Exhibit
10.48
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH IT MAY BE CONVERTED
HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES
LAWS, AND MAY NOT BE TRANSFERRED OR SOLD, UNLESS IT HAS BEEN
REGISTERED UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM
REGISTRATION IS AVAILABLE.
Note No. 12-2005
December 30, 2005
New York, New York
Secured Convertible Note
------------------------
ENTECH ENVIRONMENTAL
TECHNOLOGIES, INC., a
Florida corporation
(together with
its subsidiaries
and successors, the "Maker"), for value received, hereby
promises to pay to the
order of BARRON
PARTNERS, L.P., a Delaware limited
partnership ("Holder")
and registered assigns
the principal sum of ONE HUNDRED
THOUSAND DOLLARS
($100,000).
All payments
made on this Note
shall be made to
Holder by wire transfer of immediately available funds to Holder's
account (the
"Bank Account") at such bank in the United States as may be
specified in writing
by Holder to Maker,
together with
interest on the
principal sum of this
Note
outstanding from time
to time. All payments made on this Note shall be made pro
rata and pari passu.
1.
MATURITY DATE. The principal sum of this Note shall be payable on
December 30, 2007 (the "Maturity Date"), in such coin or currency
of the United
States of America as at the time of payment shall be legal tender for the
payment of public and
private debts.
The Maker shall have no right to prepay
this Note.
2.
INTEREST. Interest on
the principal sum of this Note outstanding from
time to time shall be payable on the Maturity Date at the rate of 8% per
annum
from the date of issuance set forth above until payment in full of
the principal
sum hereof has been made. Any installment of principal or interest
not paid when
due, by acceleration or otherwise, shall bear interest after the
due date at the
rate equal
to the lesser of (a) 18% per annum or (b) the highest rate of
interest permitted by applicable law, payable upon demand. Interest
on this Note
shall be calculated
on the basis of a 360-day year and paid for the actual
number of days elapsed.
3.
COLLATERAL.
(a) SECURITY INTEREST.
Maker hereby
grants to Holder to
secure this
Note
a security interest in
and lien on all of the tangible and intangible
assets of Maker,
whether now owned or
existing, hereafter acquired or
arising, or in which Maker now or hereafter has any rights, and
wheresoever
located including,
without limitation,
any and all of the following: (i)
accounts; (ii) accounts receivable; (iii) chattel paper; (iv)
documents;
(v)
equipment; (vi)
general intangibles,
including,
without
limitation,
patents, patent
applications,
trademarks and service
marks, and computer
software and programs; (vii) instruments; (viii) inventory; (ix)
investment
property; (x) monies,
residues and property of any kind that is now, or at
any
time hereafter, in the
possession or under the control of Maker; (xi)
real
property;
(xii)
accessions
to, substitutions for, and all
replacements, products
and proceeds of the foregoing, including, without
limitation, proceeds
of insurance policies;
and (xiii) books and
records
(including, without
limitation,
customer lists,
credit files,
computer
programs, print-outs
and other computer materials and records) of
Maker
pertaining to any of the foregoing (collectively, the "Collateral"), and
agrees that Holder
shall have all of the
rights of a secured
party under
the
Uniform Commercial Code of the State of California.
(b) FINANCING STATEMENTS AND COSTS. Maker will join with Holder in
the
execution and filing
of such financing
statement or
statements as may be
requested by Holder in
form and content
reasonably
required by Holder.
Maker will
pay all costs of filing any financing, continuation or
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<PAGE>
termination statements
with respect to the
security interest
created by
this
Note, together with
costs and expenses of any lien search reasonably
required by Holder during the term hereof.
(c) COLLECTIONS; HOLDER'S RIGHT TO NOTIFY DEBTORS; VERIFICATION.
Maker
hereby authorizes
Holder, at any time or times after an
Event of Default
(as
hereinafter
defined), to: (i) notify any or all debtors that the
accounts receivable
have been assigned to Holder and that Holder has a
security interest
therein; and (ii) direct such debtors to make all
payments due from them to Maker upon the accounts receivable directly to a
lock
box designated by Holder. Holder shall promptly furnish Maker with a
copy
of any such notice sent. Any such notice, in Holder's sole
discretion,
may
be sent on Maker's letterhead, in which event Maker shall co-sign
such
notice with Holder.
(d) CONSIGNMENT OF
INVENTORY. Maker shall
not at any time permit any
inventory to be placed on consignment with any person or entity
without the
prior written consent of Holder.
(e) PROCEEDS OF EQUIPMENT. Maker shall not, without the prior
written
consent of
Holder, sell, lease or grant a security interest in, or
otherwise dispose of or encumber, any equipment, or any part thereof. Upon
any
disposition of equipment, Maker shall, unless otherwise agreed to by
Holder, deliver all of
the cash proceeds to Holder or his designee, which
proceeds shall be applied to payments under the Note. Notwithstanding the
foregoing, Maker shall
have the right to trade in obsolete, redundant or
unnecessary equipment in connection with the purchase of any new
equipment,
provided that such new equipment is subject to Holder's
security interest
free
and clear of all other liens and encumbrances.
(f) GENERAL
INTANGIBLES. Maker
shall not at any time
sell, assign,
transfer, license
or issue a permit
to use any
general intangible, or
forfeit or allow to
lapse any rights to any general intangible, of Maker
without the prior written consent of Holder.
(g) PROCEEDS OF REAL
PROPERTY. Maker shall not, without the prior
written consent of Holder, sell, lease (as lessor or
sublessor) or grant a
mortgage in, or otherwise encumber, any real property or any part
thereof.
Upon
any such disposition,
Maker shall deliver all of the proceeds thereof
to
Holder, or his designee, to be applied to the repayment of the
Note.
4. NO PREPAYMENTS
AND ACCELERATION. All payments on account of the
indebtedness evidenced
by this Note shall be applied first to accrued and
unpaid interest and
then to principal. No
prepayments of principal may be
made.
5.
CONVERSION.
(a) ELECTIVE CONVERSION. At the election of Holder, but subject to
the
limitations provided herein and in the Note Purchase Agreement of
even date
herewith, Holder
shall have the right
to convert
all or any part of
the
principal and accrued
interest of this Note
into shares of Common
Stock,
$0.001 par value
per share at the price of $0.025 per share of Common
Stock.
(b) NOTICE; EXERCISE
OF CONVERSION RIGHT.
Holder shall give
written
notice to Maker of Holder's election to convert this Note in whole or in
part
into shares of Common Stock. If Holder intends to exercise its right
of
conversion only in part, it shall so specify in its notice to
Maker.
(c) CLOSING. Closing of the conversion of this Note shall occur at
the
office of Maker not less than five (5) business days after delivery of
Holder's notice of conversation. This Note shall be surrendered to
Maker at
the closing. If only a portion of the debt represented by this Note is
2
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<PAGE>
being converted,
then (i) the
principal of this Note shall be deemed
converted first,
then the accrued interest and (ii) a new Note of like
tenor shall be issued by Maker to Holder for the unconverted
balance of the
principal and accrued interest. The issuance of certificates for
shares of
capital stock upon the conversion of this Note shall be made
without charge
to
Holder for any taxes or other costs or expenses.
(d) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.
The character
of
the shares of Common Stock at the time issuable upon conversion of this
Note
and the Conversion Price therefore, are subject to adjustment upon
the
occurrence of the
following events, and all such adjustments shall be
cumulative:
(i)
ADJUSTMENT
FOR STOCK
SPLITS,
STOCK
DIVIDENDS,
RECAPITALIZATIONS,
ETC. The Conversion Price of this Note and the
number of shares of Common Stock at the time issuable upon
conversion
of this Note shall be
appropriately adjusted
to reflect any stock
dividend, stock
split, combination of shares, reclassification,
recapitalization or
other similar
event affecting the number of
outstanding shares of Common Stock.
(ii) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any
consolidation or
merger of the Maker with or into any
other
corporation,
entity or person, or any other corporate
reorganization, in
which the Maker shall
not be the
continuing
or
surviving entity of such consolidation, merger or reorganization (any
such transaction being hereinafter referred to as a
"Reorganization"),
then, in each case, the Holder, on conversion hereof at any time
after
the consummation
or effective date of such Reorganization (the
"Effective Date"),
shall receive,
in lieu of the shares
of stock or
other securities at any time issuable upon the conversion of this
Note
issuable on such conversion prior to the Effective Date, the stock
and
other securities and
property (including
cash) to which such
holder
would have been entitled upon the Effective Date if such holder had
converted this Note immediately prior thereto (all subject to
further
adjustment as provided in this Note).
(iii) CERTIFICATE AS TO ADJUSTMENTS. In case of any adjustment
or
readjustment in the
price or kind of securities issuable on the
conversion of this Note, the Maker will promptly give
written notice
thereof to the
Holder in the form of
a certificate,
certified and
confirmed by the Board of Directors of the Maker, setting forth such
adjustment or readjustment and showing in reasonable detail the facts
upon which such adjustment or readjustment is based.
(e) MAXIMUM EXERCISE. The Holder shall not be entitled to convert
this
Note
to acquire a number of shares of Common Sto
