I), (II), or (III), above; or (V) the
Company
shall generally not, or shall be unable to, or shall admit in
writing its inability to,
pay its debts as they become due;
(v)
The
occurrence of any of the following: (I) an event or series of
events by which any person, entity or group of persons or
entities who are not holders of the Company’s
Units on the date of this Note shall, as a result of a tender
or exchange offer, open
market purchases, privately negotiated purchases, merger,
consolidation or otherwise,
have become the beneficial owner (within the meaning of Rule
13d-3 under the
Securities Exchange Act of 1934), of more than fifty percent
(50%) of the Units of
the
Company
at any time outstanding entitled to vote generally in the
election of the Company’s
directors; (II) the Company is merged with or into another
entity with the effect
that immediately after such transaction the equity owners of
the Company immediately
prior to such transaction hold less than a majority of the
equity interests entitled
to vote generally in the election of the directors of the
entity surviving the transaction;
or (III) the direct or indirect sale, lease, exchange or other
transfer of all or substantially
all of the assets of the Company;
(vi)
A
final judgment or judgments is or are entered against the
Company in the
aggregate amount of One Hundred
Thousand
Dollars ($100,000) or more on a claim or
claims not covered by insurance;
(vii)
This
Note, the Investment Agreement or any of the Related
Documents shall
be declared invalid, void or unenforceable, or the validity or
enforceability thereof shall
be contested or challenged by the Company, or any
determination of partial invalidity,
voidness or unenforceability shall be made which would,
individually or in the aggregate,
materially reduce the principal benefits of any provision of
this Note, the Investment
Agreement or any of the Related Documents to the Holder, or
make the remedies
generally afforded thereby inadequate for the practical
realization thereof; or
(viii)
The
holder of any indebtedness owed by the Company in excess
of Seventy-Five
Thousand Dollars ($75,000) accelerates the payment of such
indebtedness for
any reason or the Company defaults in the payment of any
indebtedness with an unpaid
principal amount in excess of Seventy-Five Thousand Dollars
($75,000), and such default
remains unremedied beyond the applicable grace period
therefor.
All
payments on or in respect of this Note, including principal,
interest and premium thereon,
shall be made in such coin and currency of the United States
of America as at the time of
payment is legal tender for the payment of public and private
debts b
