UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): October
17, 2014
BIONEUTRAL GROUP, INC. |
(Exact name of registrant as specified in its charter) |
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Nevada |
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333-149235 |
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26-0745273 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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211 Warren Street, Newark, New Jersey |
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07103 |
(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including
area code: (973) 577-8003
N/A |
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 |
Entry into a Material Definitive Agreement |
On October 14, 2014, the Company completed a commercial loan
closing, and pursuant to the closing, issued a promissory note to James R. Solakian in the amount of $175,000. The note bears interest
at twenty (20) percent per annum and is due on May 5, 2015 (the “Maturity Date”). In addition, the Company shall pay
to Mr. Solakian a loan origination fee representing fifteen (15) percent of loan advances made by Mr. Solakian to the Company.
The maximum loan origination fee, based on $175,000 of loan proceeds actually being received by the Company, is $26,250. Pursuant
to the promissory note, the Company received $75,000 at the loan closing and will receive $50,000 on October 28, 2014 and $50,000
on November 30, 2014. On October 10, 2014, the Company received an advance of $50,000 on closing from Mr. Solakian. The Company
anticipates receiving the remaining $25,000 due at closing from Mr. Solakian within a few business day from the date of this report.
The proceeds of the loan are to be used for working capital purposes according to an agreed upon budget between the Company and
Mr. Solakian. To secure payment of the obligations due under the promissory note, the Company granted a security interest to Mr.
Solakian of up to $250,000 from the net proceeds from the Company’s application for sale of its New Jersey corporate income
tax losses for the years 2009 through 2013 via the 2014 State of New Jersey's Technology Business Tax Certificate Transfer Program
offered by the New Jersey Economic Development Authority (See Item 8.01 Other Events). The Company has agreed to repay the principal
along with any accrued and unpaid interest and the loan origination fee, from the sale proceeds of its State of New Jersey's Technology
Business Tax Certificate Transfer Program which is expected to occur prior to the Maturity Date. Mr. Solakian has also received
a loan guarantee from Michael Francis, a shareholder and creditor of the Company, in the amount of $150,000.
On October 13, 2014, the Company completed a commercial
loan closing, and pursuant to the closing, issued a promissory note to Michael Francis in the amount of $150,000. The note bears
interest at twenty (20) percent per annum and is due on May 5, 2015 (the “Maturity Date”). In addition, the Company
shall pay to Mr. Francis a loan origination fee representing fifteen (15) percent of loan advances made by Mr. Francis to the
Company. The maximum loan origination fee, based on all $150,000 of loan proceeds if received by the Company, is $22,500. Pursuant
to the promissory note, the Company received $12,500 on September 15, 2014, $87,500 on September 29, 2014 and is set to receive
$50,000 on November 15, 2014. The proceeds of the loan are to be used for working capital purposes. To secure payment of the obligations
due under the promissory note, the Company granted a security interest to Mr. Francis of up to $200,000 from the net proceeds
from the Company’s application for sale of its New Jersey corporate income tax losses for the years 2009 through 2013 via
the 2014 State of New Jersey's Technology Business Tax Certificate Transfer Program offered by the New Jersey Economic Development
Authority (See Item 8.01 Other Events). The Company has agreed to repay the principal along with any accrued and unpaid interest
and the loan origination fee, from the sale proceeds of its State of New Jersey's Technology Business Tax Certificate Transfer
Program which is expected to occur prior to the Maturity Date.
The Company has applied to sell its New Jersey corporate
income tax losses for the years 2009 through 2013 via the 2014 State of New Jersey's Technology Business Tax Certificate Transfer
Program offered by the New Jersey Economic Development Authority (the Program).
The Program enables approved, technology businesses to sell their
unused New Jersey Net Operating Loss Carryovers (NOLs) and unused Research and Development (R&D) Tax Credits to unaffiliated,
profitable corporate taxpayers in the State of New Jersey. This allows biotechnology businesses with NOLs to turn their tax losses
and credits into cash proceeds to fund more R&D, buy equipment and/or facilities, or cover other allowable expenditures. The
New Jersey Economic Development Authority (NJEDA) determines eligibility for the Program, the New Jersey Division of Taxation
determines the value of the available tax benefits (NOLs and R&D Tax Credits), and the New Jersey Commission on Science and
Technology evaluates the technology and its viability. The Company has received notification from NJEDA that it is eligible to
participate in the Program based on its application submitted on June 30, 2014. The extent of the aggregate losses eligible for
sale in 2014 is not known as of the date of this report.
ITEM 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
Exhibit |
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Description No. |
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10.86 |
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Promissory Note issued to James R. Solakian in the
amount of $175,000.* |
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10.87 |
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Promissory Note issued to Michael Francis in the amount
of $150,000.* |
*Filed herewith.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf
by the undersigned hereunto duly authorized.
September 17, 2014 |
BIONEUTRAL GROUP, INC. |
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By: |
/s/ Mark Lowenthal |
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Name: |
Mark Lowenthal |
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Title: |
President and Chief
Executive Officer and President |
4
Exhibit 10.86
PROMISSORY
NOTE
U.S. $175,000.00 |
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Bound Brook, New Jersey |
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October___, 2014 |
FOR
VALUE RECEIVED, the undersigned (hereinafter referred to as "Borrower" or "Maker") promises to pay to
the order of JAMES R. SOLAKIAN (hereinafter referred to as "Payee" or “Lender”); Payee or Lender, together
with any subsequent holders hereof, (hereinafter collectively referred to as "Holder" or “Note Holder”)
at Lender's address at 654 N. Meadow Drive, Bound Brook, New Jersey 08805, or at such other place as Holder shall designate from
time to time, the principal sum of ONE HUNDRED SEVENTY FIVE THOUSAND ($175,000.00) U.S. DOLLARS, representing the proceeds
of a Commercial Loan made and disbursed, or to be made and disbursed, in accordance with the terms and provisions of a TERM SHEET
and all interest and fees due on this Note (computed on the basis of 365 days and charged on the actual number of days elapsed)
as set forth herein:
1. PURPOSE
OF LOAN AND NOTE. This Note evidences a Commercial Term Loan in the amount of exactly ONE HUNDRED SEVENTY FIVE THOUSAND
($175,000.00) U.S. DOLLARS (hereinafter referred to as “the Loan” or “this Loan” or “Term Loan”),
made to be used for Borrower’s business purposes. The following documents and instruments evidencing or securing or concerning
the Loan are collectively called the “Loan Documents”:
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A. |
The
TERM SHEET. |
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B. |
The COMMERCIAL
LOAN AND SECURITY AGREEMENT. |
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C. |
This
PROMISSORY NOTE. |
Page 1 of 36 Initials _____ _____ |
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D. |
COLLATERAL:
Assignment Letter to Lender of up to $250,000.00 from the proceeds of the sale of the
Maker’s 2014 NJ Technology Business Certificate. The Board of Directors of the
Corporation has approved and duly notified New Jersey Tax Transfer Corporation to withhold
an additional $250,000.00 in escrow until 90 days from the full repayment of this $175,000.00
loan to James R. Solakian from the $1,300,000.00 anticipated proceeds from the 2014 New
Jersey Technology Business Tax Certificate.
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E. |
PERSONAL
GUARANTY: Michael D. Francis will provide a personal guaranty and a certified financial statement which are to be incorporated
into the Loan Documents and provide at closing to the Lender. |
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F. |
Corporate
Resolution Authorizing: (1) the Loan; (2) the execution of all of the Loan Documents by the Corporation; (3) the Collateral
consisting of the Assignment including direct payment of up to $250,000.00 from the proceeds of the sale of the 2014 NJ Technology
Business Tax Certificate to Lender, and (4) the applicable Representations and Warranties and the Indemnity. |
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G. |
Corporate
Warranty that: (1) the Collateral is fully assignable free and clear of all liens and/or
claims; (2) there is no pending material litigation against the Borrower, including its
Divisions and Subsidiaries, if any; and (3) the Corporation will indemnity and hold harmless
the Lender as to any and all claims asserted against: (a) the Collateral; and/or (b)
the Lender concerning the Loan and/or the assignment of the Collateral.
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| H. | The
CERTIFICATION OF BUSINESS PURPOSE OF BORROWER |
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| I. | The COMPLIANCE
AGREEMENT of BioNeutral Group, Inc. |
The
terms of each of the Loan Documents are specifically incorporated herein by reference and made a part hereof. In addition, the
terms of each of the Loan Documents are specifically incorporated by reference into and made a part of each of the other Loan
Documents.
2.
TERM OF LOAN. This Note shall be due and payable the sooner of May 5, 2015 (hereinafter
referred to as the "Maturity Date") or upon the "Collateral Payment Date" (as defined herein).
Page 2 of 36 Initials _____ _____ |
As
used herein the term “Collateral Payment Date” means the date that the Company receives the proceeds from the sale
of the Maker’s 2014 NJ Technology Business Certificate proceeds (the “Collateral”) has been assigned to the
Lender.
3.
INTEREST RATE. The Maker shall pay the Lender interest on the unpaid principal
balance of the Term Loan from the date of this Note until the Maturity Date or the Collateral Payment Date at the rate of twenty
(20%) percent per year. Interest will be calculated on the basis of a year of 365 days for the actual number of days in each interest
period. In no event will the rate of interest hereunder exceed the maximum rate allowed by law.
Upon
the happening of any Event of Default as provided for in this Note, or on May 5, 2015 (the “Maturity Date”), or on
the Collateral Payment Date, the entire amount of interest, principal and any other sums due under this Note shall become due
and payable immediately and interest shall accrue thereafter at a rate of interest equal to twenty (20%) percent per annum (the
"Default Rate"). Interest will be calculated on the basis of a year of 365 days for the actual number of days in each
interest period. In no event will the rate of interest hereunder exceed the maximum rate allowed by law.
4.
PAYMENTS OF PRINCIPAL AND INTEREST. All of the principal, together with any interest and any other charges
owed under this Note are payable in full on the Maturity Date or the Collateral Payment Date, whichever occurs first. Interest
will be charged on unpaid principal until the full amount of principal has been paid. Any payment hereunder received by Holder,
other than a partial prepayment of principal and interest due hereunder, shall be applied first to satisfaction of all costs of
collection (if Maker is delinquent in its payments hereunder), then to payment of non-interest and non-principal amounts payable
pursuant to this Note, then to all accrued but unpaid interest on the outstanding principal balance hereof, and then to reduction
of the principal amount hereof.
Page 3 of 36 Initials _____ _____ |
All
payments will be made at 654 N. Meadow Drive, Bound Brook, New Jersey 08805 or at a different place if required by the Holder.
5.
LATE CHARGE. Maker shall pay Holder a late charge equal to five (5.00%) percent of any amount not paid within seven
(7) days after said amount is due, not as a penalty, but as liquidated damages to Holder for such late payment. Holder shall have
no obligation to accept any late payment not accompanied by the late charge. The purpose of the Late Charge to reimburse the Lender
for the extra expense involved in handling delinquent payments. The Maker acknowledges that: (a) the Late Charge is a material
inducement to the Lender to make the Loan; (b) the Lender would not have made the Loan in the absence of the agreement of the
Maker to pay the Late Charge; (c) such Late Charge represents compensation to the Lender for the increased risk to the Lender
that this Note will not be repaid by the Maker; and (d) the Late Charge is not a penalty and represents a reasonable estimate
of (i) the cost to the Lender in allocating Lender’s resources (both personal and financial) to the ongoing review, monitoring,
administration and collection of this Note and (ii) compensation to the Lender for losses resulting from the Maker's default that
are difficult to ascertain.
6.
PREPAYMENT PRIVILEGE. Maker has the right to make full payment of the principal or interest or charges at any time
before it is due without paying any prepayment charge. When Maker makes full prepayment, Maker will tell the Note Holder in writing
that Maker is doing so.
Page 4 of 36 Initials _____ _____ |
7. COLLATERAL.
As consideration to the Lender by the Borrower for this Loan, an ASSIGNMENT of up to $250,000.00 from the approximate amount
of $1,300,000.00 proceeds from the sale of the Maker’s 2014 NJ Technology Business Certificate sale (the “Collateral”).
In addition to the "Collateral", the Board of Directors of the Corporation has approved and duly notified New Jersey
Tax Transfer Corporation to withhold an additional $100,000.00 in escrow until 90 days from the full repayment of this $175,000.00
loan to James R. Solakian from the $1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business Tax Certificate.
The indebtedness evidenced by this Note and the obligations created hereby are secured by this ASSIGNMENT. All of the terms of
said Assignment are specifically incorporated by reference into this Note and made a part of this Note. It is the intent of the
parties that all amounts due and payable on this Loan be paid from the sale of the Maker's 2014 NJ Technology Business Certificate
and will be the principal source of repayment of the Note. In the event that this payment is delayed past May 5, 2015, the Personal
Guaranty provide by Michael D. Francis will be the secondary source of full repayment, if not otherwise paid by the Maker.
The
Maker acknowledges that: (a) the providing of the Collateral as security by such assignment by Maker is the material inducement
to the Lender to make the Loan; and (b) the Lender would not have made the Loan in the absence of the Collateral and Assignment
and the Personal Guaranty of Michael D. Francis.
Page 5 of 36 Initials _____ _____ |
8. ADDITIONAL
COLLATERAL. None
9. DEFAULT.
The Maker shall be in default under this Note upon the occurrence of any of the following events (each an "Event of
Default"):
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(a) |
If
Maker fails to pay within 7 days of the due date amounts payable hereunder; or |
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(b) |
If Maker
fails to perform or breaches any covenant, agreement or undertaking in or otherwise commits a default under this Note or any
Loan Documents, or the assignment of the Collateral for this Note, or in or under any other document, instrument, or agreement,
evidencing, securing or otherwise relating to the indebtedness evidenced by same; or |
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(c) |
If any
of the representations or warranties or assurances made or given by the Maker in this Note or any Loan Documents, or the assignment
of the Collateral, or in or under any other document, instrument, or Agreement, evidencing, securing or otherwise relating
to the indebtedness evidenced by same are false or untrue or misrepresented, in whole or in part; or |
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(d) |
If any
lien is placed on or any claim make against the Collateral for this Note; or |
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(e) |
The ownership
or any part of the ownership of the Collateral for this Note is sold or transferred or changed for any reason; or |
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(f) |
(i) The
Borrower shall be dissolved or shall become bankrupt or shall cease paying its debts generally as they mature or shall make
an assignment for the benefit of creditors; (ii) a trustee, receiver or liquidator shall be appointed for the Borrower or
for a substantial part of the property of the Borrower or any Guarantor; (iii) bankruptcy, reorganization, arrangement, insolvency
or similar proceedings shall be instituted by or against the Borrower under the laws of any jurisdiction (other than any involuntary
proceedings which are instituted against the Borrower without their acquiescence, and which are dismissed of record within
forty-five (45) days following the institution thereof); (iv) the Borrower shall convene or hold a meeting with its creditors
to compromise or make similar arrangements with respect to its Indebtedness to such creditors; or (v) the Borrower or their
respective directors, stockholders, officers or agents shall take any action to effect or commence any of the foregoing or
with respect to any of the foregoing. |
Page 6 of 36 Initials _____ _____ |
Upon
the happening of any Event of Default, or on the Maturity Date, or on the Collateral Payment Date, the entire amount of interest,
principal and any other sums due under this Note shall become due and payable immediately and interest shall accrue thereafter
at a rate of interest equal to twenty (20%) percent per annum (the "Default Rate"). The Default Rate shall apply, without
notice, immediately upon the occurrence of any Event of Default, or on the Maturity Date, or on the Collateral Payment Date, whichever
occurs first, and shall continue thereafter until all sums then due and payable under this Note are paid in full. The Maker acknowledges
that:(a) the Default Rate is a material inducement to the Lender to make the Loan; (b) the Lender would not have made the Loan
in the absence of the Agreement of the Maker to pay the Default Rate upon the occurrence of any Event of Default; (c) such Default
Rate represents compensation to the Lender for the increased risk to the Lender that his Note will not be repaid by the Maker;
and (d) the Default Rate is not a penalty and represents a reasonable estimate of (i) the cost to the Lender in allocating its
resources (both personal and financial) to the ongoing review, monitoring, administration and collection of this Note and (ii)
compensation to the Lender for losses resulting from the Maker's default that are difficult to ascertain.
Page 7 of 36 Initials _____ _____ |
Upon
and following an Event of Default or the Maturity Date or the Collateral Payment Date, the Lender may proceed to protect and enforce
the Lender's rights under this Note, the Assignment, the Loan Documents, and any other document, instrument or agreement evidencing,
securing or otherwise relating to the indebtedness evidenced hereby. In addition to and not in limitation of, under applicable
law, the Lender may proceed by action at law, in equity, or other appropriate proceedings, including, without limitation, an action
for specific performance to enforce or aid in the enforcement of any provision contained herein and in the Assignment, in the
Loan Documents, and any other document, instrument or agreement evidencing, securing or otherwise relating to the indebtedness
evidenced hereby. All of such rights and remedies shall be cumulative. Maker shall pay all costs of collection of any and all
sums due and owing hereunder and not paid, including without limitation, court costs and reasonable attorney's fees in connection
with the collection of any sums. The Lender does not give up its rights upon an Event of Default as a result of any delay in declaring
or failing to declare an Event of Default.
Page 8 of 36 Initials _____ _____ |
The
Maker acknowledges and agrees that if more than one person or entity or combination of the two are collectively referred to as
“Maker” or “Borrower”, then any default or event of default pursuant to any Loan Document caused by any
one of them shall be deemed a default or event of default by all of them.
10.
WAIVER. Presentation for payment, demand, protest, notice of demand, notice of dishonor, notice of nonpayment and
right to trial by jury are hereby waived by the undersigned, except as expressly provided to the contrary herein.
11.
FORBEARANCE. Holder shall not be deemed to have waived any of Holder's rights or remedies under this Note unless
such waiver is express and in writing signed by Holder, and no delay or omission by Holder in exercising any of Holder's rights
hereunder or at law or in equity, including, without limitation, Holder's right, after any default by the Maker, to declare the
entire indebtedness evidenced hereby immediately due and payable (if acceleration is not automatic), shall be construed as a novation
of this Note or shall operate as a waiver or prevent the subsequent exercise of any or all of such rights. A waiver of any such
right in writing on one occasion shall not be construed as a waiver of Holder's right to insist thereafter upon strict compliance
with the terms hereof without previous notice of such intention being given to Maker, and no exercise of any right by Holder shall
constitute or be deemed to constitute an election of remedies by Holder precluding the subsequent exercise by Holder of any or
all of the rights, powers and remedies available to it hereunder, under this Note or under any of the Loan Documents or under
any other document, instrument or agreement evidencing, securing or otherwise relating to the indebtedness evidenced hereby, or
at law or in equity. No extension of the time for the payment of this Note, or any installment due hereunder, made by agreement
with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect
the original liability of Maker under this Note, either in whole or in part, unless Holder agrees otherwise in writing.
Page 9 of 36 Initials _____ _____ |
12.
APPLICABLE LAW AND CONSENT TO JURISDICTION. This Note is made and delivered in, and shall be governed by, enforced under
and interpreted in accordance with the laws of the State of New Jersey. The Maker hereby submits to the exclusive jurisdiction
of the courts of the State of New Jersey located in Hunterdon County in respect of the interpretation and enforcement of the provisions
of this Note and of the Assignment and of any of the Loan Documents and of any other document, instrument, or agreement, evidencing,
securing or otherwise relating to the indebtedness evidenced by this Note, and hereby waives and agrees not to assert as a defense
in any action, suit or proceeding for the interpretation or enforcement of this Note and/or the Assignment and/or any of the Loan
Documents and/or any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness
evidenced by this Note that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that its property is exempt or immune from execution, that the action, suit or proceeding is brought in an inconvenient
forum, or that the venue of the action, suit or proceeding is improper.
13.
NO JURY TRIAL. In any litigation relating to this Note or the Assignment given as security for this Note or any
of the Loan Documents or any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness
evidenced hereby, the Lender and Borrower as Maker hereby waive their right to trial by jury. The parties acknowledge that they
have consulted with their respective counsel specifically on the ramifications of waiving the right to request trial by jury prior
to agreeing to this provision.
Page 10 of 36 Initials _____ _____ |
14.
INDEMNIFICATION BY MAKER. The Maker shall indemnify and hold harmless the Lender and the Lender’s Representatives
from and against any liability, loss, claim, demand, damage, expense (including costs of investigation and defense and counsel
fees and expenses) or diminution in value, arising from or in connection with: (i) any breach of any representation or warranty
of the Maker made or contained in this Note or in any other Loan Document; or (ii) any breach of any agreement of the Maker made
or contained or referred to in this Note; or (iii) any and all claims asserted against the Collateral and/or any Additional Collateral;
or (iv) the Lender concerning the Loan and/or the Collateral and/or any Additional Collateral. Said indemnification shall include
all claims, liabilities and causes of action asserted against the Lender. This provision shall supplement and be in addition to
any other "hold harmless and indemnify" provision or "indemnity and reimbursement" provision contained in
this Note or any other Loan Document. It is intended that this provision and any other "hold harmless and indemnify"
provision or "indemnity and reimbursement" provision contained in this Note or any other Loan Document be as broad and
inclusive as possible to fully protect the Lender.
Page 11 of 36 Initials _____ _____ |
15. THIRD
PARTY CLAIMS. In the event that any claim or demand to which the Lender is entitled to indemnification is asserted by
a third party, the Lender shall notify the Maker of the claim or demand, and the Maker shall undertake the defense thereof by
counsel of its own choosing. In the event that the Maker fails to give the Lender notice of its agreement, as the indemnifying
party, to defend within five (5) days after receipt of notice of the claim or demand, or thereafter fails to properly defend,
the Lender may, by counsel of its own choosing, upon notice to the Maker, undertake the defense, compromise or settlement of such
claim or demand on behalf of and for the account and risk of the Maker and at the Maker’s sole expense. This provision shall
supplement and be in addition to any other "hold harmless and indemnify" provision or "indemnity and reimbursement"
provision contained in this Note or any other Loan Document. It is intended that this provision and any other "hold harmless
and indemnify" provision or "indemnity and reimbursement" provision contained in this Note or any other Loan Document
be as broad and inclusive as possible to fully protect the Lender.
16. LIMIT
OF VALIDITY. If for any circumstances whatsoever fulfillment of any provision of this Note, at the time performance of
such provision shall be due, shall involve transcending the limit of validity presently prescribed by any applicable usury statute
or any other applicable law, with regard to obligations of like character and amount, then ipso facto the obligation to
be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this Note
that is in excess of the current limit of validity, but such obligation shall be fulfilled to the limit of validity. Any payments
inadvertently charged to Maker or collected by Holder that would constitute interest in excess of any applicable legal limit shall
be applied by Holder to the reduction of the unpaid principal amount due hereunder. It is the intention of Maker and Holder not
to create any obligation in excess of the amount allowable by law. The provisions of this paragraph shall control every other
provision of this Note.
Page 12 of 36 Initials _____ _____ |
17. NOTICES.
All notices, demands, consents and requests which may be required to be given shall be in writing and shall be deemed to be
properly given if delivered in person or mailed, certified mail, postage prepaid, or sent by Federal Express, UPS or similar carrier:
(a) to Maker at 211 Warren Street, Newark, New Jersey 07103 or at such other place as Maker may from time to time designate by
ten (10) calendar days' prior written notice to Holder at the place of payment of this Note; or (b) to Holder at the place of
payment of this Note or at such other place as Holder shall designate from time to time. Notices, demands, consents and requests
mailed or hereinafter provided to Maker shall be deemed effectively given on the earlier of three (3) business days after deposit
or the date of actual delivery. Notice to the Note Holder shall not be deemed to have been given until actually received by the
Note Holder. If any notice required by this Note is also required by applicable law, the applicable law requirement will satisfy
the corresponding requirement under this Note. Rejection or refusal to accept or the inability to deliver because of changed address
of which no notice was given shall not alter the effectiveness of the notice, demand, consent or request sent.
18.
ASSIGNMENT OF NOTE. This Note, the Assignments of the Collateral for this Note, any or all of the Loan Documents
and any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced this
Note may be transferred or assigned, in whole or in part, by the Lender to someone else. The Lender or anyone who takes this Note
by transfer and who is entitled to receive payments under this Note is called the “Holder” or the “Note Holder.”
Page 13 of 36 Initials _____ _____ |
A.
The rights and remedies given in this Note to the Lender are also given to the Holder or Note Holder.
B.
The rights and remedies given to the Lender in the Assignment, the Loan Documents and any other document, instrument, or
agreement, evidencing, securing or otherwise relating to the indebtedness evidenced by this Note are also given to the Holder
or Note Holder.
C.
Maker understands and agrees that Maker will remain liable on this Note until it is paid in full.
19. AMENDMENT.
This Note may not be changed orally, but only by an agreement in writing signed by the party, against whom the enforcement
of any waiver, change, modification or discharge is sought.
20.
GRAMMAR. Throughout this Note the masculine, the feminine and the neuter shall be interchangeable, and the singular
and the plural shall be interchangeable, unless the context of this Note indicates otherwise.
21. TERMS.
The terms "Lender", "Maker", "Holder" and "Payee" as used herein shall include the
Successors and Assigns of such party. The terms "Lender", "Holder" and "Payee" shall be interchangeable,
unless the context of this Note indicates otherwise. The terms "Maker", “Payer” and “Borrower”
shall be interchangeable, unless the context of this Note indicates otherwise. The terms “Collateral” refers to the
proceeds from the sale of the Maker’s 2014 NJ Technology Business Tax Certificate.
SIGNED,
SEALED AND DELIVERED by Maker, the day and year first above written.
Page 14 of 36 Initials _____ _____ |
Witnessed or Attested
by: |
LENDER: |
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JAMES R. SOLAKIAN |
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By: |
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(LS) |
Name: |
Dawn Em |
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James R. Solakian, Individually |
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BORROWER: |
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BIONEUTRAL GROUP, INC. |
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By: |
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(LS) |
Name: |
Dawn Em |
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Mark
Lowenthal, CEO
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Page 15 of 36 Initials _____ _____ |
COMMERCIAL
LOAN AND SECURITY AGREEMENT
THIS
LOAN AND SECURITY AGREEMENT dated as of October 10, 2014, between BioNeutral Group, Inc., a New Jersey Corporation,
with Executive Offices at 211 Warren Street, Newark, New Jersey 07103 (together with its Successors and Assigns, the "Borrower");
and JAMES R. SOLAKIAN, individually, with an address of 654 N. Meadow Drive, Bound Brook, New Jersey 08805 (together with
its Successors and Assigns, the "Lender").
WHEREAS,
the Borrower and the Lender agree to enter into this Loan and Security Agreement to provide for a Term Loan with the Lender
(in the amount of $175,000.00);
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Borrower and the Lender, each party in consideration that the other
join herein, and agree as follows:
ARTICLE
I
AMOUNT
AND TERMS OF TERM LOAN
Section
1.01. Term Loan. The Lender shall make a Term Loan to the Borrower in the original principal amount of exactly ONE HUNDRED
SEVENTY FIVE THOUSAND ($175,000.00) U.S. DOLLARS (the "Term Loan" or the "Loan").
Page 16 of 36 Initials _____ _____ |
Section
1.02. Repayment of Term Loan Principal. As set forth in the Note evidencing the Term Loan, the principal of the Term Loan
shall be paid by (1) up to $250,000.00 of the $1,300,000.00 proceeds from the sale of the 2014 NJ Technology Business Certificate
[assigned to the Lender by the Borrower (the “Collateral”)] is received by the Tax Transfer Corporation of New Jersey
from the purchaser. The term the “Collateral” means up to $250,000.00 of the proceeds from the sale of the 2014 NJ
Technology Business Certificate. (2) The Personal Guaranty and certified financial statement provide by Michael D. Francis. (See:
Section 3.01. Grant of Security Interests).
Section
1.03 Payment of Term Loan Interest. Interest on the full amount of the principal shall be paid with loan principal. Prior
to any Event of Default, interest on the outstanding principal balance of the Term Loan shall accrue at a twenty (20%) percent
per annum rate. Interest shall be calculated on the basis of a 365-day year for the actual number of days elapsed. Notwithstanding
the foregoing, to the extent permitted by law, upon the occurrence of any Event of Default under this Agreement or if the Loan
is not paid in full (including all outstanding principal, interest and other charges) by the Maturity Date or by the Collateral
Payment Date (as defined in the Note), whichever is sooner, the rate of interest on the unpaid principal balance of the Term Loan
shall be a twenty (20%) percent per annum rate ("Term Loan Default Interest Rate"). The Borrower acknowledges that (a)
the Term Loan Default Interest Rate is a material inducement to the Lender to make the Term Note; (b) the Lender would not have
made the Term Loan in the absence of the agreement of the Borrower to pay the Term Loan Default Interest Rate upon the occurrence
of any Event of Default; (c) such Term Loan Default Interest Rate represents compensation to the Lender for the increased risk
to the Lender that the Term Loan will not be repaid by the Borrower; and (d) the Term Loan Default Interest Rate is not a penalty
and represents a reasonable estimate of (i) the cost to the Lender in allocating its resources (both personnel and financial)
to the ongoing review, monitoring, administration and collection of the Term Loan and (ii) compensation to the Lender for losses
resulting from the Borrower's Default that are difficult to ascertain.
Page 17 of 36 Initials _____ _____ |
Section
1.04. Fees. Borrower shall pay Lender’s Origination Fee of $26,250.00 on or before May 5, 2015. The Lender’s
expenses of $2,500.00 for preparation of Loan Documents shall be paid upon signing of the Term Sheet to John A. Solakian.
Section
1.05. Loan Documents. The following documents and instruments evidencing or securing or concerning the Commercial Loan are
collectively called the “Loan Documents”:
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A. |
The
TERM SHEET. |
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B. |
This COMMERCIAL
LOAN AND SECURITY AGREEMENT. |
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C. |
The PROMISSORY
NOTE. |
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D. |
COLLATERAL:
Assignment Letter to Lender of up to $250,000.00 from the proceeds of the sale of the Maker’s 2014 NJ Technology Business
Certificate. The Board of Directors of the Corporation has approved and duly notified New Jersey Tax Transfer Corporation
to withhold an additional $100,000.00 in escrow until 90 days from the full repayment of this $175,000.00 loan to James R.
Solakian from the $1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business Tax Certificate. |
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E. |
PERSONAL GUARANTY: Michael D. Francis will provide a personal
guaranty and a certified financial statement which are to be incorporated into the Loan Documents and provide at closing to
the Lender. |
Page 18 of 36 Initials _____ _____ |
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F. |
Corporate
Resolution Authorizing: (1) the Loan; (2) the execution of all of the Loan Documents by the Corporation; (3) the Collateral
consisting of the Assignment including direct payment of up to $250,000.00 from the proceeds of the sale of the 2014 NJ Technology
Business Tax Certificate to Lender, and (4) the applicable Representations and Warranties and the Indemnity. |
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G. |
Corporate
Warranty that: (1) the Collateral is fully assignable free and clear of all liens and/or claims; (2) there is no pending material
litigation against the Borrower, including its Divisions and Subsidiaries, if any; and (3) the Corporation will indemnity
and hold harmless the Lender as to any and all claims asserted against: (a) the Collateral; and/or (b) the Lender concerning
the Loan and/or the assignment of the Collateral. |
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H. |
The CERTIFICATION
OF BUSINESS PURPOSE OF BORROWER |
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I. |
The COMPLIANCE
AGREEMENT of BioNeutral Group, Inc. |
The
terms of each of the Loan Documents are specifically incorporated herein by reference. In addition, the terms of each of the Loan
Documents are specifically incorporated by reference into each of the other Loan Documents.
ARTICLE
II
LOAN
PROCEEDS AND PAYMENTS
Section
2.01. Use of Loan Proceeds. The proceeds of the Term Loan shall be used by the Borrowers for working capital purposes in accordance
with the cash flow projections provided by the Borrower and which are part of the Loan Documents and upon which the Lender has
placed considerable reliance, especially with respect to the Projected Contract Receipts which are incorporated into these Loan
Documents. (See: Exhibit A).
Page 19 of 36 Initials _____ _____ |
Section
2.02. Payments. All payments of interest, principal and any other sum payable hereunder shall be made to the Lender, in immediately
available funds, without counterclaim or setoff and free and clear of, and without any deduction or withholding for, any taxes
or other payments, at the Lender's address of 654 N. Meadow Drive, Bound Brook, New Jersey 08805.
Section
2.03. Late Fee. If the entire amount of any required principal and/or interest is not paid in full within seven (7) days after
the same is due, Borrower shall pay to Lender a late fee equal to five (5%) percent of the required payment. The purpose of the
Late Charge to reimburse the Lender for the extra expense involved in handling delinquent payments. The Borrower acknowledges
that: (a) the Late Charge is a material inducement to the Lender to make the Loan; (b) the Lender would not have made the Loan
in the absence of the agreement of the Borrower to pay the Late Charge; (c) such Late Charge represents compensation to the Lender
for the increased risk to the Lender that this Note will not be repaid by the Borrower; and (d) the Late Charge is not a penalty
and represents a reasonable estimate of (i) the cost to the Lender in allocating Lender’s resources (both personal and financial)
to the ongoing review, monitoring, administration and collection of this Note and (ii) compensation to the Lender for losses resulting
from the Borrower 's default that are difficult to ascertain.
Section
2.04. Usury Limitation. If, at any time, the rate of interest, together with all amounts which constitute interest and which
are reserved, charged or taken by Lender as compensation for fees, services or expenses incidental to the making, negotiating
or collection of the loan evidenced hereby, shall be deemed by any competent court of law, governmental agency or tribunal to
exceed the maximum rate of interest permitted to be charged by Lender to Borrower under applicable law, then, during such time
as such rate of interest would be deemed excessive, that portion of each sum paid attributable to that portion of such interest
rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary prepayment of principal. As used herein,
the term "applicable law" shall mean the law in effect as of the date hereof; provided, however, that in the event there
is a change in the law which results in a higher permissible rate of interest, then this Agreement shall be governed by such new
law as of its effective date.
Page 20 of 36 Initials _____ _____ |
ARTICLE
III
GRANT
OF SECURITY INTERESTS
Section
3.01. Grant of Security Interests. To secure payment and performance of the Term Loan and the Borrower’s obligations
hereunder and as described in the Loan Documents, the Borrower hereby grants to the Lender the following:
| (a) | ASSIGNMENT
(the “Collateral”) of up to $250,000.00 from the net proceeds from the Borrower’s
2014 NJ Technology Business Certificate (the "Collateral"), as security for
the performance by Maker of his obligations hereunder and as described in the Loan Documents.
In addition to the "Collateral", the Board of Directors of the Corporation
has approved and duly notified New Jersey Tax Transfer Corporation to withhold an additional
$100,000.00 in escrow until 90 days from the full repayment of this $175,000.00 loan
to James R. Solakian from the $1,300,000.00 anticipated proceeds from the 2014 New Jersey
Technology Business Tax Certificate. All of the terms of said Assignment are specifically
incorporated by reference into this Note and made a part of this Note. It is the intent
of the parties that all amounts due and payable on this Loan be paid from said assigned
$250,000.00 of the net proceeds of the 2014 NJ Technology Business Certificate proceeds,
if not otherwise paid by the Maker. |
Page 21 of 36 Initials _____ _____ |
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further security for the loan, the Lender will accept the Personal Guaranty of Michael
D. Francis, which guaranty and certified financial statement are to be incorporated into
the Loan Documents and will be provided to the Lender at closing. |
The
Collateral, Personal Guaranty and the Assignment by Borrower are all material inducements to the Lender to make the Loan
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
Section
4.01. Representations and Warranties. As a further inducement to the Lender to execute this Agreement and to make the Loan,
the Borrower hereby represents and warrants to the Lender as follows:
(a)
Borrower is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation.
Borrower has the corporate power and authority to enter into and perform this Agreement and the other Loan Documents, to
enter into and perform all of the obligations required of the Borrower by all other instruments and other documents referred
to herein to which it is a party, to fulfill its obligations set forth herein and therein, and to carry out the transactions
contemplated hereby and thereby.
Page 22 of 36 Initials _____ _____ |
(b)
The execution, delivery and performance of this Agreement, the other Loan Documents and the other documents required to be
executed by any Borrower pursuant hereto have been duly authorized by all necessary corporate action.
(c)
That the Board of Directors of the Corporation has approved and duly notified New Jersey Tax Transfer Corporation of the
assignment of the first $250,000.00 from the $1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business
Tax Certificate to Lender in accordance with the terms of a Promissory Note and LOAN AND SECURITY AGREEMENT and Assignment
Letter to Tax Transfer Corporation of New Jersey, which have been agreed to by the parties and the Assignment of the 2014 NJ
Technology Business Certificate proceeds, which assignment of the proceeds are fully assignable free and clear of all liens
and/or claims.
Page 23 of 36 Initials _____ _____ |
(d)
That the Board of Directors of the Corporation has approved and duly notified New Jersey Tax Transfer Corporation to withhold
an additional $100,000.00 in escrow until 90 days from the full repayment of this $175,000.00 loan to James R. Solakian from
the $1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business Tax Certificate to Lender in accordance
with the terms of a PROMISSORY NOTE and LOAN AND SECURITY AGREEMENT and ASSIGNMENT LETTER to Tax Transfer Corporation of New
Jersey, which have been agreed to by the parties.
(e)
There is no pending material litigation against the Borrower including its divisions and subsidiaries, of which the Borrower
is a Defendant.
(f)
Prior to funding, Lender must be provided with a current budget of all uses of cash as presented in a monthly cash flow
projection. Such monthly projections will be updated every two (2) weeks, beginning October 8, 2014 and sent to the Lender by
email to jsolakian@aol.com and by US mail.
(g)
The initial budget will be provided and approved by the Lender and will be incorporated into the Loan Documents.
(h)
The Borrower and the Guarantor acknowledge the importance of the budget and that the Lender is placing reliance on the strict
adherence of the planned expenditures to the actual expenditures.
(i)
Borrower shall furnish a copy of the bi-weekly payroll register. Such register may be redacted as necessary to preserve
confidentially of its employees.
(j)
Borrower shall furnish a copy of a cash flow statement projecting the use of funds from the State of New Jersey Tax Credit
sale.
Page 24 of 36 Initials _____ _____ |
ARTICLE
V
COVENANTS
OF THE BORROWERS
Section
5.01. Affirmative Covenants. Without limiting any other covenants and provisions hereof, the Borrower covenants and agrees,
jointly and severally, that so long as the Term Loan is in effect or any Loan is outstanding:
(a)
(Payment of Loans) The Borrower will pay the principal of and interest on the Loans hereunder at the times and place and in
the manner provided herein, and will promptly pay when due any and all other amounts owing to the Lender under this Agreement
or any of the other Loan Documents, in respect of fees, reimbursement of expenses or otherwise.
(b)
(Legal Existence and Qualification) The Borrower will preserve and maintain its corporate existence, rights, franchises,
licenses and privileges and remain in good standing in the jurisdiction of its incorporation.
(c)
(Compliance with Laws) The Borrower will comply with the requirements of all applicable laws, rules, regulations and the
orders of any court or other tribunal or governmental or administrative authority or agency applicable to it or to its
business, property or assets, all to the extent that failure to comply with any such laws, rules, regulations or orders
could, singly or in the aggregate with all other such failures, have a material adverse effect on the business, prospects,
condition or operations of any Borrower. Each Borrower will obtain and maintain all licenses, permits and permissions
relating to its properties or business, failure to obtain or maintain which could, singly or in the aggregate with all other
such failures, have a material adverse effect on the business, prospects, condition or operations of the Borrower.
Page 25 of 36 Initials _____ _____ |
(d)
(Closing Costs.) The Borrower shall pay all closing costs, including but not limited to legal, filing, and any other expense,
with regard to the underlying transactions for the Loans.
(e)
(Indemnification by Borrower.) The Borrower shall indemnify and hold harmless the Lender and the
Lender’s Representatives from and against any liability, loss, claim, demand, damage, expense (including costs of
investigation and defense and counsel fees and expenses) or diminution in value, arising from or in connection with: (i) any
breach of any representation or warranty or indemnity of the Borrower made or contained in this Agreement or in any other
Loan Document, or (ii) any breach of any agreement of the Borrower made or contained or referred to in this Agreement, or
(iii) any and all claims asserted against the Collateral; or (iv) the Lender concerning the Loan and/or the Collateral. Said
indemnification shall include all claims, liabilities and causes of action asserted against the Lender. This provision shall
supplement and be in addition to any other "hold harmless and indemnify" provision or "indemnity and
reimbursement" provision contained in this Agreement or any other Loan Document. It is intended that this provision and
any other "hold harmless and indemnify" provision or "indemnity and reimbursement" provision contained in
this Agreement or any other Loan Document be as broad and inclusive as possible to fully protect the Lender.
Page 26 of 36 Initials _____ _____ |
(f)
(Third Party Claims.) In the event that any claim or demand to which the Lender is entitled to indemnification is asserted by
a third party, the Lender shall notify the Borrower of the claim or demand, and the Borrower shall undertake the defense
thereof by counsel of its own choosing. In the event that the Borrower fails to give the Lender notice of its agreement, as
the indemnifying party, to defend within five (5) days after receipt of notice of the claim or demand, or thereafter fails to
properly defend, the Lender may, by counsel of its own choosing, upon notice to the Borrower, undertake the defense,
compromise or settlement of such claim or demand on behalf of and for the account and risk of the Borrower and at the
borrower’s sole expense. This provision shall supplement and be in addition to any other "hold harmless and
indemnify" provision or "indemnity and reimbursement" provision contained in this Agreement or any other Loan
Document. It is intended that this provision and any other "hold harmless and indemnify" provision or
"indemnity and reimbursement" provision contained in this Agreement or any other Loan Document be as broad and
inclusive as possible to fully protect the Lender.
ARTICLE
VI
DEFAULT
AND REMEDIES
Section
6.01. Events of Default. The occurrence of any of the following events shall constitute an Event of Default under this Agreement:
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(a) |
If Maker
fails to pay within 7 days of the due date amounts payable hereunder; or |
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(b) |
If Maker fails to
perform or breaches any covenant, agreement or undertaking in or otherwise commits a default under this Agreement, the Note
or any of the Loan Documents, or the assignment of the Collateral for this Note, as provided in this Agreement or in or under
any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced by
same; or |
Page 27 of 36 Initials _____ _____ |
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(c) |
If any
of the representations or warranties or assurances made or given by the Maker in this Agreement, the Note or any of the Loan
Documents, or the Assignments of the Collateral, or in or under any other document, instrument, or agreement, evidencing,
securing or otherwise relating to the indebtedness evidenced by same are false or untrue or misrepresented, in whole or in
part; or |
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(d) |
If any lien is placed
on or any claim is made against the Collateral for the Note; or |
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(e) |
The ownership or
any part of the ownership of the Collateral for the Note is sold or transferred or changed for any reason; or |
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(f) |
(i) The Borrower
shall be dissolved or shall become bankrupt or shall cease paying its debts generally as they mature or shall make an assignment
for the benefit of creditors; (ii) a trustee, receiver or liquidator shall be appointed for the Borrower or for a substantial
part of the property of the Borrower; (iii) bankruptcy, reorganization, arrangement, insolvency or similar proceedings shall
be instituted by or against the Borrower under the laws of any jurisdiction (other than any involuntary proceedings which
are instituted against the Borrower without their acquiescence, and which are dismissed of record within forty-five (45) days
following the institution thereof); (iv) the Borrower shall convene or hold a meeting with its creditors to compromise or
make similar arrangements with respect to its Indebtedness to such creditors; or (v) the Borrower or their respective directors,
stockholders, officers or agents shall take any action to effect or commence any of the foregoing or with respect to any of
the foregoing. |
Page 28 of 36 Initials _____ _____ |
Section
6.02. Rights and Remedies upon Default. Upon the occurrence of any Event of Default and at any time thereafter, in addition
to any other rights and remedies available to the Lender hereunder or in any of the other Loan Documents or otherwise, the Lender
may exercise any one or more of the following rights and remedies (all of which shall be cumulative):
(a)
Declare the entire unpaid principal amount of the Loan then outstanding, all interest accrued and unpaid with respect to any
and all of the foregoing, and all other amounts payable under or with respect to this Agreement to be forthwith due and
payable, whereupon the same shall become forthwith due and payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived by the Borrower.
(b)
Enforce the provisions of this Agreement by legal proceedings for the specific performance of any covenant or agreement
contained herein or for the enforcement of any other appropriate legal or equitable remedy, and the Lender may recover
damages caused by any breach by any Borrower of the provisions of this Agreement, including court costs, reasonable
attorneys' fees and other costs and expenses incurred in the enforcement of the obligations of the Borrower
hereunder.
Page 29 of 36 Initials _____ _____ |
(c)
Exercise all rights and remedies under this Agreement or the other Loan Documents, and any other agreement with the Borrower,
and exercise all other rights and remedies which the Lender may have under applicable law.
(d)
Exercise all rights and remedies provided in this Agreement, the other Loan Documents, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice to or consent by the Borrower, except as
such notice or consent is expressly provided for hereunder or required by applicable law.
ARTICLE
VII
MISCELLANEOUS
Section
7.01. No Waiver Cumulative Remedies. No failure or delay on the part of the Lender in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law or otherwise available to the Lender. Such remedies may be exercised
without resort or regard to any other source of satisfaction of any liabilities of the Borrower to the Lender.
Page 30 of 36 Initials _____ _____ |
Section
7.02. Amendments, Waivers and Consents. Neither this Agreement nor any provision hereof may be amended, waived, discharged
or terminated orally. No amendment or waiver of either any provision of this Agreement, or any consent to any departure by the
Borrowers therefrom, shall be effective unless the same shall be signed by the Borrowers and the Lender. Any waiver or consent
may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. In no event will any amendment, waiver or consent be deemed effective if
the result of same is to decrease in any manner the compensation of the Lender or to increase in any manner the Lender's expenses,
duties or responsibilities unless the Lender has, in each case, expressly assented thereto in writing.
Section
7.03. Addresses for Notices, etc. Except as otherwise expressly provided in this Agreement, all notices, requests, demands
and other communications provided for hereunder shall be in writing and shall be mailed or delivered to the applicable party at
the address indicated below:
If
to the Borrower:
BioNeutral
Group, Inc.
211
Warren Street
Newark,
New Jersey 07103
If
to the Lender:
James
R. Solakian
654
N. Meadow Drive
Bound
Brook, New Jersey 08805
or,
as to each of the foregoing, to such other address as shall be designated by such Person in a written notice to the other parties,
complying as to delivery with the provisions of this Section.
Page 31 of 36 Initials _____ _____ |
All
notices, demands, consents and requests which may be required to be given shall be in writing and shall be deemed to be properly
given if delivered in person or mailed, certified mail, postage prepaid, or sent by Federal Express, UPS or similar carrier. Notices,
demands, consents and requests mailed or hereinafter provided to Borrower shall be deemed effectively given on the earlier of
three (3) business days after deposit or the date of actual delivery. Notice to the Lender shall not be deemed to have been given
until actually received by the Lender. If any notice required by this Note is also required by applicable law, the applicable
law requirement will satisfy the corresponding requirement under this Note. Rejection or refusal to accept or the inability to
deliver because of changed address of which no notice was given shall not alter the effectiveness of the notice, demand, consent
or request sent.
Section
7.04. Binding Effect; Assignment. This Agreement shall be binding upon each of the Borrower and their respective Successors
and Assigns, and shall inure to the benefit of the Borrower, the Lender, and their permitted Successors and Assigns. The Lender
may enforce any of the provisions of this Agreement, the Note and the other Loan Documents against any one or more of the Borrowers
(if more than one) who sign such Loan Documents or their Successors and Assigns. No Borrower may assign this Agreement or any
rights hereunder without the express written consent of the Lender. The Lender may, in accordance with applicable law, sell to
one or more Persons, banks or other entities participating in all or a portion of the Lender's rights and obligations under this
Agreement.
Page 32 of 36 Initials _____ _____ |
Section
7.05. Consent to Jurisdiction and Governing Law. This Agreement is made and delivered in, and shall be governed by, enforced
under and interpreted in accordance with the laws of the State of New Jersey. The Borrower hereby submits to the exclusive jurisdiction
of the courts of the State of New Jersey located in Hunterdon County solely in respect of the interpretation and enforcement of
the provisions of this Agreement and the other documents/instruments comprising the Loan Documents and any of the Loan Documents
and of any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced
by the Note, and hereby waives and agrees not to assert as a defense in any action, suit or proceeding for the interpretation
or enforcement of the Note and/or the other documents/instruments comprising the Loan Documents that Borrower is not subject thereto
or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that his property is exempt
or immune from execution, that the action, suit or proceeding is brought in an inconvenient forum, or that the venue of the action,
suit or proceeding is improper.
The
Borrower and the Lender, upon advice from their respective counsel, hereby intentionally, knowingly, voluntarily, expressly and
mutually waive the right to trial by jury of any claim, demand, action or cause of action: (1) arising under the Loan Documents;
or (2) in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to
the note or the loan transaction related hereto in each case whether now existing or hereafter arising and whether in contract
or tort or otherwise, and each party hereby agrees and consents that any such claim, demand, action or cause of action shall be
decided by court trial without a jury and that any party to this Agreement may file this Agreement or a copy thereof with any
court as written evidence to the consent of the parties hereto to the waiver of their right to a trial by jury.
Page 33 of 36 Initials _____ _____ |
Section
7.06. Severability. In the event that any provision of this Agreement or the application thereof to any Person, property or
circumstances shall be held to any extent to be invalid or unenforceable, the remainder of this Agreement and the application
of such provision to Persons, properties or circumstances other than those as to which it has been held invalid or unenforceable
shall not be affected thereby, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.
Section
7.07. Headings. Article and Section headings in this Agreement and any table of contents are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any other purpose.
Section
7.08. Integration. This Agreement is intended by the parties as the final, complete and exclusive statement of the transactions
evidenced by this Agreement. All prior or contemporaneous promises, agreements and understandings, whether oral or written, are
deemed to be superseded by this Agreement, and no party is relying on any promise, agreement or understanding not set forth in
this Agreement. This Agreement may not be amended or modified except by a written instrument describing such amendment or modification
executed by the Borrower and the Lender.
Page 34 of 36 Initials _____ _____ |
Section
7.09. Relationship of the Parties. It is hereby acknowledged by the Lender and the Borrower that the relationship between
them created hereby and by the other documents/instruments comprising part of the Loan Documents is that of creditor and debtor
and is not intended to be and shall not in any way be construed to be that of a partnership, a joint venture, or principal and
agent; and it is hereby further acknowledged that disbursement of any Loan Proceeds to anyone other than Borrower pursuant to
the terms, covenants and conditions of this Agreement shall not be deemed to make Lender a partner, joint venturer, or principal
or agent of Borrower, but rather shall be deemed to be solely for the purpose of protecting Lender's security for the indebtedness
evidenced by the Note and other indebtedness of Borrower to Lender.
Section
7.10. No Third-Party Beneficiaries. No one other than the parties hereto, their respective Successors and Assigns, shall have
any rights hereunder as a third-party beneficiary or otherwise.
Section
7.11 Compliance. The Borrower agrees, if requested by Lender or any Agent for Lender, to the following:
(a)
To fully cooperate and adjust for clerical errors, any or all Loan Documents as Defined in this Agreement and any or all loan
closing documentation if deemed necessary or desirable in the reasonable discretion of Lender to enable Lender to correct,
record, sell, convey, seek guaranty, insure or market the Loan to any entity or investor.
(b)
Upon demand of Lender, to do any act or execute any additional documents as may be required by Lender to confirm or further
secure the Lender's lien(s) or security interest(s).
(c)
To comply with all above requests/demands by the Lender within (5) days from date of mailing of said requests. The Borrower
agrees to assume all costs including, by way of illustration and not limitation, actual
expenses, legal fees and related losses for failing to comply with correction requests in the above noted time
period.
Page 35 of 36 Initials _____ _____ |
(d)
To receive by email to jsolakian@aol.com monthly financial statements as available including a Balance Sheet and Statement
of Operations for the last completed fiscal month. Such financial statement shall be furnished on or before October 27, 2015 and
November 26, 2014, which dates may be subject to change.
Section
7.12. Grammar. Throughout this Agreement the masculine, the feminine and the neuter shall be interchangeable, and the singular
and the plural shall be interchangeable, unless the context of this Agreement indicates otherwise.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, as an instrument under seal, by their respective
officers thereunto duly authorized, as of the date first above written.
Witnessed
or Attested by: |
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LENDER: |
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JAMES
R. SOLAKIAN |
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By: |
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(LS) |
Name: Dawn
Em |
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James R. Solakian, Individually |
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Date: October 10, 2014 |
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Witnessed
or Attested by: |
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BORROWER: |
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BIONEUTRAL
GROUP, INC. |
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By: |
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(LS) |
Name: |
Dawn Em |
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Mark
Lowenthal, CEO
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Date: October 10, 2014 |
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Page 36 of 36 Initials _____ _____
Exhibit 10.87
PROMISSORY NOTE
U.S. $150,000.00 |
Newark, New Jersey |
|
October 13, 2014 |
FOR
VALUE RECEIVED, the undersigned (hereinafter referred to as "Borrower" or "Maker") promises to pay to
the order of MICHAEL FRANCIS (hereinafter referred to as "Payee" or “Lender”); Payee or Lender, together
with any subsequent holders hereof, (hereinafter collectively referred to as "Holder" or “Note Holder”)
at Lender's address at 150 Smith Road, Parsippany, New Jersey 07054, or at such other place as Holder shall designate from time
to time, the principal sum of ONE HUNDRED FIFTY THOUSAND ($150,000.00) U.S. DOLLARS, representing the proceeds of a Commercial
Loan made and disbursed, or to be made and disbursed, in accordance with the terms and provisions of a TERM SHEET and all interest
and fees due on this Note (computed on the basis of 365 days and charged on the actual number of days elapsed) as set forth herein:
1. PURPOSE OF LOAN AND NOTE.
This Note evidences a Commercial Term Loan in the amount of exactly ONE HUNDRED FIFTY THOUSAND ($150,000.00) U.S. DOLLARS
(hereinafter referred to as “the Loan” or “this Loan” or “Term Loan”), made to be used
for Borrower’s business purposes. The following documents and instruments evidencing or securing or concerning the Loan
are collectively called the “Loan Documents”:
|
B. |
The COMMERCIAL
LOAN AND SECURITY AGREEMENT. |
Page 1 of 35 Initials _____ |
|
D. |
COLLATERAL:
Assignment Letter to Lender of up to $200,000.00 from the proceeds of the sale of the Maker’s 2014 NJ Technology Business
Certificate. The Board of Directors of the Corporation has approved and duly notified New Jersey Tax Transfer Corporation to withhold
an additional $200,000.00 in escrow until 90 days from the full repayment of this $150,000.00 loan to Michael Francis from the
$1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business Tax Certificate. |
|
E. |
Corporate Resolution Authorizing: (1) the Loan; (2) the execution of all of the Loan Documents by the Corporation; (3) the
Collateral consisting of the Assignment including direct payment of up to $200,000.00 from the proceeds of the sale of the 2014
NJ Technology Business Tax Certificate to Lender, and (4) the applicable
Representations and Warranties and the Indemnity. |
|
F. |
Corporate
Warranty that: (1) the Collateral is fully assignable free and clear of all liens and/or claims; (2) there is no pending material
litigation against the Borrower, including its Divisions and Subsidiaries, if any; and (3) the Corporation will indemnity and hold
harmless the Lender as to any and all claims asserted against: (a) the Collateral; and/or (b) the Lender concerning the Loan and/or
the assignment of the Collateral. |
| G. | The CERTIFICATION OF BUSINESS PURPOSE OF BORROWER |
|
H. |
The COMPLIANCE
AGREEMENT of BioNeutral Group, Inc. |
The terms of each of the
Loan Documents are specifically incorporated herein by reference and made a part hereof. In addition, the terms of each of the
Loan Documents are specifically incorporated by reference into and made a part of each of the other Loan Documents.
2. TERM
OF LOAN. This Note shall be due and payable the sooner of May 5, 2015 (hereinafter referred to as the "Maturity Date")
or upon the "Collateral Payment Date" (as defined herein).
Page 2 of 35 Initials _____ |
As used herein the term
“Collateral Payment Date” means the date that the Company receives the proceeds from the sale of the Maker’s
2014 NJ Technology Business Certificate proceeds (the “Collateral”) has been assigned to the Lender.
3. INTEREST
RATE. The Maker shall pay the Lender interest on the unpaid principal balance of the Term Loan from the date of this
Note until the Maturity Date or the Collateral Payment Date at the rate of twenty (20%) percent per year. Interest will be calculated
on the basis of a year of 365 days for the actual number of days in each interest period. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.
Upon the happening of any
Event of Default as provided for in this Note, or on May 5, 2015 (the “Maturity Date”), or on the Collateral Payment
Date, the entire amount of interest, principal and any other sums due under this Note shall become due and payable immediately
and interest shall accrue thereafter at a rate of interest equal to twenty (20%) percent per annum (the "Default Rate").
Interest will be calculated on the basis of a year of 365 days for the actual number of days in each interest period. In no event
will the rate of interest hereunder exceed the maximum rate allowed by law.
4. PAYMENTS
OF PRINCIPAL AND INTEREST. All of the principal, together with any interest and any other charges owed under this Note
are payable in full on the Maturity Date or the Collateral Payment Date, whichever occurs first. Interest will be charged on unpaid
principal until the full amount of principal has been paid. Any payment hereunder received by Holder, other than a partial prepayment
of principal and interest due hereunder, shall be applied first to satisfaction of all costs of collection (if Maker is delinquent
in its payments hereunder), then to payment of non-interest and non-principal amounts payable pursuant to this Note, then to all
accrued but unpaid interest on the outstanding principal balance hereof, and then to reduction of the principal amount hereof.
Page 3 of 35 Initials _____ |
All payments will be made
at 150 Smith Road, Parsippany, New Jersey 07054 or at a different place if required by the Holder.
5. LATE
CHARGE. Maker shall pay Holder a late charge equal to five (5.00%) percent of any amount not paid within seven (7) days
after said amount is due, not as a penalty, but as liquidated damages to Holder for such late payment. Holder shall have no obligation
to accept any late payment not accompanied by the late charge. The purpose of the Late Charge to reimburse the Lender for the
extra expense involved in handling delinquent payments. The Maker acknowledges that: (a) the Late Charge is a material inducement
to the Lender to make the Loan; (b) the Lender would not have made the Loan in the absence of the agreement of the Maker to pay
the Late Charge; (c) such Late Charge represents compensation to the Lender for the increased risk to the Lender that this Note
will not be repaid by the Maker; and (d) the Late Charge is not a penalty and represents a reasonable estimate of (i) the cost
to the Lender in allocating Lender’s resources (both personal and financial) to the ongoing review, monitoring, administration
and collection of this Note and (ii) compensation to the Lender for losses resulting from the Maker's default that are difficult
to ascertain.
6. PREPAYMENT
PRIVILEGE. Maker has the right to make full payment of the principal or interest or charges at any time before it is
due without paying any prepayment charge. When Maker makes full prepayment, Maker will tell the Note Holder in writing that Maker
is doing so.
Page 4 of 35 Initials _____ |
7. COLLATERAL.
As consideration to the Lender by the Borrower for this Loan, an ASSIGNMENT of up to $200,000.00 from the approximate amount
of $1,300,000.00 proceeds from the sale of the Maker’s 2014 NJ Technology Business Certificate sale (the “Collateral”).
The indebtedness evidenced by this Note and the obligations created hereby are secured by this ASSIGNMENT. All of the terms of
said Assignment are specifically incorporated by reference into this Note and made a part of this Note. It is the intent of the
parties that all amounts due and payable on this Loan be paid from the sale of the Maker's 2014 NJ Technology Business Certificate
and will be the principal source of repayment of the Note.
The Maker
acknowledges that: (a) the providing of the Collateral as security by such assignment by Maker is the material inducement to the
Lender to make the Loan; and (b) the Lender would not have made the Loan in the absence of the Collateral and Assignment.
8. ADDITIONAL COLLATERAL. None
9. DEFAULT. The Maker shall
be in default under this Note upon the occurrence of any of the following events (each an "Event of Default"):
|
(a) |
If Maker
fails to pay within 7 days of the due date amounts payable hereunder; or |
|
(b) |
If Maker
fails to perform or breaches any covenant, agreement or undertaking in or otherwise commits a default under this Note or any Loan
Documents, or the assignment of the Collateral for this Note, or in or under any other document, instrument, or agreement, evidencing,
securing or otherwise relating to the indebtedness evidenced by same; or |
Page 5 of 35 Initials _____ |
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(c) |
If any
of the representations or warranties or assurances made or given by the Maker in this Note or any Loan Documents, or the assignment
of the Collateral, or in or under any other document, instrument, or Agreement, evidencing, securing or otherwise relating to the
indebtedness evidenced by same are false or untrue or misrepresented, in whole or in part; or |
|
(d) |
If any
lien is placed on or any claim make against the Collateral for this Note; or |
|
(e) |
The ownership
or any part of the ownership of the Collateral for this Note is sold or transferred or changed for any reason; or |
|
(f) |
(i) The
Borrower shall be dissolved or shall become bankrupt or shall cease paying its debts generally as they mature or shall make an
assignment for the benefit of creditors; (ii) a trustee, receiver or liquidator shall be appointed for the Borrower or for a substantial
part of the property of the Borrower or any Guarantor; (iii) bankruptcy, reorganization, arrangement, insolvency or similar proceedings
shall be instituted by or against the Borrower under the laws of any jurisdiction (other than any involuntary proceedings which
are instituted against the Borrower without their acquiescence, and which are dismissed of record within forty-five (45) days following
the institution thereof); (iv) the Borrower shall convene or hold a meeting with its creditors to compromise or make similar arrangements
with respect to its Indebtedness to such creditors; or (v) the Borrower or their respective directors, stockholders, officers or
agents shall take any action to effect or commence any of the foregoing or with respect to any of the foregoing. |
Page 6 of 35 Initials _____ |
Upon the happening of
any Event of Default, or on the Maturity Date, or on the Collateral Payment Date, the entire amount of interest, principal and
any other sums due under this Note shall become due and payable immediately and interest shall accrue thereafter at a rate of
interest equal to twenty (20%) percent per annum (the "Default Rate"). The Default Rate shall apply, without notice,
immediately upon the occurrence of any Event of Default, or on the Maturity Date, or on the Collateral Payment Date, whichever
occurs first, and shall continue thereafter until all sums then due and payable under this Note are paid in full. The Maker acknowledges
that:(a) the Default Rate is a material inducement to the Lender to make the Loan; (b) the Lender would not have made the Loan
in the absence of the Agreement of the Maker to pay the Default Rate upon the occurrence of any Event of Default; (c) such Default
Rate represents compensation to the Lender for the increased risk to the Lender that his Note will not be repaid by the Maker;
and (d) the Default Rate is not a penalty and represents a reasonable estimate of (i) the cost to the Lender in allocating its
resources (both personal and financial) to the ongoing review, monitoring, administration and collection of this Note and (ii)
compensation to the Lender for losses resulting from the Maker's default that are difficult to ascertain.
Page 7 of 35 Initials _____ |
Upon and following an Event
of Default or the Maturity Date or the Collateral Payment Date, the Lender may proceed to protect and enforce the Lender's rights
under this Note, the Assignment, the Loan Documents, and any other document, instrument or agreement evidencing, securing or otherwise
relating to the indebtedness evidenced hereby. In addition to and not in limitation of, under applicable law, the Lender may proceed
by action at law, in equity, or other appropriate proceedings, including, without limitation, an action for specific performance
to enforce or aid in the enforcement of any provision contained herein and in the Assignment, in the Loan Documents, and any other
document, instrument or agreement evidencing, securing or otherwise relating to the indebtedness evidenced hereby. All of such
rights and remedies shall be cumulative. Maker shall pay all costs of collection of any and all sums due and owing hereunder and
not paid, including without limitation, court costs and reasonable attorney's fees in connection with the collection of any sums.
The Lender does not give up its rights upon an Event of Default as a result of any delay in declaring or failing to declare an
Event of Default.
The Maker acknowledges
and agrees that if more than one person or entity or combination of the two are collectively referred to as “Maker”
or “Borrower”, then any default or event of default pursuant to any Loan Document caused by any one of them shall be
deemed a default or event of default by all of them.
10. WAIVER.
Presentation for payment, demand, protest, notice of demand, notice of dishonor, notice of nonpayment and right to trial
by jury are hereby waived by the undersigned, except as expressly provided to the contrary herein.
Page 8 of 35 Initials _____ |
11. FORBEARANCE.
Holder shall not be deemed to have waived any of Holder's rights or remedies under this Note unless such waiver is express
and in writing signed by Holder, and no delay or omission by Holder in exercising any of Holder's rights hereunder or at law or
in equity, including, without limitation, Holder's right, after any default by the Maker, to declare the entire indebtedness evidenced
hereby immediately due and payable (if acceleration is not automatic), shall be construed as a novation of this Note or shall
operate as a waiver or prevent the subsequent exercise of any or all of such rights. A waiver of any such right in writing on
one occasion shall not be construed as a waiver of Holder's right to insist thereafter upon strict compliance with the terms hereof
without previous notice of such intention being given to Maker, and no exercise of any right by Holder shall constitute or be
deemed to constitute an election of remedies by Holder precluding the subsequent exercise by Holder of any or all of the rights,
powers and remedies available to it hereunder, under this Note or under any of the Loan Documents or under any other document,
instrument or agreement evidencing, securing or otherwise relating to the indebtedness evidenced hereby, or at law or in equity.
No extension of the time for the payment of this Note, or any installment due hereunder, made by agreement with any person now
or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability
of Maker under this Note, either in whole or in part, unless Holder agrees otherwise in writing.
Page 9 of 35 Initials _____ |
12. APPLICABLE
LAW AND CONSENT TO JURISDICTION. This Note is made and delivered in, and shall be governed by, enforced under and interpreted
in accordance with the laws of the State of New Jersey. The Maker hereby submits to the exclusive jurisdiction of the courts of
the State of New Jersey located in Essex County in respect of the interpretation and enforcement of the provisions of this Note
and of the Assignment and of any of the Loan Documents and of any other document, instrument, or agreement, evidencing, securing
or otherwise relating to the indebtedness evidenced by this Note, and hereby waives and agrees not to assert as a defense in any
action, suit or proceeding for the interpretation or enforcement of this Note and/or the Assignment and/or any of the Loan Documents
and/or any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced
by this Note that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that its property is exempt or immune from execution, that the action, suit or proceeding is brought in an inconvenient
forum, or that the venue of the action, suit or proceeding is improper.
13. NO
JURY TRIAL. In any litigation relating to this Note or the Assignment given as security for this Note or any of the Loan
Documents or any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced
hereby, the Lender and Borrower as Maker hereby waive their right to trial by jury. The parties acknowledge that they have consulted
with their respective counsel specifically on the ramifications of waiving the right to request trial by jury prior to agreeing
to this provision.
14. INDEMNIFICATION
BY MAKER. The Maker shall indemnify and hold harmless the Lender and the Lender’s Representatives from and against
any liability, loss, claim, demand, damage, expense (including costs of investigation and defense and counsel fees and expenses)
or diminution in value, arising from or in connection with: (i) any breach of any representation or warranty of the Maker made
or contained in this Note or in any other Loan Document; or (ii) any breach of any agreement of the Maker made or contained or
referred to in this Note; or (iii) any and all claims asserted against the Collateral and/or any Additional Collateral; or (iv)
the Lender concerning the Loan and/or the Collateral and/or any Additional Collateral. Said indemnification shall include all
claims, liabilities and causes of action asserted against the Lender. This provision shall supplement and be in addition to any
other "hold harmless and indemnify" provision or "indemnity and reimbursement" provision contained in this
Note or any other Loan Document. It is intended that this provision and any other "hold harmless and indemnify" provision
or "indemnity and reimbursement" provision contained in this Note or any other Loan Document be as broad and inclusive
as possible to fully protect the Lender.
Page 10 of 35 Initials _____ |
15. THIRD
PARTY CLAIMS. In the event that any claim or demand to which the Lender is entitled to indemnification is asserted by
a third party, the Lender shall notify the Maker of the claim or demand, and the Maker shall undertake the defense thereof by
counsel of its own choosing. In the event that the Maker fails to give the Lender notice of its agreement, as the indemnifying
party, to defend within five (5) days after receipt of notice of the claim or demand, or thereafter fails to properly defend,
the Lender may, by counsel of its own choosing, upon notice to the Maker, undertake the defense, compromise or settlement of such
claim or demand on behalf of and for the account and risk of the Maker and at the Maker’s sole expense. This provision shall
supplement and be in addition to any other "hold harmless and indemnify" provision or "indemnity and reimbursement"
provision contained in this Note or any other Loan Document. It is intended that this provision and any other "hold harmless
and indemnify" provision or "indemnity and reimbursement" provision contained in this Note or any other Loan Document
be as broad and inclusive as possible to fully protect the Lender.
Page 11 of 35 Initials _____ |
16. LIMIT
OF VALIDITY. If for any circumstances whatsoever fulfillment of any provision of this Note, at the time performance of
such provision shall be due, shall involve transcending the limit of validity presently prescribed by any applicable usury statute
or any other applicable law, with regard to obligations of like character and amount, then ipso facto the obligation to
be fulfilled shall be reduced to the limit of such validity, so that in no event shall any exaction be possible under this Note
that is in excess of the current limit of validity, but such obligation shall be fulfilled to the limit of validity. Any payments
inadvertently charged to Maker or collected by Holder that would constitute interest in excess of any applicable legal limit shall
be applied by Holder to the reduction of the unpaid principal amount due hereunder. It is the intention of Maker and Holder not
to create any obligation in excess of the amount allowable by law. The provisions of this paragraph shall control every other
provision of this Note.
17. NOTICES.
All notices, demands, consents and requests which may be required to be given shall be in writing and shall be deemed to be
properly given if delivered in person or mailed, certified mail, postage prepaid, or sent by Federal Express, UPS or similar carrier:
(a) to Maker at 211 Warren Street, Newark, New Jersey 07103 or at such other place as Maker may from time to time designate by
ten (10) calendar days' prior written notice to Holder at the place of payment of this Note; or (b) to Holder at the place of
payment of this Note or at such other place as Holder shall designate from time to time. Notices, demands, consents and requests
mailed or hereinafter provided to Maker shall be deemed effectively given on the earlier of three (3) business days after deposit
or the date of actual delivery. Notice to the Note Holder shall not be deemed to have been given until actually received by the
Note Holder. If any notice required by this Note is also required by applicable law, the applicable law requirement will satisfy
the corresponding requirement under this Note. Rejection or refusal to accept or the inability to deliver because of changed address
of which no notice was given shall not alter the effectiveness of the notice, demand, consent or request sent.
Page 12 of 35 Initials _____ |
18. ASSIGNMENT
OF NOTE. This Note, the Assignments of the Collateral for this Note, any or all of the Loan Documents and any other
document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced this Note may be
transferred or assigned, in whole or in part, by the Lender to someone else. The Lender or anyone who takes this Note by
transfer and who is entitled to receive payments under this Note is called the “Holder” or the “Note
Holder.”
A. The rights and remedies
given in this Note to the Lender are also given to the Holder or Note Holder.
B. The rights and remedies
given to the Lender in the Assignment, the Loan Documents and any other document, instrument, or agreement, evidencing, securing
or otherwise relating to the indebtedness evidenced by this Note are also given to the Holder or Note Holder.
C. Maker understands and
agrees that Maker will remain liable on this Note until it is paid in full.
19. AMENDMENT.
This Note may not be changed orally, but only by an agreement in writing signed by the party, against whom the enforcement
of any waiver, change, modification or discharge is sought.
Page 13 of 35 Initials _____ |
20. GRAMMAR.
Throughout this Note the masculine, the feminine and the neuter shall be interchangeable, and the singular and the plural
shall be interchangeable, unless the context of this Note indicates otherwise.
21. TERMS.
The terms "Lender", "Maker", "Holder" and "Payee" as used herein shall include the
Successors and Assigns of such party. The terms "Lender", "Holder" and "Payee" shall be interchangeable,
unless the context of this Note indicates otherwise. The terms "Maker", “Payer” and “Borrower”
shall be interchangeable, unless the context of this Note indicates otherwise. The terms “Collateral” refers to the
proceeds from the sale of the Maker’s 2014 NJ Technology Business Tax Certificate.
SIGNED, SEALED AND DELIVERED by Maker, the
day and year first above written.
Witnessed or Attested
by: |
LENDER: |
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MICHAEL FRANCIS |
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By: |
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(LS) |
Name: |
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Michael Francis, Individually |
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BORROWER: |
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BIONEUTRAL GROUP, INC. |
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By: |
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(LS) |
Name: |
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Mark
Lowenthal, CEO
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Page 14 of 35 Initials _____ |
COMMERCIAL LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY
AGREEMENT dated as of October 13, 2014, between BioNeutral Group, Inc., a New Jersey Corporation, with Executive Offices
at 211 Warren Street, Newark, New Jersey 07103 (together with its Successors and Assigns, the "Borrower" or the “Maker”);
and MICHAEL FRANCIS, individually, with an address of 150 Smith Road, Parsippany, New Jersey 07054 (together with its Successors
and Assigns, the "Lender").
WHEREAS, the Borrower
and the Lender agree to enter into this Loan and Security Agreement to provide for a Term Loan with the Lender (in the amount of
$150,000.00);
NOW, THEREFORE, for
and in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Borrower and the Lender, each party in consideration that the other join herein,
and agree as follows:
ARTICLE I
AMOUNT AND TERMS OF TERM LOAN
Section 1.01. Term Loan.
The Lender shall make a Term Loan to the Borrower in the original principal amount of exactly ONE HUNDRED FIFTY THOUSAND
($150,000.00) U.S. DOLLARS (the "Term Loan" or the "Loan").
Page 15 of 35 Initials _____ |
Section
1.02. Repayment of Term Loan Principal. As set forth in the Note evidencing the Term Loan, the principal of the Term Loan
shall be paid by allocating up to $200,000.00 of the $1,300,000.00 proceeds from the sale of the 2014 NJ Technology Business Certificate
[assigned to the Lender by the Borrower (the “Collateral”)] is received by the Tax Transfer Corporation of New Jersey
on behalf of the Borrower. The term the “Collateral” means up to $200,000.00 of the proceeds from the sale of the 2014
NJ Technology Business Certificate. (See: Section 3.01. Grant
of Security Interests).
Section 1.03 Payment
of Term Loan Interest. Interest on the full amount of the principal actually loaned to the Borrower shall be paid with the
loan principal. Prior to any Event of Default, interest on the outstanding principal balance of the Term Loan shall accrue at a
twenty (20%) percent per annum rate. Interest shall be calculated on the basis of a 365-day year for the actual number of days
elapsed. Notwithstanding the foregoing, to the extent permitted by law, upon the occurrence of any Event of Default under this
Agreement or if the Loan is not paid in full (including all outstanding principal, interest and other charges) by the Maturity
Date or by the Collateral Payment Date (each as defined in the Note), whichever is sooner, the rate of interest on the unpaid principal
balance of the Term Loan shall be a twenty (20%) percent per annum rate ("Term Loan Default Interest Rate"). The Borrower
acknowledges that (a) the Term Loan Default Interest Rate is a material inducement to the Lender to make the Term Note; (b) the
Lender would not have made the Term Loan in the absence of the agreement of the Borrower to pay the Term Loan Default Interest
Rate upon the occurrence of any Event of Default; (c) such Term Loan Default Interest Rate represents compensation to the Lender
for the increased risk to the Lender that the Term Loan will not be repaid by the Borrower; and (d) the Term Loan Default Interest
Rate is not a penalty and represents a reasonable estimate of (i) the cost to the Lender in allocating its resources (both personnel
and financial) to the ongoing review, monitoring, administration and collection of the Term Loan and (ii) compensation to the Lender
for losses resulting from the Borrower's Default that are difficult to ascertain.
Page 16 of 35 Initials _____ |
Section 1.04. Fees. Borrower
shall pay Lender an Origination Fee of $22,500.00 on or before May 5, 2015. The $22,500 Origination Fee is based on a loan amount
of $150,000. In the event that the amount is less than $150,000 loaned to the Borrower, the Origination fee is reduced pro rata.
Section 1.05. Loan Documents.
The following documents and instruments evidencing or securing or concerning the Commercial Loan are collectively called the “Loan
Documents”:
|
B. |
This COMMERCIAL
LOAN AND SECURITY AGREEMENT. |
|
D. |
COLLATERAL:
Assignment Letter to Lender of up to $200,000.00 from the proceeds of the sale of the Borrower’s 2014 NJ Technology Business
Certificate. |
|
E. |
Corporate Resolution Authorizing: (1) the Loan; (2) the execution of all of the Loan Documents by the Corporation; (3) the
Collateral consisting of the Assignment including direct payment of up to $200,000.00 from the proceeds of the sale of the 2014
NJ Technology Business Tax Certificate to Lender, and (4)the applicable
Representations and Warranties and the Indemnity. |
|
F. |
Corporate
Warranty that: (1) the Collateral is fully assignable free and clear of all liens and/or claims; (2) there is no pending material
litigation against the Borrower, including its Divisions and Subsidiaries, if any; and (3) the Corporation will indemnity and hold
harmless the Lender as to any and all claims asserted against: (a) the Collateral; and/or (b) the Lender concerning the Loan and/or
the assignment of the Collateral. |
Page 17 of 35 Initials _____ |
| G. | The CERTIFICATION OF BUSINESS PURPOSE OF BORROWER |
|
H. |
The COMPLIANCE
AGREEMENT of BioNeutral Group, Inc. |
The terms of each of the
Loan Documents are specifically incorporated herein by reference. In addition, the terms of each of the Loan Documents are specifically
incorporated by reference into each of the other Loan Documents.
ARTICLE II
LOAN PROCEEDS AND PAYMENTS
Section 2.01. Use of
Loan Proceeds. The proceeds of the Term Loan shall be used by the Borrowers for working capital purposes in accordance with
the cash flow projections provided by the Borrower and which are part of the Loan Documents and upon which the Lender has placed
considerable reliance, especially with respect to the Projected Contract Receipts which are incorporated into these Loan Documents.
(See: Exhibit A).
Section 2.02. Payments.
All payments of interest, principal and any other sum payable hereunder shall be made to the Lender, in immediately available funds,
without counterclaim or setoff and free and clear of, and without any deduction or withholding for, any taxes or other payments,
at the Lender's address of 150 Smith Road, Parsippany, New Jersey 07054.
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Section 2.03. Late Fee.
If the entire amount of any required principal and/or interest is not paid in full within seven (7) days after the same is
due, Borrower shall pay to Lender a late fee equal to five (5%) percent of the required payment. The purpose of the Late Charge
is to reimburse the Lender for the extra expense involved in handling delinquent payments. The Borrower acknowledges that: (a)
the Late Charge is a material inducement to the Lender to make the Loan; (b) the Lender would not have made the Loan in the absence
of the agreement of the Borrower to pay the Late Charge; (c) such Late Charge represents compensation to the Lender for the increased
risk to the Lender that this Note will not be repaid by the Borrower; and (d) the Late Charge is not a penalty and represents a
reasonable estimate of (i) the cost to the Lender in allocating Lender’s resources (both personal and financial) to the ongoing
review, monitoring, administration and collection of this Note and (ii) compensation to the Lender for losses resulting from the
Borrower 's default that are difficult to ascertain.
Section 2.04. Usury
Limitation. If, at any time, the rate of interest, together with all amounts which constitute interest and which are reserved,
charged or taken by Lender as compensation for fees, services or expenses incidental to the making, negotiating or collection of
the loan evidenced hereby, shall be deemed by any competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted to be charged by Lender to Borrower under applicable law, then, during such time as such rate of interest
would be deemed excessive, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum
rate of interest so permitted shall be deemed a voluntary prepayment of principal. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof; provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then this Agreement shall be governed by such new law as of its effective date.
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ARTICLE III
GRANT OF SECURITY INTERESTS
Section 3.01. Grant of Security Interests.
To secure payment and performance of the Term Loan and the Borrower’s obligations hereunder and as described in the Loan
Documents, the Borrower hereby grants to the Lender the following:
| (a) | ASSIGNMENT (the “Collateral”) of up to $200,000.00 from the net proceeds from the Borrower’s
2014 NJ Technology Business Certificate (the "Collateral"), as security for the performance by Maker of his obligations
hereunder and as described in the Loan Documents All of the terms of said Assignment are specifically incorporated by reference
into this Note and made a part of this Note. It is the intent of the parties that all amounts due and payable on this Loan be paid
from said assigned $200,000.00 of the net proceeds of the 2014 NJ Technology Business Certificate proceeds, if not otherwise paid
by the Maker. |
The Collateral and the
Assignment by Borrower are all material inducements to the Lender to make the Loan.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations
and Warranties. As a further inducement to the Lender to execute this Agreement and to make the Loan, the Borrower hereby represents
and warrants to the Lender as follows:
(a) Borrower is a corporation
duly organized, validly existing and in good standing under the laws of its state of incorporation. Borrower has the corporate
power and authority to enter into and perform this Agreement and the other Loan Documents, to enter into and perform all of the
obligations required of the Borrower by all other instruments and other documents referred to herein to which it is a party, to
fulfill its obligations set forth herein and therein, and to carry out the transactions contemplated hereby and thereby.
(b) The execution, delivery
and performance of this Agreement, the other Loan Documents and the other documents required to be executed by any Borrower pursuant
hereto have been duly authorized by all necessary corporate action.
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(c) That the Board of Directors
of the Corporation has approved and duly notified New Jersey Tax Transfer Corporation of the assignment of the first $200,000.00
from the $1,300,000.00 anticipated proceeds from the 2014 New Jersey Technology Business Tax Certificate to Lender in accordance
with the terms of a Promissory Note and LOAN AND SECURITY AGREEMENT and Assignment Letter to Tax Transfer Corporation of New Jersey,
which have been agreed to by the parties and the Assignment of the 2014 NJ Technology Business Certificate proceeds, which assignment
of the proceeds are fully assignable free and clear of all liens and/or claims.
(d) There is no pending
material litigation against the Borrower including its divisions and subsidiaries, of which the Borrower is a Defendant.
(e) Prior to funding, Lender
must be provided with a current budget of all uses of cash as presented in a monthly cash flow projection. Such monthly projections
will be updated every two (2) weeks, beginning October 8, 2014 and sent to the Lender by email to mdf@safetyfirst.com and by US
mail.
(f) The initial budget
will be provided and approved by the Lender and will be incorporated into the Loan Documents.
(g) The Borrower and the
Guarantor acknowledge the importance of the budget and that the Lender is placing reliance on the strict adherence of the planned
expenditures to the actual expenditures.
(h) Borrower shall furnish
a copy of the bi-weekly payroll register. Such register may be redacted as necessary to preserve confidentially of its employees.
(i) Borrower shall furnish
a copy of a cash flow statement projecting the use of funds from the State of New Jersey Tax Credit sale.
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ARTICLE V
COVENANTS OF THE BORROWERS
Section 5.01. Affirmative
Covenants. Without limiting any other covenants and provisions hereof, the Borrower covenants and agrees, jointly and severally,
that so long as the Term Loan is in effect or any Loan is outstanding:
(a) (Payment of Loans)
The Borrower will pay the principal of and interest on the Loans hereunder at the times and place and in the manner provided herein,
and will promptly pay when due any and all other amounts owing to the Lender under this Agreement or any of the other Loan Documents,
in respect of fees, reimbursement of expenses or otherwise.
(b) (Legal Existence and
Qualification) The Borrower will preserve and maintain its corporate existence, rights, franchises, licenses and privileges and
remain in good standing in the jurisdiction of its incorporation.
(c) (Compliance with Laws)
The Borrower will comply with the requirements of all applicable laws, rules, regulations and the orders of any court or other
tribunal or governmental or administrative authority or agency applicable to it or to its business, property or assets, all to
the extent that failure to comply with any such laws, rules, regulations or orders could, singly or in the aggregate with all other
such failures, have a material adverse effect on the business, prospects, condition or operations of any Borrower. Each Borrower
will obtain and maintain all licenses, permits and permissions relating to its properties or business, failure to obtain or maintain
which could, singly or in the aggregate with all other such failures, have a material adverse effect on the business, prospects,
condition or operations of the Borrower.
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(d) (Closing Costs.) The
Borrower shall pay all of its closing costs, including but not limited to legal, filing, and any other expense, with regard to
the underlying transactions for the Loans.
(e) (Indemnification by
Borrower.) The Borrower shall indemnify and hold harmless the Lender and the Lender’s Representatives from and against any
liability, loss, claim, demand, damage, expense (including costs of investigation and defense and counsel fees and expenses) or
diminution in value, arising from or in connection with: (i) any breach of any representation or warranty or indemnity of the Borrower
made or contained in this Agreement or in any other Loan Document, or (ii) any breach of any agreement of the Borrower made or
contained or referred to in this Agreement, or (iii) any and all claims asserted against the Collateral; or (iv) the Lender concerning
the Loan and/or the Collateral. Said indemnification shall include all claims, liabilities and causes of action asserted against
the Lender. This provision shall supplement and be in addition to any other "hold harmless and indemnify" provision or
"indemnity and reimbursement" provision contained in this Agreement or any other Loan Document. It is intended that this
provision and any other "hold harmless and indemnify" provision or "indemnity and reimbursement" provision
contained in this Agreement or any other Loan Document be as broad and inclusive as possible to fully protect the Lender.
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(f) (Third Party Claims.)
In the event that any claim or demand to which the Lender is entitled to indemnification is asserted by a third party, the Lender
shall notify the Borrower of the claim or demand, and the Borrower shall undertake the defense thereof by counsel of its own choosing.
In the event that the Borrower fails to give the Lender notice of its agreement, as the indemnifying party, to defend within five
(5) days after receipt of notice of the claim or demand, or thereafter fails to properly defend, the Lender may, by counsel of
its own choosing, upon notice to the Borrower, undertake the defense, compromise or settlement of such claim or demand on behalf
of and for the account and risk of the Borrower and at the borrower’s sole expense. This provision shall supplement and
be in addition to any other "hold harmless and indemnify" provision or "indemnity and reimbursement" provision
contained in this Agreement or any other Loan Document. It is intended that this provision and any other "hold harmless and
indemnify" provision or "indemnity and reimbursement" provision contained in this Agreement or any other Loan Document
be as broad and inclusive as possible to fully protect the Lender.
ARTICLE VI
DEFAULT AND REMEDIES
Section 6.01. Events
of Default. The occurrence of any of the following events shall constitute an Event of Default under this Agreement:
(a) If Maker fails to
pay within 7 days of the due date amounts payable hereunder; or
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(b) If Maker
fails to perform or breaches any covenant, agreement or undertaking in or otherwise commits a default under this Agreement, the
Note or any of the Loan Documents, or the assignment of the Collateral for this Note, as provided in this Agreement or in or under
any other document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced by same;
or
(c) If any
of the representations or warranties or assurances made or given by the Maker in this Agreement, the Note or any of the Loan Documents,
or the Assignments of the Collateral, or in or under any other document, instrument, or agreement, evidencing, securing or otherwise
relating to the indebtedness evidenced by same are false or untrue or misrepresented, in whole or in part; or
(d) If any
lien is placed on or any claim is made against the Collateral for the Note; or
(e) The ownership
or any part of the ownership of the Collateral for the Note is sold or transferred or changed for any reason; or
(f) (i)
The Borrower shall be dissolved or shall become bankrupt or shall cease paying its debts generally as they mature or shall make
an assignment for the benefit of creditors; (ii) a trustee, receiver or liquidator shall be appointed for the Borrower or for a
substantial part of the property of the Borrower; (iii) bankruptcy, reorganization, arrangement, insolvency or similar proceedings
shall be instituted by or against the Borrower under the laws of any jurisdiction (other than any involuntary proceedings which
are instituted against the Borrower without their acquiescence, and which are dismissed of record within forty-five (45) days following
the institution thereof); (iv) the Borrower shall convene or hold a meeting with its creditors to compromise or make similar arrangements
with respect to its Indebtedness to such creditors; or (v) the Borrower or their respective directors, stockholders, officers or
agents shall take any action to effect or commence any of the foregoing or with respect to any of the foregoing.
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Section 6.02. Rights
and Remedies upon Default. Upon the occurrence of any Event of Default and at any time thereafter, in addition to any other
rights and remedies available to the Lender hereunder or in any of the other Loan Documents or otherwise, the Lender may exercise
any one or more of the following rights and remedies (all of which shall be cumulative):
(a) Declare the entire
unpaid principal amount of the Loan then outstanding, all interest accrued and unpaid with respect to any and all of the foregoing,
and all other amounts payable under or with respect to this Agreement to be forthwith due and payable, whereupon the same shall
become forthwith due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly
waived by the Borrower.
(b) Enforce the provisions
of this Agreement by legal proceedings for the specific performance of any covenant or agreement contained herein or for the enforcement
of any other appropriate legal or equitable remedy, and the Lender may recover damages caused by any breach by any Borrower of
the provisions of this Agreement, including court costs, reasonable attorneys' fees and other costs and expenses incurred in the
enforcement of the obligations of the Borrower hereunder.
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(c) Exercise all rights
and remedies under this Agreement or the other Loan Documents, and any other agreement with the Borrower, and exercise all other
rights and remedies which the Lender may have under applicable law.
(d) Exercise all rights
and remedies provided in this Agreement, the other Loan Documents, the Uniform Commercial Code and other applicable law, all of
which rights and remedies may be exercised without notice to or consent by the Borrower, except as such notice or consent is expressly
provided for hereunder or required by applicable law.
ARTICLE VII
MISCELLANEOUS
Section 7.01. No Waiver
Cumulative Remedies. No failure or delay on the part of the Lender in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or otherwise available to the Lender. Such remedies may be exercised without
resort or regard to any other source of satisfaction of any liabilities of the Borrower to the Lender.
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Section 7.02. Amendments,
Waivers and Consents. Neither this Agreement nor any provision hereof may be amended, waived, discharged or terminated orally.
No amendment or waiver of either any provision of this Agreement, or any consent to any departure by the Borrowers therefrom, shall
be effective unless the same shall be signed by the Borrowers and the Lender. Any waiver or consent may be given subject to satisfaction
of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given. In no event will any amendment, waiver or consent be deemed effective if the result of same is to decrease in
any manner the compensation of the Lender or to increase in any manner the Lender's expenses, duties or responsibilities unless
the Lender has, in each case, expressly assented thereto in writing.
Section 7.03. Addresses
for Notices, etc. Except as otherwise expressly provided in this Agreement, all notices, requests, demands and other communications
provided for hereunder shall be in writing and shall be mailed or delivered to the applicable party at the address indicated below:
If to the Borrower: |
|
BioNeutral Group, Inc. |
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211 Warren Street |
|
Newark, New Jersey 07103
|
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If to the Lender:
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Michael Francis |
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150 Smith Rd. |
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Parsippany, New Jersey
07054 |
or, as to each of the foregoing, to such other
address as shall be designated by such Person in a written notice to the other parties, complying as to delivery with the provisions
of this Section.
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All notices, demands, consents and requests
which may be required to be given shall be in writing and shall be deemed to be properly given if delivered in person or mailed,
certified mail, postage prepaid, or sent by Federal Express, UPS or similar carrier. Notices, demands, consents and requests mailed
or hereinafter provided to Borrower shall be deemed effectively given on the earlier of three (3) business days after deposit
or the date of actual delivery. Notice to the Lender shall not be deemed to have been given until actually received by the Lender.
If any notice required by this Note is also required by applicable law, the applicable law requirement will satisfy the corresponding
requirement under this Note. Rejection or refusal to accept or the inability to deliver because of changed address of which no
notice was given shall not alter the effectiveness of the notice, demand, consent or request sent.
Section 7.04. Binding
Effect; Assignment. This Agreement shall be binding upon each of the Borrower and their respective Successors and Assigns,
and shall inure to the benefit of the Borrower, the Lender, and their permitted Successors and Assigns. The Lender may enforce
any of the provisions of this Agreement, the Note and the other Loan Documents against any one or more of the Borrowers (if more
than one) who sign such Loan Documents or their Successors and Assigns. No Borrower may assign this Agreement or any rights hereunder
without the express written consent of the Lender. The Lender may, in accordance with applicable law, sell to one or more Persons,
banks or other entities participating in all or a portion of the Lender's rights and obligations under this Agreement.
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Section 7.05. Consent
to Jurisdiction and Governing Law. This Agreement is made and delivered in, and shall be governed by, enforced under and interpreted
in accordance with the laws of the State of New Jersey. The Borrower hereby submits to the exclusive jurisdiction of the courts
of the State of New Jersey located in Essex County solely in respect of the interpretation and enforcement of the provisions of
this Agreement and the other documents/instruments comprising the Loan Documents and any of the Loan Documents and of any other
document, instrument, or agreement, evidencing, securing or otherwise relating to the indebtedness evidenced by the Note, and hereby
waives and agrees not to assert as a defense in any action, suit or proceeding for the interpretation or enforcement of the Note
and/or the other documents/instruments comprising the Loan Documents that Borrower is not subject thereto or that such action,
suit or proceeding may not be brought or is not maintainable in said courts or that his property is exempt or immune from execution,
that the action, suit or proceeding is brought in an inconvenient forum, or that the venue of the action, suit or proceeding is
improper.
The Borrower and the Lender,
upon advice from their respective counsel, hereby intentionally, knowingly, voluntarily, expressly and mutually waive the right
to trial by jury of any claim, demand, action or cause of action: (1) arising under the Loan Documents; or (2) in any way connected
with or related or incidental to the dealings of the parties hereto or any of them with respect to the note or the loan transaction
related hereto in each case whether now existing or hereafter arising and whether in contract or tort or otherwise, and each party
hereby agrees and consents that any such claim, demand, action or cause of action shall be decided by court trial without a jury
and that any party to this Agreement may file this Agreement or a copy thereof with any court as written evidence to the consent
of the parties hereto to the waiver of their right to a trial by jury.
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Section 7.06. Severability.
In the event that any provision of this Agreement or the application thereof to any Person, property or circumstances shall
be held to any extent to be invalid or unenforceable, the remainder of this Agreement and the application of such provision to
Persons, properties or circumstances other than those as to which it has been held invalid or unenforceable shall not be affected
thereby, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
Section 7.07. Headings.
Article and Section headings in this Agreement and any table of contents are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose.
Section 7.08. Integration.
This Agreement is intended by the parties as the final, complete and exclusive statement of the transactions evidenced by this
Agreement. All prior or contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be superseded
by this Agreement, and no party is relying on any promise, agreement or understanding not set forth in this Agreement. This Agreement
may not be amended or modified except by a written instrument describing such amendment or modification executed by the Borrower
and the Lender.
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Section 7.09. Relationship
of the Parties. It is hereby acknowledged by the Lender and the Borrower that the relationship between them created hereby
and by the other documents/instruments comprising part of the Loan Documents is that of creditor and debtor and is not intended
to be and shall not in any way be construed to be that of a partnership, a joint venture, or principal and agent; and it is hereby
further acknowledged that disbursement of any Loan Proceeds to anyone other than Borrower pursuant to the terms, covenants and
conditions of this Agreement shall not be deemed to make Lender a partner, joint venturer, or principal or agent of Borrower, but
rather shall be deemed to be solely for the purpose of protecting Lender's security for the indebtedness evidenced by the Note
and other indebtedness of Borrower to Lender.
Section 7.10. No Third-Party
Beneficiaries. No one other than the parties hereto, their respective Successors and Assigns, shall have any rights hereunder
as a third-party beneficiary or otherwise.
Section 7.11 Compliance.
The Borrower agrees, if requested by Lender or any Agent for Lender, to the following:
|
(a) |
To fully cooperate and adjust for
clerical errors, any or all Loan Documents as Defined in this Agreement and any or all loan closing documentation if deemed necessary
or desirable in the reasonable discretion of Lender to enable Lender to correct, record, sell, convey, seek guaranty, insure or
market the Loan to any entity or investor. |
|
(b) |
Upon demand of Lender, to do any
act or execute any additional documents as may be required by Lender to confirm or further secure the Lender's lien(s) or security
interest(s). |
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|
(c) |
To
comply with all above requests/demands by the Lender within (5) days from date of mailing of said requests. The Borrower agrees
to assume all costs including, by way of illustration and not limitation, actual expenses,
legal fees and related losses for failing to comply with correction requests in the above noted time period. |
Section
7.12. Grammar. Throughout this Agreement the masculine, the feminine and the neuter shall be interchangeable, and the singular
and the plural shall be interchangeable, unless the context of this Agreement indicates otherwise.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, as an instrument under seal, by their respective
officers thereunto duly authorized, as of the date first above written.
Witnessed or Attested
by: |
LENDER: |
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MICHAEL FRANCIS |
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By: |
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(LS) |
Name: |
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Michael Francis, Individually |
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Date: |
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Witnessed or Attested by: |
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BORROWER: |
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BIONEUTRAL GROUP, INC. |
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By: |
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(LS) |
Name: |
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Mark
Lowenthal, CEO
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Date: |
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Page 34 of 35 Initials _____ |
STATE
OF NEW JERSEY : |
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SS: |
COUNTY
OF HUNTERDON : |
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I
CERTIFY THAT on October ____, 2014, MICHAEL FRANCIS personally came before me, and this person acknowledged under oath,
to my satisfaction, that he is named in and personally signed this document; and signed, sealed and delivered this document as
his act and deed.
STATE
OF NEW JERSEY : |
|
|
SS: |
COUNTY
OF HUNTERDON : |
BE
IT REMEMBERED that on October ___, 2014, the Borrower’s Chief Executive Officer, MARK LOWENTHAL, personally appeared
before me and acknowledged under oath, to my satisfaction that he:
(a)
is the Chief Executive Officer of BioNeutral Group, Inc., and
(b) was authorized to
execute this instrument on behalf of BioNeutral Group, Inc., and
(c)
executed the instrument as the act of BioNeutral Group, Inc.
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