THIS SENIOR
SECURED PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
ONLY AND NOT FOR DISTRIBUTION AND MAY BE TRANSFERRED OR OTHERWISE
DISPOSED OF ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND APPLICABLE STATE SECURITIES
LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY PROMISSORY NOTE ISSUED
IN EXCHANGE FOR THIS SECURED PROMISSORY NOTE.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION
§1.1275-3(b)(1), PHILLIP HAMILTON, A REPRESENTATIVE OF THE
BORROWERS HEREOF WILL, BEGINNING TEN (10) DAYS AFTER THE ISSUE DATE
OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST
THE INFORMATION DESCRIBED IN TREASURY REGULATION
§1.1275-3(b)(1)(i). PHILLIP HAMILTON MAY BE REACHED AT
TELEPHONE NUMBER 559-665-5800.
SENIOR SECURED PROMISSORY
NOTE
|
Original
Issuance
Date: December
19, 2008
|
Original Principal
Amount: $6,000,000
|
FOR VALUE RECEIVED, upon the terms and subject
to the conditions set forth in this senior secured promissory note
(this “Note”), GLOBAL DIVERSIFIED INDUSTRIES, INC., a
Nevada corporation with its principal place of business at 1200
Airport Drive, Chowchilla, California 93610 (the
“Borrower”) absolutely and unconditionally promise to
pay to the order of DEBT OPPORTUNITY FUND, LLLP or registered
assigns (the “Payee” or “Holder”), when
due, whether upon the Maturity Date (as defined below),
acceleration or otherwise (in each case in accordance with the
terms hereof), the amount set out above as the Original Principal
Amount or so much thereof as may from time to time be advanced
hereunder (without deduction for the original issue discount taken
by the Holder pursuant to Article I of the Loan and Securities
Purchase Agreement of even date herewith between the Borrowers and
the Holder (the “Loan Agreement”), each an
“Advance” and collectively the “Advances”)
and accrued interest thereon as hereinafter
provided. All Advances made to the Borrowers shall be
recorded by the holder hereof on Schedule A attached to this
Note, which schedule is incorporated herein by reference and made a
part hereof. This Note is issued in connection with the Loan
Agreement, all terms of which are incorporated herein by this
reference and hereby made a part of this Note. Capitalized terms
not defined herein shall have the meanings ascribed to them in the
Loan Agreement.
ARTICLE I
PAYMENT OF PRINCIPAL AND
INTEREST; METHOD OF PAYMENT; MATURITY DATE
1.1 Payment of
Principal . Principal shall be paid in four equal lump sum
payments, with the first lump sum payment being due December 18,
2010, the second lump sum payment being due December __, 2011, the
third lump sum payment being due December 18, 2012, and the final
lump sum payment being due on the Maturity Date. For example if the
Advances are $6,000,000, then the Borrower shall make: (i) a
$1,500,000 payment of principal on December 18, 2010; (ii) a
$1,500,000 payment of principal on December 18, 2011; (iii) a
$1,500,000 payment of principal on December 18, 2013; and (iv) a
$1,500,000 payment of principal on the Maturity
Date. All outstanding principal, interest and fees and
charges of any kind under the Note shall become due and payable on
December 18, 2014 (the “Maturity
Date”). Payment of the principal of this Note (and
any interest accrued thereon) shall be made in U.S. dollars in
immediately available funds.
1.2 Payment of
Interest . Interest on the principal under this Note shall
accrue at the rate of thirteen percent (13%) per annum (the
“Stated Interest Rate”) commencing on the date that an
Advance is made to the Borrower and shall be computed on the basis
of a 360-day year comprised of twelve (12) thirty (30) day months
and shall be payable monthly in cash on the first (1st) day of each
month, in arrears; provided, however, during the first 12 months
after the Original Issuance Date, accrued interest shall be
deferred and payable in one lump sum payment on the first
anniversary date of the Original Issuance Date. Interest
shall be paid in U.S. dollars in immediately available
funds.
1.3 Payment on
Non-Business Days . If the outstanding principal or accrued but
unpaid interest under this Note becomes due and payable on a
Saturday, Sunday or public holiday under the laws of the State of
New York, the due date hereof shall be extended to the next
succeeding full business day and interest shall be payable at the
rate of thirteen (13%) percent per annum during such extension. All
payments received by the Holder shall be applied first to the
payment of all accrued interest payable hereunder.
1.4 Late Fee .
In the event any payment of principal or interest or both shall
remain unpaid for a period of ten (10) days or more after the due
date thereof, a one-time late charge equivalent to five percent
(5%) of each unpaid amount shall be charged.
1.5
Adjustment of Stated Interest Rate .
(a) After an Event of
Default and acceleration of the Maturity Date by the Holder the
Stated Interest Rate shall be adjusted
