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8-K - NIRTA ENTERPRISES PROMISSORY NOTE - ABVC BIOPHARMA, INC. | nirtaloan8k.htm |
US
$24,000
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April
15, 2010
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PROMISSORY NOTE
FOR VALUE
RECEIVED, the
undersigned, Ecology Coatings, Inc., a Nevada corporation (the “The Maker”),
promises to pay to the order of Nirta Enterprises, LLC (the “Holder”), the
principal amount Twenty Four Thousand and 00/100 dollars ($24,000.00), together
with interest thereon as provided below.
ARTICLE
I
TERMS OF
REPAYMENT
1.
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Interest.
The Note shall bear interest (“Interest”) equal to five (5%)
percent per annum on the unpaid principal balance, computed on a three
hundred and sixty-five (365) day year, during the term of the Note.
The Maker shall pay all Interest on or before the Maturity Date. In no
event shall the rate of Interest payable on this Note exceed the maximum
rate of interest permitted to be charged under applicable
law.
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2.
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Payments.
All payments by the Maker under this Note shall first be credited
against costs and expenses provided for hereunder, second to the payment
of any penalties, third to the payment of accrued and unpaid interest, if
any, and the remainder shall be credited against principal. All payments
due hereunder shall be payable in legal tender of the United States of
America, and in same day funds delivered to the Holder by cashier’s check,
certified check, or any other means of guaranteed funds to the mailing
address provided below, or at such other place as the Holder or any holder
hereof shall designate in writing for such purpose from time to time. If a
payment hereunder otherwise would become due and payable on a Saturday,
Sunday or legal holiday, the due date thereof shall be extended to the
next succeeding business day, and Interest, if any, shall be payable
thereon during such extension.
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3.
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Maturity
Date. All outstanding principal and interest shall be payable on
June 30, 2009 (the “Maturity Date”). At its sole option, the Maker
may extend the Maturity Date for an additional thirty (30) days upon
delivery to Holder of an option to purchase fifteen thousand (15,000)
shares of the Maker’s Common Stock (the “Extension Option”). The Company
shall pay the Note on or before the Maturity Date on a pro rata basis with
all three (3) Notes on even date
herewith.
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4.
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Pre-Payment
Demand. If at any time before the Maturity Date the Maker completes
an underwritten public offering of its common stock or other form of
security convertible into common stock pursuant to an effective
registration statement under the Securities Act of 1933 (the “Act”), as
amended, or a managed private offering exempt from registration under
Section 4(2) of the Act and Regulation D promulgated thereunder
(collectively, a “New Offering”) which results in proceeds received by the
Maker net of underwriting discounts and commissions, of at least One
Million and 00/100 dollars ($1,000,000.00) (a “Pre-Payment Event”), then
at the sole and absolute discretion of the Holder, and upon written demand
to the Maker (the “Pre-Payment Notice”), all amounts owed under this Note
shall become due and payable within fifteen (15) days following
Maker’s receipt of the Pre-Payment
Notice.
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5.
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Exemption
from Restrictions. It is the intent of the Maker and the Holder in
the execution of this Note that the indebtedness hereunder be exempt from
the restrictions of the usury laws of any applicable jurisdiction. The
Maker and the Holder agree that none of the terms and provisions contained
herein shall be construed to create a contract for the use, forbearance or
detention of money requiring payment of interest at a rate in excess of
the maximum interest rate permitted to be charged by the laws of any
applicable jurisdiction. In such event, if any holder of this Note shall
collect monies which are deemed to constitute interest which would
otherwise increase the effective interest rate on this Note to a rate in
excess of the maximum rate permitted to be charged by the laws of any
applicable jurisdiction, all such sums deemed to constitute interest in
excess of such maximum rate shall, at the option of such holder, be
credited to the payment of this principal amount due hereunder or returned
to the Maker.
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ARTICLE
II
COVENANTS
6.
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Conversion
into Common Stock. If at any time before the Maturity Date, the
Maker completes a New Offering, the Maker shall give the Holder the option
to convert this Note, in whole or in part, into Common Stock of the Maker
based on a conversion price equal to the lower of: (a) the closing
bid price per share of the Common Stock on the date first above written as
reported on the Over-The-Counter Bulletin Board, or if there is not such
price on the Effective Date, then the last bid price on the date nearest
preceding the date first above written, or; (b) the average price at
which the Maker sells its Common Stock in the New Offering (the
“Conversion Price”)(the “Conversion
Shares”).
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7.
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Piggyback
Registration. If the Conversion Shares and the Underlying Shares
(collectively, the “Shares”) have not been otherwise registered and at any
time the Maker proposes to file a registration statement, whether or not
for sale for the Maker’s own account, on a form and in a manner that would
also permit registration of shares (other than in connection with a
registration statement on Forms S-4 or S-8 or any similar or successor
form) the Maker shall give to Holder, written notice of such proposed
filing promptly, but in any case at least twenty (20) days before the
anticipated filing. The notice referred to in the preceding sentence shall
offer the holder(s) holding the Shares the opportunity to register such
amount of the Shares as he may request (a “Piggyback Registration”).
Subject to this Section, the Maker will include in each such Piggyback
Registration (and any related qualification under state blue sky laws and
other compliance filings, and in any underwriting involved therein) that
portion of the Shares with respect to which the Maker has received written
requests for inclusion therein within twenty (20) days after the
written notice from the Maker is given. The holders holding any portion of
the Shares will be permitted to withdraw all or part of the Shares from a
Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. Notwithstanding the foregoing, the Maker will not
be obligated to effect any registration of shares under this
Paragraph 7 as a result of the registration of any of its securities
solely in connection with mergers effected pursuant to a Form S-4
Filing.
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8.
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Covenants
Regarding Registration
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a.
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The
Maker shall use its best efforts to have any registration statement
declared effective at the earliest possible time, and shall furnish such
number of prospectuses as shall be reasonably required.
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b.
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The
Maker shall bear all costs, fees and expenses in connection with a
Piggyback Registration,
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c.
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The
Maker will take all necessary action which may be required in qualifying
qualifying or registering the Shares included in any Piggyback
Registration for offering and sale under the securities or blue sky laws
of such states as are requested by the holders of such Shares, provided
that the Maker shall not be obligated to execute or file any general
consent to service or process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
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9.
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Indemnification.
The Maker shall, at The Maker’s expense, protect, defend,
indemnify, save and hold Holder harmless against any and all claims,
demands, losses, expenses, damages, causes of action (whether legal or
equitable in nature) asserted by any person or entity arising out of,
caused by or relating to the Note, including without limitation the
construction of the Note and the use or application of the proceeds of the
Note, and The Maker shall pay Holder upon demand all claims, judgments,
damages, losses and expenses (including court costs and reasonable
attorneys’ fees and expenses) incurred by Holder as a result of any legal
or other action arising out of the Note as
aforesaid.
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10.
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Attorneys
Fees. The Maker shall reimburse Holder for all reasonable costs,
attorney’s fees, and all other expenses in connection with this
Note.
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11.
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Notice of
Default. So long as any amount under this Note shall remain unpaid,
the Holder will, unless the Maker otherwise consents in writing, promptly
give written notice to the Maker in reasonable detail of the occurrence of
any Event of Default, or any condition, event or act which with the giving
of notice or the passage of time or both would constitute an Event of
Default.
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ARTICLE
III
DEFAULT
12.
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Events
of Default. Any of the following events shall constitute an “Event
of Default” hereunder:
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a.
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Failure
by the Maker to pay the principal or Interest, if any, of this Note when
due and payable on the Maturity Date.
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b.
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The
entry of an order for relief under Federal Bankruptcy Code as to the Maker
or approving a petition in reorganization or other similar relief under
bankruptcy or similar laws in the United States of America or any other
competent jurisdiction, and if such order, if involuntary, is not
satisfied or withdrawn within sixty (60) days after entry thereof; or
the filing of a petition by the Maker seeking any of the foregoing,
or
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consenting
thereto; or the filing of a petition to take advantage of any debtor’s
act; or making a general assignment for the benefit of creditors; or
admitting in writing inability to pay debts as they mature;
or
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c.
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Failure
by the Maker to pay the principal and Interest, if any, of this Note
concurrent with a Pre-Payment Event; or
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d.
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The
breach of any covenant made by the Maker in this
Note.
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13.
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Acceleration.
Upon any Event of Default (in addition to any other rights or
remedies provided for under this Note), at the option of the Holder or any
holder hereof, all sums evidenced hereby, including all principal, accrued
but unpaid Interest, fees and all other amounts due hereunder, shall
become immediately due and payable. If an Event of Default relating to
certain events of bankruptcy or insolvency of the Maker occurs and is
continuing, the principal of and interest, if any, on this Note will
become and be immediately due and payable without any declaration or other
act on the part of the Holder or any holder hereof. This Note shall bear
interest at the rate of ten (10%) percent per annum upon the occurrence of
an Event of Default (“Default Interest”). Payments of the Default Interest
shall be due every thirty (30) days following the occurrence Event of
Default.
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14.
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No Waiver.
Failure of the Holder or any holder hereof to exercise any option
hereunder shall not constitute a waiver of the right to exercise the same
in the event of any subsequent Event of Default, or in the event of
continuance of any existing Event of Default after demand or performance
thereof.
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15.
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Pursuit
of any Remedy. The Holder or holder hereof may pursue any remedy
under this Note without notice or presentment. The Holder or any holder
hereof has the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Holder or any
such holder hereof under this Note.
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ARTICLE
IV
MISCELLANEOUS
16.
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Amendments.
No amendment or waiver of any provision of this Note, nor consent
to any departure by the Maker herefrom, shall in any event be effective
unless the same shall be in writing and signed by the Holder, and then
such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which
given.
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17.
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Notices.
All notices and other communications provided for hereunder shall
be in writing (including telecopier communication) and mailed, telecopied,
or delivered, to the Maker or the Holder, as applicable, at their
respective addresses specified on the signature pages hereof, or, as to
each party, at such other address as shall be designated by such party in
a written notice to the other party. All such notices and communications
shall, when mailed or telecopied, be effective when deposited in the mails
or telecopied with receipt confirmed,
respectively.
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18.
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No Waiver;
Remedies. No failure on the part of the Holder to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any
other right. All rights, powers and remedies of the Holder in connection
with this Note are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided by law or
equity.
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19.
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Severability;
Headings. If any one or more provisions of this Note shall be held
to be illegal, invalid or otherwise unenforceable, the same shall not
affect any other provisions of this Note and the remaining provisions of
this Note shall remain in full force and effect. Article and paragraph
headings in this Note are included herein for convenience of reference
only and shall not constitute a part of this Note for any other purpose or
be given any substantive effect.
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20.
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Binding
Effect; Transfer. This Note shall be binding upon and inure to the
benefit of the Maker and the Holder and their respective successors and
assigns. The Holder may not assign or otherwise transfer, or grant
participations in, this Note or all or any portion of its rights hereunder
or its interest herein to any person or entity, without the prior written
consent of the Maker which consent shall not be unreasonably withheld. The
Maker may not assign or otherwise transfer its rights or obligations
hereunder or any interest herein without the prior written consent of the
Holder. Any attempted assignment by the Maker or the Holder in
contravention of this paragraph shall be null and void and of no force or
effect.
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21.
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Enforcement.
It is agreed that time is of the essence of this Note and in the
event of default of the terms of this Note, the Maker agrees to pay all
costs of collection or enforcement, including reasonable attorneys’ fees
and if there is a default in payment of any sum due
hereunder.
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22.
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Governing
Law. This Note shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Michigan
without regard to conflicts of laws principles. The venue of any legal
proceeding taken in connection with this Note will be in Pontiac,
Michigan.
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23.
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Independence
of Covenants. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or event which with notice or
lapse of time or both would become an Event of Default if such action is
taken or condition exists.
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24.
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Interpretation.
The Holder and the Maker hereby waive the benefit of any statute or
rule of law or judicial decision which would otherwise require that the
provisions of this Note be construed or interpreted more strongly against
the party responsible for the drafting
thereof.
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IN WITNESS
WHEREOF, this Note has been issued as of date first written
above.
MAKER:
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Ecology
Coatings, Inc.
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/s/Robert
G. Crockett
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Robert
G. Crockett
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Chief
Executive Officer
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Mailing
Address of Holder:
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Nirta
Enterprises, LLC
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5600
Orion Road
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Rochester,
MI 48306
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Mailing
Address of Maker:
Ecology
Coatings, Inc.
2701
Cambridge Court
Suite
100
Auburn
Hills, MI 48326