This Promissory Note involves
Title: 18% CONVERTIBLE
Governing Law: Missouri Date: 4/6/2004
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
$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.
1.1. 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 $0.001 par value common stock of Borrower.
"Conversion Price" means Seventy-five cents ($.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
"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
"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.
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
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
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
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
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.
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 become due on a day which is not a Business Day, the due
date thereof shall be extended to the next following day which is a Business Day
and such additional time shall be included in the computation of interest.
3.6. Application of Payments. Lender shall have the absolute right
to determine the order in which payments received by Lender under this Note
shall be applied to the amounts which are then due and payable under the Note,
regardless of any application designated by Borrower; provided, however, that,
unless and until the occurrence of an Event of Default hereunder, all payments,
including, without limitation, all prepayments, shall be applied first against
any fees or expenses due and payable to Lender under this Note, second, to the
payment of delinquency or late charges, third, to interest due and payable on
the Loan, and fourth to repay the Principal Amount.
3.7. Optional Conversion of Note and Notice Thereof. Anything
contained in this Section 3 to the contrary notwithstanding, in the event that
Borrower shall give Lender notice of prepayment, Lender may, within five (5)
Business Days following the giving of such notice, elect to convert the entire
unpaid Principal Amount of this Note and any accrued interes