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18% CONVERTIBLE PROMISSORY NOTE

Promissory Note

18% CONVERTIBLE

                                PROMISSORY NOTE | Document Parties: Third Millennium Industries, Inc You are currently viewing:
This Promissory Note involves

Third Millennium Industries, Inc

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Title: 18% CONVERTIBLE PROMISSORY NOTE
Governing Law: Missouri     Date: 4/6/2004

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Exhibit 10.6

 

 

THIS PROMISSORY NOTE AND THE UNDERLYING COMMON STOCK ("COMMON STOCK") OF THIRD

MILLENNIUM INDUSTRIES, INC. (THE "COMPANY") HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED, AND ANY REGULATIONS PROMULGATED THEREUNDER

(COLLECTIVELY, THE "SECURITIES ACT") OR WITH THE SECURITIES AUTHORITIES OF ANY

STATE UNDER ANY STATE SECURITIES LAWS AND ANY REGULATIONS PROMULGATED THEREUNDER

(COLLECTIVELY, "STATE SECURITIES LAWS"). AS A CONSEQUENCE, NEITHER THIS

PROMISSORY NOTE NOR COMMON STOCK MAY BE SOLD, TRANSFERRED, ASSIGNED, MORTGAGED,

PLEDGED, LIENED, HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF

(COLLECTIVELY, A "TRANSFER") EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION

STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL

SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT

REQUIRED.

 

                                18% CONVERTIBLE

                                PROMISSORY NOTE

 

$165,000.00                                                  Springfield, Missouri

                                                                    Aug, 1, 2003

 

FOR VALUE RECEIVED, Third Millennium Industries, Inc., a Nevada corporation with

an office at 4933 HWY 60, Rogersville, MO 65742, including its successors and

assigns, ("Borrower"), hereby promises to pay to the order of Philip E. Tearney

("Lender"), the principal sum of One Hundred Sixty-Five Thousand Dollars

($165,000) (the "Principal Amount"), with interest on any unpaid balance of such

amount at the rate of interest specified herein, in lawful money of the United

States of America and in immediately available funds in accordance with the

terms hereof. The unpaid Principal Amount of this 18% Convertible Promissory

Note (this "Note"), together with all accrued and unpaid interest hereunder,

shall be due and payable on the Maturity Date (as defined below), unless this

Note is prepaid in accordance with Section 3 hereof or converted in accordance

with Section 4 hereof. This Note evidences a loan (the "Loan") made by Lender to

Borrower in the Principal Amount.

 

1.        Definitions.

 

         1.1.      Certain Defined Terms. As used in this Note, the following

terms have the meanings indicated below:

 

         "Business Day" means a day other than Saturday, Sunday or other day on

which commercial banks in Springfield, Missouri are authorized or required by

law or executive order to close.

 

         "Common Stock" means the $0.001 par value common stock of Borrower.

 

<PAGE>

 

         "Conversion Price" means Seventy-five cents ($.75) per share of Common

Stock subject to adjustment as provided in Section 4.

 

         "Default" means any event which, with the passage of time or the giving

of notice, or both, could become an Event of Default.

 

         "Default Rate" means a rate of interest equal to the Stated Interest

Rate plus three (3) percentage points per annum.

 

         "Disbursement Date" means the date that the proceeds of this note are

paid by Lender to Borrower.

 

         "Dollars" or "$" mean lawful currency of the United States of America

and, in relation to any amount to be disbursed or paid under this Note,

immediately available funds or such other funds as may be acceptable to Lender

in its sole discretion.

 

         "Event of Default" has the meaning set forth in subsection 6.1.

 

         "Indebtedness" of any Person means as of the date of any determination

thereof, (i) all indebtedness for borrowed money or purchase money financing,

(ii) all indebtedness evidenced by a note, bond, debenture or similar instrument

(but only to the extent actually disbursed), (iii) the face amount of all

letters of credit and, without duplication, all unreimbursed amounts drawn

thereunder, (iv) all payment obligations under any interest rate protection

agreements and currency swaps and similar agreements, (v) all indebtedness under

capitalized leases, (vi) all obligations to pay money or assume indebtedness in

respect of the acquisition of property, securities and other assets, (vii) all

obligations in respect of guaranties, (viii) all obligations to purchase,

repurchase or otherwise acquire, to supply or advance funds or to become liable

(directly or indirectly) with respect to any indebtedness or obligation of any

Person and (ix) all refundings, renewals, extensions or restatements of any of

the foregoing.

 

         "Maturity Date" is defined in Section 2.2.

 

         "Person" means an individual, a corporation, an association, a joint

stock company, a business trust, a partnership, a joint venture, a limited

liability company, an unincorporated organization, or a government or any agency

or political subdivision thereof.

 

         "Securities Act" means, collectively, the Securities Act of 1933, as

amended, and any regulations promulgated thereunder.

 

         "State Securities Act" means, collectively, the securities law of any

State that is applicable to this Note or the Common Stock and any regulations

promulgated thereunder.

 

         "Stated Interest Rate" means simple interest at the rate of eighteen

percent (18%) per annum.

 

         "Taxes" means any and all present and future taxes, levies, imposts,

duties, fees, deductions, withholdings or charges of a similar nature imposed or

assessed by any country or any political subdivision or taxing authority thereof

(but not including any income or franchise taxes of Lender), together with any

interest thereon and any penalties with respect thereto.

 

                                       -2-

<PAGE>

 

         1.2.      Computation of Time Periods. Unless otherwise provided herein,

with respect to the computation of periods of time from a specified date to a

later specified date herein, the word "from" means "from and including" and each

of the words "to" and "until" means "to but excluding".

 

         1.3.      Dollar Amounts. All dollar amounts used herein shall mean

Dollars.

 

         1.4.      Construction. In this Note, the singular includes the plural,

the plural includes the singular, and the word "or" is used in the inclusive

sense.

 

2.        The Loan.

 

         2.1.      Use of Loan Proceeds. The proceeds of the Loan shall be used

for the general working capital needs of Borrower and the payment of debt.

 

         2.2.      Maturity Date. The Maturity Date for the Loan shall be (i) the

first business day after the expiration of 180 days from the Distribution Date,

(ii) such other date as the Principal Amount shall become due and payable

pursuant to the terms and provisions of this Note or shall have been prepaid or

converted in full in accordance with the provisions hereof; provided, however,

Borrower may extend the Maturity Date at any time with the prior written consent

of Lender.

 

3.        Payments.

 

         3.1.      Funding Fee. Upon receipt by Borrower of the proceeds of this

note, Borrower shall issue to Lender stock certificate(s) for 40,000 shares of

Common Stock, provided however, Lender shall furnish any appropriate

endorsements and transfer documents reasonably requested by Borrower.

 

         3.2.      Payment of Interest.

 

                  3.2.1.    Interest Rate: Interest Payment. Interest shall

accrue on any unpaid balance of the outstanding Principal Amount at the Stated

Interest Rate: (a) from and including the Disbursement Date through the Maturity

Date, and (b) shall be due and payable on the Maturity Date. All interest and

fees accruing under the Note shall be computed on the basis of a 360-day year

and the actual number of days elapsed.

 

                  3.2.2.    Default Interest. Notwithstanding anything to the

contrary contained in this Note, if Borrower shall fail to make any payment when

due of principal, interest or any other amount owing under this Note, then such

principal, interest or other amount shall accrue interest thereon at a rate

equal to the Default Rate to the fullest extent permitted by law from the date

such payment was due until payment in full of the amount overdue plus such

interest thereon.

 

                  3.2.3.    Maximum Interest. Anything in this Note to the

contrary notwithstanding, the interest rate on the Loan shall in no event be in

excess of any maximum interest rate permitted by applicable law; provided,

however, that, to the extent permitted by applicable law, in the event that

interest is not collected as a result of the operation of this subsection and

interest thereafter payable pursuant to this Note shall be less than such

maximum amount, then such interest thereafter payable shall be increased up to

such maximum amount to the extent necessary to recover the amount of interest,

if any, theretofore uncollected as a result of the operation of this subsection.

 

                                       -3-

<PAGE>

 

In determining whether or not any interest payable under this Note exceeds the

maximum rate permitted by applicable law, any non-principal payment, except

payments specifically stated to be "interest", shall be deemed, to the extent

permitted by applicable law, to be a fee, expense reimbursement or penalty,

rather than interest.

 

         3.3.      Payments of Principal.

 

                  3.3.1.    Maturity. Subject to subsection 3.6 hereof, the

unpaid balance of the Principal Amount, together with all accrued and unpaid

interest, and all other amounts payable under the Note, shall be due and payable

in full on the Maturity Date.

 

                  3.3.2.    Prepayment. Subject to subsection 3.6 hereof, (i)

Borrower may at any time prior to the Maturity Date prepay all or any portion of

the Principal Amount without penalty, upon ten (10) days advance notice to

Lender specifying the date and amount of such repayment; and (ii) Borrower's

notice of prepayment, once given, shall obligate Borrower either (a) to make the

prepayment on the date specified therein or (b) pay Lender's reasonable

out-of-pocket costs and damages incurred as a result of Borrower's failure to

make such prepayment on the date specified for such prepayment.

 

         3.4.      Manner of Payments. Each payment of principal of and interest

on this Note shall be made by check of Borrower or by transferring the amount

thereof in Dollars in immediately available funds via the Fedwire or intra-bank

account transfer, not later than 5:00 p.m., Springfield, Missouri time, on the

date on which such payment shall be due. Each such payment shall be made without

setoff, offset, deduction or counterclaim.

 

         3.5.      Extension of Payments. If any payment from Borrower to Lender

under this Note shall beco


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