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
